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.
Willi-Food Reports Fiscal 2016 Year End Financial Results
Net Profit growth in fiscal 2016 of 58.6% year-over-year to NIS 10.9
Net Cash from operating activities of NIS 17.3 million (US$ 4.5
million) in fiscal 2016
YAVNE, Israel, March 28, 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
financial results for the fiscal year ended December 31, 2016.
Fiscal 2016 Highlights
Operating income increased by 224% from fiscal 2015 to NIS 22.7 million
(US$ 5.9 million), or 7.7% of sales in fiscal 2016.
Sales decreased by 5.9% from fiscal 2015 to NIS 294.2 million (US$ 76.5
million) in fiscal 2016.
Gross margin increased by 8.3% from fiscal 2015 to 26% of sales, or NIS
76.6 million (US$ 19.5 million), in fiscal 2016.
Net income increased by 58.6% from fiscal 2015 to NIS 10.9 million (US$
2.8 million), or 3.7% of sales in fiscal 2016.
Earning per share increased to NIS0.82 (US$ 0.21) in fiscal
Net cash from operating activities increased by 20.6% from fiscal 2015
to NIS 17.3 million (US$ 5.5 million) in fiscal 2016.
Cash and securities balance of NIS 234.5 million (US$ 61 million) as of
December 31, 2016.
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
Iram Graiver, President of Willi-Food, commented, "We are pleased with
our 2016 results, which represent a strong improvement for Willi-Food.
In particular, during the year we placed strong focus on, and succeeded
in, significantly improving profitability. Specifically, we focused on
products with higher margins, which enabled us to improve gross profit
even given a lower level of sales. Moreover, combined with tight
control over our corporate expenses, we more than doubled our net
profits over those of 2015. Towards the end of 2016, we launched a
dividend program, sharing our profits and bringing increased value to
Continued Mr. Graiver, "Looking ahead to 2017, we will continue to work
hard in keeping our expenses low and maintaining a favorable product
mix. In addition, we look to expand our product lines, increase product
sales with existing customers while growing into new customers. We have
also started the process of exmaining M&A oppurtunities to further
increase our market presence. Our overall goal is to build a strong,
stable and profitable company, with the aim of maximizing long-term
value for our shareholders."
Fiscal 2016 Summary
Sales for fiscal 2016 decreased by 5.9% to NIS 294.2 million (US$ 76.5
million) from NIS 312.5 million (US$ 81.3 million) in fiscal 2015.
Sales decreased in 2016 due to; (i) the change in the Company's
strategic focus to higher gross margin products which, while causing a
decrease in the volume of sales, it enabled an increased level of gross
profit as compared to fiscal 2015; (ii) the impact of shortage of
inventories in the third quarter 2016 due to the strike at the Israeli
Ministry of Health in July-August 2016, which significantly delayed the
release of the Company's products from customs, and (iii) overall
market decline in food product consumption by the Israeli consumer.
Gross profit for fiscal 2016 increased by 2.1% to NIS 76.6 million (US$
19.9 million) compared to NIS 75.1 million (US$ 19.5 million) recorded
in fiscal 2015. Gross margins for fiscal 2016 increased by 8.3 % to
26.0% compared to gross margins of 24.0% for fiscal 2015. The increase
in gross margin was the result of the Company's strategic focus on
selling a favorable mix of products, which generated a higher gross
margin in addition to successful negotiations with suppliers for
improved commercial terms.
Operating income for fiscal 2016 increased by 224% to NIS 22.7 million
(US$ 5.9 million) compared to NIS 7 million (US$ 1.8 million) recorded
in fiscal 2015. The most significant expense, which affected operating
income, and in particular general and administrative expenses in fiscal
2015, was the cost related to the termination agreement with companies
controlled by Messrs. Zwi and Joseph Williger, the Company's former
Chairman and President, as described below.
Selling expenses increased by 5.7% from fiscal 2015, primarily due to
an increase of 58% in promotional expenses that included an
approximate NIS 3 million (US$ 0.8 million) expense related to a
nationwide campaign launched in the second half of 2016 aimed at
broadening awareness of Willi-Food's brands and products. Selling
expenses as a percentage of sales were 13.4%, compared to 11.9% as in
General and administrative expenses decreased by 56% from fiscal 2015
to NIS 14.6 million (US$ 3.8 million) compared to NIS 32.9 million (US$
8.6 million). This was mainly due to the significant decrease in the
costs of management salaries to Mr. Zwi Williger, the Company's former
Co-Chairman of the Board of Directors and president, and Mr. Joseph
Williger, a former director and president of the Company, which totaled
NIS 13 million (US$ 3.4 million). In addition, in fiscal 2015, a NIS
1.7 million (US$ 0.4 million) write-off was recorded, with respect to
the Company's estimated exposure to Mega Retail Ltd. and Eden Briut
Teva Market Ltd. debts.
