G. Willi-Food Reports net Income of US$ 1.8 Million for First Quarter 2011
YAVNE, Israel, May 31, 2011 /PRNewswire-FirstCall/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi-Food"), a global company specializing in the development, manufacturing, marketing and international distribution of kosher foods, today announced its unaudited financial results for the first quarter ended March 31, 2011.
First Quarter Fiscal 2011 Highlights
- Sales of NIS 88.5 million (US$ 25.4 million)
- Gross profit of NIS 23.0 million (US$ 6.6 million), or 26.0% of sales
- Operating income of NIS 6.8 million (US$ 2.0 million), or 7.7% of sales
- Income before taxes on income of NIS 8.2 million (US$ 2.3 million), or 9.2% of sales
- Net income of NIS 6.2 million (US$ 1.8 million), or 7.0% of sales
- Cash and securities balance of NIS 181.3 million (US$ 52.1 million) as of March 31, 2011
Willi-Food's operating divisions include Willi-Food, a distributor of a broad variety of kosher foods; its wholly owned Gold Frost - a designer, developer and distributor of branded kosher dairy food products, and Shamir Salads - an Israeli distributor and manufacturer of Mediterranean style salads.
First Quarter Fiscal 2011 Summary
Sales for the first quarter of 2011 were NIS 88.5 million (US$ 25.4 million) compared to sales of NIS 95.0 million (US$ 27.3 million) in the first quarter of 2010. The sales in the first quarter of 2011 were affected by the timing of the Passover festival that fell during the second quarter this year, while last year it fell during the first quarter.
Gross profit for the first quarter of 2011 was NIS 23.0 million (US$ 6.6 million) compared to gross profit of NIS 28.3 million (US$ 8.1 million) in the first quarter of 2010. First quarter gross margin was 26.0% compared to gross margin of 29.7% for the same period in 2010. The decrease in the gross profit in the first quarter of 2011 compared to the first quarter of 2010 is due to the decrease in sales which was mainly due to the timing of the Passover festival, as discussed above, and due to the decrease in gross margins. The main reason for the decrease in gross margins was the hard sale activities (including special discounts, samples and free tasting) that the Company offered its customers during the first quarter of 2011, mainly in order to enhance the awareness to its new products. A minor negative effect on the gross margins was the worldwide inflation of food products' prices - Willi-Food mitigated its effects during the quarter by working closely with suppliers to anticipate adverse price trends, building inventory accordingly and raising prices to its customers.
Willi-Food's operating income for the first quarter of 2010 was NIS 6.8 million (US$ 2.0 million) compared to operating income of NIS 10.5 million (US$ 3.0 million) in the first quarter of 2010. Selling expenses decreased by 9.9% from the comparable quarter of 2010, and general and administrative expenses decreased by 6.4% from the comparable quarter of 2010, both primarily due to the decreased sales.
Willi-Food's net income in the first quarter of 2011 decreased NIS 1.2 million (US$ 0.3 million) to NIS 6.2 million (US$ 1.8 million), or 7.0% of sales, from NIS 7.4 million (US$ 2.1 million), or 7.8% of sales, recorded in the first quarter of 2010. Willi-Food's net income related to Company Shareholders in the first quarter of 2011 was NIS 6.0 million (US$ 1.7 million), or NIS 0.45 (US$ 0.13) per share, compared to NIS 7.3 million (US$ 2.1 million), or NIS 0.68 (US$ 0.18) per share, recorded in the first quarter of 2010.
Willi-Food ended the first quarter of 2011 with NIS 181.3 million in cash and securities (US$ 52.1 million) and NIS 2.7 million (US$ 0.8 million) in short-term debt (51% of the debt of Shamir Salads). Willi-Food's shareholders' equity as of March 31, 2011 was NIS 313.1 million (US$ 89.9 million).
Outlook
Mr. Zwi Williger, President and COO of Willi-Food commented: "We are pleased with our first quarter 2011 results in the current challenging environment of global food commodity purchase prices inflation. We are sustaining our flexible purchasing strategy and we are well-positioned to limit the impact of such price inflation. Willi-Food's first quarter results were affected by the shift of Passover sales to the second quarter and by the hard sale activities mainly relating to our new products. Despite all - Willi Food has achieved net income of NIS 6.2 million in a margin of 7.0% of sales."
