Arden Group, Inc. Announces First Quarter Earnings

    Business Editors

    LOS ANGELES--(BUSINESS WIRE)--May 12, 2005--Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and income figures for the first quarter ended April 2, 2005.
    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 FIRST QUARTER EARNINGS RELEASE (UNAUDITED)

Thirteen Weeks Ended --------------------- (In Thousands, Except Share and Per Share Data) April 2, April 3, 2005 2004 ---------- ----------

Sales (a) $115,976 $147,394 ========== ==========

Operating income (a) 8,998 14,124 Interest and dividend income (expense), net 255 314 ---------- ----------

Income before income taxes 9,253 14,438 Income tax provision 3,770 5,883 ---------- ----------

Net income $5,483 $8,555 ========== ==========

Net income per common share (b): Basic - Class A Common Stock $1.62 $2.64 Basic - Class B Common Stock 0.00 2.37 Diluted 1.62 2.53

Weighted average common shares outstanding (b): Basic - Class A Common Stock 3,383,252 2,017,668 Basic - Class B Common Stock 0 1,363,584 Diluted 3,383,252 3,382,382

(a) The results of operations for the first quarter of 2005 compared to the first quarter of 2004 reflect the impact of a labor dispute in the Company's trade area that commenced October 11, 2003 and concluded February 29, 2004. The labor dispute resulted in a temporary shift in consumer shopping patterns and a significant increase in the Company's sales and operating income during the fourth quarter of 2003 and the first quarter of 2004. Since the settlement of the labor dispute, most 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. Sales for the first quarter ended April 3, 2004 have been revised to reflect a change in the way the Company classifies rental, license and other income beginning in the third quarter of 2004. This classification change had no impact on operating income, net income or net cash flow and represents less than 1% of sales for all periods presented.

Operating income decreased 36.3% in the first quarter of 2005 compared to 2004. During the labor dispute, the Company achieved significant economies of scale from incremental sales and has succeeded in preserving some of these savings as a result of the sales retained compared to pre-strike periods. During the first quarter of 2005, the Company reversed $1,592,000 of compensation expense recognized in previous periods related to stock appreciation rights primarily due to a decrease in the Company's Class A Common Stock price compared to expense of $105,000 recognized in the same period of 2004.

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

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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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