G. Willi-Food Reports Q3 2011 Sales up 7% Over Q3 2010 Sales
2011 Q3 Net Income of US$ 0.6 million
YAVNE, Israel, November 28, 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 third quarter and the nine-months ended September 30, 2011.
Third Quarter Fiscal 2011 Highlights
- Sales increased 7.1% over third quarter of 2010 to NIS 85.3 million (US$ 23.0 million)
- Gross profit decreased 14.7% over third quarter of 2010 to NIS 21.0 million (US$ 5.7 million), or 24.7% of sales
- Operating income decreased 51.7% over third quarter of 2010 to NIS 4.0 million (US$ 1.1 million), or 4.7% of sales
- Net income decreased 71.2% over third quarter of 2010 to NIS 2.26 million (US$ 0.6 million), or 2.6% of sales
- Net income attributed to the owners of the Company decreased 67.6% over third quarter of 2010 to NIS 2.35 million (US$ 0.63 million), or 2.7% of sales
- Cash and securities balance of NIS 194.2 million (US$ 52.3 million) as of September 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.
Third Quarter Fiscal 2011 Summary
Sales for the third quarter of 2011 increased by 7.1% to NIS 85.3 million (US$ 23.0 million) compared to sales of NIS 79.7 million (US$ 21.5 million) in the third quarter of 2010. The growth in sales in the third quarter was primarily due to increased awareness to the Company's new products following intensified sales activities that the Company initiated during 2011.
Gross profit for the third quarter of 2011 decreased by 14.7% to NIS 21.0 million (US$ 5.7 million) compared to gross profit of NIS 24.7 million (US$ 6.6 million) in the third quarter of 2010. Third quarter gross margin was 24.7% compared to gross margin of 30.9% for the same period in 2010. The decrease in gross profit and gross margins was primarily due to the reductions in the prices of certain of our products as a result of continued pressure from our customers to reduce prices as a result of national protests against the cost of food products, due to an increase in global prices of food products compounded by the recent strengthening of the U.S. dollar versus the NIS (a depreciation of 8.7% of the value of the NIS in the third quarter of 2011) and due to the general effects of the global economic recession. The Company expects a further decline in its gross margins in the fourth quarter of 2011 and in the first quarter of 2012. To the extent that customer pressure to reduce prices continues, or that global prices of food products continue to increase, or that the depreciation of the NIS versus the U.S. dollar continues, the Company's gross margins may be impacted beyond the first quarter of 2012.
Mr. Zwi Williger, Chairman of Willi-Food commented, "Third quarter results were affected by the national protest against the cost of food products which led our customers to reduce the selling prices of food products, pressuring us to decrease our selling prices to them. This quarter was also affected by the increase in global purchase prices, the depreciation of the NIS versus the U.S. dollar, an environment of continued uncertainty in the global financial markets, and a recession that is seen both in our home market and abroad. We believe that Willi-Food's results in the fourth quarter of 2011 and in 2012 will be affected by the economic situation and significant recession that has affected our customers and the global markets."
Willi-Food's operating income for the third quarter of 2011 decreased 51.7% to NIS 4.0 million (US$ 1.1 million) over the third quarter of 2010. Selling expenses increased by 4.2% from the comparable quarter of 2010. Selling expenses as a percentage of sales decreased in the third quarter of 2011 to 13.1% compared to 13.4% in the third quarter of 2010. General and administrative expenses decreased by 13.8% from the comparable quarter of 2010. General and administrative expenses as a percentage of sales decreased in the third quarter of 2011 to 5.7% from 7.1% in the third quarter of 2010. Most of the other expenses that were recorded in the third quarter of 2011 are a one-time expense resulting from an impairment charge in the amount of NIS 1.1 million ($0.3 million) on intangible assets in Shamir Salads.
