G. Willi-Food Reports Q1 2014 Sales Up 4.9% From Q1 2013 Net Income of US$ 2 million in Q1 2014 PR Newswire YAVNE, Israel, May 28, 2014 YAVNE, Israel, May 28, 2014 /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 first quarter ended March 31, 2013. First Quarter Fiscal 2014 Highlights oSales increased 4.9% from first quarter of 2013 to NIS 95.0 million (US$ 27.2 million) oGross profit increased 0.1% from first quarter of 2013 to NIS 21.4 million (US$ 6.1 million), or 22.5% of sales oOperating income decreased 30.0% from first quarter of 2013 to NIS 6.4 million (US$ 1.8 million), or 6.8% of sales oNet income decreased 13.9% from first quarter of 2013 to NIS 7.1 million (US$ 2.0 million), or 7.5% of sales oEarning per share of NIS 0.55 (US$ 0.16) compared to earning per share of NIS 0.64 (US$ 0.18) in the first quarter of 2013 oCash and securities balance (net of short-term bank debt) of NIS 198.8 million (US$ 57.0 million) as of March 31, 2014 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. First Quarter Fiscal 2013 Summary Sales for the first quarter of 2014 increased by 4.9% to NIS 95.0 million (US$ 27.2 million) from NIS 90.6 million (US$ 26.0 million) recorded in the first quarter of 2013. Sales increased in the first quarter of 2014 primarily due to our increased marketing efforts and sales activities combined with the growing demand from domestic and international customers for our quality kosher products. Gross profit for the first quarter of 2014 increased by 0.1% to NIS 21.4 million (US$ 6.1 million) compared to NIS 21.4 million (US$ 6.1 million) recorded in the first quarter of 2013. First quarter gross margin was 22.5% compared to gross margin of 23.6% for the same period in 2013. The decrease in gross margin in the first quarter of 2014 was primarily due to reductions in the prices of certain of our products as a result of continued pressure from our customers to reduce prices and an increase in global prices of food products. The Company expects the decline in its gross margins to continue in the second and third quarters of 2014 compared to 2013 second and third quarter's gross margins. To the extent that customer pressure to reduce prices continues, or global and local prices of food products continue to increase, the Company's gross margins may be impacted beyond the third quarter of 2014. Willi-Food's operating income for the first quarter of 2013 decreased by 30.0% to NIS 6.4 million (US$ 1.8 million) compared to NIS 9.2 million (US$ 2.6 million) recorded in the first quarter of 2013 due to the price pressure referred to above. Selling expenses increased by 33.5% from the comparable quarter of 2013, primarily due to an increase in promotion expenses as well as vehicle and transport expenses. Selling expenses as a percentage of sales increased in the first quarter of 2014 to 10.6% compared to 8.3% in the first quarter of 2013. General and administrative expenses increased by 8.3% from the first quarter of 2013, primarily due to an expense of NIS 0.5 million (US$ 0.14 million) related to options granted to the Company's Chairman, President and CEO on November 2013. General and administrative expenses as a percentage of sales increased in the first quarter of 2013 to 5.3% from 5.2% in the first quarter of 2013. Willi-Food's income before taxes for the first quarter of 2014 decreased by 10.6% to NIS 9.8 million (US$ 2.8 million) compared to NIS 10.9 million (US$ 3.1 million) recorded in the first quarter of 2013. Willi-Food's net income in the first quarter of 2014 decreased by 13.9% to NIS 7.1 million (US$ 2.0 million), or NIS 0.55 (US$ 0.16) per share, from NIS 8.2 million (US$ 2.4 million), or NIS 0.64 (US$ 0.18) per share, recorded in the first quarter of 2013. Willi-Food ended the first quarter of 2014 with NIS 198.8 million (US$ 57.0 million) in cash and securities net from short-term debt. Willi-Food's shareholders' equity at the end of March 2014 was NIS 373.5 million (US$ 107.1 million). Business Outlook Mr. Zwi Williger, Chairman of Willi-Food commented, "First quarter results were affected by the sharp decline of consumption by the Israeli consumer that although didn't reduced the number of visits to stores, sharply decreased the consumer's consumption basket. Although we achieved organic sales growth of 5% - the highest