G. Willi-Food Reports Fiscal 2014 Year End Financial Results

Sales down 2.2% from fiscal 2013 sales and Net Cash from operating activities of NIS 19.7 million (US$ 5.1 million) in fiscal 2014

News provided by

G. Willi-Food International Ltd.

Mar 26, 2015, 06:40 ET

YAVNE, Israel, March 26, 2015 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi-Food"), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its financial results for the fiscal year ended December 31, 2014.

Fiscal 2014 Highlights

Sales decreased by 2.2% from fiscal 2013 to NIS 328.7 million (US$ 84.5 million)
Gross profit decreased 4.9% from fiscal 2013 to NIS 79.6 million (US$ 20.5 million), or 24.2% of sales
Operating income decreased 19.1% from fiscal 2013 to NIS 23.6 million (US$ 6.1 million), or 7.2% of sales
Net income decreased 40.7% from fiscal 2013 to NIS 18.9 million (US$ 4.8 million), or 5.7% of sales
Earning per share of NIS 1.45 (US$ 0.37)
Net cash from operating activities increased by 426.9% from fiscal 2013 to NIS 19.7 million (US$ 5.1 million
Cash and securities balance of NIS 225.1 million (US$ 57.9 million) as of December 31, 2014

Willi-Food's operating divisions include Willi-Food, a distributor of a broad variety of kosher foods, and its wholly-owned Gold Frost, a designer, developer and distributor of branded kosher innovative dairy food products.

Fiscal 2014 Summary
Sales for fiscal 2014 decreased by 2.2% to NIS 328.7 million (US$ 84.5 million) from NIS 336.0 million (US$ 86.4 million) in fiscal 2013. Willi-Food achieved these sales figures in the fiscal year of 2014 despite Operation Protective Edge, an almost two month military operation launched by the State of Israel on July 8, 2014 in the Hamas-controlled Gaza Strip, which adversely affected Willi-Food sales in July-August 2014, as well as the overall market decline in food product consumption by the Israeli consumer.

Gross profit for fiscal 2014 decreased by 4.9% to NIS 79.6 million (US$ 20.5 million) compared to NIS 83.7 million (US$ 21.5 million) recorded in fiscal 2013. Fiscal 2014 gross margin was 24.2% compared to gross margin of 24.9% for fiscal 2013. The decrease in gross margin in fiscal 2014 was primarily due to reductions in the prices of certain of our products as a result of continued expectations from our customers for us to reduce prices. The decrease in gross margin was also less significantly caused by the strengthening of the U.S. dollar versus the NIS commencing from the third quarter of 2014.

Willi-Food's operating income for fiscal 2014 decreased by 19.1% to NIS 23.6 million (US$ 6.1 million) compared to NIS 29.2 million (US$ 7.5 million) recorded in fiscal 2013. Selling expenses increased by 13.0% from 2013, primarily due to an increase in promotional expenses as well as vehicles and transport expenses. Selling expenses as a percentage of sales increased to 13.0% compared to 12.1% in fiscal 2013. General and administrative expenses decreased by 0.9% from fiscal 2013, primarily due to decrease of NIS 1.7 million (US$ 0.4 million) in management profit-related bonuses compared to 2013 offset by an expense of NIS 2.1 million (US$ 0.5 million) related to options granted to the Company's Chairman, President and CEO in November 2013, which was recorded in fiscal 2014. General and administrative expenses as a percentage of sales in fiscal 2014 were 5.8%, approximately the same percentage as in fiscal 2013.

Willi-Food's income before taxes for fiscal 2014 decreased by 37.0% to NIS 26.0 million (US$ 6.7 million) compared to NIS 41.3 million (US$ 10.6 million) recorded in fiscal 2013.

Willi-Food's net income for fiscal 2014 decreased by 40.7% to NIS 18.9 million (US$ 4.8 million), or NIS 1.45 (US$ 0.37) per share, from NIS 31.8 million (US$ 8.2 million), or NIS 2.45 (US$ 0.63) per share, recorded in fiscal 2013.

Willi-Food ended 2014 with NIS 225.1 million (US$ 57.9 million) in cash and securities with no short-term debt. Net cash from operating activities fiscal 2014 was NIS 19.7 million (US$ 5.1 million).Willi-Food's shareholders' equity at the end of December 2014 was NIS 386.1 million (US$ 99.3 million).

Business Outlook
Mr. Zwi Williger, Chairman of Willi-Food, commented, "Our results in fiscal 2014 were negatively affected by the noticeable decline in consumption by the Israeli consumer in 2014, which, although didn't reduce the number of visits to supermarkets per consumer, decreased the basket of consumer goods. Our results were also impacted by Operation Protective Edge that lasted almost two thirds of the third quarter. Despite this, we were able to sustain our level of sales and maintain gross margins of over 24%. In light of the anticipated continued downward pressure on prices and decreasing private consumption, our foreseeable challenges ahead will be in managing our expenses in order to offer our products at the low prices our customers expect. This expense management will be needed in order to maintain our customer base both in the retail and wholesale markets during these difficult times for the food industry".

