ROSH HA'AYIN, Israel, August 17 /PRNewswire-FirstCall/ -- - The
Continued Implementation of the Strategic Plan That Includes a
Successful Launch and the Expansion of the "Mega Bool" Chain, the
Launch of a Private Brand, Establishing Logistic Centers for the
Non-Food and Vegetables Activities and Launching Additional
Enrolment Options to "You" Club - The Operating Profit Margin was
Maintained Compared to the Prior Quarter, Despite the Increased
Competition and the Effect of the Passover Holiday Blue
Square-Israel Ltd. (NYSE and TASE: BSI) today announced its
financial results for the first half of 2009 and the second quarter
ended June 30, 2009. Results for the First Half of 2009 Revenues
for the first half of 2009 were NIS 3,608.7 million (U.S.(1) $920.8
million), compared to NIS 3,739.6 million in the corresponding
period of 2008 - a decrease of 3.5 %. Supermarket same store sales
(SSS) for the period decreased by 6.8% due to the recession in the
market, increase competition and erosion of the sales prices in HD
chains. On the other hand, the decrease in sales was offset by the
net addition of ten new stores during the 12-month period of
approximately 12,100 square meters; in addition, the sales of BEE
Group increased during the period compared to the corresponding
period last year by 8.2%. Gross Profit of the first half of 2009
amounted to NIS 1,004.8 million (U.S. $ 256.4 million) (27. 8 % of
revenues) compared to gross profit of NIS 1,031.1 million (27.6% of
revenues) in the first half of 2008. The increase in the gross
profit margin derives from an increase in sales of BEE Group
characterized with higher gross profit margins relative to those
acceptable in the food retail sector. In addition, gross margin
increased from supplier agreements, part of which relate to the
establishment of the "Mega Bool" chain that offset the effect of
the planned erosion in the gross profitability rate due to the
establishment of the "Mega Bool" chain. Selling, General, and
Administrative Expenses for the first half of 2009 amounted to NIS
884.0 million (U.S. $ 225.6 million) (24.5% of revenues) compared
to NIS 870.1 million (23.3% of revenues) in the corresponding
period, an increase of 1.6%. The increase reflects increased
expenses associated with the opening of ten new stores, including
the expenses associated with the accelerated opening of six
branches of the Eden Teva Market format during the last twelve
months and expenses associated with the launch of the Mega Bool
format. Concurrently, several measures to increase efficiency were
taken, which resulted in a relative decrease of the tendency for
increased expenses as a result of opening new branches. Operating
Income (before income and other expenses and increase in fair value
of real estate) in the first half of 2009 amounted to NIS 120.9
million (U.S $ 30.8 million) (3.3% of revenues) compared to the
operating income of NIS 161.0 million (4.3% of revenues) in the
corresponding period. The decrease in the operating income was
affected by a decrease in sales and increase in the selling and
administrative expenses, mainly from accelerated opening of
branches (pre-operating costs and their negative contribution in
the initial operating period) and costs associated with the
establishment of the "Mega Bool" chain. Appreciation of Investment
Property: In the first half of 2009, the Company recorded gain from
appreciation of investment property in the amount of NIS 1.7
million (U.S $ 0.4 million) compared to NIS 18.0 million in the
corresponding period of the previous year. Other Income Expenses,
Net: In the first half of 2009, the Company recorded other
expenses, net of NIS 0.6 million (U.S. $ 0.2 million), compared to
other expenses, net of NIS 1.8 million in the corresponding period
of the previous year. The other expenses included, in this period,
a provision for impairment of property and equipment in Dr. Baby
Stores in the amount of NIS 2.8 million (U.S $ 0.7 million) and
were offset from the capital gain of NIS 0.3 million (U.S $ 0.1
million) from the sale of 1.5% of the shares of Blue Square Real
Estate for NIS 10.1 million (U.S $2.6 million) and from a capital
gain of NIS 2.8 million (U.S $ 0.7 million) from purchasing 8% of
Naaman shares that were held by minority. Operating Income before
financing in the first half of 2009 was NIS 122.0 million (U.S. $
31.1 million) (3.4% of revenues) compared to operating income of
NIS 177.2 million (4.7% of revenues) in the first half of 2008.
Financial Expenses (net) for the first half of 2009 were NIS 47.2
million (U.S. $12 million) compared to financial expenses (net) of
NIS 48.4 million in the corresponding period of the previous year.
