G. Willi-Food Reports Q2 2011 Operating Income Up 71.5% Over Q2 2010 Operating Income
2011 Q2 Sales Up 10% Over 2010 Q2 Sales; 2011 Q2 Gross Profit Up 19.4% Over 2010 Q2 Gross Profit; 2011 Q2 Net Income of US$ 2.1 Million
YAVNE, Israel, August 15, 2011 /PRNewswire/ --
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 second quarter and the six months ended June 30, 2011.
Second Quarter Fiscal 2011 Highlights
- Sales increased 10.0% over second quarter of 2010 to NIS 90.8 million (US$ 26.6 million)
- Gross profit increased 19.4% over second quarter of 2010 to NIS 26.9 million (US$ 7.9 million), or 29.6% of sales
- Operating income increased 71.5% over second quarter of 2010 to NIS 11.7 million (US$ 3.4 million), or 12.9% of sales
- Income from continuing operations increased 21.9% over second quarter of 2010 to NIS 7.3 million (US$ 2.1 million), or 8.0% of sales
- Net income attributed to the owners of the Company increased 13.1% over second quarter of 2010 to NIS 7.0 million (US$ 2.0 million), or 7.7% of sales
- Cash and securities balance of NIS 188.9 million (US$ 55.3 million) as of June 30, 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.
Second Quarter Fiscal 2011 Summary
Sales for the second quarter of 2011 increased by 10.0% to NIS 90.8 million (US$ 26.6 million) compared to sales of NIS 82.6 million (US$ 24.2 million) in the second quarter of 2010. The growth in sales in the second quarter was primarily due to the timing of the Passover festival that fell during the second quarter this year, while last year it fell during the first quarter and due to increased awareness to the Company's new products following the hard sale activities that the Company initiated during the first quarter of 2011.
Gross profit for the second quarter of 2011 increased by 19.4% to NIS 26.9 million (US$ 7.9 million) compared to gross profit of NIS 22.5 million (US$ 6.6 million) in the second quarter of 2010. Second quarter gross margin was 29.6% compared to gross margin of 27.3% for the same period in 2010. Willi-Food successfully achieved an increase in gross profit and in gross margins despite the huge pressure coming from the supermarket chains to reduce prices and despite the price reductions by competiting food companies to the supermarket chains as a result of this pressure, Willi-Food was able to sustain or raise its sales prices to the supermarket chains due to its product mix and its broad range of products.
Willi-Food's operating income for the second quarter of 2011 increased 71.5% to NIS 11.7 million (US$ 3.4 million) over the second quarter of 2010. Selling expenses decreased by 7.7% from the comparable quarter of 2010. Selling expenses as a percentage of sales decreased in the second quarter of 2011 to 10.8% compared to 12.9% in the second quarter of 2010 primarily due to aggressive expense reduction initiatives. General and administrative expenses as a percentage of sales decreased in the second quarter of 2011 to 6.0% from 6.2% in the second quarter of 2010.
Willi-Food's income before taxes for the second quarter of 2011 increased 19.8% to NIS 9.3 million (US$ 2.7 million) over the second quarter of 2010. Income from continuing operations for the second quarter of 2011 increased 21.9% to NIS 7.3 million (US$ 2.1 million) over the second quarter of 2010.
Willi-Food's net income in the second quarter of 2011 increased 7.1% to NIS 7.3 million (US$ 2.1 million) from NIS 6.8 million (US$ 2.0 million) recorded in the second quarter of 2010. Willi-Food's net income attributed to the owners of the Company in the second quarter of 2011 increased 13.1% to NIS 7.0 million (US$ 2.0 million), or NIS 0.51 (US$ 0.15) per share, compared to NIS 6.2 million (US$ 1.8 million), or NIS 0.45 (US$ 0.13) per share, recorded in the second quarter of 2010.
Willi-Food generated NIS 8.7 million (US$ 2.6 million), or NIS 0.64 (US$ 0.19) per share from continuing operating activities in the second quarter of 2011.