quarterly sales in the Company's history, our profit margins declined. Going forward, we are facing an increase in the level of uncertainty in the local economy. On May 18, 2014 the Israeli Central Bureau of Statistics announced that the Private Consumption Expenditure per Capita in the first quarter of 2014 decreased by 4% compared to the fourth quarter of 2013 after decreasing by 1% in the fourth quarter of 2013 compared to the third quarter of 2013. The economic uncertainty, coupled with changes in the Israeli market and ongoing consumer demand for price reductions, will probably negatively affect our results in near future. Saying that, we expect that we will not meet our budget for the second and third quarter of 2014." Mr. Williger continued, "In light of the anticipated continued recession and decreasing Private Consumption as well as continuing price pressure from consumers, our foreseeable challenges ahead will be in managing our expenses, and in particular the cost of our products, in order to accommodate our consumers' continued 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 in the wholesale markets." Mr. Williger concluded, "We believe that this period presents an opportunity for us to utilize cash on hand to purchase synergetic companies at prices lower than before. We continue to look for opportunities to create additional value for our shareholders." Conference Call The Company will host a conference call and live webcast on May 28, 2014 to discuss the financial results beginning at 11:00 AM Eastern Time. Interested parties may participate on the call by dialing 1-877-941-1427 (US), or 1-480-629-9664 (International), approximately 10 minutes prior to the scheduled start time. Participants may also access a live listen only webcast at: http://public.viavid.com/index.php?id=109380 Following the conclusion of the call, atelephonic replay will be available for 14 days beginning at 2:00 PM Eastern Time on May 28, 2014 through 11:59 PM Eastern Time on June 11, 2014 and may be accessed by dialing 1-877-870-5176 (US), or 1-858-384-5517 (International), using access code 4685109. In addition, an archived webcast will be available for one year at: http://public.viavid.com/reports/eventparticipantreporttab.php?id=o5arop%2BX 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 March 31, 2014, U.S. $1.00 equals NIS 3.487. The translation was made solely for the convenience of the reader. NOTE B: IFRS The Company's consolidated financial results for the three-month ended March 31, 2014 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, 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 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, 2013, filed with the Securities and Exchange Commission on April 30, 2014. 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. G. WILLI-FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, March 31, December 31, 2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3 NIS US dollars (*) (in thousands) ASSETS Current assets Cash and cash equivalents 53,380 36,197 15,308 10,381 Financial assets carried at fair 148,036 112,864 42,454 32,367 value through profit or loss Trade receivables 105,565 82,932 30,274 23,783 Other receivables and prepaid 3,695 2,694 1,060 773 expenses Inventories 53,500 54,001 15,343 15,486 Loan carried at fair value - 65,300 - 18,727 through profit or loss Total current assets 364,176 353,988 104,439 101,517 Non-current assets Property, plant and equipment 67,193 66,663 19,270 19,118 Less -Accumulated depreciation 25,837 25,689 7,410 7,367 41,356 40,974 11,860 11,751 Other receivables and prepaid 29 50 8 14 expenses Goodwill 36 36 10 10 Total non-current assets 41,421 41,060 11,878 11,775 405,597 395,048 116,317 113,292 EQUITY AND LIABILITIES Current liabilities Short-term bank debt 2,644 18 758 5 Trade payables 21,747 20,245 6,237 5,806 Employees Benefits 2,144 1,880 615 539 Current tax liabilities 636 637 182 183 Other payables and accrued 4,069 5,282 1,167 1,515 expenses Total current liabilities 31,240 28,062 8,959 8,048 Non-current liabilities Deferred taxes 299 499 86 143 retirement benefit obligation 606 644 174 185 Total non-current liabilities 905 1,143 260 328 Shareholders' equity Share capital 1,407 1,407 403 403 Additional paid in capital 119,757 119,281 34,344 34,207 Capital