Willi-Food's income before taxes for the third quarter of 2011 decreased 67.2% to NIS 3.3 million (US$ 0.9 million) over the third quarter of 2010. Willi-Food's net income in the third quarter of 2011 decreased 71.2% to NIS 2.3 million (US$ 0.6 million) from NIS 7.8 million (US$ 2.1 million) recorded in the third quarter of 2010. Willi-Food's net income attributed to the owners of the Company in the third quarter of 2011 decreased 67.6% to NIS 2.3 million (US$ 0.6 million), or NIS 0.17 (US$ 0.05) per share, compared to NIS 7.2 million (US$ 2.0 million), or NIS 0.53 (US$ 0.14) per share, recorded in the third quarter of 2010.
Willi-Food generated NIS 9.6 million (US$ 2.6 million), or NIS 0.71 (US$ 0.19) per share from continuing operating activities in the third quarter of 2011.
Willi-Food ended the third quarter of 2011 with NIS 194.2 million (US$ 52.3 million) in cash and securities and NIS 3.3 million (US$ 0.9 million) in short-term debt (51% of the debt of Shamir Salads). Willi-Food's shareholders' equity at the end of September 2011 was NIS 322.5 million (US$ 86.9 million).
Nine-Month Results
Willi-Food's sales for the nine-month period ending September 30, 2011 increased by 2.9% to NIS 264.7 million (US$ 71.3 million) compared to sales of NIS 257.3 million (US$ 69.3 million) in the first nine-months of 2010. Gross profit for the period decreased 6.0% to NIS 70.9 million (US$19.1 million) compared to gross profit of NIS 75.4 million (US$ 20.3 million) for the nine-month period in 2010. First nine-month gross margins in 2011 were 26.8% compared to gross margins of 29.3% in the same period of 2010.
Operating income for the first nine months of 2011 decreased by 7.7% to NIS 22.5 million (US$ 6.1 million) from NIS 25.6 million (US$ 6.9 million) reported in the comparable period of last year. First nine-month of 2011 income before taxes decreased by 25.6% to NIS 20.8 million (US$ 5.6 million) compared to NIS 28.0 million (US$ 7.5 million) recorded in the first nine months of 2010. Net income for the first nine months of 2011 decreased by 28.7% to NIS 15.7 million (US$ 4.2 million) from NIS 22.1 million (US $5.9 million) in the first nine months of 2010. Net income attributable to the owners of the Company for the first nine months of 2011 decreased by 25.9% to NIS 15.4 million (US $4.1 million), or NIS 1.13 (US$ 0.30) per share compared to net income attributable to the owners of the Company for the first nine months of 2010 of NIS 20.7 million (US$ 5.6 million), or NIS 1.64 (US$ 0.44) per share.
Business Outlook
Mr. Williger commented, "Looking forward, we are facing a significant increase in the level of uncertainty in the global economy. In Israel, economic uncertainty is coupled with changes in the Israeli market that we expect will negatively affect our results in the remainder of 2011 and the beginning of 2012. On the other hand, our top line growth reflected the synergies we have created to channel the broad range of products coming from our own sourcing and that of our subsidiaries. We expect this growth to cease in the remainder of 2011 due to the global and Israeli economic situations, which we expect will affect our customer base, both in the retail and wholesale markets, in Israel and abroad. We therefore expect net income for the fourth quarter of 2011 and the first quarter of 2012 to be significantly lower compared to comparable prior quarters. Nevertheless, this period of economic uncertainty presents an opportunity for Willi-Food to utilize its cash on hand to purchase synergetic companies at lower prices than before. We continue looking for opportunities to create additional value for our shareholders."
Mr. Williger concluded, "In light of the anticipated continued recession, our foreseeable challenges ahead will be to manage our expenses, and in particular the cost of our products, to an acceptable degree in order to accommodate our consumers' continued anticipated desire to acquire lower cost products. We hope that in these difficult times we will be able to maintain our customer base both in the retail and wholesale markets."