Willi-Food ended the second quarter of 2011 with NIS 188.9 million (US$ 55.3 million) in cash and securities and NIS 4.1 million (US$ 1.2 million) in short-term debt (51% of the debt of Shamir Salads). Willi-Food's shareholders' equity at the end of June 2011 was NIS 320.4 million (US$ 93.8 million).
Six-Month Results
Willi-Food's sales for the six-month period ending June 30, 2011 increased by 1.0% to NIS 179.3 million (US$ 52.5 million) compared to sales of NIS 177.6 million (US$ 52.0 million) in the first half of 2010. Gross profit for the period decreased 1.8% to NIS 49.8 million (US$ 14.6 million) compared to gross profit of NIS 50.8 million (US$ 14.9 million) for the six month period in 2010. First half gross margins in 2011 was 27.8% compared to gross margins of 28.6% in the same period of 2010.
Operating income for the first half of 2011 increased by 6.7% to NIS 18.5 million (US$ 5.4 million) from NIS 17.5 million (US$ 5.1 million) reported in the comparable period of last year. First half 2011 income before taxes decreased by 2.2% to NIS 17.4 million (US$ 5.1 million) compared to NIS 17.9 million (US$ 5.2 million) recorded in the first half of 2010. Net income for the first half of 2011 decreased by 5.4% to NIS 13.5 million (US$ 3.9 million) from NIS 14.2 million (US $4.2 million) in the first half of 2010. Net income attributable to the owners of the Company for the first half of 2011 decreased by 3.5% to NIS 13.0 million (US $3.8 million), or NIS 0.96 (US$ 0.28) per share compared to net income attributable to the owners of the Company for the first half of 2010 of NIS 13.5 million (US$ 3.9 million), or NIS 1.11 (US$ 0.32) per share.
Business Outlook
Mr. Zwi Williger, President and COO of Willi-Food commented, "We are very pleased with overall performance and with our second quarter 2011 results, especially in the current challenging environment of increased competition resulting from customers demanding to reduce prices despite of the global food commodity purchase prices inflation. We have grown sales and gross profits while controlling SG&A expense growth. Second quarter gross profits grew nearly 20% and operating income grew nearly 72%, despite the huge pressure coming from the supermarket chains to reduce prices and despite the well-known pressures in commodity costs being felt around the world. Throughout 2010 and 2011 we have introduced great-tasting, higher margin food products which we develop together with our suppliers. We implemented our plan to increase the awareness to our newly added products, by initiating hard sale activities that we believe created broad awareness to our new and old products and broaden our customer base. That has helped us achieve our goals to strengthen our position in the market, due to our broad range of quality food products."
Conference Call
The Company will host a conference call to discuss results on Monday, August 15, 2011 at 10:00 AM Eastern time. Interested parties may participate in the conference call by dialing 1-877-941-4774 (US), or 1-480-629-9760 (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=00008A8C
A replay of the conference call will be available for 14 days from 1:00 PM EST on August 15, 2011 through 11:59 PM EST on August 29, 2011 by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), access code 4461479. 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 June 30, 2011, U.S. $1.00 equals NIS 3.415. The translation was made solely for the convenience of the reader.
NOTE B: IFRS
The Company's consolidated financial results for the three-month and six-month ended June 30, 2011 are presented in accordance with International Financial Reporting Standards ("IFRS").
NOTE C: Discontinued Operations
Discontinued operations are measured and presented in accordance with the provisions of IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations".
The results of discontinued operations are presented in the income statement in a separate item below income from continuing operations.
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, 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 who 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 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, 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 30, 2011. 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.
