G. Willi-Food International Reports the Results of First Qua

|May 21|magazine33 min read

YAVNE, Israel, May 21, 2020 /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, 2020.

First Quarter Fiscal Year 2020

  • Sales increased by 32.0% year-over-year to NIS 129.1 million (US$ 36.2 million).
  • Gross profit increased by 37.5% year-over-year to NIS 41.5 million (US$ 11.6 million).
  • Operating profit increased by 50.9% year-over-year to NIS 19.0 million (US$ 5.3 million).
  • Net profit decreased by 92.5% year-over-year to NIS 1.2 million (US$ 0.3 million).
  • Cash and securities balance of NIS 242.6 million (US$ 68.1 million) as of March 31, 2020.
  • Earnings per share of NIS 0.09 (US$ 0.03).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-Food, commented: "Since a strain of coronavirus surfaced in China at the end of 2019 and reached many other countries worldwide, including Israel, there has been a substantial increase in demand for the Company's products, especially in the retail market. The Company acted to maintain its operational ability and to ensure that sufficient levels of inventory were available in order to meet demand during the COVID-19 pandemic. As a result, the first quarter 2020 financial results show the Company's highest ever sales, gross profit and operating profit. We intend to continue to maintain sufficient inventory levels and work to further strengthen the Company's supply chain, and product portfolio to meet its future demand."

According to retail data analytics provided by StoreNext Ltd[1], the Company recorded a higher growth rate in the last quarter for "sale out" sales (in other words, sales to the final consumer) than any other Israeli food and beverage company, growing 45.5% compared to the average of such companies, which increased by 15.4%.

[1] StoreNext Ltd. has a direct connection to the cash register systems of over 2,200 points of sales, providing information regarding 80% of real time sales data in Israel.

First Quarter Fiscal 2020 Summary

Sales for the first quarter of 2020 increased by 32.0% to NIS 129.1 million (US$ 36.2 million) from NIS 97.8 million (US$ 27.4 million) recorded in the first quarter of 2019. Sales increased primarily due to the COVID-19 pandemic, which led to an increase in demand for the Company's products, primarily in the retail chains.

Gross profit for the first quarter of 2020 increased by 37.5% to NIS 41.5 million (US$ 11.6 million) compared to NIS 30.2 million (US$ 8.5 million) recorded in the first quarter of 2019. The increase in gross profit was primarily due to the increase in sales, a gross margin increase resulting from the Company's strategy of selling a favorable mix of products which generate a higher gross margin and depreciation of the Euro and USD exchange rates against the NIS.

Selling expenses increased by 33.3% to NIS 16.6 million (US$ 4.7 million) compared to NIS 12.5 million (US$ million 3.5) in the first quarter of 2019. The increase in selling expenses was primarily due to an increase of payroll expenses in the sales department, an increase of freight to customers' expenses to support sales growth and an increase in advertising expenses of existing and new products.

General and administrative expenses increased by 14.8% to NIS 5.9 million (US$ 1.7 million) compared to NIS 5.1 million (US$ million 1.4) in the first quarter of 2019. The increase in general and administrative expenses was primarily due to increases in payroll expenses.

As a result, operating profit for the first quarter of 2020 increased by 50.9% to NIS 19.0 million (US$ 5.3 million) compared to NIS 12.6 million (US$ 3.5 million) in the first quarter of 2019.

Finance expenses, net totaled NIS 17.4 million (USD$ 4.9 million) compared to Finance income, net of NIS 7.2 million (US$ 2.1 million) in the first quarter of 2019. As a result of the COVID-19 pandemic, capital markets recorded sharp declines and, as a result, the Company suffered a decline in its portfolio of securities which totaled NIS 18.7 million since the beginning of the year. Capital markets have recovered somewhat since March 31, 2020 and as a result the Company's loss has been reduced to approximately NIS 8.9 million (USD$ 2.5 million) since the beginning of the year.

Willi-Food's income before taxes for the first quarter of 2020 was NIS 1.6 million (US$ 0.4 million) compared to income before taxes of NIS 19.8 million (US$ 5.6 million) in the first quarter of 2019.

