G. Willi-Food Reports Second Quarter 2010 Financial Results; Net Income up 28.1% Compared to Second Quarter 2009
- Second Quarter Net Cash From Continuing Operating Activities Reached
US $5.5 Million, or US $0.40 per Share
- Second Quarter Gross Profit Increased 30.1% Over Second Quarter 2009
Gross Profit
- Second Quarter Operating Income Increased 32.0% Over Second Quarter
2009 Operating Profit
- Second Quarter Sales Increased 13.4% Over Second Quarter 2009 Sales
G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi-Food"), a global food company specializing in the development, manufacturing, marketing and international distribution of kosher foods, today announced its unaudited financial results for the second quarter and for the first six months ending June 30, 2010.
Second Quarter Fiscal 2010 Highlights
- Sales increased 13.4% over second quarter of 2009 to NIS 82.6
million (US $21.3 million)
- Gross profit increased 30.1% over second quarter of 2009 to NIS
22.5 million (US $5.8 million)
- Gross margins improved to 27.3% compared to 23.8% in the second
quarter of 2009
- Operating income increased 32.0% over second quarter of 2009 to
NIS 6.8 million (US $1.8 million)
- Income from continuing operations increased 40.8% over second
quarter of 2009 to NIS 6.0 million (US $1.5 million)
- Net income increased 28.1% over second quarter of 2009 to NIS 6.8
million (US $1.8 million)
- Net cash from continuing operating activities in the second
quarter of 2010 was NIS 21.3 million (US $5.5 million), or NIS 1.57
(US $0.40) per share
Willi-Food's sales for the second quarter of 2010 increased by 13.4% to NIS 82.6 million (US $21.3 million) compared to sales of NIS 72.8 million (US $18.8 million) in the second quarter of 2009. The growth in sales was driven by the introduction of new products as well as increased awareness of the Willi-Food brand in the Israeli market following a national media campaign launched during the first quarter.
Willi-Food's gross profit for the second quarter of 2010 increased by 30.1% to NIS 22.5 million (US $5.8 million) compared to gross profit of NIS 17.3 million (US $4.5 million) in the second quarter of 2009. Second quarter gross margin expanded to 27.3% compared to a gross margin of 23.8% during the same period in 2009. The increase in gross margins was largely due to the introduction of higher-margin products into the product lineup, offset by the depreciation of the New Israeli Shekel against the U.S. dollar, in 2010 second quarter, by 4.4%.
Willi-Food's operating income for the second quarter of 2010 increased by 32.0% to NIS 6.8 million (US $1.8 million) compared to NIS 5.2 million (US $1.3 million) reported in the second quarter of 2009. Selling expenses as a percentage of sales increased to 12.9% in the second quarter of 2010 compared to 10.1% in the second quarter of 2009 mainly due to increased promotion activities and higher transportation costs resulting from increased sales. General and administrative expenses as a percentage of sales decreased in the second quarter of 2010 to 6.2% from 6.6% in the second quarter of 2009.
Willi-Food's income before taxes for the second quarter of 2010 increased by 41.1% to NIS 7.8 million (US $2.0 million) compared to income before taxes of NIS 5.5 million (US $1.4 million) recorded in the second quarter of 2009. Willi-Food's income from continuing operations for the second quarter of 2010 increased by 40.8% to NIS 5.9 million (US $1.5 million) compared to income from continuing operations of NIS 4.3 million (US $1.1 million) recorded in the second quarter of 2009.
Willi-Food's net income for the second quarter of 2010 increased by 28.1% to NIS 6.8 million (US $1.8 million) compared to net income of NIS 5.3 million (US $1.4 million) recorded in the second quarter of 2009. Willi Food's net income attributable to the owners of the Company in the second quarter of 2010 increased by 15.9% to NIS 6.2 million (US $1.6 million), or NIS 0.45 (US $0.12) per share compared to a net income attributable to the owners of the Company of NIS 5.3 million (US $1.4 million), or NIS 0.52 (US $0.13) per share, recorded in the second quarter of 2009.
