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G. Willi-Food International Reports Major Improvements in All Major Operational Parameters in Second Quarter 2018 Compared to Second Quarter 2017

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G. Willi-Food International Reports Major Improvements in All Major Operational Parameters in Second Quarter 2018 Compared to Second Quarter 2017

The Company's Operating Profit in the First Half of 2018 Exceeded its Operating Profit in all of 2017

PR Newswire

YAVNE, Israel, Aug. 15, 2018 /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 unaudited financial results for the second quarter ended June 30, 2018.

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

Second Quarter Fiscal Year 2018 Highlights

  • Sales increased by 2.6% year-over-year to NIS 78.4 million (US$ 21.5 million).
  • Gross profit increased by 51.8% year-over-year to NIS 22.2 million (US$ 6.1 million).
  • Operating profit of NIS 7.6 million (US$ 2.1 million), or 9.7% of sales, compared to operating loss of NIS (1.6) million (US$ 0.4 million) in the comparable quarter of 2017.
  • Net profit increased by 312% year-over-year to NIS 6.5 million (US$ 1.8 million), or 8.2% of sales.
  • Net cash from operating activities of NIS 7.8 million (US$ 2.1 million).
  • Cash and securities balance of NIS 270.8 million (US$ 74.2 million) as of June 30, 2018.
  • Earnings per share of NIS 0.49 (US$ 0.13).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-Food, commented: "We are pleased to present the second quarter 2018 financial results which show improvements in sales, gross profit, operating profit and net profit over the comparable period last year. Sales increased by 2.6% versus second quarter of 2017, gross profit increased by 51.8% versus second quarter of 2017, operating profit increased by 560% versus second quarter of 2017, and net profit increased by 312% versus second quarter of 2017.

This is the fourth consecutive quarter since the Company's control has been changed and new managers have been appointed in which the Company presents improvement in its operating results over the comparable quarter of the previous year. We believe that the activities we are taking will continue to generate steady growth and increase profitability over time.

We are happy to update that the Company has contracted with several European dairies to supply a range of alternative dairy products to the products previously provided by Arla Foods Amba (a former significant supplier of our dairy products segment). In August 2018, the Company launched a dairy line with the products from the European dairies under an independent brand called Euro Dairy Europe.

Second Quarter Fiscal 2018 Summary

Sales for the second quarter of 2018 increased by 2.6% to NIS 78.4 million (US$ 21.5 million) from NIS 76.4 million (US$ 20.9 million) recorded in the second quarter of 2017. Sales increased in the second quarter of 2018 primarily due to redirection of resources in favor of sales, increasing the range of the Company's products and proper inventory management.

Gross profit for the second quarter of 2018 increased by 51.8% to NIS 22.2 million (US$ 6.1 million) compared to NIS 14.6 million (US$ 4.0 million) recorded in the second quarter of 2017. Second quarter gross margin increased by 48.2% to 28.3% compared to gross margin of 19.1% for the same period in 2017. The increase in gross margin was the result of the Company's continued strategic focus on selling a favorable mix of products which generate a higher gross margin.

Willi-Food's operating profit for the second quarter of 2018 increased by 559.9% to NIS 7.6 million (US$ 2.1 million) compared to operating loss of NIS (1.6) million (US$ (0.4) million) in the second quarter of 2017.

Selling expenses decreased by 9% from the comparable quarter of 2017 primarily due to a decrease in promotional expenses. Selling expenses as a percentage of sales were 13.0%, compared to 14.6% in the second quarter of 2017.

General and administrative expenses were NIS 4.4 million (US$ 1.2 million) in the second quarter of 2018, a decrease of 17% compared to NIS 5.3 million (US$ 1.5 million) in the second quarter of 2017. This was primarily due to a decrease in legal and consulting expenses.

Willi-Food's operating income before taxes for the second quarter of 2018 was NIS 8.0 million (US$ 2.2 million) compared to operating income before taxes of NIS 1.0 million (US$ 0.3 million) in the second quarter of 2017.

Willi-Food's net profit in the second quarter of 2018 was NIS 6.5 million (US$ 1.8 million), or NIS 0.49 (US$ 0.13) per share, compared to NIS 1.6 million (US$ 0.4 million), or NIS 0.12 (US$ 0.03) per share, recorded in the second quarter of 2017.

Willi-Food ended the second quarter of 2018 with NIS 270.8 million (US$ 74.2 million) in cash and securities. Net cash from operating activities for the second quarter of 2018 was NIS 7.8 million (US$ 2.1 million). Willi-Food's shareholders' equity at the end of June 2018 was NIS 429.3 million (US$ 117.6 million).