Conference Call
The Company will host a conference call to discuss results on Monday, November 28, 2011 at 11:00 AM Eastern time. Interested parties may participate in the conference call by dialing 1-877-941-2068 (US), or 1-480-629-9712 (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=000090F6
A replay of the conference call will be available for 14 days from 2:00 PM EST on November 28, 2011 through 11:59 PM EST on December 12, 2011 by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), access code 4491030. 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 September 30, 2011, U.S. $1.00 equals NIS 3.712. 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 nine-month ended September 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. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 30, September 30, December 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 24,866 113,631 6,699 30,612
Financial assets carried
at fair value through
profit or loss 169,357 67,890 45,624 18,289
Trade receivables 87,633 85,902 23,608 23,141
Other receivables and
prepaid expenses 1,960 2,307 528 621
Inventories 43,504 37,614 11,720 10,133
Total current assets 327,320 307,344 88,179 82,796
Non-current assets
Property, plant and
equipment 72,136 71,350 19,434 19,222
Less -Accumulated
depreciation 23,195 20,512 6,249 5,526
48,941 50,838 13,185 13,696
Prepaid expenses 2,366 2,405 637 648
Goodwill 1,936 1,936 522 522
Intangible assets 2,633 4,067 709 1,095
Deferred taxes 1,449 694 391 187
Total non-current assets 57,325 59,940 15,444 16,148
384,645 367,284 103,623 98,944
EQUITY AND LIABILITIES
Current liabilities
Short-term bank credit 6,548 5,780 1,764 1,557
Trade payables 37,868 32,959 10,202 8,879
Employees Benefits 2,882 3,057 776 824
Accruals 465 268 125 72
Current tax liabilities 7,389 5,910 1,990 1,592
Other payables and
accrued expenses 5,562 10,326 1,499 2,781
Total current liabilities 60,714 58,300 16,356 15,705
Non-current liabilities
Long-term bank loans - 309 - 83
Deferred taxes 164 522 44 141
Employees Benefits 1,254 1,281 338 345
Total non-current
liabilities 1,418 2,112 382 569
Shareholders' equity
Share capital NIS 0.10
par value
(authorized - 50,000,000
shares, issued
and outstanding -
13,573,679 shares at September
30, 2011 and December 31,
2010) 1,444 1,444 389 389
Additional paid in
capital 128,863 128,863 34,716 34,715
Capital fund 247 247 67 67
Foreign currency
translation reserve 649 736 175 198
Retained earnings 185,423 170,060 49,952 45,813
Noncontrolling interest 5,887 5,522 1,586 1,488
322,513 306,872 86,885 82,670
384,645 367,284 103,623 98,944
(*) Convenience translation into U.S. dollars
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine-months Three months Nine-months
ended September 30, ended September 30,
2 0 1 1 2 0 1 0 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 264,663 257,304 85,342 79,710 71,300 69,317
Cost of sales 193,770 181,885 64,299 55,051 52,202 48,999
Gross profit 70,893 75,419 21,043 24,659 19,098 20,318
Selling
expenses 31,294 32,800 11,162 10,714 8,431 8,836
General and
administrative
expenses 16,190 17,019 4,884 5,666 4,362 4,585
Other income 900 (33) 1,003 3 242 (9)
Total operating
expenses 48,384 49,786 17,049 16,383 13,035 13,412
Operating
income 22,509 25,633 3,994 8,276 6,063 6,906
Financial
income (940) 3,218 (580) 2,143 (253) 867
Financial
expense 764 890 108 345 205 240
Total financial
income
(expenses) 1,704)) 2,328 (688) 1,798 (458) 627
Income before
taxes on income 20,805 27,961 3,306 10,074 5,605 7,533
Taxes on income 5,077 6,716 1,051 2,246 1,368 1,809
