Kosher Food (WILC)

[midastouch017]

G. Willi-Food Reports 376% Increase in Operating Income, 155% Increase in Income Before Taxes and 117% Net Income Growth for Q2 2006 Over Q2 2005
Wednesday August 16, 10:00 am ET


YAVNE, Israel, August 16 /PRNewswire-FirstCall/ -- G. Willi-Food International Ltd. (NASDAQ: WILC - News; the "Company" or "Willi Food"), one of Israel's largest food importers and a single-source supplier of one of the world's most extensive range of quality kosher food products, today announced its unaudited financial results for the quarter and six months ended June 30, 2006.

Second Quarter 2006 Financial Highlights

- 11% increase in revenues over second quarter 2005
- 376% increase in operating income over second quarter 2005
- 155% increase in income before taxes over second quarter 2005
- 117% increase in net income over second quarter 2005


The Company's revenues for the second quarter of 2006 increased 11% to NIS 43.2 million (US $9.7 million) compared to revenues of NIS 39.0 million (US $8.8 million) in the second quarter of 2005. Gross profits increased 6% to NIS 11.4 million (US $2.6 million) compared to gross profits of NIS 10.8 million (US $2.4 million) in the second quarter of 2005.

Mr. Zwi Williger, President and COO of Willi-Food commented, "We are very excited about our strong results for the second quarter and first half of 2006. We were able to achieve revenue growth through successfully launching new items into our product line, as well as increasing sales of existing products to new and existing customers. We expect to launch additional new product lines in the second half of 2006. Our strong financial results for the first six months of 2006 demonstrate Willi-Food's ability to capitalize on the growing interest of consumers in the kosher market."

Mr Williger noted that the Company has to date seen revenue growth in the third quarter, which is in part due to increased consumption relating to the recent conflict in Israel. He also remarked that Willi Food has donated more than NIS 150,000 (US $34,000) worth of food products as aid to those affected in the northern region of Israel.

Second quarter operating income increased 376% to NIS 3.8 million (US $0.9 million) compared to operating income of NIS 0.8 million (US $0.2 million) in the second quarter of 2005.

Second quarter 2006 income before taxes increased 155% to NIS 4.6 million (US $1.0 million) compared to an income before taxes of NIS 1.8 million (US $0.4 million) recorded in the second quarter of 2005. Net income for second quarter increased 117% to NIS 2.6 million (US $0.6 million), or NIS 0.31 (US $0.07) per share compared to a net income of NIS 1.2 million (US $0.3 million), or NIS 0.14 (US $0.03) per share, recorded in the second quarter of 2005.

Six-Month Results

The Company's revenues for the six months ended June 30, 2006 increased 23% to NIS 97.7 million (US $22.0 million) compared to revenues of NIS 79.5 million (US $17.9 million) in the first half of 2005. Gross profits for the period increased 35% to NIS 25.8 million (US $5.8 million) compared to gross profits of NIS 19.2 million (US $4.3 million) in the six months ended June 30, 2005. First half gross margins improved to 26.4% compared to gross margins of 24.1% in the same period in 2005.

Operating income for the first half of 2006 increased 157% to NIS 8.3 million (US $1.9 million) from NIS 3.2 million (US $0.7 million) reported in the comparable period of last year. 2006 first half operating income includes NIS 1.9 million (US $0.4 million) of expense that was recorded during the period for an advertising campaign and promotional activities to promote Willi-Food's brand name and products compared to NIS 0.4 million (US $0.1 million) in the first half of 2005 for promotional activities during that period. In addition, 2006 first half operating income includes a NIS 1.9 million (US $0.4 million) one-time general and administrative expense due to a management bonus attributed to an unrealized capital gain resulting from the commencement of the trading of shares of the Company's majority-owned subsidiary, Gold Frost Ltd., on London's AIM market on March 9, 2006.

First half 2006 income before taxes increased 520% to NIS 28.8 million (US $6.5 million) compared to an income before taxes of NIS 4.6 million (US $1.0 million) recorded in the first half of 2005. Net income for the first half of 2006 increased 724% to NIS 25.3 million (US $5.7 million), or NIS 2.94 (US $0.66) per share compared to a net income of NIS 3.1 million (US $0.7 million), or NIS 0.36 (US $0.08) per share, recorded in the first half of 2005. Net income for first half of 2006 includes NIS 17.8 million (US $4.0 million) as a net one-time unrealized capital gain due to the public listing of the shares of Gold Frost Ltd.