"We believe we are well positioned to continue our expansion," concluded Mr. Williger. "We are constantly focused on looking to meet the demands of consumers for new kosher products, and we have the infrastructure in place and development expertise to develop and deliver these products. At the same time, we remain focused on maximizing long-term profitability and creating additional value for our shareholders."

Conference Call
The Company will host a conference call and live webcast on Thursday, March 26, 2015 to discuss the financial results beginning at 11:00 AM Eastern Time. Interested parties may participate on the call by dialing 1-888-505-4368 (US), or 1-719-325-2452 (International), approximately 10 minutes prior to the scheduled start time. Participants may also access a live listen only webcast at:
http://public.viavid.com/index.php?id=113674

Following the conclusion of the call, a telephonic replay will be available for 14 days beginning at 2:00 PM Eastern Time on March 26, 2015 through 11:59 PM Eastern Time on April 9, 2015 and may be accessed by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), using Pin Number: 7375168. In addition, an archived webcast will be available for one year at:
http://public.viavid.com/reports/eventparticipantreporttab.php?id=o5elpZ6b

NOTE A: Convenience Translation to Dollars
The convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on December 31, 2014, U.S. $1.00 equals NIS 3.889. The translation was made solely for the convenience of the reader.

NOTE B: IFRS
The Company's consolidated financial results for fiscal year ended December 31, 2014 are presented in accordance with International Financial Reporting Standards ("IFRS").

About G. Willi-Food International Ltd.
G. Willi-Food International Ltd. (http://www.willi-food.com) is an Israeli-based company specializing in high-quality, great-tasting kosher food products. Willi-Food is engaged directly and through its subsidiaries in the design, import, marketing and distribution of over 600 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,500 customers in Israel and around the world including large retail and private supermarket chains, wholesalers and institutional consumers. The Company's operating divisions include Willi-Food in Israel and Gold Frost, a wholly owned subsidiary who designs, develops and distributes branded kosher, dairy-food products.

FORWARD LOOKING STATEMENT
This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for our products and expected sales, operating results, and earnings. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: monetary risks including changes in marketable securities or changes in currency exchange rates- especially the NIS/U.S. Dollar exchange rate, payment default by any of our major clients, the loss of one of more of our key personnel, changes in laws and regulations, including those relating to the food distribution industry, and inability to meet and maintain regulatory qualifications and approvals for our products, termination of arrangements with our suppliers, in particular Arla Foods, loss of one or more of our principal clients, increase or decrease in global purchase prices of food products, increasing levels of competition in Israel and other markets in which we do business, changes in economic conditions in Israel, including in particular economic conditions in the Company's core markets, our inability to accurately predict consumption of our products and changes in consumer preferences, our inability to protect our intellectual property rights, our inability to successfully integrate our recent acquisitions, insurance coverage not sufficient enough to cover losses of product liability claims and risks associated with product liability claims. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2013, filed with the Securities and Exchange Commission on April 30, 2014. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release.

G. WILLI‑FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED BALANCE SHEETS


	December 31,		December 31,
	2 0 1 4	2 0 1 3	2 0 1 4	2 0 1 3
	NIS		*US dollars ()**
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	82,902	36,197	21,317	9,308
Financial assets carried at fair value through profit or loss	122,733	112,864	31,559	29,021
Short term deposit	19,445	-	5,000	-
Trade receivables	86,690	82,932	22,291	21,325
Other receivables and prepaid expenses	3,763	2,694	968	692
Inventories	48,586	54,001	12,493	13,886
Current tax assets	1,372	-	353	-
Loan carried at fair value through profit or loss	-	65,300	-	16,791
Total current assets	365,491	353,988	93,981	91,023

Non-current assets
Property, plant and equipment	73,826	66,663	18,984	17,142
Less -Accumulated depreciation	28,579	25,689	7,349	6,606
	45,247	40,974	11,635	10,536

Prepaid expenses	133	50	34	13
Goodwill	36	36	9	9
Deferred taxes	505	-	130	-
Total non-current assets	45,921	41,060	11,808	10,558

	411,412	395,048	105,789	101,581
EQUITY AND LIABILITIES
Current liabilities
Short-term bank debt	-	18	-	5
Trade payables	15,518	20,245	3,990	5,206
Employees Benefits	2,120	1,880	545	483
Current tax liabilities	-	637	-	164
Other payables and accrued expenses	7,010	5,282	1,803	1,358
Total current liabilities	24,648	28,062	6,338	7,216

Non-current liabilities
Retirement benefit obligation	635	644	162	166
Deferred taxes	-	499	-	128
Total non-current liabilities	635	1,143	162	294

Shareholders' equity
Share capital	1,407	1,407	362	362
Additional paid in capital	121,430	119,281	31,223	30,670
Capital fund	247	247	64	64
Foreign currency translation reserve	-	786	-	202
Retained earnings	263,039	244,185	67,637	62,789
Remeasurement of the net liability in respect of defined benefit	6	(63)	2	(16)
	386,129	365,843	99,288	94,071

	411,412	395,048	105,788	101,581


(*) Convenience translation into U.S. dollars.