Willi-Food's net profit in the first quarter of 2020 was NIS 1.2 million (US$ 0.3 million), or NIS 0.09 (US$ 0.03) per share, compared to NIS 15.8 million (US$ 4.4 million), or NIS 1.19 (US$ 0.33) per share, recorded in the first quarter of 2019.

Willi-Food ended the first quarter of 2020 with NIS 242.6 million (US$ 68.0 million) in cash and securities. Net cash from operating activities for the first quarter of 2020 was NIS 8.0 million (US$ 2.2 million). Willi-Food's shareholders' equity at the end of March 2020 was NIS 492.5 million (US$ 138.1 million).

NOTE A: NIS to US$ exchange rate used for convenience only

The convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on March 31, 2020, with U.S. $1.00 equal to NIS 3.565 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 March 31, 2020 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 1,250 customers and 2,500 selling points 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 Euro European Dairies Ltd. (Former: "Gold-Frost Ltd."), 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, risks associated with product liability claims and risks associated with the start of credit extension activity. 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, 2019, filed with the Securities and Exchange Commission on March 27, 2019. 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 2 0

2 0 1 9

2 0 1 9

2 0 2 0

2 0 19

2 0 1 9


NIS

US dollars (*)


(in thousands)

ASSETS














Current assets







Cash and cash equivalents

121,040

118,641

121,860

33,952

33,279

34,182

Financial assets carried at fair value through
 profit or loss

121,564

141,894

141,543

34,099

39,802

39,703

Trade receivables

160,396

113,747

133,039

44,992

31,907

37,318

Loans to others

17,650

18,123

17,650

4,951

5,084

4,951

Other receivables and prepaid expenses

6,695

5,840

9,360

1,878

1,638

2,626

Inventories

55,991

51,107

71,548

15,706

14,336

20,070

Total current assets

483,336

449,352

495,000

135,578

126,046

138,850








Non-current assets







Property, plant and equipment

81,765

79,822

81,402

22,935

22,390

22,834

Less -Accumulated depreciation

44,802

41,138

43,881

12,567

11,539

12,309


36,963

38,684

37,521

10,368

10,851

10,525








Right of use asset

3,710

2,079

3,860

1,041

583

1,083

Financial assets carried at fair value through
  profit or loss

9,273

-

-

2,601

-

-

Goodwill

36

36

36

10

10

10

Deferred taxes

5,101

1,841

818

1,432

516

229

Total non-current assets

55,083

42,640

42,235

15,452

11,960

11,847
















538,419

491,992

537,235

151,030

138,006

150,697

EQUITY AND LIABILITIES














Current liabilities







Current maturities of lease liabilities

1,708

972

1,675

479

273

470

Current tax liabilities

3,410

1,298

3,750

957

364

1,052

Trade payables

20,420

21,938

24,650

5,728

6,153

6,914

Employees Benefits

3,876

3,441

2,911

1,087

965

817

Other payables and accrued expenses

12,862

6,335

9,195

3,608

1,777

2,579

Total current liabilities

42,276

33,984

42,181

11,859

9,532

11,832








Non-current liabilities







Lease liabilities

2,035

1,112

2,212

571

312

620

retirement benefit obligation

1,568

877

1,486

440

246

417

Total non-current liabilities

3,603

1,989

3,698

1,011

558

1,037








Shareholders' equity 







Share capital NIS 0.1 par value (authorized -
 50,000,000 shares, issued and outstanding -
13,217,017 shares at March 31, 2020; and
December 31, 2019)

1,425

1,425

1,425

400

400

400

Additional paid in capital

128,354

128,354

128,354

36,004

36,004

36,004

Capital fund

247

247

247

69

69

69

Treasury shares

(628)

(625)

(628)

(176)

(175)

(176)

Retained earnings

364,171

327,241

362,987

102,152

91,793

101,820

Remeasurement of the net liability in respect of
 defined benefit

(1,029)

