G. Willi-Food International Reports Improvements in Major Operational Parameters in Q3 2017 Compared to Q3 2016

 

Q3 2017 Net Profit up 83.4% from Q3 2016

YAVNE, Israel, Nov. 27, 2017 /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 third quarter ended September 30, 2017.

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

Third Quarter Fiscal 2017 Highlights (income statement highlights compared to same period last year):

  • Sales increased 13.3% from third quarter of 2016 to NIS 80 million (US$ 22.7 million)
  • Gross profit increased by 9.8% year-over-year to NIS 20.8 million (US$ 5.9 million).
  • Operating profit of NIS 8.2 million (US$ 2.3 million), or 10.3% of sales, compared to operating profit  of NIS 4.8 million (US$ 1.4 million) in the comparable quarter of 2016.
  • Net profit was NIS 8.2 million (US$ 2.3 million), or 10.2% of sales, an increase of 83.4% versus the third quarter of 2016.
  • Net cash from operating activities of NIS 31.0 million (US$ 8.8 million).
  • Cash and securities balance of NIS 234.3 million (US$ 66.4 million) as of September 30, 2017.
  • Earnings per share of NIS 0.62 (US$ 0.18).

Management Comment

Tim Cranko, CEO of Willi-Food, commented: "We are pleased to present the third quarter 2017 financial report which shows improvements in operations and in results. Sales increased 13.3% versus third quarter 2016, gross profit increased 9.8% and total operating expenses decreased by 11%, together leading to an increase in operating profit of 70.1% versus third quarter of 2016. A major area of focus during the quarter was inventory optimization. While this is still an area of focus, we are pleased to report that the level of inventory was reduced by 41.3% from NIS 70.9 million (US$ 20.1) at the end of second quarter of 2017 to NIS 41.6 million (US$11.8) at the end of the third quarter of 2017. During the third quarter, we began integrating a new senior management team which initiated the introduction of management systems, routines and procedures. These management changes and initiatives allow for organizational stability and provide a solid basis for enhanced future growth."

Third Quarter Fiscal 2017 Summary

Sales for the third quarter of 2017 increased by 13.3% to NIS 80.0 million (US$ 22.7 million) from NIS 70.6 million (US$ 20 million) recorded in the third quarter of 2016. The increase in sales was primarily due to a strike at the Ministry of Health in the third quarter of 2016 which limited release of goods from the port and caused a decrease of NIS 6 million in sales in the third quarter of 2016 offset by an increase in sales due to and various sales promotions in the third quarter of 2017.

Gross profit for the third quarter of 2017 increased by 9.8% to NIS 20.9 million (US$ 5.9 million) compared to NIS 19.0 million (US$ 5.4 million) recorded in the third quarter of 2016. Third quarter 2017 gross margin decreased by 3% to 26.1% compared to gross margin of 26.9% for the same period in 2016. The decrease in gross margin was primarily due to reductions in the prices of certain of our products as a result of an inventory with a short expire date that the Company had to sell with lower prices.

Willi-Food's operating profit for the third quarter of 2017 increased by 70.8% to NIS 8.2 million (US$ 2.3 million) compared to operating profit of NIS 4.8 million (US$ 1.4 million) in the third quarter of 2016. Selling expenses decreased by 12.7% from the comparable quarter of 2016 primarily due to a decrease in promotional expenses which was somewhat offset by an increase of inventory-storage expenses. Selling expenses as a percentage of sales were 11.6%, compared to 15% in the third quarter of 2016.

General and administrative expenses were NIS 3.3 million (US$ 0.9 million) in the third quarter of 2017, a decrease of 9% compared to NIS 3.7 million (US$ 1 million) in third quarter of 2016, mainly due to a decrease in senior management salary.

Willi-Food's income before taxes for the third quarter of 2017 was NIS 10.9 million (US$ 3.1 million) compared to income before taxes of NIS 5.5 million (US$ 1.5 million) recorded in the third quarter of 2016.

Willi-Food's net profit in the third quarter of 2017 was NIS 8.2 million (US$ 2.3 million), or NIS 0.62 (US$ 0.17) per share, compared to NIS 4.5 million (US$ 1.3 million), or NIS 0.34 (US$ 0.1) per share, recorded in the third quarter of 2016.

Willi-Food ended the third quarter of 2017 with NIS 234 million (US$ 66 million) in cash and securities. Net cash from operating activities for the third quarter of 2017 was NIS 31.0 million (US$ 8.7 million). Willi-Food's shareholders' equity at the end of September 2017 was NIS 404.7 million (US$ 114.7 million).

Nine months Fiscal 2017 Highlights (compared to same period last year)

  • Sales increased 4.3% to NIS 239.7 million (US$ 67.9 million).
  • Gross profit decreased 6.2% to NIS 57.5 million (US$ 16.2 million), or 24.0% of sales.
  • Operating profit decreased 35.8% to NIS 13.2 million (US$ 3.7 million), or 5.5% of sales.
  • Net income decreased 17.1% to NIS 14.0 million (US$ 3.9 million), or 5.9% of sales.
  • Net cash used for operating activities of NIS 5.3 million (US$ 1.5 million)
  • Earning per share of NIS 1.06 (US$ 0.3).

