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

    Business Editors

    LOS ANGELES--(BUSINESS WIRE)--March 11, 2005--Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and income figures for the fourth quarters and fiscal years ended January 1, 2005 and January 3, 2004.
    Arden Group, Inc. is the parent company of Gelson's Markets which operates 18 full-service supermarkets in Southern California carrying both perishable and grocery products.

ARDEN GROUP, INC. AND CONSOLIDATED SUBSIDIARIES FOURTH QUARTER AND FISCAL YEAR EARNINGS RELEASE

Thirteen Fourteen Fifty-Two Fifty-Three Weeks Weeks Weeks Weeks Ended Ended Ended Ended 1/1/2005 1/3/2004 1/1/2005 1/3/2004 (In Thousands, Except (Unaudited) Share and Per Share Data) ---------------------- ---------------------

Sales (a) $122,250 $185,148 $502,898 $486,378 =========== ========== ========== ==========

Operating income (a) 5,854 12,029 34,579 25,458 Interest, dividend and other income (expense), net (b) 692 615 3,591 2,446 ----------- ---------- ---------- ----------

Income before income taxes 6,546 12,644 38,170 27,904 Income tax provision 2,612 5,108 15,498 11,323 ----------- ---------- ---------- ----------

Net income $3,934 $7,536 $22,672 $16,581 =========== ========== ========== ==========

Net income per common share: Basic - Class A $1.23 $2.32 $7.00 $5.11 Basic - Class B 0.84 2.09 6.13 4.60 Diluted 1.16 2.23 6.70 4.90

Weighted average common shares outstanding (c): Basic - Class A 2,813,894 2,017,349 2,217,675 2,015,859 Basic - Class B 569,358 1,363,584 1,164,977 1,363,584 Diluted 3,383,252 3,382,120 3,382,652 3,380,524

(a) The Company's financial results for fiscal years 2004 and 2003 reflect the pervasive impact of a labor dispute involving other supermarkets in the Company's trade area that began on October 11, 2003 and ended on February 29, 2004. During the fourth quarter of 2003 and the first quarter of 2004, the Company experienced a significant increase in sales and operating income due to a shift in consumer shopping patterns throughout the strike. Since the settlement of the labor dispute, customers have returned to their previous shopping patterns; however, the Company has successfully retained some of the new shoppers that experienced the Gelson's format and service during the labor dispute.

The decrease of 34.0% in same store sales for the fourth quarter of 2004 compared to the prior year highlights the significant sales growth experienced in the latter part of 2003 as a result of the labor dispute. For the entire 2004 fiscal year, however, same store sales increased 3.4% over the prior year due to retained sales growth despite the fact that fiscal 2003 was a 53-week year compared to a 52-week year for fiscal 2004. No adjustment has been made with respect to the additional week in the 2003 fiscal year.

Operating income increased 35.8% in fiscal 2004 compared to 2003. Prior year operating income included a $4,311,000 impairment charge related to the Pasadena store and a $5,797,000 accrual to cover union health care claims and restore trust fund reserves to the required levels. The increase in operating income in fiscal 2004 was partially offset by higher compensation expense related to stock appreciation rights of $3,658,000 compared to $740,000 in the prior year. Furthermore, union health and welfare and pension plan expense was higher in 2004 due to an increase in the per hour contribution rates, an increase in hours worked due to the increased sales volume in 2004 and the suspension of pension plan contributions to the trust fund covering the majority of the Company's union employees for two months during 2003.

(b) Other income (expense) includes net gains realized on the sale of investments of $1,739,000 and $843,000 in fiscal 2004 and 2003, respectively.

(c) As of November 10, 2004, all Class B Common Stock was converted to Class A Common Stock.

--30--SW/la*

CONTACT: Arden Group, Inc. Debra L. Jensen, 310-638-2842

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: SUPERMARKETS RETAIL EARNINGS SOURCE: Arden Group, Inc.

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