"The fundamentals of our business are strong," concluded Mr. Williger. "Our innovative approach to the rapidly expanding kosher food market continues to drive revenue and margin growth. In addition, we are executing our strategic plan to expand internationally. We look forward to the remainder of the year."


G. WILLI FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31, June 30, December 31,
2 0 0 6 2 0 0 5 2 0 0 6 2 0 0 5 (1)
(1)
NIS US dollars
I n t h o u s a n d s
ASSETS

Current assets
Cash and cash equivalents 66,452 30,431 14,967 6,854
Marketable securities 6,518 3,229 1,468 727
Trade receivables 49,125 48,396 11,063 10,900
Receivables and other 5,300 7,673 1,194 1,728
current assets
Inventories 18,708 30,798 4,214 6,937
Total current assets 146,103 120,527 32,906 27,146

Property and equipment, 24,542 16,657 5,527 3,752
net

Other assets, net 90 90 20 20

170,735 137,274 38,453 30,918

LIABILITIES AND
SHAREHOLDERS'
EQUITY

Current liabilities
Payables:
Trade payables 18,050 19,938 4,065 4,491
Related parties 3,463 2,193 780 494
Other and accrued 7,702 12,973 1,735 2,922
expenses
Total current liabilities 29,215 35,104 6,580 7,907

Long term liabilities
Accrued severance pay 299 299 67 67

Minority interest 14,023 - 3,158 -

Shareholders' equity
Ordinary shares NIS 0.10
par value
(authorized - 50,000,000
shares, issued and
outstanding - 8,615,000
shares)
948 948 213 213
Additional paid-in 20,258 20,258 4,563 4,563
capital
Retained earnings 105,992 80,665 23,872 18,168
127,198 101,871 28,648 22,944

170,735 137,274 38,453 30,918


(1) Convenience translation into U.S. dollars.
G. WILLI FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six months Three months Six months
ended June 30, ended June 30,
2 0 0 6 2 0 0 5 2 0 0 6 2 0 0 5 2 0 0 6 2 0 0 5
(1) (1)
NIS US dollars
I n t h o u s a n d s (except per share and share
data)

Sales 97,745 79,469 43,200 38,972 22,015 17,898

Cost of sales 71,910 60,294 31,783 28,187 16,196 13,579

Gross profit 25,835 19,175 11,417 10,785 5,819 4,319

Selling 9,866 7,099 4,711 3,541
expenses 2,222 1,599

General and
administrative 7,709 8,867 2,885 6,441 1,736 1,997
expenses

Total
operating
expenses 17,575 15,966 7,596 9,982 3,958 3,596

Operating 8,260 3,209 3,821 803 1,861 723
income

Financial 1,380 1,396 767 963 311 314
income, net

Other income 19,113 35 - 35 4,305 8

Income before
taxes
on income 28,753 4,640 4,588 1,801 6,477 1,045


Taxes on 2,687 1,568 1,218 585 605 353
income

Income after
taxes
on income 26,066 3,072 3,370 1,216 5,872 692

Minority 735 - 735 - 166 -
interest

Net income 25,331 3,072 2,635 1,216 5,706 692

Earnings per
share data:

Earnings per
share:

Basic 2.94 0.36 0.31 0.14 0.66 0.08

Diluted 2.90 0.36 0.30 0.14 0.65 0.08

Shares used in
computing
basic and
diluted
earnings 8,615,000 8,615,000 8,615,000 8,615,000 8,615,000 8,615,000
per
ordinary
share:


(1) Convenience translation into U.S. dollars.
About G. Willi-Food International, Ltd.
G. Willi-Food International Ltd. is one of Israel's largest food importers and a single-source supplier of one of the world's most extensive ranges of quality kosher food products. It currently imports, markets and distributes more than 400 food products manufactured by some 100 top-tier suppliers throughout the world to more than 1,000 customers. The Company excels in identifying changing tastes in its markets and sourcing high-quality kosher products to address them. For more information, please visit the Company's website at www.willi-food.co.il.

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, competition, changing economic conditions and other risk factors detailed in the Company's SEC filings.

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 June 30, 2006: U.S. $1.00 equals NIS 4.44. The translation was made solely for the convenience of the reader.

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