Willi-Food ended the quarter with US $41.9 million in cash and securities and $1.1 million in short-term debt (51% of the debt of Shamir Salads).
Willi-Food generated NIS 21.3 million (US $5.5 million), or NIS 1.57 (US $0.40) per share from continuing operating activities in the second quarter of 2010.
Six-Month Results
Willi-Food's sales for the six-month period ending June 30, 2010 increased by 14.5% to NIS 177.6 million (US $45.8 million) compared to sales of NIS 155.1 million (US $40.0 million) in the first half of 2009. Gross profit for the period increased 35.4% to NIS 50.8 million (US $13.1 million) compared to gross profit of NIS 37.5 million (US $9.7 million) for the six month period in 2009. First half gross margins in 2010 reached 28.6% compared to gross margins of 24.2% in the same period of 2009.
Operating income for the first half of 2010 increased by 35.7% to NIS 17.4 million (US $4.5 million) from NIS 12.8 million (US $3.3 million) reported in the comparable period of last year. First half 2010 income before taxes increased by 36.3% to NIS 17.9 million (US $4.6 million) compared to NIS 13.1 million (US $3.4 million) recorded in the first half of 2009. Net income for the first half of 2010 increased by 17.9% to NIS 14.2 million (US $3.7 million) from NIS 12.1 million (US $3.1 million) in the first half of 2009. Net income attributable to the owners of the Company for the first half of 2010 increased by 17.4% to NIS 13.5 million (US $3.5 million), or NIS 1.11 (US$ 0.29) per share compared to net income attributable to the owners of the Company for the first half of 2009 of NIS 11.5 million (US $3.0 million), or NIS 1.12 (US$ 0.29) per share.
Business Outlook
Mr. Zwi Williger, President and COO of Willi-Food commented: "For the fourth consecutive quarter, Willi-Food continued to achieve improved results in all the P&L parameters - sales, gross profit, operating profit and net profit. We achieved this due to the introduction of great-tasting, higher profit margin food products, which we have developed together with our suppliers, into the product mix lineup. We are pleased with our strong performance in the second quarter of 2010, especially that:
1) We increased our sales by 13.4% over second quarter 2009
sales, despite the fact that the Passover holiday in 2010 was on
March and therefore all of the holiday sales were in the first
quarter, versus 2009 in which the holiday occurred on April and
therefore most the holiday sales were in the second quarter of 2009.
2) We increased our quarterly gross profit to 27.3% of sales from
23.8% of sales in the same quarter in 2009, despite the fact that the
New Israeli Shekel depreciated in value by 4.4% against the U.S.
dollar during the quarter (therefore raising our product purchase
prices). This contrasted with the the second quarter of 2009, when
the New Israeli Shekel appreciated in value by 6.5% against the U.S.
dollar (therefore lowering our product purchase prices). In spite of
the nearly 11% move in the exchange rates, we have successfully
improved our gross margin."
"Revenue from the new products introduced in the past six month continues to maintain good momentum. We are committed to the continued development of new, innovative, high-margin food products with careful attention to meeting the special needs and health concerns of our customers. For example, we recently introduced to the market a new category of "Gelato" - kosher Italian ice-cream products, available in eight different flavors. Sales generated by our newly established export division in Israel, a key driver of our organic growth internationally, are also adding to our top line. As we see global consumer demand for kosher foods continuing to increase, we are confident that our focused marketing strategy in Israel and the introduction of higher-margin products targeted to health-conscious and kosher consumers worldwide will continue to support our growth in 2010 and beyond."