Nine Month Results

Willi-Food's sales for the nine month period ending September 30, 2017 increased by 4.3% to NIS 239.7 million (US$ 67.9 million) compared to sales of NIS 229.8 million (US$ 65 million) in nine months of  2016. The increase in sales was primarily due to a strike at the Ministry of Health in the third quarter of 2016 which limited release of goods from the port and caused a decrease of NIS 6 million in sales in the corresponding period last year offset by an increase in sales due to and various sales promotions in the third quarter of 2017.

Gross profit for the period decreased by 6.2% to NIS 57.5 million (US$ 16.2 million) compared to gross profit of NIS 61.3 million (US$ 17.3 million) for nine months of 2016. Nine months of 2017 gross margin was 24.0% compared to a gross margin of 26.6% for the same period in 2016.

Operating profit for nine months of 2017 decreased by 35.8% to NIS 13.2 million (US$ 3.7 million) from NIS 20.6 million (US$ 5.8 million) reported in the comparable period of last year primarily due to the decrease of gross profit and increase of selling expenses. Nine months of 2017 income before taxes decreased by 20.1% to NIS 17.7 million (US$ 5.0 million) compared to NIS 22.1 million (US$ 6.3 million) recorded in the nine months of 2016. Net income for the nine months of 2017 decreased by 17.1% to NIS 14.0 million (US$ 3.9 million), or NIS 1.06 (US$ 0.30) per share, from NIS 16.9 million (US$ 4.8 million), or NIS 1.28 (US$ 0.34) per share, recorded in nine months of 2016.

Note regarding a notice of the end of Exclusive Distribution Agreement

On October 19, 2017 the Company's wholly owned subsidiary, Gold Frost Ltd. ("Goldfrost"), received a notice from its Danish producer of dairy products, Arla Foods amba ("Arla"), to end their Exclusive Distribution Agreement effective as of December 31, 2017.

As announced by the Company, the end of the Exclusive Distribution Agreement with Arla may have a significant negative impact on the Company's operating results although the Company believes that it will be able to enter into agreements in the near future with alternative suppliers for a portion of the products currently purchased from Arla.

Representatives of the Company's wholly owned subsidiary, Goldfrost, and representatives of Arla have met several times in recent weeks and have agreed that Goldfrost may place new orders for additional dairy products produced by Arla and to be sold by Goldfrost during the first half of 2018.

Goldfrost intends to continue its communications with Arla.

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, 2017, U.S. $1.00 equals NIS 3.529. The translation was made solely for the convenience of the reader.

Note B: IFRS

The Company's consolidated financial results for the six-month period ended September 30, 2017 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 or 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, 2016, filed with the Securities and Exchange Commission on April 27, 2017. 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 31

September 30,

December 31



2 0 1 7

2 0 1 6

2 0 1 6

2 0 1 7

2 0 1 6

2 0 1 6


NIS

US dollars (*)


(in thousands)

ASSETS














Current assets







Cash and cash equivalents

111,350

237,613

129,577

31,553

63,228

36,718

Financial assets carried at fair value through profit or loss

122,981

14,948

104,921

34,849

3,978

29,731

Trade receivables

95,993

83,379

80,227

27,201

22,187

22,734

Other receivables and prepaid expenses

2,621

5,263

4,795

743

1,400

1,358

Inventories

41,646

44,982

41,877

11,801

11,970

11,867

Current tax assets

6,308

3,351

5,443

1,787

892

1,542

Total current assets

380,899

389,536

366,840

107,934

103,655

103,950








Non-current assets







Property, plant and equipment

78,315

77,116

77,204

22,192

20,520

21,877

Less -Accumulated depreciation

36,530

34,024

34,963

10,351

9,054

9,907


41,785

43,092

42,241

11,841

11,466

11,970








Non current financial assets

-

7,900

-

-

2,102

-

Goodwill

36

36

36

10

10

10

Deferred taxes

1,619

2,313

2,354

459

617

667

Total non-current assets

43,440

53,341

44,631

12,310

14,195

12,647
















424,339

442,877

411,471

120,244

117,850

116,597








EQUITY AND LIABILITIES














Current liabilities







Trade payables

10,463

21,788

14,832

2,965

5,798

4,203

Employees Benefits

2,117

2,335

2,253

600

621

638

Other payables and accrued expenses

5,789

1,542

2,533

1,641

410

717

Total current liabilities

18,369

25,665

19,618

5,206

6,829

5,558








Non-current liabilities







retirement benefit obligation

1,212

544

849

343

145

241

Total non-current liabilities

1,212

544

849

343

145

241








Shareholders' equity







Share capital NIS 0.1 par value (authorized -
50,000,000 shares, issued and outstanding -
13,240,913 shares at
March 31, 2017; and December 31, 2016)