{FINANCIAL TABLES TO FOLLOW}
G. WILLIFOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
December December
June 30, 31, June 30, 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 65,681 113,631 19,233 33,274
Financial assets carried at fair
value through profit or loss 123,198 67,890 36,076 19,880
Trade receivables 92,047 85,902 26,954 25,155
Other receivables and prepaid
expenses 1,970 2,307 577 675
Inventories 41,788 37,614 12,236 11,014
Total current assets 324,684 307,344 95,076 89,998
Non-current assets
Property, plant and equipment 71,999 71,350 21,083 20,894
Less -Accumulated depreciation 22,207 20,512 6,503 6,007
49,792 50,838 14,580 14,887
Prepaid expenses 2,293 2,405 672 704
Goodwill 1,936 1,936 567 567
Intangible assets 3,826 4,067 1,120 1,191
Deferred taxes 1,447 694 424 203
Total non-current assets 59,294 59,940 17,363 17,552
383,978 367,284 112,439 107,550
EQUITY AND LIABILITIES
Current liabilities
Short-term bank credit 7,993 5,780 2,340 1,693
Trade payables 37,805 32,959 11,071 9,652
Accruals 268 268 78 78
Current tax liabilities 4,463 5,910 1,307 1,731
Other payables and accrued
expenses 8,275 10,326 2,423 3,023
Employees Benefits 3,011 3,057 882 895
Total current liabilities 61,815 58,300 18,101 17,072
Non-current liabilities
Long-term bank loans - 309 - 90
Deferred taxes 419 522 123 153
Employees Benefits 1,325 1,281 388 375
Total non-current liabilities 1,744 2,112 511 618
Shareholders' equity
Share capital NIS 0.10 par value
(authorized - 50,000,000 shares,
issued and outstanding - 13,573,679
shares at June 30, 2011 and
December 31, 2010) 1,444 1,444 423 423
Additional paid in capital 128,863 128,863 37,735 37,735
Capital fund 247 247 72 72
Foreign currency translation
reserve 810 736 237 216
Retained earnings 183,077 170,060 53,610 49,797
Noncontrolling interest 5,978 5,522 1,750 1,617
320,419 306,872 93,827 89,860
383,978 367,284 112,439 107,550
(*) Convenience translation into U.S. dollars
G. WILLIFOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six months Three months
ended June 30,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS
In thousands (except per share and share
data)
Sales 179,316 177,594 90,771 82,555
Cost of sales 129,471 126,834 63,904 60,052
Gross profit 49,845 50,760 26,867 22,503
Selling expenses 20,127 22,086 9,797 10,620
General and administrative
expenses 11,306 11,353 5,436 5,080
Other income (103) (36) (69) (19)
Total operating expenses 31,330 33,403 15,164 15,681
Operating income 18,515 17,357 11,703 6,822
Financial income (360) 1,075 (2,086) 1,228
Financial expense 656 545 276 254
Income before taxes on
income 17,499 17,887 9,341 7,796
Taxes on income 4,026 4,470 2,043 1,810
Income from continuing
operations 13,473 13,417 7,298 5,986
Income from discontinued
operations - 830 - 830
Net income 13,473 14,247 7,298 6,816
Owners of the Company 13,017 13,494 6,975 6,165
Non-controlling interest 456 753 323 651
Net income 13,473 14,247 7,298 6,816
Earnings per share data:
Earnings per share:
Basic from continuing
operations 0.96 1.04 0.51 0.39
Basic from discontinued
operations - 0.07 - 0.06
Basic 0.96 1.11 0.51 0.45
Diluted from continuing
operations 0.96 1.04 0.51 0.39
Diluted from discontinued
operations - 0.07 - 0.06
Diluted 0.96 1.11 0.51 0.45
Shares used in computing
basic and diluted earnings
per ordinary share: 13,573,679 12,167,350 13,573,679 13,573,679
(Table cont'd.)