The decrease in financial expenses in the first half of this year
compared to the corresponding period last year mainly derives from
the effect of the change in the value of hedging transactions on
the index that were effected in the fourth quarter of 2008 and the
change in the value derivative financial instruments that
contributed in the first half of 2009 to an income of NIS 24.0
million (U.S $6.1 million) compared to an expense of NIS 11.1
million in the corresponding period last year and from a decrease
in financial expenses on debentures and CPI linked loans, of NIS
9.1 million (U.S $ 2.3 million) in the first half of 2009 compared
to corresponding period last year (increase in the known index in
the first half of 2009 amounted to 1.1% compared to 2.8% in the
corresponding period last year). On the other hand, the decrease in
the financial expenses was offset as a result of the increase in
the value of the conversion option of the convertible debenture
(following the increase in the company's share price) which
contributed in the current half to an expense of NIS 13.1 million
(U.S $ 3.3 million) compared to an income of NIS 24.7 million in
the corresponding half last year. Taxes on Income for the first
half of 2009 were NIS 24.8 million (U.S. $6.3 million) (33.2%
effective tax rate compared to a statutory tax rate of 26%)
compared to NIS 26.5 million (effective tax rate of 20.6% compared
to a statutory tax rate of 27%) in the corresponding half last
year. The increase in the effective tax rate in the first half
compared to the corresponding half last year derives mainly from
recording financial expenses from revaluation of the conversion
component in convertible debentures of the company and from losses
of Dr. Baby formats for which no deferred taxes were recorded. On
July 14, 2009, the Law for Economic Efficiency passed in the
Knesset (Legislation Amendments for the Implementation of Economic
Plan for 2009- 2010) 5769 - 2009, which prescribed, among others,
the gradual decrease of corporate tax rate down to 18% in the 2016
tax year and onwards. The implication of the change in the tax rate
will be reflected in the results of the third quarter of 2009 by
decrease in deferred tax liability and recognition in income from
taxes in the amount of NIS 14 million (U.S $ 3.5 million) out of
which the portion attributed to the company's owners is NIS 12
million (U.S $ 3.0 million). Net Income for the first half of 2009
was NIS 49.9 million (U.S. $ 12.7 million) compared to net income
of NIS 102.3 million in the first half of 2008. The decrease in the
net income in the first half this year compared to the
corresponding period last year derives from decrease in operating
income, decrease in a gain from appreciation of investment property
and increase in income tax expenses, as mentioned above. The net
income for the first half of 2009, in accordance with the IFRS
attributable to shareholders, was NIS 39.6 million (U.S. $10.1
million), or NIS 0.91 per ADS (U.S. $ 0.23), while the portion
attributable to the share of minority interests was NIS 10.3
million (U.S. $2.6 million). Cash Flows in the First Half of 2009
Cash Flows from Operating Activities: Net cash flows deriving from
operating activities in the first half of 2009 amounted to NIS
156.6 million (U.S. $ 39.9 million) compared to NIS 278.2 million
in the corresponding period last year. The decrease in cash flows
from operating activities derives from decrease in operating income
and decrease in the negative working capital balances. Cash Flows
from Investing Activities: Net Cash flows used in investing
activities in the first half of 2009 amounted to NIS 85.1 million
(U.S. $21.7 million) compared to net cash flows of NIS 38.5 million
used in investing activities in the corresponding period last year.
Cash flows used in investing activities in the first half of 2009
included mainly purchase of property and equipment, other assets
and investment property in a total amount of NIS 104.9 million
(U.S. $26.8 million) net of proceeds from sale of property and
equipment and investment property in the amount of NIS 7.2 million
(U.S. $1.8 million) and proceeds from realization of investment in
a subsidiary in the amount of NIS 10.1 million (U.S. $2.6 million).
Cash flows used in investing activities in the first quarter of
2008 included mainly purchase of property and equipment, other
assets and investment property amounting to NIS 155.7 million net
of proceeds from realization of short term deposits in the amount
of NIS 100.3 million. Cash Flows from Financing Activities: Net
Cash flows used in financing activities in the first half of 2009
amounted to NIS 24.0 million (U.S $ 6.1 million) compared to net
cash used in financing activities of NIS 67.3 million in the
corresponding period last year. Cash flows used in financing
activities in the first half of 2009 included mainly repayment of
long term loans of NIS 66.4 million (U.S $ 16.9 million) and paid
interest of NIS 45.9 million (U.S $ 11.7 million), net of increase
in short term credit of NIS 86.6 million (U.S $ 22 million). Net
Cash flows used in financing activities in the first half of 2008
included mainly repayment of long term loans of NIS 46.0 million
and paid interest of NIS 39.6 million and dividend paid to minority
in subsidiaries in the amount of NIS 11.1 million net of receipt of
long term loans amounting to NIS 13.7 million and short term credit
from banks amounting to NIS 16.6 million. Comments of Management
Commenting on the financial results, Mr. Zeev Vurembrand, Blue
Square's President and CEO, said: "During this quarter, we
continued to implement the strategic measures and establish the
awareness to "Mega Bool" chain as the leading chain of the HD
format and we acted to expand the categories in the private brand
"Mega", constituting over 3.5% of total sales. During August, 8
additional stores will be added to the "Mega Bool" chain, 2 of
which are new, as part of providing solutions to the market needs
and the competitive environment. Several days ago, we announced the
