Argan, Inc. Announces Fourth Quarter and Year End Results.ROCKVILLE, Md. -- Argan Argan character who suffers imaginary ills; determined to be an invalid. [Fr. Lit.: Le Malade Imaginaire] See : Hypochondria , Inc. (Amex:AGX) today announced financial results for the fourth quarter and year ended January 31, 2008. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the year ended January 31, 2008 were $206.8 million compared to $68.9 million for the year ended January 31, 2007. Gemma Power Systems, acquired in December 2006, contributed $180.4 million in revenues for the year ended January 31, 2008. Revenue for the year ended January 31, 2008 at Vitarich Laboratories (VLI VLI Virtual LAN Internetwork (Cisco) VLI Port Vila, Vanuatu - Bauerfield (Airport Code) VLI Variable Life Insurance VLI Visible Light Illuminator (special flashlight mounted on weapons) ) decreased to $16.7 million from $20.8 million in the year ended January 31, 2007 and Southern Maryland Southern Maryland in popular usage is composed of the state's southernmost counties on the "Western Shore." This region includes all of Calvert, Charles and St. Mary's counties and southern portions of Anne Arundel and Prince George's counties. Cable (SMC SMC Saint Mary's College SMC Santa Monica College SMC Solaris Management Console SMC Smooth Muscle Cell SMC Small Magellanic Cloud (also see LMC) SMC Safety Management Certificate (maritime shipping) ) revenues for the year ended January 31, 2008 declined to $9.7 million from $14.3 million in the year ended January 31, 2007. Net loss for the year ended January 31, 2008 was $3.2 million or $0.29 per fully diluted share based on 11,097,000 fully diluted shares outstanding, compared to a net loss of $113,000, or $0.02 per fully diluted share based on 5,338,000 shares outstanding in the year ended January 31, 2007. During the year ended January 31, 2008, the Company conducted valuations of its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. . Both Gemma Power Systems and SMC's valuations exceeded their carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. . The Company's analysis of VLI operations indicated that its carry value of goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. were impaired. Based on this analysis, the Company recorded a goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. loss of $5.6 million, thereby reducing the goodwill related to VLI to an adjusted balance of approximately $921,000 as of January 31, 2008. The Company also recorded intangible asset impairment losses at VLI of $1,181,000 for the year ended January 31, 2008. Of the aforementioned impairment losses related to goodwill and intangible assets, $1.8 million and $341,000, respectively, were recorded in the fourth quarter. Net sales for the quarter were $53.9 million compared to $41.7 million for the three months ended January 31, 2007. Gemma Power Systems contributed $49.4 in revenues for the quarter compared to $33.7 in the fourth quarter last year. Revenues for the quarter ended January 31, 2008 at VLI decreased to $2.1 million from $4.6 million in the same quarter last year and revenues at SMC in the current quarter declined to $2.4 million from $3.5 million in the three months ended January 31, 2007. Net loss for the quarter ended January 31, 2008 was $565,000, or $0.05 per fully diluted share based on 11,105,000 shares outstanding, compared to net income of $315,000, or $0.04 per fully diluted share based on 8,414,000 shares outstanding in the fourth quarter of last year. The Company believes that its Non-GAAP Measurement of Earnings Before Interest, Taxes, Depreciation and Amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Gemma's backlog was $122 million as of January 31, 2008. This backlog number does not include the value of approximately $340 million in potential construction work for a power plant project in Colusa, California Colusa is the county seat of Colusa County, California. The population was 5,402 at the 2000 census. Geography According to the United States Census Bureau, the city has a total area of 4.3 km² (1.7 mi²), all land. . During the fourth quarter, Gemma received an interim notice to proceed from Pacific Gas & Electric (PG&E) to design and build a natural gas-fired, combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. power plant in Colusa, and we expect to receive in the near term the final notice to proceed. Commenting on the results for the quarter and the year, Rainer Bosselmann, Chairman and Chief Executive Officer stated, "Fiscal 2008 was a transformative year for Argan in which we began to drive significant cash flow. Gemma generated 87% of our revenues and experienced strong cash flow performance with approximately $16.8 million in EBITDA. Demand for Gemma's services remains strong as we head into the new fiscal year. The economy is highly dependant on Adj. 1. dependant on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, contingent upon, dependant upon, dependent on, dependent upon, depending on, contingent affordable and reliable electricity and Gemma's broad based experience building a wide range of power plants positions the company favorably." Mr. Bosselmann continued, "At our two smaller subsidiaries, VLI and SMC, we reported a decrease in revenues for the quarter and for the year. While their combined sales account for only 13% of our overall revenues, we were not satisfied with this performance and are focused on improving their results in fiscal 2009." About Argan, Inc. Argan is a publicly traded holding company focusing on companies that provide products and services to growth industries. Argan's primary business is designing and building energy plants for the rapidly growing alternative energy sector through its Gemma Power Systems subsidiary. Argan has two other subsidiaries: Southern Maryland Cable, which provides inside premise wiring services to the federal government including military installations and government office sites requiring high-level security clearance and also provides underground and aerial construction services and splicing splicing /splic·ing/ (spli´sing) 1. the attachment of individual DNA molecules to each other, as in the production of chimeric genes. 2. RNA s. to major telecommunications and utilities customers; and Vitarich Laboratories, a farm to market, vertically integrated private label manufacturer that manufactures, packages and distributes premium nutraceutical nu·tra·ceu·ti·cal n. A food or naturally occurring food supplement thought to have a beneficial effect on human health. nutraceutical products, including nutritional and whole food dietary supplements Noun 1. dietary supplement - something added to complete a diet or to make up for a dietary deficiency diet - a prescribed selection of foods vitamin pill - a pill containing one or more vitamins; taken as a dietary supplement and other personal healthcare products. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Argan's financial and operational results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the Securities and Exchange Commission. 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