[2] Blue Square - Israel Ltd. Announces Third Quarter and First Nine Months 1999 Results.ROSH HA'AYIN, Israel--(BUSINESS WIRE)--November 18, 1999-- Blue Square-Israel Ltd. (NYSE NYSE See: New York Stock Exchange : BSI BSI - British Standards Institute ) today announced unaudited results for the third quarter and nine months ended September September: see month. 30, 1999. Israel's Macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. Environment Various factors of the economic environment in which the Company has operated during the third quarter and first nine months of 1999 have had a negative impact on the Company's results. The main factors included high financing costs, an ongoing slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of the overall economy, a rising unemployment rate, and erosion erosion (ĭrō`zhən), general term for the processes by which the surface of the earth is constantly being worn away. The principal agents are gravity, running water, near-shore waves, ice (mostly glaciers), and wind. of the public's purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. . In addition, in the retail sector, competition has increased, causing a decrease in same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. . Main Events During the Reporting Period -- On October October: see month. 1, 1999, Mr. Yoram Dar replaced Mr. Yacov Gelbard as the Company's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . -- During the reporting period, the Company opened eight new stores and closed five stores, resulting in a net increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14,500 square meters Noun 1. square meter - a centare is 1/100th of an are centare, square metre area unit, square measure - a system of units used to measure areas . -- As previously reported, during the quarter the Company decided to withdraw from its activities in the furniture segment, and has divested its 50% interest in FCP (Fibre Channel Protocol) See Fibre Channel. FCP - Flat Concurrent Prolog. ["Design and Implementation of Flat Concurrent Prolog", C. Mierowsky, TR CS84-21 Weizmann Inst, Dec 1984]. design. Results of Operations Three Months Ended September 30, 1999 compared to Three Months Ended September 30, 1998 -- Revenues: the Company's sales increased by 3.5% to NIS Niš or Nish (both: nēsh), city (1991 pop. 175,391), SE Serbia, on the Nišava River. An important railway and industrial center, it has industries that manufacture textiles, electronics, spirits, and locomotives. 1,276.5 million (a) (U.S. $298.5 million(b)) from NIS 1,233.0 million. This increase was primarily due to an increase in the selling space of the Company's supermarkets Supermarkets, past and present, include: Transnational Originating (HQ) country first. The rest in alphabetical order.
337.5 million (U.S. $79.0 million) from NIS 329.0 million. -- Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. : the Company's operating income decreased by 20.4% to NIS 47.7 million (U.S. $11.2 million) from NIS 60.0 million. The decrease was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a sharp increase in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by a 7.6% decrease in same-store sales. -- Financial Expenses: the Company's financing costs increased to NIS 3.9 million (U.S. $0.9 million) from an income of NIS 4.0 million. The increase was primarily due to an increase in the Company's loans and the rise in the real rate of interest, and was also affected by the payment of dividends totaling NIS 187 million, or $1.25/ADS. -- Other Expenses: "Other expenses" includes a one time expense of NIS 5.4 million (U.S. $1.3 million) recorded as a result of a negotiation with the Israeli tax authorities regarding the Company's property tax liabilities related to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. lease agreements. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the agreement, the Company's property tax liability for long-term leases totals about NIS 7.6 million, out of which NIS 5.4 million are recorded as "other expenses." The remaining NIS 2.2 million is related to future periods, and has been recorded as a deferred asset. The Company will be indemnified by the Coop in Verb 1. coop in - confine in or as if in a coop; "she coops herself up in the library all day" coop up confine - prevent from leaving or from being removed respect of this cost pursuant to a prior commitment. The indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from payments, net of tax effects, have been added to additional paid-in capital additional paid-in capital Stockholder contributions that are in excess of a stock's stated or par value. For example, if a firm issues stock with a par value of $1 per share but sells the stock to investors at $10 per share, the firm's financial statements . -- Net Income Before Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. : Net income before discontinued operations decreased by 46% to NIS 17.6 million (U.S. $4.1 million), or NIS 0.46 (U.S. $0.11 ) per ADS, compared to NIS 32.7 million, or NIS 0.89 per ADS. -- Net Income: Net income for the quarter decreased by 33.6% to NIS 17.6 million (U.S. $4.1 million), or NIS 0.46 per ADS (U.S. $0.11), from NIS 26.4 million, or NIS 0.72 per ADS. All previous period information has been reclassified