expansion of enrollment options to customers club "You" where the
objective is to reach 500,000 members until the end of 2009. During
the last year, the organic division of "Teva Eden Market" expanded
significantly; comprising 9 branches and the opening of the tenth
branch will take place during the fourth quarter of 2009, whereby
we shall complete the first stage of the chain deployment. In
addition, we commenced to exercise the synergy process under BEE
group by way of process for centralizing the financial activity,
import, information systems and more under the headquarters of BEE
group and providing these services to subsidiaries. Finally, I wish
to stress that the strategy implementation and achieving the target
milestones are moving forward according to management
expectations." Additional Information As of June 30, 2009, the
Company operated 200 supermarkets in the following formats: Mega In
Town -115; Mega Bool - 40; Mega - 19; Shefa Shuk - 18; Eden Teva
Market - 8. EBITDA (Earnings before Interest, Taxes, Depreciation,
and Amortization): In the first half of 2009, the EBITDA (Earnings
before Interest, Taxes, Depreciation, and Amortization) was NIS
205.4 million (U.S. $ 52.4 million) (5.7 % of revenues) compared to
NIS 237.5 million (6.4% of revenues) in the corresponding period of
last year. In the second quarter of 2009, amounted to NIS 103.6
million (U.S. $ 26.4 million) (5.6 % of revenues) compared to NIS
123.5 million (6.4% of revenues) in the corresponding period of
last year. As of June 30, 2009, the ratio of its financial
obligations to EBITDA was 3.6 and the ratio of its unencumbered
property and equipment to the financial obligations was 1.7. Data
in NIS (millions) Data Q2 2009 Q2 2008 1-6 2009 1-6 2008 Sales
1,844.0 1,918.4 3,608.7 3,739.6 Gross profit 501.7 527.5 1,004.8
1,031.1 % Gross profit 27.2% 27.5% 27.8% 27.6% Operating profit
(before increase in fair value of real estate) 60.7 83.5 120.9
161.0 % Operating profit (before increase in fair value of real
estate) 3.3% 4.4% 3.3% 4.3% Financial expenses 35.2 40.2 47.2 48.4
Net income 17.5 37.2 49.9 102.3 Events During the Second Quarter of
2009 Reorganization of real estate activity - transfer of real
estate properties to the subsidiary Blue Square Real Estate Ltd. On
December 30, 2008, and January 12, 2009, the company reported a
reorganization plan of its real estate activity to be centralized
under the subsidiary Blue Square Real Estate (BSRE) by the transfer
of the real estate properties of the subsidiary Blue Square Chain
Investment & Properties Ltd. (BSIP) to BSRE. The transaction of
the property transfer was subject to the approval of the
shareholders' meeting of BSRE which was obtained on February 18,
2009 by the majority. As previously reported, under the approval of
the property transfer transaction the following were approved as
well: 1. Lease agreement to lease the transferred properties that
are not leased to third parties to BSIP for ten years from the
closing date of the purchase agreement and an option to the lessee
to extend the lease agreement for five additional years, and, 2. An
agreement to extend the term of the existing lease agreements
between BSIP and BSRE to an identical period (ten years from the
closing date of the purchase agreement and an option to the lessee
to extend the lease agreement for five additional years). Following
discussions held between the company and its subsidiaries and the
tax authorities regarding the outline of the property transfer
transaction, the tax authority granted an approval according to
which the transaction will be performed by a split pursuant to
Section 105 to the Israel Income Tax Ordinance. Under such
approval, BSIP will transfer to BSRE the transferred properties and
in return BSRE will assume the financial obligations of BSIP
attributed to these properties. The difference between the value of
the transferred properties, as determined in the transaction (NIS
464 million) and the amount of the related financial obligations
(NIS 390 million) will be paid in cash to the company by BSRE, on
the closing date. Accordingly, the transaction is expected to be
executed by the end of 2009. The transaction costs including
purchase tax will be recorded upon their incurrence as expenses in
the statements of operations. The effecting of the transaction in
the outline of split pursuant to Section 105 to the Income Tax
Ordinance confers upon BSIP an exemption from the payment of land
appreciation tax at this stage and its deferment under the sale
agreement with BSRE until the realization of the properties (as far
as realized) or by the depreciation rate of the depreciable
properties by BSRE. In addition, the payment of purchase tax for
the transaction will be at a reduced tax rate of 0.5%. The company
and the subsidiaries, BSIP and BSRE will be subject to the
restrictions prescribed by the provisions of the second and fourth
chapters to part E-2 to the Income Tax Ordinance regarding the
split pursuant to Section 105 to the Ordinance and the conditions
or limitations determined in the approval of the tax authority,
will apply, including the requirement that in two years from the
split date, most of the properties remaining with BSIP and most
properties transferred to BSRE under the split will not be sold by
any of them and in the relevant period, such assets will be used in
an acceptable manner in the ordinary course of business. The
subsidiaries are further required that in two years from the split
date, the company will have the same rights as previously held in
BSRE prior to the split, however such event will not be considered
as 1) Submitted Prospectus for Public Offering 2) private issuance
of shares or 3) sale of shares not exceeding 10% of the rights in
BSRE - as an event of change in rights, provided that during the
two years from the split date, the rights of BSIP in BSRE will not
fall below 50%. BSRE intends to pledge most of the transferred
properties as collateral for a loan to be taken in order to finance
