YAVNE, Israel, May 31, 2012 /PRNewswire/ --
G. Willi-Food International Ltd. (NASDAQ: WILC) (the " Company" or " Willi-Food"), a global company specializing in the development, marketing and international distribution of kosher foods, today announced its unaudited financial results for the first quarter ended March 31, 2012.
First Quarter Fiscal 2012 Highlights
- Sales increased 4.6% from first quarter of 2011 to NIS 73.7 million ( US$ 19.8 million)
- Gross profit decreased 12.8% from first quarter of 2011 to NIS 15.7 million ( US$ 4.2 million), or 21.3% of sales
- Operating income decreased 25.4% from first quarter of 2011 to NIS 4.7 million ( US$ 1.3 million), or 6.4% of sales
- Net income decreased 21.8% from first quarter of 2011 to NIS 4.8 million ( US$ 1.3 million), or 6.6% of sales
- Cash and securities balance of NIS 196.5 million ( US$ 52.9 million) as of March 31, 2012
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 dairy food products.First Quarter Fiscal 2012 Summary Sales for the first quarter of 2012 increased by 4.6% to NIS 73.7 million ( US$ 19.8 million) from NIS 70.4 million ( US$ 18.9 million) recorded in the first quarter of 2011. The growth in sales in the first quarter of 2012 was driven by the introduction of new products and by the timing of the Passover festival that it sells fell during the first quarter this year, while last year it sales fell during the second quarter. Gross profit for the first quarter of 2012 decreased by 12.8% to NIS 15.7 million ( US$ 4.2 million) compared to NIS 18.0 million ( US$ 4.8 million) recorded in the first quarter of 2011. First quarter gross margin was 21.3% compared to gross margin of 25.6% for the same period in 2011. The decrease in gross profit and gross margins was primarily due to reductions in the prices of certain of our products as a result of the ongoing national protest against the cost of food products and continued pressure from our customers to reduce prices and due to an increase in global prices of food products compounded by the continued global economic recession. The Company expects the decline in its gross margins to continue in the second quarter of 2012 compared to 2011 second quarter's gross margins. Willi-Food's operating income for the first quarter of 2012 decreased by 25.4% to NIS 4.7 million ( US$ 1.3 million) compared to NIS 6.3 million ( US$ 1.7 million) recorded in the first quarter of 2011. Selling expenses increased by 1.5% from the comparable quarter of 2011, primarily due to the sales growth. Selling expenses as a percentage of sales decreased in the first quarter of 2012 to 9.4% compared to 9.6% in the first quarter of 2011. General and administrative expenses decreased by 15.8% from the comparable quarter of 2011, primarily due to aggressive expense reduction initiatives. General and administrative expenses as a percentage of sales decreased in the first quarter of 2011 to 5.6% from 7.0% in the first quarter of 2011. Willi-Food's income before taxes for the first quarter of 2012 decreased by 16.4% to NIS 6.6 million ( US$ 1.8 million) compared to NIS 7.8 million ( US$ 2.1 million) recorded in the first quarter of 2011. Willi-Food's profit from continuing operations for the first quarter of 2012 decreased by 17.6% to NIS 4.8 million ( US$ 1.3 million) from NIS 5.9 million ( US$ 1.6 million) recorded in the first quarter of 2011. Willi-Food's net income in the first quarter of 2012 decreased 21.8% to NIS 4.8 million ( US$ 1.3 million) from NIS 6.2 million ( US$ 1.7 million) recorded in the first quarter of 2011. Willi-Food's net income attributed to the owners of the Company in the first quarter of 2012 decreased 20.1% to NIS 4.8 million ( US$ 1.3 million), or NIS 0.37 (US$ 0.10) per share, compared to NIS 6.0 million ( US$ 1.6 million), or NIS 0.45 (US$ 0.13) per share, recorded in the first quarter of 2011. Willi-Food ended the first quarter of 2012 with NIS 196.5 million ( US$ 52.9 million) in cash and securities and with no short-term debt. Willi-Food's shareholders' equity at the end of March 2012 was NIS 314.5 million ( US$ 84.7 million). Business Outlook Mr. Zwi Williger, Chairman of Willi-Food commented, "As with the second half of 2011, first quarter 2012 results were affected by continued consumer pressure to reduce prices which accordingly, caused us to reduce the prices of some of our products. The actions taken in the first quarter, by way of price reductions, resulted in a decrease of our profitability. Going forward, we anticipate a significant increase in the level of uncertainty in the global economy. In Israel, economic uncertainty is coupled with changes in the Israeli market and ongoing consumer demand for price reductions that we expect will negatively affect our gross margins in the second quarter of 2012 compared to 2011 second quarter's gross margins." Mr. Williger concluded, "Our foreseeable challenge will be to manage the cost of our products and our other expenses in order to accommodate the continued desire of our customers to acquire lower cost products. However, we believe that this period presents us with an opportunity utilize our cash on hand to acquire synergetic companies at prices lower than before. We continue to look for opportunities to create additional value for our shareholders."
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