G. WILLI‑FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


		For the year ended December 31,		For the year ended December 31,
		2 0 1 4	2 0 1 3	2 0 1 4	2 0 1 3
		NIS		*US dollars ()**
		In thousands (except per share and share data)

	Sales	328,741	336,032	84,531	86,406
	Cost of sales	249,136	252,355	64,062	64,890

	Gross profit	79,605	83,677	20,469	21,516

	Selling expenses	39,696	35,130	10,207	9,033
	General and administrative expenses	19,231	19,408	4,945	4,991
	Other income	(2,943)	(54)	(757)	(14)

	Total operating expenses	55,984	54,484	14,395	14,010


	Operating income	23,621	29,193	6,074	7,506

	Financial income	2,794	13,008	718	3,345
	Financial expense	375	876	96	225
	Total financial income	2,419	12,132	622	3,120

	Income before taxes on income	26,040	41,325	6,696	10,626
	Taxes on income	(7,186)	(9,517)	(1,848)	(2,447)

	Net income	18,854	31,808	4,848	8,179


	Earnings per share:
	Basic earnings per share	1.45	2.45	0.37	0.63

	Diluted earnings per share	1.45	2.45	0.37	0.63

	Shares used in computation of basic EPS	12,974,245	12,974,245	12,974,245	12,974,245


	(*) Convenience translation into U.S. dollars.

G. WILLI‑FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the year ended		For the year ended
	December 31,		December 31,
	2 0 1 4	2 0 1 3	2 0 1 4	2 0 1 3
	NIS		*US dollars ()**
	In thousands (except per share and share data)
CASH FLOWS - OPERATING ACTIVITIES
Profit from continuing operations	18,854	31,808	4,848	8,179
Adjustments to reconcile net income to net cash from operating activities (Appendix)	799	(28,078)	205	(7,219)
Net cash from continuing operating activities	19,653	3,730	5,053	960


CASH FLOWS - INVESTING ACTIVITIES
Acquisition of property plant and equipment	(8,077)	(6,077)	(2,077)	(1,563)
Proceeds from sale of property plant and Equipment	969	29	249	7
Additions to long term other receivables	-	(445)	-	(114)
Proceeds from (used in) purchase of marketable securities, net	(11,777)	56,309	(3,028)	14,479
Proceeds from (used in) purchase of loan carried at fair value through profit or loss	65,400	(65,000)	16,817	(16,714)
Proceeds used in purchase of Short term deposit	(19,445)	-	(5,000)	-
Net cash from (used in) continuing investing activities	27,070	(15,184)	6,961	(3,905)


CASH FLOWS - FINANCING ACTIVITIES
Short-term bank debt, net	(18)	(9,912)	(5)	(2,549)
Net cash from used in continuing financing activities	(18)	(9,912)	(5)	(2,549)


Increase (decrease) in cash and cash equivalents	46,705	(21,366)	12,009	(5,494)
Cash and cash equivalents at the beginning of the year	36,197	57,563	9,308	14,802
Cash and cash equivalents of the end of the year	82,902	36,197	21,317	9,308



(*) Convenience Translation into U.S. Dollars.

G. WILLI-FOOD INTERNATIONAL LTD. APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the year ended		For the year ended
	December 31,		December 31,
	2 0 1 4	2 0 1 3	2 0 1 4	2 0 1 3
	NIS		*US dollars ()**
	In thousands (except per share and share data)

CASH FLOWS - OPERATING ACTIVITIES: A. Adjustments to reconcile net profit to net cash from operating activities
Depreciation and amortization	3,634	4,459	934	1,147
Unrealized Gain of loan carried at fair value through profit or loss	(100)	(300)	(26)	(77)
Decrease in deferred income taxes	(1,004)	519	(258)	133
Capital Gain on disposal of property plant and equipment	(188)	(29)	(48)	(7)
Unrealized Loss (Gain) on marketable securities	1,908	(10,363)	491	(2,665)
Stock based compensation reserve	2,126	190	547	50
Net foreign exchange gain	(786)	-	(202)	-

Changes in assets and liabilities:
Increase in trade receivables and other receivables	(6,282)	(9,046)	(1,616)	(2,326)
Increase in inventories	5,415	(4,731)	1,392	(1,217)
Increase (decrease) in payables and other current liabilities	(3,924)	(8,777)	(1,009)	(2,257)
	799	(28,078)	205	(7,219)

B. Significant non-cash transactions:


(*) Convenience Translation into U.S. Dollars.