"Throughout the recent year we introduced great-tasting, higher margin food products, which we developed together with our suppliers. For instance, we recently introduced new series of premium frozen kosher Neapolitan Pizza produced in Naples, Italy - the homeland of pizza, a new series of premium impulse kosher Italian Gelato ice-cream in family 6-8 packs and in 0.15 liter receptacles and the broadening of our line of premium kosher Swiss chocolate bars. Those new products were added to the new line of kosher Swiss premium KAMBLY' fine biscuit and cookie products that we introduced only a few months ago. In the first quarter, we implemented our plan to increase the awareness to our newly added products, by initiating hard sale activities that, although they impacted our gross margins in the first quarter, we believe created broad awareness to our new products and broaden its customer base."
"We have taken the appropriate measures to position Willi-Food for a stronger fiscal 2011 by adding new premium higher margin food products to our product line and by highly focusing on reducing production costs and SG&A expenses. We remain focused on maximizing long-term profitability."
Conference Call
The Company will host a conference call to discuss results on Tuesday, May 31, 2011 at 11:00 AM Eastern time. Interested parties may participate in the conference call by dialing 1-877-941-2321 (US), or 1-480-629-9714 (International), approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which will be available on the day of the call through the following link:
http://viavid.net/dce.aspx?sid=0000871D
A replay of the conference call will be available for 14 days from 2:00 PM EST on May 31, 2011 through 11:59 PM EST on June 14, 2011 by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), access code 4443202. In addition, a recording of the call will be available via the link shown above for one year.
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 March 31, 2011, U.S. $1.00 equals NIS 3.481. The translation was made solely for the convenience of the reader.
NOTE B: IFRS
The Company's consolidated financial results for the three-month period ended March 31, 2011 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.co.il) 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, manufacture, marketing and distribution of over 1,000 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; Gold Frost, a wholly owned subsidiary which designs, develops and distributes branded kosher, dairy-food products; and Shamir Salads, an Israeli manufacturer and distributor of a broad line of over 400 Mediterranean-style chilled salads.
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 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, 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, 2010, filed with the Securities and Exchange Commission on June 28, 2010. 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
March 31, December 31, March 31, 31,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS US dollars (*)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents 109,032 113,631 31,322 32,643
Financial assets carried at
fair value through profit or
loss 72,291 67,890 20,767 19,503
Trade receivables 87,986 85,902 25,277 24,677
Other receivables and prepaid 663
expenses 2,962 2,307 851
Inventories 43,445 37,614 12,480 10,806
Total current assets 315,716 307,344 90,697 88,292
Non-current assets
Property, plant and equipment 71,680 71,350 20,592 20,497
Less -Accumulated 5,893
depreciation 21,103 20,512 6,063
50,577 50,838 14,529 14,604
Prepaid expenses 2,394 2,405 688 691
Goodwill 1,936 1,936 556 556
Intangible assets 3,946 4,067 1,134 1,168
Deferred taxes 759 694 218 199
Total non-current assets 59,612 59,940 17,125 17,218
375,328 367,284 107,822 105,510
EQUITY AND LIABILITIES
Current liabilities
Short-term bank credit 5,407 5,780 1,553 1,660
Trade payables 38,106 32,959 10,947 9,468
Accruals 268 268 77 77
Current tax liabilities 7,048 5,910 2,025 1,698
Other payables and accrued 2,966
expenses 6,195 10,326 1,780
Employees Benefits 3,350 3,057 963 878
Total current liabilities 60,374 58,300 17,345 16,747
Non-current liabilities
Long-term bank loans 97 309 28 89
Deferred taxes 457 522 131 150
Employees Benefits 1,314 1,281 377 368