1,424

1,424

1,424

404

379

404

Additional paid in capital

128,354

128,354

128,354

36,371

34,155

36,371

Capital fund

247

247

247

70

66

70

Remeasurement of the net liability in respect of defined benefit

(809)

(197)

(508)

(229)

(52)

(144)

Retained earnings

275,542

286,840

261,487

78,079

76,328

74,097

Equity attributable to owners of the Company

404,758

416,668

391,004

114,695

110,876

110,798
















424,339

442,877

411,471

120,244

117,850

116,597








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


G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 1 7

2 0 1 6

2 0 1 7

2 0 1 6

2 0 1 7

2 0 1 6


NIS

US dollars (*)


In thousands (except per share and share data)








Sales

239,771

229,849

80,041

70,621

67,943

61,163

Cost of sales

182,270

168,524

59,166

51,616

51,649

44,844








Gross profit

57,501

61,325

20,875

19,005

16,294

16,319








Operating costs and expenses:














Selling expenses

32,296

29,148

9,260

10,606

9,152

7,756

General and administrative expenses

12,229

11,605

3,352

3,684

3,465

3,088

Other income

301

112

-

123

85

30








Total operating expenses

44,224

40,641

12,612

14,167

12,532

10,814








Operating profit

13,277

20,684

8,263

4,838

3,762

5,505








Financial income

7,853

3,583

2,352

2,567

2,225

954

Financial expense (income)

3,423

2,112

(264)

1,943

970

563








Total financial income

4,430

1,471

2,616

624

1,255

391















Income before taxes on income

17,707

22,155

10,879

5,462

5,017

5,896

Taxes on income

3,653

5,198

2,691

998

1,035

1,383








Profit for the period

14,054

16,957

8,188

4,464

3,982

4,513








Earnings per share:







Basic earnings per share

1.06

1.28

0.62

0.34

0.30

0.34








Diluted earnings per share

1.06

1.28

0.62

0.34

0.30

0.34








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


Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 1 7

2 0 1 6

2 0 1 7

2 0 1 6

2 0 1 7

2 0 1 6


NIS

US dollars (*)


(in thousands)








CASH FLOWS - OPERATING ACTIVITIES







Profit from continuing operations

14,054

16,957

8,188

4,464

3,982

4,805

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

(19,320)

(457)

22,817

(1,705)

(5,474)

(127)








Net cash used in (used to) continuing operating activities

(5,266)

16,500

31,005

2,759

(1,492)

4,678















CASH FLOWS - INVESTING ACTIVITIES







Acquisition of property plant and equipment

(2,202)

(1,828)

(609)

(147)

(624)

(518)

Proceeds from sale of property plant and Equipment

301

190

-

122

86

54

Proceeds from purchase of marketable securities, net

(13,228)

20,288

(9,632)

-

(3,749)

5,749

Short term deposit

-

(8,504)

-

-

-

(2,410)

Proceeds (acquisition) of non current financial assets

2,168

131,562

1,398

70,070

614

37,279








Net cash from investing activities

(12,961)

141,708

(8,843)

70,045

(3,673)

40,154















CASH FLOWS - FINANCING ACTIVITIES







Short-term bank debt

-

(16)

-

-

-

(5)















Net cash used in continuing financing activities

-

(16)

-

-

-

(5)















Increase (decrease) in cash and cash equivalents

(18,227)

158,192

22,162

72,804

(5,165)

44,827








Cash and cash equivalents  at the beginning of the financial period

129,577

79,421

89,188

164,809

36,718

22,505








Cash and cash equivalents of the end of the financial year

111,350

237,613

111,350

237,613

31,553

67,332








(*)        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:


Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 1 7

2 0 1 6

2 0 1 7

2 0 1 6

2 0 17

2 0 1 6


NIS

US dollars (*)


(in thousands)








Decrease in deferred income taxes

735

1,301

1,509

1,022

208

369

Unrealized loss (gain) on marketable securities

(4,832)

(1,502)

(2,804)

(2,413)

(1,369)

(426)

Unrealized loss (gain) from non current financial assets

-

604

-

399

-

171

Depreciation and amortization

2,658

2,822

868

968

753

800

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

(301)

(111)

-

(122)

(86)

(31)








Changes in assets and liabilities:







Decrease (increase) in trade receivables and other receivables

(16,624)

(179)

(2,124)

5,635

(4,709)

(51)

Decrease (increase) in inventories

231

(10,465)

29,281

(11,922)

65

(2,965)

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

(1,187)

7,073

(3,913)

4,728

(336)

2,006









(19,320)

(457)

22,817

(1,705)

(5,474)

(127)









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.
Tim Cranko, CEO
 (+972) 8-932-1000
tim.c@willi-food.co.il

 

View original content:http://www.prnewswire.com/news-releases/g-willi-food-international-reports-improvements-in-major-operational-parameters-in-q3-2017-compared-to-q3-2016-300561740.html

SOURCE G. Willi-Food International Ltd.



 

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