to report the results of Hamashbir Lazarchan Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. Ltd. and FCP Design Ltd. as "discontinued operations, net of taxes." Nine Months Ended September 30, 1999 compared to Nine Months Ended September 30, 1998 -- Revenues: the Company's sales increased by 6.7% to NIS 3,688.8 million (U.S. $862.7 million) from NIS 3,456.2 million. -- Gross Profit: the Company's gross profit increased by 7.0% to NIS 999.1 million (U.S. $233.6 million) from NIS 933.5 million. -- Operating Income: Operating income for the first nine months decreased by 3.0% to NIS 171.5 million (U.S. $40.1 million) from NIS 176.7 million. -- Financial Expenses: the Company's financing costs increased to NIS 20.4 million (U.S. $4.8 million) from an income of NIS 10.4 million. This derives from the high rate interest set by the Bank of Israel, and was affected by the payment of dividends as described above. -- Net Income Before Discontinued Operations: Net income before discontinued operations decreased by 27% to NIS 73.9 million (U.S. $17.3 million), or NIS 1.90 (U.S. $0.44) per ADS, from NIS 101.3 million, or NIS 2.75 per ADS,. -- Net Income: Net income decreased by 27% to NIS 64.3 million (U.S.$15.0 million), or NIS 1.65 (U.S. $0.39) per ADS, from NIS 87.9 million, or NIS 2.38 per ADS. All previous period information has been reclassified to report the results of Hamashbir Lazarchan Israel Ltd. and FCP Design Ltd. as "discontinued operations, net of taxes." Liquidity and Capital Resources -- Working Capital Ratio: The Working Capital Ratio of the Company was 0.75 on September 30, 1999, compared to 0.84 on December December: see month. 31, 1998. The decrease is due to a decrease in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. -- Quick Ratio: The Quick Ratio of the Company was 0.54 on September 30, 1999, compared to 0.62 on December 31, 1998. The decrease is due to a reduction in short-term investments. -- Return on Equity: The Company's Return on Equity was 8% on September 30, 1999, compared to 12% on December 31, 1998. Cash Flow -- Cash flows from operating activities: During the third quarter of 1999, the Company recorded cash flows from operating activities of NIS 243.3 million (U.S. $56.9 million), as compared to NIS 264.6 for the third quarter of 1998. -- Invested capital: During the reporting period, the Company invested NIS 240 million (U.S. $56.1 million) to open new stores and to purchase equipment. -- Dividend Distribution: During the reporting period, the Company distributed NIS 228 million (U.S. $53.3 million) as dividends. Comments of the Board of Directors: Blue Square's Board of Directors has noted the Company's increase in selling and general expenses, and instructed Management to devise a plan for reducing the Company's level of expenses during the year 2000. Comments of the CEO: Yoram Dar, Blue Square's new President and Chief Executive Officer since October 1, 1999, commented, "We are currently drafting a new strategic plan for the year 2000 to improve the Company's results through expansion and greatly improved efficiency. The main points of the plan will include: -- Accelerated expansion through the opening of 10-15 new stores in 30,000-40,000 square meters during the year 2000 -- Launching of the Mega discount chain -- Greatly improving the efficiency of headquarters and branches -- Adjusting the Company's operations to the more competitive retail environment -- Closing underperforming branches -- Increasing level of self-distribution via the logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. center -- Increasing percentage of private-label sales "We will begin work according to this plan, and look forward to reporting progress during the next year." Blue Square is a leading retailer in Israel. A pioneer of modern food retailing in the region, Blue Square currently operates 161 supermarkets under different formats, each offering varying levels of service and pricing. The statements contained in this release which are not historical facts contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information with respect to plans, projections, or future performance of the Company, the occurrence of which involve certain risks and uncertainties, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's filings with the Security and Exchange Commission, particularly the prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. with respect to its public offering in July July: see month. ,1996. (a) The convenience translation of the Adjusted New Israeli Shekel (NIS) into US dollars was made at the rate of exchange prevailing at September 30, 1999: US $1.00 equals 4.276 NIS. The translations were made solely for the convenience of the reader. (b) In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with applicable Israeli accounting principles, the Company maintains its accounts and presents its financial statements in New Israeli Shekels ("NIS") adjusted for changes in the Israeli consumer price index ("CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch. (2) (Counts Per I ") through the latest balance sheet date ("Adjusted CPI"). The Israeli CPI increased 1.2% for the three months ended September 30, 1999, and 0.9% for the nine months ended September 30, 1999. -0-
Blue Square - Israel Ltd.