First Half Fiscal 2018 Highlights

  • Sales increased by 7.5% year-over-year to NIS 171.8 million (US$ 47.1 million).
  • Gross profit increased by 28.2% year-over-year to NIS 46.9 million (US$ 12.8 million), or 10% of sales.
  • Operating profit increased by 241.5% year-over-year to NIS 17.1 million (US$ 4.7 million), or 10% of sales.
  • Net profit increased 133% to NIS 13.7 million (US$ 3.7 million), or 8% of sales.
  • Net cash from operating activities of NIS 7.8 million (US$ 2.1 million).
  • Earnings per share of NIS 1.03 (US$ 0.28).

First Half Fiscal 2018 Summary

Willi-Food's sales for the six-month period ending June 30, 2018 increased by 7.5% to NIS 171.8 million (US$ 47.1 million) compared to sales of NIS 159.7 million (US$ 43.8 million) in the first half of 2017. Sales increased in the first half of 2018 primarily to due redirection of resources in favor of sales, increasing the range of the Company's products and proper inventory management.

Gross profit for the period increased by 28.2% to NIS 46.9 million (US$ 12.8 million) compared to gross profit of NIS 36.6 million (US$ 10.0 million) for the first half of 2017. First half 2018 gross margin was 27.3% compared to a gross margin of 22.9% for the same period in 2017. The increase in gross margin was the result of the Company's continued strategic focus on selling a favorable mix of products which generate a higher gross margin.

Operating income for the first half of 2018 increased by 241% to NIS 17.1 million (US$ 4.7 million) from NIS 5.0 million (US$ 1.4 million) reported in the comparable period of last year primarily due to the increase of gross profit and decrease of selling expenses.

First half 2018 income before taxes increased by 157.5% to NIS 17.6 million (US$ 4.8 million) compared to NIS 6.8 million (US$ 1.9 million) recorded in the first half of 2017.

Net income for the first half of 2018 increased by 133.5% to NIS 13.7 million (US$ 3.7 million), or NIS 1.03 (US$ 0.28) per share, from NIS 5.9 million (US$ 1.6 million), or NIS 0.44 (US$ 0.12) per share, recorded in the first half of 2017.

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, 2018, U.S. $1.00 equals NIS 3.65. The translation was made solely for the convenience of the reader.

IFRS

The Company's consolidated financial results for the six-month period ended June 30, 2018 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, 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, 2017, filed with the Securities and Exchange Commission on April 30, 2018. 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




June 30,

December 31

June 30,

December 31



2 0 1 8

2 0 1 7

2017

2 0 1 8

2 0 1 7

2017


NIS

US dollars (*)



(in thousands)


ASSETS














Current assets







Cash and cash equivalents

130,882

89,188

113,062

35,858

24,435

30,976

Financial assets carried at fair value through profit or loss

139,961

110,545

143,514

38,345

30,286

39,319

Trade receivables

97,339

92,917

85,943

26,668

25,457

23,546

Other receivables and prepaid expenses

3,155

5,112

5,996

864

1,401

1,643

Inventories

44,695

70,927

39,899

12,245

19,432

10,931

Current tax assets

2,572

6,165

6,760

705

1,689

1,852

Total current assets

418,604

374,854

395,174

114,685

102,700

108,267








Non-current assets







Property, plant and equipment

79,176

79,886

78,598

21,692

21,887

21,534

Less -Accumulated depreciation

39,225

37,842

37,389

10,747

10,368

10,244


39,951

42,044

41,209

10,945

11,519

11,290








Goodwill

36

36

36

10

10

10

Deferred taxes

1,306

3,128

503

358

857

138

Total non-current assets

41,293

45,208

41,748

11,313

12,386

11,438









459,897

420,062

436,922

125,998

115,086

119,705








EQUITY AND LIABILITIES














Current liabilities







Trade payables

19,945

16,223

12,800

5,464

4,445

3,507

Employees Benefits

2,671

2,428

2,147

732

665

588

Other payables and accrued expenses

6,912

3,666

5,246

1,893

1,004

1,437

Total current liabilities

29,528

22,317

20,193

8,089

6,114

5,532








Non-current liabilities







retirement benefit obligation

1,090

875

1,148

299

241

315

Total non-current liabilities

1,090

875

1,148

299

241

315








Shareholders' equity







Share capital NIS 0.1 par value (authorized - 50,000,000 shares,
issued and outstanding - 13,240,913 shares at March 31, 2018;
and  December 31, 2017)

1,425

1,424

1,425

390

390

390

Additional paid in capital

128,354

128,354

128,354

35,165

35,165

35,165

Capital fund

247

247

247

68

68

68

Remeasurement of the net liability in respect of defined benefit

(954)

(508)

(954)

(261)

(139)

(261)

Retained earnings

300,207

267,353

286,509

82,248

73,247

78,496

Equity attributable to owners of the Company

429,279

396,870

415,581

117,610

108,731

113,858









459,897

420,062

436,922

125,998

115,086

119,705








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

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Six months

Three months

Six months


ended

ended

ended


June 30,

June 30,

June 30,


2 0 1 8

2 0 1 7

2018

2017

2 0 1 8

2 0 1 7


NIS

US dollars (*)