fund 247 247 71 71 Foreign currency translation 774 786 222 225 reserve remeasurement of the net liability in respect of (25) (63) (7) (18) definedbenefit Retained earnings 251,292 244,185 72,065 70,028 Equity attributable to owners of 373,452 365,843 107,098 104,916 the Company 405,597 395,048 116,317 113,292 (*) Convenience translation into U.S. dollars. G. WILLI-FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Three months ended March 31 March 31 2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3 NIS US dollars (*) (in thousands, except per share and share data) Sales 94,969 90,585 27,235 25,978 Cost of sales 73,565 69,196 21,097 19,844 Gross profit 21,404 21,389 6,138 6,134 Operating costs and expenses: Selling expenses 10,067 7,542 2,887 2,163 General and administrative 5,056 4,668 1,450 1,339 expenses Other Income (147) - (42) - Total operating expenses 14,976 12,210 4,295 3,502 Operating income 6,428 9,179 1,843 2,632 Financial income 3,497 2,639 1,003 756 Financial expense 162 898 46 257 Total financial income 3,335 1,741 957 499 Income before taxes on income 9,763 10,920 2,800 3,131 Taxes on income 2,656 2,670 762 765 Net income 7,107 8,250 2,038 2,366 Earnings per share: Basic earnings per share 0.55 0.64 0.16 0.18 Diluted earnings per share 0.55 0.64 0.16 0.18 Shares used in 12,974,245 12,974,245 12,974,245 12,974,245 computation of basic EPS (*) Convenience translation into U.S. dollars G. WILLI-FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Three months ended March 31 March 31 2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3 NIS US dollars (*) (in thousands, except per share and share data) Cash flows - operating activities: Profit from continuing 7,107 8,250 2,038 2,366 operations Adjustments to reconcile net profit to net cash used in (24,702) (14,963) (7,084) (4,291) continuing operating activities (Appendix A) Net cash from continuing (17,595) (6,713) (5,046) (1,925) operating activities Cash flows - investing activities: Acquisition of property plant (1,829) (4,395) (525) (1,260) and equipment Additions to prepaid expenses, - (445) - (128) net Proceeds from sale of property 745 - 214 - plant and Equipment Proceeds from (used in) purchase of marketable (32,164) 23,544 (9,224) 6752 securities, net Proceeds from Loan carried at fair value through profit or 65,400 - 18,755 - loss Net cash from continuing 32,152 18,704 9,220 5,364 investing activities Cash flows - financing activities: Short-term bank debt 2,626 (9,911) 753 (2,842) Net cash from (used in) continuing financing 2,626 (9,911) 753 (2,842) activities Increase in cash and cash 17,183 2,080 4,927 597 equivalents Cash and cash equivalents at the beginning of the financial 36,197 57,563 10,381 16,508 year Cash and cash equivalents of 53,380 59,643 15,308 17,105 the end of the financial year (*) Convenience Translation into U.S. Dollars. G. WILLI-FOOD INTERNATIONAL LTD. APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Three months ended March 31 March 31 2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3 NIS US dollars (*) (in thousands, except per share and share data) Cash flows from operating activities: A. Adjustments to reconcile net profit to net cash from operating activities Increase in deferred income (200) (225) (57) (65) taxes Unrealized Gain of loan carried at fair value through (100) - (28) - profit or loss Unrealized gain on marketable (3,008) (1,569) (863) (450) securities Depreciation and amortization 890 1,011 255 290 Capital gain on disposal of (188) - (54) - property plant and equipment Stock based compensation 476 5 137 1 reserve Changes in assets and liabilities: Increase in trade receivables (23,613) (9,565) (6,772) (2,743) and other receivables Decrease in inventories 501 5,478 143 1,571 Increase (Decrease) in trade and other payables, and other 540 (10,098) 155 (2,895) current liabilities (24,702) (14,963) (7,084) (4,291) B. Significant non-cash transactions: Supplemental cash flow information: Income tax paid 2,447 2,172 702 623 (*) 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. Raviv Segal, CFO (+972) 8-932-1000 firstname.lastname@example.org SOURCE G. Willi-Food International Ltd. Website: http://www.willi-food.com
G. Willi-Food Reports Q1 2014 Sales Up 4.9% From Q1 2013
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