Arden Group, Inc. Announces Second Quarter Earnings

  Arden Group, Inc. Announces Second Quarter Earnings

Business Wire

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
(UNAUDITED)

                    Thirteen Weeks Ended         Twenty-Six Weeks Ended
                     June 29,       June 30,      June 29,       June 30,
(In Thousands,
Except Share, Per     2013         2012           2013         2012
Share & Footnote
Data)
Sales          (a)   $ 111,031      $ 107,699     $ 224,686      $ 214,926
Operating      (b)     8,185           8,236         15,528          13,133
income
Interest,
dividend and          (7        )    25           (2        )    48
other income
(expense), net
Income before          8,178           8,261         15,526          13,181
income taxes
Income tax            3,332         3,366        6,326         5,370
provision
Net income           $ 4,846        $ 4,895       $ 9,200        $ 7,811
Basic and
diluted net          $ 1.58          $ 1.59        $ 3.00          $ 2.54
income per
common share
Basic and
diluted
weighted               3,071,000       3,071,000     3,071,000       3,071,000
average common
shares
outstanding

    
      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.

Contact:

Arden Group, Inc.
Patricia S. Betance
Assistant Secretary
310-638-2842
 
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