Arden Group, Inc. Announces Second Quarter Earnings
LOS ANGELES -- August 8, 2013
Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and income figures
for the second quarter ended June 29, 2013.
Arden Group, Inc. is the parent company of Gelson’s Markets which currently
operates 16 full-service supermarkets in Southern California carrying both
perishable and grocery products.
ARDEN GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
SECOND QUARTER EARNINGS RELEASE
Thirteen Weeks Ended Twenty-Six Weeks Ended
June 29, June 30, June 29, June 30,
Except Share, Per 2013 2012 2013 2012
Share & Footnote
Sales (a) $ 111,031 $ 107,699 $ 224,686 $ 214,926
Operating (b) 8,185 8,236 15,528 13,133
dividend and (7 ) 25 (2 ) 48
Income before 8,178 8,261 15,526 13,181
Income tax 3,332 3,366 6,326 5,370
Net income $ 4,846 $ 4,895 $ 9,200 $ 7,811
diluted net $ 1.58 $ 1.59 $ 3.00 $ 2.54
weighted 3,071,000 3,071,000 3,071,000 3,071,000
Same store sales from the Company’s 16 supermarkets (excluding the
Pasadena location which was closed June 15, 2013) were $107,994,000
during the second quarter of 2013 compared to $104,207,000 in the second
quarter of 2012, an increase of 3.6%. The increase in same store sales
is due to an increase in the number of transactions, as well as
inflation, but was partially offset by a shift in holiday sales. Easter
(a) and Passover sales occurred in the second quarter of 2012 but fell into
the first quarter of 2013. For the twenty-six weeks ended June 29, 2013,
same store sales (which also excludes the Northridge location which was
closed on February 25, 2012, in addition to the Pasadena store mentioned
above) were $218,050,000 compared to $206,294,000 in the same period of
2012, an increase of 5.7%. The year-to-date increase in same store sales
is the result of inflation, as well as an increase in the number of
transactions in 2013 compared to the prior year.
In September 2012, Gelson’s entered into a lease for a supermarket
location in the marina area of Long Beach, California. Gelson’s took
possession of the property on March 1, 2013. Gelson’s is in the process
of extensively remodeling the site and currently anticipates opening a
new Gelson’s supermarket at that location in late 2013.
Operating income in the second quarter of 2013 decreased slightly
primarily due to higher stock appreciation rights (SARs) compensation
expense and the timing of the Easter and Passover holidays as described
above. The Company recorded SARs compensation expense of $670,000 in the
second quarter of 2013 due to an increase in SARs fair value since the
beginning of the quarter and additional vesting. Conversely, in the
(b) second quarter of 2012, the Company reversed $170,000 of SARs
compensation expense recognized in prior periods. Operating income also
decreased due to an increase in the United Food & Commercial Workers
International Union (UFCW) health and welfare and pension contribution
rates at various times throughout 2012 and 2013. The negative impact of
higher SARs compensation expense and union benefits costs on operating
income was offset by the positive impact of higher sales.
Operating income in the first half of 2013 and 2012 reflects the impact
of two store closures – the Pasadena and Northridge locations. Closing
costs of $170,000 and $1,906,000 related to the closing of the Pasadena
and Northridge stores were accrued in the first half of 2013 and 2012,
respectively. Excluding the costs related to store closings, operating
income increased by 4.4% in the first half of 2013 compared to the same
period of 2012. This increase is the result of higher sales, slightly
improved gross margins and a decrease in store expense as a percent of
sales. The decrease in store expense as a percent of sales is due to an
increase in sales without a comparable increase in expense, as well as
the closing of unprofitable locations. The increase in operating income
was partially offset by an increase in SARs compensation expense,
increased UFCW benefit contribution rates and a UFCW bonus of
approximately $768,000 paid in March 2013. The Company recorded SARs
compensation expense of $1,110,000 in the first half of 2013.
Conversely, in the first half of 2012, the Company reversed $434,000 of
SARs compensation expense recognized in prior periods.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements made by or on behalf of the Company. Certain
statements contained in this Current Report on Form 8-K are forward-looking
statements. These statements discuss, among other things, the opening of a new
location which may or may not be accomplished. These forward-looking
statements reflect the Company’s current plans and expectations and are based
on information currently known to the Company. The Company cautions readers
that any forward-looking statements contained in this Current Report involve
risks and uncertainties and are subject to change. The Company does not
undertake any obligation to update forward-looking statements.
Arden Group, Inc.
Patricia S. Betance
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