Six months
ended June 30,
2 0 1 1 2 0 1 0
US dollars (*)
In thousands (except
per share and share
data)
Sales 52,508 52,004
Cost of sales 37,912 37,140
Gross profit 14,596 14,864
Selling expenses 5,894 6,467
General and administrative
expenses 3,311 3,324
Other income (30) (11)
Total operating expenses 9,175 9,780
Operating income 5,421 5,084
Financial income (105) 315
Financial expense 192 160
Income before taxes on
income 5,124 5,239
Taxes on income 1,179 1,309
Income from continuing
operations 3,945 3,930
Income from discontinued
operations - 243
Net income 3,945 4,173
Owners of the Company 3,812 3,953
Non-controlling interest 133 220
Net income 3,945 4,173
Earnings per share data:
Earnings per share:
Basic from continuing
operations 0.28 0.30
Basic from discontinued
operations - 0.02
Basic 0.28 0.32
Diluted from continuing
operations 0.28 0.30
Diluted from discontinued
operations - 0.02
Diluted 0.28 0.32
Shares used in computing
basic and diluted earnings
per ordinary share: 13,573,679 12,167,350
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Three months Six months
ended June 30, ended June 30,
2011 2010 2011 2010 2011 2010
NIS US dollars (*)
(in thousands)
CASH FLOWS - OPERATING
ACTIVITIES
Profit from continuing
operations 13,473 13,417 7,297 5,986 3,945 3,930
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 2,961 2,393 1,479 1,177 867 701
Deferred expenses - 458 - 230 - 134
Deferred income taxes (856) (276) (726) (213) (251) (81)
Capital Gain on disposal
of property plant and
equipment (102) (36) (68) (19) (30) (11)
Unrealized loss on
marketable securities 3,294 537 3,252 417 966 157
Revaluation of loans from
banks and others - (3) - 5 - (1)
Employees benefit, net 44 27 11 (11) 13 8
Changes in assets and
liabilities:
Increase in trade
receivables and other
receivables (5,808) (7,003) (3,069) 9,359 (1,701) (2,051)
Decrease (Increase) in
inventories (4,174) (1,439) 1,657 9,777 (1,222) (421)
Increase (Decrease) in
long term receivables - 141 - (139) - 41
Increase (Decrease) in
payables and other
current liabilities 1,376 (10,365) (1,109) (5,312) 403 (3,035)
Net cash from (used in)
continuing operating
activities 10,208 (2,149) 8,724 21,257 2,990 (629)
Net cash from (used in)
discontinued operating
activities - (22) - (22) - (6)
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Three months Six months
Ended June 30, Ended June 30,
2011 2010 2011 2010 2011 2010
NIS US dollars (*)
(in thousands)
CASH FLOWS -
INVESTING ACTIVITIES
Proceeds from
purchase of
marketable
securities, net (58,602) (43,721) (54,159) (41,363) (17,160) (12,803)
Acquisition of
property plant and
equipment (1,451) (1,742) (320) (1,377) (425) (510)
Additions to prepaid
expenses (337) (504) (116) (258) (99) (148)
Long term deposit,
net (50) (19) (37) (53) (15) (6)
Proceeds from sale
of property plant
and Equipment 378 211 68 19 111 62
Net cash used in
continuing investing
activities (60,062) (45,775) (54,564) (43,032) (17,588) (13,405)
CASH FLOWS -
FINANCING ACTIVITIES
Proceeds of Public
offering, net - 70,238 - (125) - 20,568
Short-term bank
credit, net 2,343 746 2,709 (640) 686 218
Proceeds (Repayment)
of loans (439) (1,572) (220) 108 (129) (460)
Net cash from (used
in) continuing
financing activities 1,904 69,412 2,489 (657) 557 20,326
Net cash used in
discontinued
financing activities - (926) - (926) (271)
Increase (decrease)
in cash and cash
equivalents (47,950) 20,540 (43,351) (23,380) (14,041) 6,021
Cash and cash
equivalents at the
beginning of the
financial period 113,631 87,104 109,032 131,024 33,274 25,506
Cash and cash
equivalents of the
end of the financial
period 65,681 107,644 65,681 107,644 19,233 31,527
(*) 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 Ltd.
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