Mr. Williger concluded, "We are optimistic about the remainder of 2010 and believe we will continue to strengthen our market position by benefiting from a multi-channel approach and a broad kosher multi-product lineup that addresses a trend toward more health-conscious food choices. We will continue our efforts to expand our reach into targeted retail and wholesale markets in the U.S. This will include strategic distribution partnerships in order to expand the footprint and brand recognition of Willi-Food globally. We remain committed to our strategy of expanding marketing channels for our higher-margin products in the U.S., European and Israeli markets and to promoting our broad selection of kosher products to health-conscious consumers across Europe, Israel and the United States."
Dismissal of purported class action lawsuit
On July 27, 2010, the District Court of Tel-Aviv dismissed the lawsuit (and demand to approve it as a class action) referred to in the Company's press release on April 20, 2009.
Conference Call
The Company will host a conference call to discuss results on Monday, August 9, 2010 at 11:00 AM Eastern time. Interested parties may participate in the conference call by dialing 1-888-549-7704 (US), or 1-480-629-9857 (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=000078D6
A replay of the conference call will be available for 14 days from 2:00 PM EST on August 9, 2010 through 11:59 PM EST on August 23, 2010 by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), access code 4339424. In addition, a recording of the call will be available via the 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, 2010, U.S. $1.00 equals NIS 3.875. 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 June 30, 2010 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. The comparative income from discontinued operations has been re-casted to include those operations classified as discontinued in the current period.
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 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 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, 2009, 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.
This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31, June 30, December 31,
2010 2009 2010 2009
NIS US dollars (*)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents 107,644 87,104 27,779 22,478
Financial assets carried
at fair value through
profit or loss 54,540 11,356 14,074 2,930
Trade receivables 85,524 77,752 22,070 20,065
Other receivables and
prepaid expenses 1,222 1,990 315 514
Inventories 46,249 44,810 11,935 11,564
Total current assets 295,179 223,012 76,173 57,551
Non-current assets
Property, plant and
equipment 68,405 67,120 17,652 17,321
Less -Accumulated
depreciation 19,349 17,542 4,993 4,527
49,056 49,578 12,659 12,794
Long term receivables 619 760 160 196
Prepaid expenses 2,339 2,384 604 615
Goodwill 1,936 1,936 500 500
Intangible assets 4,370 4,674 1,128 1,206
Deferred taxes 591 375 153 97
Total non-current assets 58,911 59,707 15,204 15,408
354,090 282,719 91,377 72,959
EQUITY AND LIABILITIES
Current liabilities
Short-term bank credit 8,645 10,372 2,231 2,677
Trade payables 37,831 49,382 9,763 12,744
Accruals 165 145 43 37
Current tax liabilities 6,317 2,801 1,630 723
Other payables and accrued
expenses 5,714 8,976 1,475 2,316
Employees Benefits 3,136 2,977 809 768
Total current liabilities 61,808 74,653 15,951 19,265
Non-current liabilities
Long-term bank loans 51 97 13 25
Deferred taxes 385 445 99 115
Employees Benefits 1,071 1,044 276 269
Total non-current liabilities 1,507 1,586 388 409
Shareholders' equity
Share capital NIS 0.10 par
value (authorized - 50,000,000
shares, issued and outstanding
- 13,573,679 shares at June
30, 2010; 10,267,893 shares