the transaction. Results for the Second Quarter of 2009 Revenues
for the second quarter of 2009 were NIS 1,844 million (U.S$470.5
million), compared to NIS 1,918.4 million in the corresponding
quarter of 2008 - a decrease of 3.9 %. Supermarket same store sales
(SSS) for the period decreased by 6.1% compared to the
corresponding quarter due to the recession and increased
competition mainly on "Mega" format (stores that were not yet
converted) erosion of prices in HD chains and the timing of
Passover which this year fell on April 8 compared to April 20 last
year and its contribution to increase in sales in the second
quarter this year was partial compared to full contribution to an
increase in sales in the second quarter last year. On the other
hand, the decrease in sales was offset by the opening of ten new
stores during the 12-month period of approximately 12,100 square
meters. The sales of BEE Group decreased during this quarter
compared to the corresponding quarter last year by 4.2% and that is
due to Passover, as described above. Gross Profit of the second
quarter of 2009 amounted to NIS 501.7 million (U.S. $ 128 million)
(27.2 % of revenues) compared to gross profit of NIS 527.5 million
(27.5% of revenues) in the corresponding quarter of 2008. The
decrease in the gross profit and gross profit margin derives from a
decrease in sales characterized with relatively higher gross profit
margins ("Mega" "Mega In Town") and the increase in the scope of
sales of the HD formats of total sales which were offset by
improved supplier agreements and discounts and the contribution of
the private brand of "Mega" constituting already over 3% of the
sales. Selling, General, and Administrative Expenses for the second
quarter of 2009 amounted to NIS 441 million (U.S. $ 112.5 million)
(23.9% of revenues) compared to NIS 444.0 million (23.1% of
revenues) in the corresponding quarter, a decrease of 0.7%. The
decrease reflects the effect of efficiency measures taken by the
company during the quarter, which is contingent upon increased
expenses associated with the opening of ten new stores during the
last year, including the expenses associated with the accelerated
opening of six branches of the Eden Teva Market format and expenses
deriving from the increase in the selling prices of the private
brand. Operating Income (before other income and expenses and
increase in the fair value of real estate) in the second quarter of
2009 amounted to NIS 60.7 million (U.S $ 15.5 million) (3.3% of
revenues) compared to the operating income of NIS 83.5 million
(4.4% of revenues) in the corresponding period. Appreciation of
Investment Property: During the second quarter of 2009, the Company
recorded gain from appreciation of investment property of NIS 1.7
million (U.S $ 0.4 million) compared to NIS 5.2 million in the
corresponding quarter of the previous year. Other Income Expenses,
Net: In the second quarter of 2009, the Company recorded other
expenses, net of NIS 2.8 million (U.S. $ 0.7 million), compared to
other expenses of NIS 0.6 million in the corresponding quarter of
the previous year. The expenses included, in this quarter,
provision for impairment of property and equipment in Dr. Baby
stores in the amount of NIS 2.8 million (U.S. $ 0.7 million) and
were offset from the capital gain in the amount of NIS 0.3 million
(U.S. $ 0.1 million) from selling 1.5% of the shares of Blue Square
Real Estate for NIS 10.1 (U.S. $ 2.6 million). Operating Income
before financing in the second quarter of 2009 was NIS 59.6 million
(U.S. $ 15.2 million) (3.2% of revenues) compared to operating
income of NIS 88.2 million (4.6% of revenues) in the second quarter
of 2008 and compared to NIS 62.3 million (3.5% of revenues) in the
first quarter of 2009. Financial Expenses (net) for the second
quarter of 2009 were NIS 35.2 million (U.S. $9 million) compared to
financial expenses (net) of NIS 40.2 million in the corresponding
quarter of the previous year. The decrease in financial expenses in
this quarter compared to the corresponding quarter last year mainly
derives from the effect of the change in the value of hedging
transactions on the index and derivative financial instruments that
contributed in the current quarter to an income of NIS 14.9 million
(U.S $3.8 million) compared to an expense of NIS 1.9 million in the
corresponding quarter last year and from a decrease in financial
expenses on debentures and CPI linked loans, of NIS 5.6 million
(U.S $ 1.4 million) in this quarter compared to the corresponding
quarter last year. The decrease in the financial expenses was
offset mainly from the effect of the change in the value of the
conversion option of the convertible debenture (following the
increase in the company's share price) which contributed in the
current quarter to an expense of NIS 9.8 million (U.S $ 2.5
million) compared to an income of NIS 3.8 million in the
corresponding quarter last year. Taxes on Income for the second
quarter of 2009 were NIS 6.9 million (U.S. $1.8 million) (28.2%
effective tax rate compared to a statutory tax rate of 26%)
compared to NIS 10.7 million (effective tax rate of 22.2% compared
to a statutory tax rate of 27%) in the corresponding quarter last
year. The increase in the effective tax rate in this quarter
compared to the corresponding quarter last year derives mainly from
recording financial expenses from revaluation of the conversion
component in convertible debentures of the company and from losses
of Dr. Baby formats, for which no deferred taxes were recorded Net
Income for the second quarter of 2009 was NIS 17.5 million (U.S. $
4.5 million) compared to net income of NIS 37.2 million in the
second quarter of 2008. The decrease in the net income in this
quarter compared to the corresponding quarter last year derives
from decrease in operating income and increase in income tax
expenses, as mentioned above. The net income for the second quarter
of 2009, in accordance with the IFRS attributable to shareholders,
was NIS 13.1 million (U.S. $3.3 million), or NIS 0.3 per ADS (U.S.
