Arden Group, Inc. Announces Fourth Quarter And Fiscal Year Earnings

Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and income figures for the fourth quarter and fiscal year ended January 1, 2011.

Arden Group, Inc. is the parent company of Gelson’s Markets which operates eighteen full-service supermarkets in Southern California carrying both perishable and grocery products.
               
ARDEN GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
FOURTH QUARTER EARNINGS RELEASE
 
 

Thirteen

Thirteen

Fifty-Two

Fifty-Two

Weeks Ended
   

Weeks Ended

Weeks Ended
   

Weeks Ended

January 1,

January 2,

January 1,

January 2,

2011

2010

2011

2010

(In Thousands, Except Share, Per Share & Footnote Data)

(Unaudited)
 
 
Sales (a) $

110,020
$ 110,718 $ 417,065 $ 431,170
 
Operating income (b) 9,175 10,600 30,143 36,036
 
Interest, dividend and other income (expense), net   8   83   188   253
 
Income before income taxes 9,183 10,683 30,331 36,289
 
Income tax provision   3,632   4,231   12,246   14,665
 
Net income $ 5,551 $ 6,452 $ 18,085 $ 21,624
Basic and diluted net income per common share

$
1.75 $ 2.03 $ 5.72 $ 6.84
 
Weighted average common shares outstanding 3,161,098 3,161,098 3,161,098 3,161,098
 

(a) Same store sales from the Company’s eighteen supermarkets decreased by 0.6% and 3.1% for the fourth quarter and fiscal year ended January 1, 2011, respectively, compared to the same periods of the prior year.

(b) Operating income decreased in the fourth quarter and fiscal year of 2010 compared to the same periods of the prior year primarily due to an increase in health and welfare costs related to a union multi-employer plan to which the Company contributes. The increase was effective in March 2010 and has resulted in an average weekly increase in expense of approximately $74,000. Effective in February 2011, the Company’s agreement with the union also allowed for an additional increase in the health and welfare contribution rate resulting in a further increase in the Company’s costs of approximately $11,000 per week. In the fourth quarter of 2010, the Company recognized a gain of $570,000 from the early termination of a lease for a property that was not being used in the Company’s current operations. Additionally, the Company recognized stock appreciation rights (SARs) compensation expense of $90,000 in the fourth quarter of 2010 compared to a reversal of previously recognized SARs compensation expense of $559,000 in the same period of the prior year.

The Company’s collective bargaining agreement with the United Food & Commercial Workers International Union (UFCW) expired on March 6, 2011. The UFCW’s contract with the three major grocery retailers in our trade area – Vons, Ralphs and Albertsons grocery chains (Majors) – also expired on the same date. The Majors are currently in negotiations with the UFCW to renew their collective bargaining agreements. The Company has signed an extension agreement with the UFCW pending the outcome of the UFCW’s negotiations with the Majors which obligates Gelson’s to any changes agreed to by the Majors in hourly wage rates and contributions to the benefit plans.

Copyright Business Wire 2010

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