Income from
continuing
operations 15,728 21,245 2,255 7,828 4,237 5,724
Income from
discontinued
operations - 830 - - - 224
Net income 15,728 22,075 2,255 7,828 4,237 5,948
Owners of the
Company 15,363 20,741 2,345 7,247 4,139 5,589
Non-controlling
interest 365 1,334 (90) 581 98 359
Net income 15,728 22,075 2,255 7,828 4,237 5,948
Earnings per
share data:
Earnings per
share:
Basic from
continuing
operations 1.13 1.57 0.17 0.53 0.30 0.45
Basic from
discontinued
operations - 0.07 - - - 0.02
Basic 1.13 1.64 0.17 0.53 0.30 0.47
Diluted from
continuing
operations 1.13 1.57 0.17 0.53 0.30 0.45
Diluted from
discontinued
operations - 0.07 - - - 0.02
Diluted 1.13 1.64 0.17 0.53 0.30 0.47
Shares used in
computing basic
and diluted
earnings per
ordinary share: 13,573,679 12,641,278 13,573,679 13,573,679 13,573,679 12,641,278
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine-months Three months Nine-months
ended September 30, ended September 30,
2 0 1 1 2 0 1 0 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 15,728 21,245 2,255 7,828 4,237 5,724
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization 5,530 3,623 2,569 1,230 1,490 976
Deferred expenses - 695 - 237 - 187
Deferred income taxes (1,113) (104) (257) 172 (300) (28)
Capital Gain on
disposal of property
plant and equipment (86) (33) 16 3 (23) (9)
Unrealized loss on
marketable securities 5,482 (1,521) 2,188 (2,058) 1,478 (410)
Revaluation of loans
from banks and others - (11) - (8) - (3)
Employees benefit, net (27) 77 (71) 50 (7) 21
Changes in assets and
liabilities:
Increase (Decrease) in
trade receivables and
other receivables (1,384) (2,417) 4,424 4,586 (373) (651)
Decrease (Increase) in
inventories (5,890) 2,700 (1,716) 4,139 (1,587) 727
Decrease in long term
receivables - 350 - 209 - 94
Increase (Decrease) in
payables and other
current liabilities 1,559 (8,853) 183 1,512 420 (2,385)
Net cash from (used
in) continuing
operating activities 19,799 15,751 9,591 17,900 5,335 4,243
Net cash from (used
in) discontinued
operating activities - (22) - - - -
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine-months Three months Nine-months
Ended September 30, Ended September 30,
2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0 2 0 1 1 2 0 1 0
NIS US dollars (*)
(in thousands)
CASH FLOWS -
INVESTING ACTIVITIES
Proceeds from
purchase of
marketable
securities, net (106,949) (44,841) (48,347) (1,120) (28,812) (12,080)
Acquisition of
property plant and
equipment (1,736) (5,545) (285) (3,803) (468) (1,494)
Additions to prepaid
expenses (679) (784) (342) (280) (183) (211)
Long term deposit,
net (47) 20 3 39 (13) 5
Proceeds from sale
of property plant
and Equipment 388 427 10 216 105 115
Net cash used in
continuing investing
activities (109,023) (50,723) (48,961) (4,948) (29,371) (13,665)
CASH FLOWS -
FINANCING ACTIVITIES
Proceeds of Public
offering, net - 70,238 - 10 - 18,925
Short-term bank
credit, net 1,119 1,471 (1,224) 725 301 396
Proceeds (Repayment)
of loans (660) (3,250) (221) (1,678) (178) (876)
Net cash from (used
in) continuing
financing activities 459 68,469 (1,445) (943) 123 18,445
Net cash used in
discontinued
financing activities - (926) - - - -
Increase (decrease)
in cash and cash
equivalents (88,765) 32,549 (40,815) 12,009 (23,913) 9,023
Cash and cash
equivalents at the
beginning of the
financial period 113,631 87,104 65,681 107,644 30,612 23,466
Cash and cash
equivalents of the
end of the financial
period 24,866 119,653 24,866 119,653 6,699 32,489
(*) 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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