$ 0.08), while the portion attributable to the share of minority
interests was NIS 4.4 million (U.S. $1.1 million). Cash Flows in
the Second Quarter of 2009 Cash Flows from Operating Activities:
Net cash flows deriving from operating activities in the second
quarter of 2009 amounted to NIS 126.4 million (U.S. $ 32.2 million)
compared to NIS 255.0 million in the corresponding quarter last
year. The decrease in cash flows from operating activities derives
mainly from decrease in sales. Cash Flows from Investing
Activities: Net Cash flows used in investing activities in the
second quarter of 2009 amounted to NIS 27.3 million (U.S. $6.9
million) compared to net cash flows of NIS 60.2 million used in
investing activities in the corresponding quarter last year. Cash
flows used in investing activities in the second quarter of 2009
included mainly purchase of property and equipment, other assets
and investment property in a total amount of NIS 45.3 million (U.S.
$11.6 million) net of proceeds from realization of investment in a
subsidiary in the amount of NIS 10.1 million (U.S. $2.6 million).
Cash flows used in investing activities in the second quarter of
2008 included mainly purchase of property and equipment, other
assets and investment property amounting to NIS 52.2 and net
investment in marketable securities in the amount of NIS 10.5
million. Cash Flows from Financing Activities: Net Cash flows used
in financing activities in the second quarter of 2009 amounted to
NIS 21.1 million (U.S $ 5.4 million) compared to net cash used in
financing activities of NIS 19.2 million in the corresponding
quarter last year. Cash flows used in financing activities in the
second quarter of 2009 included mainly repayment of long term loans
of NIS 35.9 million (U.S $ 9.2 million) dividend paid to minority
in subsidiaries in the amount of NIS 6.2 million (U.S $ 1.6
million) and paid interest of NIS 10.5 million (U.S $ 2.7 million),
net of increase in short term credit of NIS 27.1 million (U.S $ 6.9
million). Net Cash flows used in financing activities in the second
quarter of 2008 included mainly repayment of long term loans of NIS
22.7 million, dividend paid to minority in subsidiaries in the
amount of NIS 11.1 million and paid interest of NIS 8.2 million net
of receipt of long term loans amounting to NIS 5.0 million and
short term credit from banks amounting to NIS 18.4 million. NOTE A:
Convenience Translation to Dollars The convenience translation of
New Israeli Shekel (NIS) into U.S. dollars was made at the exchange
rate prevailing at June 30, 2009: U.S. $1.00 equals NIS 3.919. The
translation was made solely for the convenience of the reader. Blue
Square is a leading retailer in Israel. A pioneer of modern food
retailing in the region, Blue Square currently operates 201
supermarkets under different formats, each offering varying levels
of service and pricing. This press release contains forward-looking
statements within the meaning of safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may include, but are not limited to, plans or
projections about our business and our future revenues, expenses
and profitability. Forward-looking statements may be, but are not
necessarily, identified by the use of forward-looking terminology
such as "may," "anticipates," "estimates," "expects," "intends,"
"plans," "believes," and words and terms of similar substance.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual events,
results, performance, circumstance and achievements to be
materially different from any future events, results, performance,
circumstance and achievements expressed or implied by such
forward-looking statements. These risks, uncertainties and other
factors include, but are not limited to, the following: the effect
of the recession in Israel on the sales in our stores and on our
profitability; our ability to compete effectively against
low-priced supermarkets and other competitors; quarterly
fluctuations in our operating results that may cause volatility of
our ADS and share price; risks associated with our dependence on a
limited number of key suppliers for products that we sell in our
stores; the effect of an increase in minimum wage in Israel on our
operating results; the effect of any actions taken by the Israeli
Antitrust Authority on our ability to execute our business strategy
and on our profitability; the effect of increases in oil, raw
material and product prices in recent years; the effects of damage
to our reputation or to the reputation to our store brands due to
reports in the media or otherwise; and other risks, uncertainties
and factors disclosed in our filings with the U.S. Securities and
Exchange Commission, including, but not limited to, risks,
uncertainties and factors identified under the heading "Risk
Factors" in our Annual Report on Form 20-F for the year ended
December 31, 2008. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Except for our ongoing obligations to
disclose material information under the applicable securities laws,
we undertake no obligation to update the forward-looking
information contained in this press release. It is hereby clarified
that this version is a translation to Hebrew for merely convenience
purposes of the company's notice to SEC in the U.S. The binding
version is the version in English. BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2009 (UNAUDITED)
Convenience translation(a) December 31, June 30, June 30, 2008 2008
2009 2009 ---------- --------- ----------- -------- Audited
Unaudited ------- ----------------------------------- NIS U.S.
