Arden Group, Inc. Announces Fourth Quarter and Fiscal Year Earnings
March 15 2012 - 2:55PM
Business Wire
Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and
income figures for the fourth quarter and fiscal year ended
December 31, 2011.
Arden Group, Inc. is the parent company of Gelson’s Markets
which operates seventeen full-service supermarkets in Southern
California carrying both perishable and grocery products.
ARDEN GROUP, INC. AND CONSOLIDATED
SUBSIDIARIES
FOURTH QUARTER EARNINGS RELEASE
Thirteen Weeks
Ended
Fifty-Two Weeks
Ended
December 31,
January 1,
December 31,
January 1,
2011
2011
2011
2011
(In Thousands,
Except Share, Per Share & Footnote Data)
(Unaudited)
Sales (a) $ 114,503 $ 110,020 $
429,483 $ 417,065 Operating income (b) 6,969 9,175 26,122
30,143 Interest, dividend and other income (expense), net
(c) 63 8 2,301 188 Income before income taxes 7,032 9,183
28,423 30,331 Income tax provision 2,701 3,632 11,418 12,246
Net income $ 4,331 $ 5,551 $ 17,005 $ 18,085 Basic
and diluted net income per common share (d) $ 1.41 $ 1.75 $ 5.50 $
5.72 Weighted average common shares outstanding (d) 3,071,000
3,161,098 3,094,020 3,161,098
(a) In 2011 and 2010, the Company operated 18 full-service
supermarkets in Southern California through its wholly-owned
subsidiary, Gelson’s Markets (Gelson’s). Year over year sales
increases were due, to a great extent, to both inflation and an
increase in the number of transactions in 2011 compared to 2010.
Increased sales also reflect improvement in the economic
environment in our local trade areas despite intense competition
and cautious consumer purchasing behavior.
Gelson’s closed its store located in Northridge, California
after the close of business on February 25, 2012. Subject to
certain closing conditions, Gelson’s has reached an agreement with
the landlord and a third party to assign the lease and to be
released by the landlord from all obligations under the lease no
later than May 1, 2012. In return, Gelson’s agreed to pay the
assignee a lease assignment fee of $1,850,000 and agreed to
transfer various items of equipment to the assignee. In addition,
Gelson’s expects to incur closing costs estimated to be between
$300,000 and $400,000.
(b) Operating income on a year over year basis was negatively
impacted by increases in the United Food & Commercial Workers
International Union (UFCW) health and welfare contribution rate in
March 2010, February 2011 and September 2011. The majority of the
Company’s employees belong to the UFCW. During the fourth quarter
of 2011, the Company recognized $339,000 and $90,000 of stock
appreciation rights (SARs) compensation expense. On a year-to-date
basis, the Company recognized SARs compensation expense of $488,000
during 2011 compared to a reversal of $394,000 for 2010. Operating
income was also negatively impacted in 2011 due to a ratification
bonus of approximately $714,000 paid to Gelson’s employees who are
members of the UFCW in accordance with the new labor contract
discussed below. In addition, the fourth quarter of 2010 reflects a
gain of $570,000 from the early termination of a lease for a
property that was not being used in the Company’s supermarket
operations.
The Company’s previous collective bargaining agreement with the
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.
In late September 2011, employees of the Majors ratified a new
labor contract. Employees of Gelson’s who are members of the UFCW
ratified a new labor contract with Gelson’s on terms similar to
those reached by the Majors in a vote held on October 14, 2011. The
new labor agreement expires on March 2, 2014.
(c) Other income reflects a gain of approximately $2,129,000
from the sale of an undeveloped parcel of land during the first
quarter of 2011.
(d) In April 2011, the Company purchased 90,098 shares of its
Class A Common Stock in an unsolicited private transaction for an
aggregate purchase price of approximately $6,684,000.
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, a future lease assignment
which may or may not be accomplished and certain estimated closing
costs. 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.
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