at December 31, 2009) 1,444 1,113 373 287
Additional paid in capital 128,853 59,056 33,252 15,240
Capital fund 247 247 64 64
Foreign currency translation
reserve 559 639 144 165
Retained earnings 155,377 141,883 40,097 36,615
Noncontrolling interest 4,295 3,542 1,108 914
290,775 206,480 75,038 53,285
354,090 282,719 91,377 72,959
(*) Convenience translation into U.S. dollars
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six months Three months
ended June 30,
2010 2009 2010 2009
NIS
In thousands (except per share and share data)
Sales 177,594 155,076 82,555 72,784
Cost of sales 126,834 117,580 60,052 55,492
Gross profit 50,760 37,496 22,503 17,292
Selling expenses 22,086 15,243 10,620 7,360
General and
administrative expenses 11,353 9,573 5,080 4,777
Other income 36 104 19 9
Total operating expenses 33,403 24,712 15,681 12,128
Operating income 17,357 12,784 6,822 5,164
Financial income 1,075 925 1,228 263
Financial expense 545 588 254 (95)
Income before taxes on income 17,887 13,121 7,796 5,522
Taxes on income 4,470 2,805 1,810 1,273
Income from continuing
operations 13,417 10,316 5,986 4,249
Income from discontinued
operations 830 1,763 830 1,072
Net income 14,247 12,079 6,816 5,321
Owners of the Company 13,494 11,495 6,165 5,319
Non-controlling interest 753 584 651 2
Net income 14,247 12,079 6,816 5,321
Earnings per share data:
Earnings per share:
Basic from continuing
operations 1.04 0.97 0.39 0.40
Basic from discontinued
operations 0.07 0.15 0.06 0.12
Basic 1.11 1.12 0.45 0.52
Diluted from continuing
operations 1.04 0.97 0.39 0.40
Diluted from discontinued
operations 0.07 0.15 0.06 0.12
Diluted 1.11 1.12 0.45 0.52
Shares used in
computing basic and
diluted earnings per
ordinary share: 12,167,350 10,267,893 13,573,679 10,267,893
(*) Convenience translation into U.S. dollars.
Six months
ended June 30,
2010 2009
US dollars (*)
In thousands (except per share and share data)
Sales 45,831 40,020
Cost of sales 32,731 30,343
Gross profit 13,100 9,677
Selling expenses 5,700 3,934
General and administrative
expenses 2,930 2,470
Other income 9 27
Total operating expenses 8,621 6,377
Operating income 4,479 3,300
Financial income 277 238
Financial expense 140 152
Income before taxes on income 4,616 3,386
Taxes on income 1,154 724
Income from continuing
operations 3,462 2,662
Income from discontinued
operations 214 455
Net income 3,676 3,117
Owners of the Company 3,482 2,966
Non-controlling interest 194 151
Net income 3,676 3,117
Earnings per share data:
Earnings per share:
Basic from continuing
operations 0.27 0.25
Basic from discontinued
operations 0.02 0.04
Basic 0.29 0.29
Diluted from continuing
operations 0.27 0.25
Diluted from discontinued
operations 0.02 0.04
Diluted 0.29 0.29
Shares used in computing
basic and diluted earnings
per ordinary share: 12,167,350 10,267,893
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(NIS in thousands)
Foreign
Additional currency
Share paid in Capital translation
capital capital fund reserve
Balance - January 1, 2009 1,113 59,056 247 369
Profit for the year - - - -
Currency translation
differences - - - 39
Total comprehensive
income for the year 408
Purchase of
non-controlling interest - - - -
Dividend paid to
non-controlling interests - - - -
Disposal of subsidiary - - - 231
Balance - December 31, 2009 1,113 59,056 247 639
Profit for the year - - - -
Currency translation
differences - - - (80)
Total comprehensive
income for the year 559
Public offering 331 69,797 - -
Balance - June 30, 2010 1,444 128,853 247 559
Attributable Non- Total
Retained to owners of controlling shareholders'
earnings the parent interest equity
Balance - January 1,
2009 111,447 172,232 13,350 185,582
Profit for the year 30,436 30,436 1,092 31,528
Currency translation
differences - 39 13 52