dollars ----------------------------------- ------- In thousands
--------------------------------------------- A s s e t s CURRENT
ASSETS: Cash and cash equivalents 95,325 228,754 137,241 35,019
Marketable securities 171,849 195,857 173,726 44,329 Short-term
bank deposit 206 1,231 207 53 Restricted deposit - - 440,015
112,277 Trade receivables 729,970 826,136 773,892 193,799 Other
accounts receivable 87,624 109,626 96,308 28,248 Income taxes
receivable 74,446 46,951 87,635 22,362 Inventories 497,080 491,591
527,798 134,677 --------- --------- --------- ------- 1,656,500
1,900,146 2,236,822 570,764 --------- --------- --------- -------
NON-CURRENT ASSETS: Long-term receivables 1,554 3,810 4,827 1,231
Embedded derivative 5,248 925 19,381 4,945 Prepaid expenses in
respect of operating lease 192,426 196,684 190,605 48,636
Investments in investee companies 4,915 4,931 1,356 346 Investment
property 434,232 409,297 1,739,071 443,754 Intangible assets, net
404,422 287,635 435,386 111,096 Property and equipment, net
1,701,222 1,658,553 404,934 103,326 Deferred taxes 44,508 35,401
46,504 11,866 --------- --------- --------- ------- 2,788,527
2,597,236 2,842,064 725,200 --------- --------- --------- ---------
Total assets 4,445,027 4,497,382 5,078,886 1,295,964 ---------
--------- --------- --------- BLUE SQUARE - ISRAEL LTD. INTERIM
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2009 (UNAUDITED)
Convenience translation(a) December 31, June 30, June 30 2008 2008
2009 2009 Audited Unaudited U.S. dollars In thousands Liabilities
and shareholders' equity CURRENT LIABILITIES: Credit From banks and
others 210,901 184,057 725,528 185,131 Current maturities of
convertible debentures 25,999 72,450 29,064 7,416 Trade payables
1,006,386 1,086,936 1,025,728 261,732 Other accounts payable
426,217 481,124 493,312 125,878 Income taxes payable 6,933 4,254
3,449 880 Provisions for other liabilities 43,397 36,677 42,457
10,834 --------- --------- --------- ------- 1,719,833 1,865,498
2,319,538 591,871 --------- --------- --------- ------- LONG-TERM
LIABILITIES: Loans from banks 341,586 224,763 289,885 73,969
Convertible debentures 130,525 144,916 128,070 32,679 Debentures
985,844 796,888 1,001,537 255,559 Other liabilities 39,925 10,834
45,506 11,612 Derivatives instruments * 21,074 7,954 8,725 2,226
Liabilities in respect of employee benefits, net 49,911 37,095
49,619 12,661 Deferred taxes 60,327 59,675 66,354 16,931 ---------
--------- --------- ------- 1,629,192 1,282,125 1,589,696 405,637
--------- --------- --------- ------- Total liabilities 3,349,025
3,147,623 3,909,234 997,508 --------- --------- --------- -------
SHAREHOLDERS' EQUITY: Share capital - Ordinary shares of NIS 1 par
value 57,094 57,094 57,438 14,656 Additional paid-in capital
1,018,405 1,018,405 1,030,259 262,888 Other reserves (261) 4,757
8,183 2,088 Accumulated deficit (154,719) (17,658) (109,711)
(27,995) --------- --------- --------- ------- 920,519 1,062,598
986,169 251,637 Minority interest 175,483 287,161 183,483 46,819
--------- --------- --------- ------- Total equity 1,096,002
1,349,759 1,169,652 298,456 --------- --------- --------- -------
Total liabilities and shareholders' equity 4,445,027 4,497,382
5,078,886 1,295,964 --------- --------- --------- ------- *)
Reclassified, under the application of IAS1(R). The company
classified financial liabilities at fair value through the
statements of operations from current liabilities to long term
liabilities. * BLUE SQUARE - ISRAEL LTD. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE SIX AND THREE MONTHS PERIODS ENDED
JUNE 30, 2009 Convenience translation(a) For the For the for the
Year ended Six months Three months six months December Ended 31,
Ended June 30, Ended June 30, June 30, 2008 2008 2009 2008 2009
2009 Audited Unaudited Unaudited NIS U.S. dollars In thousands
(except share and per share data) Revenues from sales 7,429,121
3,739,561 3,608,739 1,918,403 1,843,951 920,832 Cost of sales
5,369,149 2,708,484 2,603,905 1,390,880 1,342,204 664,431 ---------
--------- --------- --------- --------- ------- Gross profit
2,059,972 1,031,077 1,004,834 527,523 501,747 256,401 Selling,
general and administrative expenses 1,794,720 870,050 883,981
443,983 441,062 225,563 --------- --------- --------- ---------
--------- ------- Operating profit before changes in fair value of
investment property and other gains and losses 265,252 161,027
120,853 83,540 60,685 30,838 Other gains 12,233 617 4,464 392 1,739
1,139 Other losses (14,716) (2,426) (5,102) (947) (4,539) (1,302)
Changes in fair value of investment property, net 19,067 17,970
1,740 5,225 1,740 444 --------- --------- --------- ---------
--------- ------- Operating profit 281,836 177,188 121,955 88,210
59,625 31,119 Finance income 60,700 45,231 37,995 16,004 27,016
9,695 Finance expenses (166,295) (93,658) (85,222) (56,187)
