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Arden Group Inc. Reports Operating Results (10-Q)

November 10, 2010 | About:
10qk

10qk

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Arden Group Inc. (ARDNA) filed Quarterly Report for the period ended 2010-10-02.

Arden Group Inc. has a market cap of $279.5 million; its shares were traded at around $88.44 with a P/E ratio of 13.8 and P/S ratio of 0.7. The dividend yield of Arden Group Inc. stocks is 1.2%. 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, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

SG&A expense as a percent of sales was 32.3% in the third quarter of 2010 compared to 30.6% in the same period of 2009. The increase in SG&A expense as a percent of sales is predominately due to the increase in the health & welfare contribution rate as discussed above. Contributions to the health & welfare trust were somewhat offset by a reduction in labor hours worked as a result of decreased sales. SG&A expense as a percent of sales is also higher due to an increase in UFCW hourly wage rates effective March 2010 in accordance with the current collective bargaining agreement. The increase in SG&A expense as a percent of sales in the third quarter of 2010 also reflects an increase in SARs compensation expense compared to the same period of 2009. In the third quarter of 2010, the Company recognized $81,000 of SARs compensation expense, which amount was due to additional vesting partially offset by a decrease in the fair value of SARs since the beginning of the quarter. In comparison, the Company reversed $135,000 of SARs compensation expense in the third quarter of 2009.

SG&A expense as a percent of sales was 31.4% in the first nine 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 nine months of 2010, the Company reversed $484,000 of SARs compensation expense recognized in prior periods. In comparison, SARs compensation expense of $286,000 was recognized in the same period of 2009.

The Company s current cash position, including investments and net cash provided by operating activities, is the primary source of funds available to meet the Company s capital expenditure and liquidity requirements. The Company s cash position, including investments, at the end of the third quarter of 2010 was $48,831,000. During the thirty-nine weeks ended October 2, 2010, the Company generated $15,555,000 of cash from operating activities compared to $18,166,000 in the same period of 2009. The decrease in net cash provided by operating activities reflects lower sales volume and increased labor costs during the first nine months of 2010 compared to the same period of the prior year.

As of October 2, 2010, management had authorized expenditures on incomplete projects for the purchase and remodel of property, plant and equipment which totaled approximately $430,000. The Company has an ongoing program to remodel existing supermarkets and to add new stores. During the first nine months of 2010, capital expenditures were $1,941,000.

On October 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 September 30, 2010.

A change in market prices exposes the Company to market risk related to its investments. As of October 2, 2010, all investments were classified as available-for-sale securities and totaled $33,333,000. A hypothetical 10% drop in the market value of these investments would result in a $3,333,000 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.

Read the The complete Report

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