Total comprehensive
income for the year 141,883 202,707 14,455 217,162
Purchase of
non-controlling interest - - (7,559) (7,559)
Dividend paid to
non-controlling interests - - (101) (101)
Disposal of subsidiary - 231 (3,253) (3,022)
Balance - December 31,
2009 141,883 202,938 3,542 206,480
Profit for the year 13,494 13,494 753 14,247
Currency translation
differences - (80) - (80)
Total comprehensive
income for the year 155,377 216,352 4,295 220,647
Public offering - 70,128 - 70,128
Balance - June 30, 2010 155,377 286,480 4,295 290,775
G. WILLI-FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Three months Six months
ended June 30, ended June 30,
2010 2009 2010 2009 2010 2009
NIS US dollars (*)
(in thousands)
CASH FLOWS - OPERATING
ACTIVITIES
Profit from continuing
operations 13,417 10,316 5,986 4,249 3,462 2,662
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 2,393 2,301 1,177 1,153 618 594
Deferred expenses 458 462 230 287 118 119
Deferred income taxes (276) 474 (213) (300) (71) 122
Capital Gain on disposal
of property plant and
equipment (36) (107) (19) (12) (9) (27)
Unrealized loss (gain) on
marketable securities 537 (1,604) 417 (527) 139 (414)
Revaluation of loans from
banks and others (3) 52 5 (39) (1) 13
Change in value of
warrants to issue shares - (5) - - - (1)
Employees benefit, net 27 11 (11) (34) 7 3
Changes in assets and
liabilities:
Decrease (Increase) in:
Trade accounts receivable (7,772) (7,256) 9,026 4,314 (2,006) (1,872)
Receivables and other
current assets 769 2,075 333 (737) 198 535
Inventory (1,439) 13,649 9,777 13,524 (371) 3,522
Decrease in long term
receivables 141 - (139) - 36 -
Increase (Decrease) in:
Trade accounts payable (11,606) (3,207) (8,508) 4,388 (2,995) (828)
Payables and other
current liabilities 1,241 2,339 3,196 2,239 320 604
Net cash from (used in)
continuing operating
activities (2,149) 19,500 21,257 28,505 (555) 5,032
Net cash from (used in)
discontinued operating
activities (22) 1,166 (22) 1,617 (6) 301
(*) 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,
2010 2009 2010 2009 2010 2009
NIS US dollars (*)
(in thousands)
CASH FLOWS - INVESTING
ACTIVITIES
Proceeds from realization
(purchase) of marketable
securities, net (43,721) (1,179) (41,363) 617 (11,283) (304)
Disposal of subsidiary - (7) - (7) - (2)
Acquisition of property
plant and equipment (1,742) (1,207) (1,377) (184) (449) (311)
Additions to prepaid
expenses (504) (997) (258) (820) (130) (257)
Long term deposit, net (19) (3) (53) (21) (5) (1)
Proceeds from sale of
property plant and
Equipment 211 205 19 110 54 53
Net cash used in
continuing investing
activities (45,775) (3,188) (43,032) (305) (11,813) (822)
Net cash used in
discontinued investing
activities - (23) - (1) - (6)
CASH FLOWS - FINANCING
ACTIVITIES
Proceeds of Public
offering, net 70,238 - (125) - 18,126 -
Short-term bank credit,
net 746 382 (640) (1,573) 193 98
Proceeds (Repayment )of
loans (1,572) (376) 108 (250) (405) (97)
Net cash from (used in)
continuing financing
activities 69,412 6 (657) (1,823) 17,914 1
Net cash used in
discontinued financing
activities (926) (1,101) (926) (1,250) (239) (284)
Increase (decrease) in
cash and cash
equivalents 20,540 16,360 (23,380) 26,743 5,301 4,222
Cash and cash
equivalents at the
beginning of the
financial period 87,104 78,749 131,024 68,563 22,478 20,322
Net foreign exchange
difference on cash and
cash equivalents from
discontinued activities - 140 - (57) - 36
Cash and cash
equivalents of the end
of the financial period 107,644 95,249 107,644 95,249 27,779 24,580
(*) Convenience translation into U.S. dollars.
Company Contact:
G. Willi Food International Ltd.
Ety Sabach, CFO
+972-8-932-1000
[email protected]
SOURCE G. Willi-Food International Ltd
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