Condensed Consolidated Statement of Operations
(In thousands, except for per share data)
(unaudited)
Convenience
Translation
into US$
September 1999 adjusted NIS Three Months
Three Months Ended Nine Months Ended Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999
Sales 1,276,518 1,232,997 3,688,773 3,456,225 $ 298,531
Cost
of sales 938,980 904,035 2,689,708 2,522,723 $ 219,593
Gross profit 337,538 328,962 999,065 933,502 $ 78,938
Operation &
administrative
expenses 289,812 268,973 827,574 756,792 $ 67,776
Operating
income 47,726 59,989 171,491 176,710 $ 11,161
Financial
(expenses)
income, net (3,877) 4,005 (20,668) 10,400 $ (907)
43,849 63,994 150,823 187,110 $ 10,255
Other
(expenses)
income, net (5,416) 122 (5,334) (166) $ (1,267)
Income
before taxes on
income 38,433 64,116 145,489 186,944 $ 8,988
Taxes on income 15,564 25,121 56,039 69,551 $ 3,640
22,869 38,995 89,450 117,393 $ 5,348
Equity in
results of
affiliated,
net of taxes (58) 1,039 478 1,975 $ (14)
22,811 40,034 89,928 119,368 $ 5,335
Minority
interest in
subsidies, net (5,259) (7,297) (16,064) (18,041) $ (1,230)
Net income
for the
period (before
discontinued
operation) 17,552 32,737 73,864 101,327 $ 4,105
Discontinued
operations,
net of taxes - (6,310) (9,603) (13,403) $ -
Net income
for the
period 17,552 26,427 64,261 87,924 $ 4,105
Basic and
diluted
earnings per
ordinary share or
per ADS from
continued
operations 0.46 0.89 1.90 2.75 $ 0.11
Basic and
diluted
earnings per
ordinary
share or per ADS
from discontinued
operations - (0.17) (0.25) (0.37) $ -
Basic and
diluted
earnings per
ordinary share or
per ADS 0.46 0.72 1.65 2.38 $ 0.11
Weighted
average no.
of shares
outstanding
during the
period 38,400,000 38,400,000 38,400,000 38,400,000 38,400,000
Blue Square - Israel Ltd.
Condensed Consolidated Balance Sheet
(in thousands, adjusted to the NIS of September 1999)
Convenience
Translation
into US$
September 30, December 31,September 30,
1999 1998 1999
ASSETS (Unaudited) (Audited) (Unaudited)
Current assets
Cash and cash equivalents 80,079 3,314 $ 18,728
Marketable securities
and short-term deposits 104,804 303,100 $ 24,510
Trade receivable 526,678 510,823 $ 123,171
Other accounts receivable 100,934 53,762 $ 23,605
Inventories 310,942 304,245 $ 72,717
Total current assets 1,123,437 1,175,244 $ 262,731
Long-term Investments
Investments in affiliates 67,439 66,980 $ 15,771
Long-term loan to related party 2,128 2,019 $ 498
69,567 68,999 $ 16,269
Fixed assets 2,463,568 2,247,295 $ 576,138
Cost 690,693 630,614 $ 161,528
Less -accumulated depreciation 1,772,875 1,616,681 $ 414,610
Intangible assets and deferred
charges, net 118,914 121,831 $ 27,810
Total Assets 3,084,793 2,982,755 $ 721,420
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Short-term credit from
banks and others 361,756 364,713 $ 84,601
Trade payables 773,367 670,142 $ 180,862
Other accounts payable 231,603 212,294 $ 54,163
Dividend declared - 154,837 -
Parent corporation 136,305 - $ 31,877
1,503,031 1,401,986 $ 351,503
Long-term liabilities,
net of current maturities
Long-term loans from
banks and others 192,589 245,861 $ 45,040
Debentures 55,373 79,883 $ 12,950
Accrued severance pay, net 8,773 7,926 $ 2,052
Deferred taxes 20,813 17,487 $ 4,867
277,548 351,157 $ 64,909
Minority interest 138,808 165,357 $ 32,462
Shareholders` equity
Share capital 48,954 47,434 $ 11,449
Capital surplus 672,004 618,765 $ 157,157
Retained earnings 444,448 398,056 $ 103,940
1,165,406 1,064,255 $ 272,546
3,084,793 2,982,755 $ 721,420
Blue Square - Israel Ltd.
Selected Operating Data
(in thousands, adjusted to the NIS of September 1999)
Convenience
Translation
into US$
Three months
Three months ended Nine months ended Ended
Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998 1999
Sales
(in millions) 1,277 1,233 3,689 3,456 $ 299
Operating
income
(in millions) 47.7 60.0 171.5 176.7 $ 11
Number of
stores
(at end of
period) 161 155 161 155 na
Total square
meters
(at end of
period) 229,715 215,270 229,715 215,270 na
Same store
sales (7.6%) (7.0%) (2.6%) (4.4%) na
Sales
per sq.
mtr. 5,575 6,140 16,516 17,141 $ 1,304
Sales per
employee
(in
thousands) 173 189 536 563 $ 40
EBITDA
(in
millions) 71 88 250 250 $ 17
EBITDA Margin 5.6% 7.1% 6.8% 7.2% na
-- EBITDA is defined as operating income before depreciation and
amortization
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion