Blue Square - Israel Ltd. Reports Financial Results For The First Quarter of 2008

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Despite Timing of Passover Holiday, the Success of Mega in Town Brought Sales Up 7.5% With 27.7% Gross Margin, 5.0% Operating Margin ROSH HA'AYIN, Israel, May 29 /PRNewswire-FirstCall/ -- Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced unaudited results for the first quarter ended March 31, 2008. NOTE: IFRS - International Financial Reporting Standard All financial results reported in this release are presented for the first time in accordance with International Financial Reporting Standards ("IFRS"). Results for the First Quarter Revenues: Revenues for the quarter increased by 7.5% to NIS 1,821.2 million (U.S. $512.6 million) (a) compared to NIS 1,693.5 million in the first quarter of 2007. The increase reflected: 1) the addition of 15,436 square meters of selling space through the opening of eleven new supermarkets during the twelve month period; 2) the ongoing expansion of operations of Bee Group Retail ("Bee Group") (formerly Kfar Ha'Shaashuim), including the consolidation during the year of the revenues of Vardinon Textile Ltd. (TASE: WRDT) ("Vardinon") and Naaman Porcelain Ltd. (TASE:NAMN) ("Naaman") since the second and the fourth quarter of 2007, respectively; 3) the consolidation since the fourth quarter of 2007 of Eden Briyut Teva Market Ltd. ("Eden Teva"); and 4) the 1.1% rise in Same Store Sales, which derived from the quarter's increase in food prices, countered by the timing of the Passover buying season, which fell entirely in the second quarter of 2008 but partially in the first quarter of 2007. Gross Profit: Gross profit for the first quarter increased by 13.5% to NIS 503.6 million (U.S. $141.7 million) compared to NIS 443.6 million in the first quarter of 2007. Gross margin for the period increased to 27.7% compared to 26.2% in the parallel quarter of 2007, reflecting improved agreements with suppliers; the success of the Mega In Town format, reducing the weight of hard discount sales due to the decrease in sales of the Shefa Shuk and Mega chains; and the higher gross margin of sales generated by the Company's subsidiary Bee Group Retail. This was moderated by a strongly competitive environment. Revaluation of Investment Property: In compliance with the IFRS Accounting Standard, the Company adjusts the value of its investment property according to Fair Market Value. As such, in the first quarter of 2008, the Company recorded non-cash income of NIS 12.7 million (U.S. $3.6 million). Selling, General, and Administrative Expenses: Selling, General, and Administrative expenses for the quarter increased by 16.9% to NIS 426.1 million (U.S. $119.9 million) (23.4% of revenues) compared to NIS 364.3 million (21.5% of revenues) in the first quarter of 2007. The increase derived mainly from the expenses of opening new stores, and the expenses of the companies which were consolidated into Blue Square's results of the first quarter of 2008 but not in the parallel quarter of 2007. In addition, operating expenses such as rent and municipal taxes increased due to the increase in the Israeli CPI. Operating Income: Operating income for the quarter increased by 13.8% to NIS 90.2 million (U.S. $25.4 million) from NIS 79.3 million in the first quarter of 2007. The increase reflects the period's higher revenues, gross profit and non-cash income from the revaluation of investment properties, mitigated somewhat by increased operating expenses. Operating margin for the period was 5.0% compared to 4.7% in the first quarter of 2007. Excluding the income derived from the revaluation of investment property, operating margin for the first quarter was 4.3%. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization): EBITDA for the quarter was NIS 114.0 million (U.S. $32.1 million) compared to NIS 112.8 million in the first quarter of 2007. EBITDA margin for the period was 6.3% compared to 6.7% in the parallel period of 2007. Financial Expenses (net): Financial expenses (net) for the quarter were NIS 8.2 million (U.S. $2.3 million) compared to NIS 36.7 million in the first quarter of 2007. This significant decrease reflected the Company's adoption of the IFRS standard, which mandates the presentation of financial instruments at Fair Market Value with changes in value accounted for as financial income or expense. During the first quarter of 2008, the Company recorded financial income of approximately NIS 11.3 million (U.S. $3.2 million) related to the revaluation of its holdings in financial instruments, compared to the parallel quarter of 2007, in which its financial expenses connected with financial instruments totaled approximately NIS 28.7 million. This reduction in financial expenses was partially mitigated by an increase associated with the period's changes in the value of its debt attributable to the increase in Israel's "Known" price index. Taxes on Income: Taxes on income for the quarter were NIS 15.8 million (U.S. $4.5 million), a decrease of 30.4% compared to NIS 22.7 million in the first quarter of 2007. The effective tax rate for the quarter declined to 19.6% compared to 52.4% for the first quarter of 2007, reflecting the fact that the Company, in compliance with the IFRS, did not record tax liability from the revaluation of its financial instruments to Fair Value. Net Income: Net income for the first quarter of 2008 was NIS 65.0 million (U.S. $18.3 million), an increase of 214.7% compared to NIS 20.7 million for the first quarter of 2007. The increase of net income, reflects the significant improvement and the reduction of financial expenses, as explained above. The portion of the net profit attributable to shareholders, as calculated in accordance with the IFRS, was NIS 58.1 million (U.S. $16.4 million), or NIS 1.34 per ADS (U.S. $0.38), while the portion attributable to the share of minority interests was NIS 6.9 million (U.S. $2.0 million). Other - The Company's Same Store Sales for the first quarter of 2008 increased by 1.1%. - During the quarter, the Company opened three supermarkets, adding a net total of 4,235 square meters to the chain. - Since the second half of March 2008, the media has published reports that certain sectors within Israel's ultra-Orthodox population segment are considering the declaration of a boycott against Blue Square's Shefa Shuk chain. Although the Company is unaware of any such public declaration, since the end of March 2008, the Company has experienced a significant decrease in the sales of several Shefa Shuk stores which appeal to the ultra-Orthodox community and/or are located within ultra-Orthodox neighborhoods. The decrease in sales in these stores did not make a material impact on the Company's financial results for the first quarter of 2008; however it is possible that changes in the situation may create an effect on the Company as 2008 progresses. Management is currently finalizing alternative strategies for addressing potential developments. Comments of Management Commenting on the results, Mr. Zeev Vurembrand, Blue Square's President and CEO said, "We are pleased to report another solid quarter, reflecting the continued success of our Mega In Town brand." "Since I took over as CEO in March 2008, our focus has been to form a comprehensive strategy for driving the Company's long-term growth and establishing leadership of Israel's supermarket and retail markets. Although we have not yet finalized the plan, we have already begun working on one of its key action items: the improvement of our flagship Mega brand through innovative marketing and improvements in the supply chain. As part of this effort, we will soon be opening our first supermarket targeting the Arab sector while also launching a variety of customer loyalty, financial services and other initiatives. For the medium-to-long term, our goals include the build-out of our 'Bee' retail brand into a nationwide chain of housewares, textiles, children/babies and toy stores. In parallel, we will expand Eden Teva, our organic chain, significantly to build on our early lead in Israel's emerging market for organic and health food. We believe the combination of these initiatives will drive continuous growth and success for Blue Square, enabling us to deliver significant value to our shareholders over the long term." NOTE A: Convenience Translation to Dollars The convenience translation of New Israeli Shekel (NIS) into U.S. dollars was made at the rate of exchange prevailing at March 31, 2008: U.S. $1.00 equals NIS 3.553. 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 188 supermarkets under different formats, each offering varying levels of service and pricing. This press release may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, with respect to the Company's business, financial condition, prospects and operating results. These statements are based on current expectations and projections that involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints, the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's Annual Report on Form 20-F/A and other filings with the Security and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. BLUE SQUARE - ISRAEL LTD. INTERIM CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 Convenience translation December 31, March 31, March 31, __________________ 2007 2007 2008 2008 __________ __________ __________ __________ Unaudited _________________________________________________ U.S. NIS dollars ____________________________________ __________ In thousands _________________________________________________ A s s e t s CURRENT ASSETS: Cash and cash equivalents 56,410 127,522 53,196 14,972 Short-term investments 199,394 64,831 187,044 52,644 Short-term bank deposit 103,498 531,866 1,834 516 Trade receivables 776,251 766,134 802,856 225,966 Other accounts 74,445 receivable 99,841 251,894 264,514 Income taxes receivable 23,062 19,779 25,013 7,040 Inventories 453,944 441,956 556,592 156,654 _________ _________ _________ _________ 1,712,400 2,203,982 1,891,049 532,237 _________ _________ _________ _________ NON-CURRENT ASSETS: Long-term receivables 48,289 16,426 2,874 3,612 Embedded derivative 10,500 - 5,250 1,478 Prepaid expenses in respect of operating lease 199,679 204,172 198,181 55,779 Investments in investee companies 4,948 5,386 5,076 1,429 Investment property 315,778 281,149 388,098 109,231 Intangible assets, net 280,420 92,399 287,945 81,043 Fixed assets, net 1,613,515 1,524,140 1,652,829 462,389 Deferred taxes 36,167 33,252 39,022 10,983 _________ _________ _________ _________ 4,221,696 4,360,906 4,470,324 1,258,181 ========= ========= ========= ========= BLUE SQUARE - ISRAEL LTD. INTERIM CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 Convenience translation December 31, March 31, March 31, _________________ 2007 2007 2008 2008 _______ _______ _______ _______ Unaudited ___________________________________________________ U.S. NIS dollars ________________________________________ _________ In thousands ____________________________________________________ Liabilities and shareholders' equity CURRENT LIABILITIES: Credit From banks and others 171,010 155,813 167,338 47,098 Current maturities of convertible debentures 69,859 37,347 70,987 19,979 Trade payables 973,461 997,549 1,024,668 288,395 Other accounts payable 447,729 563,815 604,671 170,186 Income taxes payable 2,905 359 4,480 1,261 Dividend payable - 60,000 3,945 1,110 __________ __________ _________ ________ 1,664,964 1,814,883 1,876,089 528,089 __________ __________ _________ ________ LONG-TERM LIABILITIES: Loans from banks 260,134 177,422 248,444 69,925 Convertible debentures 169,897 303,669 145,688 41,004 Debentures 772,827 827,350 776,684 218,599 Derivatives instruments 9,968 8,005 11,619 3,270 Liabilities in respect of employee benefits, net 35,986 32,854 37,023 10,420 Deferred taxes 60,240 44,197 61,299 17,253 1,309,052 1,393,497 1,280,757 360,471 SHAREHOLDERS' EQUITY: Share capital - Ordinary shares of NIS 1 par value 57,094 54,996 57,094 16,069 Additional paid-in capital 1,019,348 873,086 1,020,594 287,541 Accumulated deficit (106,833) (17,980) (48,456) (13,931) _________ _________ _________ _________ 969,609 910,102 1,029,232 289,680 Minority interest 278,071 242,424 284,246 80,002 _________ _________ _________ ________ Total equity 1,247,680 1,152,526 1,313,478 369,681 _________ _________ _________ ________ Total liabilities and shareholders' equity 4,221,696 4,360,906 4,470,324 1,258,181 ========= ========== ========= ========= BLUE SQUARE - ISRAEL LTD. INTERIM CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 Convenience translation for the three months For the three months ended December 31, ended March 31, March 31, __________________ 2007 2007 2008 2008 _________ ________ _______ _________ Unaudited __________________________________________________ U.S. NIS dollars _____________________________________ __________ In thousands __________________________________________________ Revenues from sales 6,982,228 1,693,456 1,821,158 512,569 Cost of sales 5,129,578 1,249,851 1,317,604 370,843 _________ _________ __________ _________ Gross profit 1,852,650 443,605 503,554 141,726 Net gain from adjustment of investment property to fair value 10,456 - 12,745 3,587 Selling, general and administrative expenses 1,559,292 364,339 426,067 119,918 _________ ________ _________ ________ Operating income 303,814 79,266 90,232 25,395 Other income 214 (expenses), net (837) (1,253) (353) Finance income 50,279 14,938 29,227 8,226 Finance expenses (107,842) (51,637) (37,471) (10,546) Equity in earnings of investee companies, net 186 625 127 36 ________ ________ ________ _____ Income before taxes 43,406 on income 245,600 80,862 22,758 Taxes on income 69,779 22,740 15,824 4,454 ________ ________ ________ _____ Net income 175,822 20,666 65,037 18,304 ========== ========== ========= ======= Attributable to: Equity holders of the parent 143,628 12,483 58,109 16,354 _________ ________ ________ ________ Minority interests 32,194 8,183 6,929 1,950 _________ ________ ________ ________ Net income per Ordinary share or ADS: Basic 3.39 0.31 1.34 0.38 ________ _______ _______ ______ Fully diluted 3.39 0.31 0.85 0.24 ________ _______ _______ ______ Weighted average number of shares or ADS used for computation of income per share: Basic 42,355,339 40,460,766 43,372,820 43,372,820 ___________ Fully diluted 45,134,184 45,125,965 44,793,242 44,793,242 ___________ BLUE SQUARE - ISRAEL LTD. SELECTED OPERATING DATA FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 (UNAUDITED) Convenience translation(a) for the three For the three months months ended ended March 31, March 31, ____________________ 2007 2008 2008 _________ _________ _________ Unaudited __________________________________ NIS U.S. dollars _____________________ ____________ Sales (in millions) 1,693.5 1,821.2 512.6 Operating income (in 79.3 90.2 25.5 millions) Operating income net of revaluation of investment property (in millions) 79.3 77.5 21.8 EBITDA (in millions) 112.8 114.0 32.1 EBITDA margin 6.7% 6.3% NA Increase in same store sales* 5.1% 1.1% NA Number of stores at end of NA period 177 188 Stores opened during the NA period 2 3 Total square meters at end of NA period 331,504 346,940 Square meters added during NA the period, net 8,200 4,235 Sales per square meter 4,969 4,954 1,392 Sales per employee (in 234 237 66 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:

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BSI Be Semiconductor Industries NV