6-K 1 zk1720834.htm 6-K


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K
  
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of November 2017
 
G. Willi-Food International Ltd.
(Translation of registrant’s name into English)
  
4 Nahal Harif St., Yavne, Israel 81106
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒                     Form 40-F £
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ 
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. 
 
Yes ☐                    No S
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________ 
 
Attached hereto and incorporated by reference herein is a press release, dated November 27, 2017, entitled “G. Willi-Food International reports improvements in major operational parameters in Q3 2017 compared to Q3 2016”.
This Form 6-K is hereby incorporated by reference in the Registration Statements on Form F-3 (File No. 333-11848 and 333-138200) of the Registrant.
 

 
Signatures 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 
 
  G. Willi-Food International Ltd.  
       
 
By:
/s/ Amir Kaplan  
    Name: Amir Kaplan  
    Title: Chief Financial Officer  
       
Date: November 27, 2017
 

 
 
 
FOR IMMEDIATE RELEASE

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 - November 27, 2017 - 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.

2

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}
 
3

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.
 
4

 
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.
 
5

 
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.
 
6


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 1 7
   
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
)
 
7

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

###

SOURCE: G. Willi-Food International Ltd.
 
 
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