In thousands (except per share and share data)








Sales

171,781

159,730

78,410

76,440

47,063

43,762

Cost of sales

124,828

123,104

56,246

61,838

34,199

33,727








Gross profit

46,953

36,626

22,164

14,602

12,864

10,035








Operating costs and expenses:














Selling expenses

20,895

23,036

10,173

11,183

5,725

6,311

General and administrative expenses

8,932

8,876

4,421

5,327

2,447

2,432

Other income

-

301

-

262

-

82








Total operating expenses

29,827

31,611

14,594

16,248

8,172

8,661








Operating income (loss)

17,126

5,015

7,570

(1,646)

4,692

1,374








Financial income

(655)

5,501

(195)

3,354

(180)

1,507

Financial expense

(1,111)

3,688

(674)

670

(304)

1,010








Total financial income

456

1,813

479

2,684

124

497















Income before taxes on income

17,582

6,828

8,049

1,038

4,816

1,871

Taxes on income

(3,888)

(962)

(1,565)

535

(1,065)

(264)








Profit (loss) for the period

13,694

5,866

6,484

1,573

3,751

1,607








Earnings per share:







Basic earnings per share

1.03

0.44

0.49

0.12

0.28

0.12








Diluted earnings per share

1.03

0.44

0.49

0.12

0.28

0.12








Shares used in computation of
basic EPS

13,240,913

13,240,913

13,240,913

13,240,913

13,240,913

13,240,913








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

 

 


G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




Six months

Three months

Six months


ended

ended

ended


June 30,

June 30,

June 30,


2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7


NIS

US dollars (*)


(in thousands)








CASH FLOWS - OPERATING ACTIVITIES







Profit from continuing operations

13,694

5,866

6,484

1,572

3,751

1,607

Adjustments to reconcile net profit to net cash used
in continuing operating activities (Appendix)

(2,573)

(42,136)

1,341

5,472

(705)

(11,544)








Net cash used in (used to) continuing operating activities

11,121

(36,270)

7,825

7,044

3,046

(9,937)















CASH FLOWS - INVESTING ACTIVITIES







Acquisition of property plant and equipment

(578)

(1,593)

(521)

(1,282)

(158)

(436)

Proceeds from sale of property plant and Equipment

-

301

-

262

-

82

Proceeds from purchase of marketable securities, net

3,307

(3,597)

3,402

(1,426)

906

(985)

Short term deposit

-

-


-


-

Proceeds (acquisition) of non current financial assets

3,970

770

-

-

1,088

211








Net cash from continuing investing activities

6,699

(4,119)

2,881

(2,446)

1,836

(1,128)















CASH FLOWS - FINANCING ACTIVITIES







Short-term bank debt

-

-

(20,161)

-

-

-








Net cash used in continuing financing activities

-

-

(20,161)

-

-

-















Increase (decrease) in cash and cash equivalents

17,820

(40,389)

(9,455)

4,598

4,882

(11,065)








Cash and cash equivalents  at the beginning of the financial period

113,062

129,577

140,337

84,590

30,976

35,500








Cash and cash equivalents of the end of the financial year

130,882

89,188

130,882

89,188

35,858

24,435








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

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



CASH FLOWS - OPERATING ACTIVITIES:


A.         Adjustments to reconcile net profit to net cash from operating activities:




Six months

Three months

Six months


ended

ended

ended


June 30,

June 30,

June 30,


2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7


NIS

US dollars (*)


(in thousands)     















Decrease in deferred income taxes

(803)

(774)

(444)

(1,298)

(220)

(212)

Unrealized loss (gain) on marketable securities

246

(2,028)

(2,022)

(766)

67

(556)

Depreciation and amortization

1,836

1,790

916

861

503

490

Capital loss (gain)  on disposal of  property plant and equipment

-

(301)

-

(262)

-

(82)








Changes in assets and liabilities:







increase in trade receivables and other receivables

(8,338)

(14,499)

6,484

4,598

(2,284)

(3,972)

increase in inventories

(4,796)

(29,051)

(5,187)

5,621

(1,314)

(7,959)

Increase (decrease) in trade and other payables,
and other current liabilities

9,282

2,727

1,594

(3,282)

2,543

747









(2,573)

(42,136)

1,341

5,472

(705)

(11,544)








 

 

B.         Significant non-cash transactions:




Six months

Three months

Six months


ended

ended

ended


June 30,

June 30,

June 30,


2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7

2 0 1 8

2 0 1 7


NIS

US dollars (*)


(in thousands)








Supplemental cash flow information:







Income tax paid

3,434

3,719

1,268

1,069

941

1,019








(*)        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.
Amir Kaplan, Chief Financial Officer
(+972) 8-932-1000
amir.k@willi-food.co.il

 

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SOURCE G. Willi-Food International Ltd.

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