(62,246) (21,746) Share in losses of associates (33) (17) (88)
(144) (4) (22) --------- --------- --------- --------- ---------
------- Income before taxes on income 176,208 128,744 74,640 47,883
24,391 19,046 Taxes on income 43,806 26,474 24,780 10,650 6,879
6,323 Net income 132,402 102,270 49,860 37,233 17,512 12,723
--------- --------- --------- --------- --------- -------
Attributable to: Equity holders of the parent 104,586 87,613 39,606
29,505 13,071 10,106 --------- --------- --------- ---------
--------- ------- Minority interests 27,816 14,657 10,254 7,728
4,441 2,617 --------- --------- --------- --------- ---------
------- Net income per Ordinary share attributed to Company
shareholders or ADS: Basic 2.41 2.02 0.91 0.68 0.30 0.23 ---------
--------- --------- --------- --------- ------- Fully diluted 1.62
2.02 0.91 0.64 0.30 0.23 --------- --------- --------- ---------
--------- ------- Weighted average number of shares or ADS used for
computation of income per share: Basic 43,372,819 43,372,819
43,397,543 43,372,819 43,421,996 43,397,543 ---------- ----------
---------- ---------- ---------- ---------- Fully diluted
45,037,692 44,793,240 43,397,543 44,793,240 43,421,996 43,397,543
---------- ---------- ---------- ---------- ---------- ----------
BLUE SQUARE - ISRAEL LTD. INTERIM CONSOLIDATED STATEMENTS OF CASH
FLOW FOR FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2009
(UNAUDITED) Convenience translation(a) For the For the for the Year
ended Six months Three months six months December 31, ended June
30, ended June 30 ended June 30, -------------- ------------- 2008
2008 2009 2008 2009 2009 ------- ------- ------- ------- -------
------ Audited Unaudited Unaudited -------
---------------------------------- --------- NIS U.S. dollars
----------------------------------------------------------- In
thousands
----------------------------------------------------------- CASH
FLOWS FROM OPERATING ACTIVITIES: Income before taxes on income
176,208 128,744 74,640 47,883 24,391 19,046 Income tax paid
(94,212) (48,044) (34,775) (29,410) (19,642) (8,873) Adjustments
required to reflect the cash flows from operating activities (a)
327,777 197,529 116,688 236,561 121,669 29,775 ------- -------
------- ------- ------- ------ Net cash provided by operating
activities 409,773 278,229 156,553 255,034 126,418 39,948 -------
------- ------- ------- ------- ------ CASH FLOWS FROM INVESTING
ACTIVITIES: Purchase of property, plant and equipment (211,646)
(104,306) (92,439) (44,517) (39,107) (23,587) Purchase of
investment property (69,749) (36,331) (3,307) (4,158) (978) (844)
Purchase of minority shares in subsi- diaries (186,403) - (6,607) -
- (1,686) Purchase of intangible assets (30,372) (15,108) (9,194)
(3,609) (5,181) (2,347) Proceeds from collection of short-term bank
deposits, net 102,531 100,426 - 256 - - Proceeds from sale of
property, plant and equipment 1,559 377 1,537 60 1,036 392 Proceeds
from investment property 6,567 6,567 5,700 - - 1,454 Proceeds from
sale of marketable securities 185,104 106,237 57,179 40,481 22,976
14,590 Investment in marketable securities (169,747) (100,640)
(54,339) (50,989) (20,946) (13,866) Proceeds from sale of
investment in subsidiary - - 10,074 - 10,074 2,571 Interest
received 17,778 4,242 6,330 2,208 4,747 1,615 ------- -------
------- ------- ------- ------ Net cash used in investing
activities (354,378) (38,536) (85,066) (60,268) (27,379) (21,708)
------- ------- ------- ------- ------- ------ CASH FLOWS FROM
FINANCING ACTIVITIES: Dividend paid to share- holders (150,000) - -
- - - Issuance of debentures 121,259 - - - - - Dividend paid to
minority shareholders of subsidiaries (22,077) (11,117) (6,181)
(11,117) (6,181) (1,577) Receipt of long-term loans 231,398 13,709
6,500 5,000 2,500 1,659 Repayment of long-term loans (130,571)
(46,074) (66,389) (22,824) (35,901) (16,940) Repayment of long term
credit from trade payables (1,740) (870) (870) (435) (435) (222)
Short-term credit from banks and others, net 15,689 16,645 86,560
18,392 27,142 22,087 Proceeds from exercise of options in a
subsidiary - - 2,306 - 2,306 588 Interest paid (89,244) (39,642)
(45,879) (8,224) (10,495) (11,707) ------- ------- ------- -------
------- ------ Net cash used in financing activities (25,286)
(67,349) (23,953) (19,208) (21,064) (6,112) ------- ------- -------
------- ------- ------ INCREASE IN CASH AND CASH EQUIVALENTS AND
BANK OVERDRAFT 30,109 172,344 47,534 175,558 77,975 12,128 BALANCE
OF CASH AND CASH EQUIVALENTS AND BANK OVERDRAFT AT BEGINNING OF
PERIOD 53,029 56,410 83,138 53,196 52,697 21,214 ------- -------
------- ------- ------- ------ BALANCE OF CASH AND CASH EQUIVALENTS
AND BANK OVERDRAFT AT END OF PERIOD 83,138 228,754 130,672 228,754
130,672 33,342 ------- ------- ------- ------- ------- ------ BLUE
SQUARE - ISRAEL LTD. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2009