Total non-current liabilities 1,868 2,112 536 607
Shareholders' equity
Share capital NIS 0.10 par
value
(authorized - 50,000,000
shares, issued and
outstanding - 13,573,679 415
shares at March 31, 2011 and
December 31, 2010) 1,444 1,444 415
Additional paid in capital 128,863 128,863 37,019 37,019
Capital fund 247 247 71 71
Foreign currency translation 211
reserve 774 736 222
Retained earnings 176,103 170,060 50,590 48,854
Noncontrolling interest 5,655 5,522 1,624 1,586
313,086 306,872 89,941 88,156
375,328 367,284 107,822 105,510
(*) Convenience translation into U.S. dollars
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS US dollars (*)
(in thousands, except per share and
share data)
Sales 88,545 95,039 25,437 27,302
Cost of sales 65,567 66,782 18,836 19,185
Gross profit 22,978 28,257 6,601 8,117
Selling expenses 10,330 11,466 2,967 3,294
General and administrative
expenses 5,870 6,273 1,687 1,802
Other Income (34) (17) (10) (5)
Total operating expenses 16,166 17,722 4,644 5,091
Operating income 6,812 10,535 1,957 3,026
Financial income 1,726 (153) 496 (44)
Financial expense 379 291 109 84
Income before taxes on income 8,159 10,091 2,344 2,898
Taxes on income 1,983 2,660 570 764
Net income 6,176 7,431 1,774 2,134
Attributable to:
Owners of the company 6,043 7,329 1,736 2,105
Non - controlling interests 133 102 38 29
Net income 6,176 7,431 1,774 2,134
Earnings per share data:
Earnings per share:
Basic 0.45 0.68 0.13 0.20
Diluted 0.45 0.68 0.13 0.20
Shares used in computing basic
and diluted earnings per
ordinary share: 13,573,679 10,745,395 13,573,679 10,745,395
(*) Convenience translation into U.S. dollars
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
Three months ended March 31,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS US dollars (*)
(in thousands)
Cash flows - operating activities
Profit from continuing operations 6,176 7,431 1,774 2,135
Adjustments to reconcile net income
to net cash from continuing operating
activities (Appendix) (4,692) (30,836) (1,348) (8,858)
Net cash from (used in) continuing
operating activities 1,484 (23,405) 426 (6,723)
Cash flows - investing activities
Acquisition of property plant and
equipment (1,131) (365) (325) (105)
Proceeds from sale of property plant
and Equipment 310 192 89 55
Additions to intangible assets (221) - (63) -
Additions to prepaid expenses, net (13) (212) (4) (61)
Proceeds used in purchase of
marketable securities, net (4,443) (2,358) (1,276) (677)
Net cash used in continuing investing
activities (5,498) (2,743) (1,579) (788)
Cash flows - financing activities
Proceeds of Public offering, net - 70,362 - 20,213
Short-term bank credit, net (366) (294) (105) (84)
Repayment of loans (219) - (63) -
Net cash from (used in) continuing
financing activities (585) 70,068 (168) 20,129
Increase (decrease) in cash and cash
equivalents (4,599) 43,920 (1,321) 12,618
Cash and cash equivalents at the
beginning of the financial year 113,631 87,104 32,643 25,023
Cash and cash equivalents of the end
of the financial year 109,032 131,024 31,322 37,641
(*) Convenience Translation into U.S. Dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Adjustments to reconcile net income to net cash from operating activities
Three months ended March 31,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS US dollars (*)
(in thousands)
Revaluation of loans from banks and
others - (8) - (2)
Deferred expenses - 228 - 65
Deferred income taxes (130) (63) (37) (18)
Unrealized loss on marketable
securities 42 120 12 34
Depreciation and amortization 1,482 1,216 426 349
Capital gain on disposal of property
plant and equipment (34) (17) (10) (5)
Employees benefit, net 33 38 9 11
Changes in assets and liabilities:
Increase in trade receivables and
other receivables (2,739) (16,362) (787) (4,700)
Increase in inventories (5,831) (11,216) (1,675) (3,221)
Decrease in long term receivables - 280 - 80
Increase (Decrease) in trade and
other payables, and other current
liabilities 2,485 (5,052) 714 (1,451)
(4,692) (30,836) (1,348) (8,858)
(*) Convenience Translation into U.S. Dollars.
This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.
Company Contact:
G. Willi Food International Ltd.
Baruch Shusel, CFO
(+972)8-932-1000
[email protected]
SOURCE G Willi Food International
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