Arden Group Inc. has a market cap of $300.9 million; its shares were traded at around $95.22 with a P/E ratio of 14.4 and P/S ratio of 0.7. The dividend yield of Arden Group Inc. stocks is 1%. Arden Group Inc. had an annual average earning growth of 9.3% over the past 10 years.ARDNA is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Same store sales from the Companys 18 supermarkets (all of which are located in Southern California), including revenue from licensing arrangements, subleases, leases and finance charges, were $206,737,000 during the first half of 2010. This represents a decrease of 4.6% from the same period of the prior year, when sales were $216,698,000. Sales during 2010 were negatively impacted by economic conditions and competition in our trade area.
SG&A expense as a percent of sales was 31.0% in the first six months of 2010 compared to 30.7% in the same period of 2009. The increase in SG&A expense as a percent of sales is primarily due to the increase in the health & welfare contribution rate effective March 2010, as well as the increase in UFCW hourly wage rates as discussed above. The increase in SG&A expense as a percent of sales was partially offset by a reduction in store labor hours and a decrease in SARs compensation expense. During the first half of 2010, the Company reversed $565,000 of SARs compensation expense recognized in prior periods. In comparison, SARs compensation expense of $421,000 was recognized in the same period of 2009.
The Companys current cash position, including investments and net cash provided by operating activities, is the primary source of funds available to meet the Companys capital expenditure and liquidity requirements. The Companys cash position, including investments, at the end of the second quarter of 2010 was $45,909,000. During the twenty-six weeks ended July 3, 2010, the Company generated $11,084,000 of cash from operating activities compared to $15,481,000 in the same period of 2009. The decrease in net cash provided by operating activities reflects lower sales volume during the first half of 2010 compared to the same period of the prior year and a reduction in income tax payments in early 2009 due to lower than expected income in late 2008.
As of July 3, 2010, management had authorized expenditures on incomplete projects for the purchase of property, plant and equipment which totaled approximately $834,000. The Company has an ongoing program to remodel existing supermarkets and to add new stores. During the first half of 2010, capital expenditures were $1,451,000.
On July 20, 2010, the Company paid a regular quarterly cash dividend of $0.25 per share of Class A totaling approximately $790,000 to stockholders of record on June 30, 2010.
A change in market prices exposes the Company to market risk related to its investments. As of July 3, 2010, all investments were classified as available-for-sale securities and totaled $28,211,000. A hypothetical 10% drop in the market value of these investments would result in a $2,821,000 unrealized loss and a corresponding decrease in the fair value of these instruments. This hypothetical drop would not affect cash flow and would not have an impact on earnings until the Company sold the investments.
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