(UNAUDITED) Convenience translation(a) Year For the For the for the
ended Six months Three months six months December 31, ended June
30, ended June 30 ended June 30 -------------- ------------- 2008
2008 2009 2008 2009 2009 ------- ------- ------- ------- -------
------ Audited Unaudited Unaudited -------
------------------------------ --------- NIS U.S. dollars
----------------------------------------------------- In thousands
----------------------------------------------------- (a)
Adjustments required to reflect the cash flows from operating
activities: Income and expenses not involving cash flows:
Depreciation and amortization 153,882 71,440 79,766 36,848 39,992
20,354 Increase in fair value of investment property, net (19,067)
(17,970) (1,740) (5,225) (1,740) (444) Share in losses of
associated company 33 17 88 144 4 22 Share based payment 8,175
2,666 5,619 2,397 2,933 1,434 Loss (gain) from sale and disposal of
property, plant and equipment and provision for impairment of
property, plant and equipment, net 5,989 (225) 2,196 29 2,554 560
Gain from changes in fair value of derivative financial instruments
(19,247) (14,627) (17,952) (961) (15,396) (4,581) Linkage
differences on debentures, loans and other long term liabilities
59,669 35,258 16,358 29,945 23,668 4,174 Capital loss (gain) from
realization of investments in subsidiaries (9,801) 1,603 (1,022)
350 1,522 (261) Accrued severance pay, net 263 1,220 (292) 72 (304)
(75) Decrease in value of marketable securities deposit and
long-term receivables, net 11,169 3,402 7,064 3,488 4,768 1,802
Interest paid, net 71,466 35,400 39,550 6,016 5,748 10,092 Changes
in operating assets and liabilities: Decrease (increase) in trade
receivables and other accounts receivable 59,967 (55,914) (56,412)
133,418 290,230 (14,394) Decreased (increase) in inventories
(43,136) (37,647) (37,140) 65,001 46,829 (9,477) Increase
(decrease) in trade payables and other accounts payable 48,415
172,906 80,605 (34,961) (279,139) 20,569 ------- ------- -------
------- ------- ------ 327,777 97,529 116,688 236,561 121,669
29,775 ------- ------- ------- ------- ------- ------ BLUE SQUARE -
ISRAEL LTD. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE
SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2009 (UNAUDITED)
Convenience translation(a) Year For the For the for the ended Six
months Three months six months December 31, ended June 30, ended
June 30 ended June 30 -------------- ------------- 2008 2008 2009
2008 2009 2009 ------- ------- ------- ------- ------- ------
Audited Unaudited Unaudited ------- ------------------------------
--------- NIS U.S. dollars
----------------------------------------------------- In thousands
----------------------------------------------------- (b)
Supplementary information on investing and financing activities not
involving cash flows: Conversion of convertible debentures of
subsidiaries 6,655 6,387 - 2,224 - - ------- ------- -------
------- ------- ------ Purchasing property, plant and equipment on
credit 14,797 6,931 10,153 6,931 10,153 2,591 ------- -------
------- ------- ------- ------ Conversion of convertible debentures
of the company - - 12,198 - 12,198 3,113 ------- ------- -------
------- ------- ------ Restricted deposit against receipt of a
short term loan - - 440,015 - 440,015 112,277 ------- -------
------- ------- ------- ------ BLUE SQUARE - ISRAEL LTD. SELECTED
OPERATING DATA FOR THE THREE MONTH AND SIX MONTH PERIOD ENDED JUNE
30, 2009 (UNAUDITED) Convenience translation(a) for the three
months ended June 30 For the six For the three months ended months
ended June 30 June 30 ------------ -------------- 2008 2009 2008
2009 2009 NIS NIS NIS NIS U.S.$ ---- ---- ---- ---- ----
(Unaudited) (Unaudited) Sales (in millions) 3,740 3,609 1,918 1,844
470.5 Operating income (in 161 121 84 61 15.5 millions) EBITDA (in
millions) 237 205 123 104 26.5 EBITDA margin 6.3% 5.7% 6.4% 6.4% NA
Increase (decrease) in 4.4% (6.8%) 8.2% (6.1%) NA same store sales*
Number of stores at end of period 190 200 190 200 NA Stores opened
during the period 5 7 2 2 Stores closed during the period - 1 - 1
NA Total square meters at end of period 350,200 362,300 350,200
362,300 NA Square meters added during the period, net 7,000 7,900
2,700 2,800 NA Sales per square meter 10,142 9,366 5,141 4,624
1,180 Sales per employee (in 479 484 241 244 62 thousands) *
Compared with the same period in the prior fiscal year. Contact:
Blue Square-Israel Ltd. Dror Moran, CFO Toll-free telephone from
U.S. and Canada: 888-572-4698 Telephone from rest of world:
+972-3-928-2220 Fax: +972-3-928-2299 Email: DATASOURCE: Blue Square
Israel Ltd CONTACT: Contact: Blue Square-Israel Ltd., Dror Moran,
CFO, Toll-free telephone from U.S. and Canada: 888-572-4698,
Telephone from rest of world: +972-3-928-2220, Fax:
+972-3-928-2299, Email:
Copyright