(623)

(1,029)

(289)

(175)

(289)

Equity attributable to owners of the
 Company

492,540

456,019

491,356

138,160

127,916

137,828









538,419

491,992

537,235

151,030

138,006

150,697


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

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



Three months

Three months


ended

ended


March 31,

March 31,


2 0 2 0

2 0 1 9

2 0 2 0

2 0 19


NIS

US dollars (*)


In thousands (except per share and share data)






Sales

129,103

97,835

36,214

27,443

Cost of sales

87,581

67,638

24,567

18,973






Gross profit

41,522

30,197

11,647

8,470






Operating costs and expenses:










Selling expenses

16,617

12,466

4,661

3,497

General and administrative expenses

5,876

5,118

1,648

1,436






Total operating expenses

22,493

17,584

6,309

4,933






Operating income

19,029

12,613

5,338

3,537






Finance income  

1,460

8,146

410

2,285

Finance cost

(18,896)

934

(5,300)

262






Total financial income (expenses), net

(17,436)

7,212

(4,891)

2,023











Income before taxes on income

1,593

19,825

447

5,560

Taxes on income

(412)

(4,060)

(116)

(1,139)






Profit for the period

1,181

15,765

331

4,421











Earnings per share:





Basic/diluted earnings per share

0.09

1.19

0.03

0.33






Shares used in computation of
basic EPS

13,217,014

13,217,014

13,217,014

13,217,014






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

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three months

Three months


ended

ended


March 31,

March 31,


2 0 2 0

2 0 1 9

2 0 2 0

2 0 19


NIS

US dollars (*)


(in thousands)






CASH FLOWS - OPERATING ACTIVITIES





Profit from operations

1,181

15,765

331

4,421

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

6,786

(15,229)

1,903

(4,272)






Net cash used in continuing operating activities

7,967

536

2,234

149











CASH FLOWS - INVESTING ACTIVITIES





Acquisition of property plant and equipment

(362)

(211)

(102)

(59)

Proceeds from purchase of marketable securities, net

(8,000)

2,994

(2,244)

840

Loans granted to others

-

(18,123)

-

(5,084)






Net cash used to continuing investing activities

(8,362)

(15,340)

(2,346)

(4,303)











CASH FLOWS - FINANCING ACTIVITIES





Lease liability payments

(425)

(217)

(118)

(61)

Acquisition of treasury shares

-

(625)

-

(175)






Net cash used to continuing financing activities

(425)

(842)

(118)

(236)











decrease in cash and cash equivalents

(820)

(15,646)

(230)

(4,390)






Cash and cash equivalents  at the beginning of the financial
 year

121,860

134,287

34,182

37,669






Cash and cash equivalents of the end of the financial year

121,040

118,641

33,952

33,279


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

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


CASH FLOWS – OPERATING ACTIVITIES:

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



Three months

Three months


ended

ended


March 31,

March 31,


2 0 2 0

2 0 1 9

2 0 2 0

2 0 19


NIS

US dollars (*)


(in thousands)











Decrease (increase) in deferred income taxes

(4,283)

1,041

(1,202)

292

Unrealized loss (gain) on marketable securities

18,707

(6,984)

5,247

(1,959)

Depreciation and amortization

1,353

1,141

380

320






Changes in assets and liabilities:





Increase in trade receivables and other receivables

(24,692)

(15,665)

(6,926)

(4,394)

Decrease (increase) in inventories

15,556

(1,818)

4,364

(510)

Increase in trade and other payables, and other current
liabilities

145

7,056

40

1,979







6,786

(15,229)

1,903

(4,272)






B.         Significant non-cash transactions:



Three months

Three months


ended

ended


March 31,

March 31,


2 0 2 0

2 0 1 9

2 0 2 0

2 0 19


NIS

US dollars (*)


(in thousands)






Supplemental cash flow information:





Income tax paid

6,480

-

1,818

-


(*)     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.
Yitschak Barabi, Chief Financial Officer
(+972) 8-932-1000  
[email protected]


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