Arden Group, Inc. Announces Third Quarter Earnings
November 07 2013 - 12:41PM
Business Wire
Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and
income figures for the third quarter ended September 28, 2013.
Arden Group, Inc. is the parent company of Gelson’s Markets
which currently operates 17 full-service supermarkets in Southern
California carrying both perishable and grocery products.
ARDEN GROUP, INC. AND
CONSOLIDATED SUBSIDIARIES THIRD QUARTER EARNINGS RELEASE
(UNAUDITED)
Thirteen Weeks
Ended
Thirty-Nine Weeks
Ended
(In Thousands, Except Share, Per Share
& Footnote Data)
September 28,2013
September 29,2012
September 28,2013
September 29,2012
Sales (a) $ 112,121 $ 108,150 $ 336,807 $
323,076 Operating income (b) 6,303 8,541 21,831 21,674
Interest, dividend and other income (expense), net
(10 ) 25 (12 ) 73
Income before income taxes
6,293 8,566 21,819 21,747
Income tax provision
2,564 3,491 8,890 8,861
Net income $ 3,729 $ 5,075 $ 12,929 $ 12,886
Basic and diluted net income per common share $ 1.21 $ 1.65
$ 4.21 $ 4.20
Basic and diluted weighted average common
shares outstanding
3,071,000 3,071,000 3,071,000 3,071,000
(a)
Same store sales from the Company’s 16
supermarkets (which excludes the Northridge and Pasadena locations
which were closed on February 25, 2012 and June 15, 2013,
respectively) were $111,068,000 during the third quarter of 2013
compared to $104,709,000 in the third quarter of 2012, an increase
of 6.1%. For the thirty-nine weeks ended September 28, 2013, same
store sales were $329,118,000 compared to $311,003,000 in the same
period of 2012, an increase of 5.8%. The increase in same store
sales is the result of an increase in the number of transactions in
2013 compared to the prior year, as well as inflation.
In September 2012, Gelson’s entered into a
lease for a supermarket location in the marina area of Long Beach,
California. After extensively remodeling the site, Gelson’s opened
a new supermarket at that location on November 7, 2013. In
September 2013, Gelson’s entered into a lease for a supermarket
location in La Cañada Flintridge, California. Gelson’s took
possession of the property on November 1, 2013 and anticipates
opening a new supermarket at that location in February 2014.
(b)
Operating income in the third quarter of
2013 decreased due to higher stock appreciation rights (SARs)
compensation expense in the current period compared to the same
period of the prior year primarily as a result of an increase in
the price of the Company’s Class A Common Stock. The Company
recorded SARs compensation expense of $1,939,000 and $200,000 in
the third quarter of 2013 and 2012, respectively. 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, as well as an increase in worker’s compensation insurance
premiums effective July 1, 2013. The negative impact of higher SARs
compensation expense, union benefits and worker’s compensation
costs on operating income was partially offset by the positive
impact of higher sales.
Operating income in the first nine months
of 2013 and 2012 reflects the impact of two store closures – the
Pasadena and Northridge locations. Closing costs of $121,000 and
$1,912,000 related to the closing of the Pasadena and Northridge
stores were recognized in the first nine months of 2013 and 2012,
respectively. In addition, the Company recorded SARs compensation
expense of $3,049,000 in the first nine months of 2013. Conversely,
in the same period of 2012, the Company reversed $234,000 of SARs
compensation expense recognized in prior periods. Excluding the
costs related to store closings and SARs compensation expense,
operating income increased by 7.1% in the first nine months of 2013
compared to the same period of 2012. This increase is the result of
higher sales 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. Operating income in 2013
also reflects an increase in UFCW benefit contribution rates and a
UFCW bonus of approximately $768,000 paid in March 2013.
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. BetanceAssistant
Secretary310-638-2842
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