Willi-Food's income before taxes for fiscal 2016 increased by 136% to
NIS 16.1 million (US$ 4.2 million) compared to NIS 9.4 million (US$ 2.4
million) recorded in fiscal 2015.
Willi-Food's net income for fiscal 2016 increased by 142% to NIS 16.6
million (US$ 4.3 million), or NIS 0.82 (US$ 0.21) per share, from NIS
6.8 million (US$ 1.8 million), or NIS 0.52 (US$ 0.14) per share,
recorded in fiscal 2015.
Willi-Food ended fiscal 2016 with NIS 234.5 million (US$ 61 million) in
cash and securities with no short-term debt. Net cash from operating
activities in fiscal 2016 was NIS 17.2 million (US$ 4.5
million).Willi-Food's shareholders' equity at the end of December 2016
was NIS 391 million (US$ 101.7 million).
Note regarding the convening of an annual meeting of shareholders
The Company's Board of directors has scheduled the convening of
an annual meeting of shareholders, to be held on June 20, 2017
following submission by the Company of its Annual Report on Form 20-F.
Note regarding the conference call
As previously announced, on March 7, 2017, the Company will host a
conference call on Tuesday, March 28, 2017 starting at 1.30pm Eastern
Time. Management will host the call and will be available to
answer questions after presenting the results.
To participate in the conference call, please call one of the following
teleconferencing numbers. Please begin placing your calls at least 10
minutes before the conference call commences. If you are unable to
connect using the toll-free numbers, try the international dial-in
Israel: 03- 918-0685
International: +972-3- 918-0685
At: 1.30pm Eastern Time, 10.30am Pacific Time, 6.30pm UK Time, 8.30pm
For those unable to participate, the teleconference will be available
for replay on the company's website at http://willi-food.com/ beginning
24 hours after the call for a period of 30 days.
Note regarding Israeli Securities Authority Investigation
As previously announced, on February 17, 2016, a search was conducted
in the offices of the Company, the Parent Company, BSD Crown Ltd., and
B.G.I Investments Ltd. (collectively, the "Group"), by the Israeli
Securities Authority (the "ISA"), during which various documents and
computers were taken from the Group's offices. A number of executives
in the Group were investigated by the ISA, and Mr. Gregory Gurtovoy,
member of the Company's board of directors and the indirect controlling
shareholder, was detained for interrogation by the ISA for three days,
after which, he was placed under house arrest for a period of two weeks
(which has since ended), on the suspicion of the crimes of fraudulent
acquisitions under aggravating circumstances, falsifying corporate
documents, fraud, breach of fiduciary duty in a corporation, money
laundering, as well as misleading reporting.
To Company management's knowledge, the investigation by the ISA relates
to an investment of approximately US$ 2.25 million (the "Investment")
made during January 2016 in the form of bonds of a European
company, which allegedly served as a collateral to a loan obtained by
the controlling shareholder or another individual, and which was
unrelated to the Company's operations.
The Investment was carried out by B.H.W.F.I Ltd., a wholly owned
subsidiary of the Company ("BHWFI"), pursuant to subscription forms to
purchase 300 bonds with a nominal value of US$ 10,000 each
("Subscription Forms"). The Bonds bear an annual interest rate of 6%,
payable semi-annually on June 30 and December 31 of each year as of the
issue date until the final maturity date of 31 December 2018. The
issuer has the right to repay the Bonds with prior notice of 30 days
On December 30, 2016, BHWFI and the issuer signed an agreement (the
"Agreement") for an early redemption of the bonds for a total of US$
1.8 million that was to be paid until February 15, 2017.
Similarly, as part of the terms of the Agreement, the issuer waived all
its claims against BHWFI, including an alleged obligation to make an
additional investment in bonds up to an aggregate amount of $5 million
(as stated above, an amount of US$ 2.25 million was invested in the
On March 21, 2017, a first payment in the amount of US$200 thousands
was received. As of the financial results reporting date, due to
uncertainty related to the collection of the remaining US$1.6 million
debt, the company made non-cash provision in the amount of the unpaid
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 December 31,
2016, U.S. $1.00 equals NIS 3.845. The translation was made solely for
the convenience of the reader.
NOTE B: IFRS
The Company's consolidated financial results for fiscal year ended
December 31, 2016 are presented in accordance with International
Financial Reporting Standards ("IFRS").
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, 2015, filed with
the Securities and Exchange Commission on April 28, 2016. 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.