G. Willi-Food Reports Operating Income of NIS 8.5 Million and Net Income of NIS 6.8 Million for the First Quarter of 2009

G. Willi-Food Anticipates 2009 Second Quarter Gross Margin Will Not be Affected by Previously Announced Decrease in Global Purchase Prices of Food Products

YAVNE, Israel, May 26 /PRNewswire-FirstCall/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (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 2009 first quarter ended March 31, 2009.

    First Quarter Fiscal 2009 Summary

    - 10.2% decrease in sales over first quarter of 2008

    - 28.2% decrease in gross profit over first quarter of 2008

    - 22.8% gross margin in first quarter of 2009 compared with
      28.5% gross margin in first quarter of 2008

    - Operating income of NIS 8.5 million (US $2.0 million) in
      first quarter 2009

    - Income before taxes of NIS 8.5 million (US $2.0 million) in
      first quarter of 2009

    - Income after taxes of NIS 6.8 million (US $1.6 million) in
      first quarter of 2009

    - Net income related to Company Shareholders of NIS 6.2
      million (US $1.5 million) in first quarter of 2009

Willi-Food's operating divisions include Willi-Food in Israel, majority owned Gold Frost - a designer, developer and distributor of branded kosher dairy food products, and its subsidiary - the dairy distributor based in Denmark, the Company's global kosher trade and export joint venture with the Baron family and Shamir Salads - an Israeli distributor and manufacturer of Mediterranean style salads.

Revenues for the first quarter of 2009 decreased 10.2% to NIS 95.6 million (US$22.8 million) compared to revenues of NIS 106.4 million (US$25.4 million) in the first quarter of 2008. This decrease was mainly due to the cessation of the operations of of Laish Israeli - the Company's U.S. subsidiary during July 2008, as reported by the Company on July 14, 2008.

Gross profit for the first quarter of 2009 decreased by 28.2% to NIS 21.8 million (US$5.2 million) compared to gross profit of NIS 30.4 million (US$7.2 million) in the first quarter of 2008. First quarter gross margin was 22.8% compared to gross margin of 28.5% for the same period in 2008. As previously announced by the Company on December 29, 2008, and on March 12, 2009, during the fourth quarter of 2008, the global purchase prices of food products sharply decreased, resulting in the sharp decrease in the selling prices of the Company's products as well. Because the Company's commitments to purchase food products were based on higher prices from its vendors, the immediate consequence was a decline in the gross margin in the fourth quarter of 2008 and further decline in the first quarter of 2009. The company anticipates that its 2009 second quarter results will not be affected by the abovementioned decrease in global purchase prices of food products, as the Company has completed the sale of the inventory in the orders from vendors backlog acquired at the higher prices. The decrease in 2009 first quarter gross margin compared to the gross margin in the first quarter of 2008 was due to the decrease of global purchase prices of food products compounded with the strengthening of the U.S. dollar versus the NIS (a depreciation of more than 11% of the value of the NIS in the fourth quarter of 2008 and a further 10% depreciation in the first quarter of 2009) and the general effects of the global economic recession.

Willi-Food's operating income for the first quarter of 2009 decreased by 42.6% to NIS 8.5 million (US $2.0 million) compared to NIS 14.8 million (US $3.5 million) reported in the comparable quarter of last year. Selling expenses as a percentage of revenues decreased in the first quarter of 2009 to 8.3% compared to 8.8% in the first quarter of 2008. General and administrative expenses as a percentage of revenue decreased in the first quarter of 2009 to 5.7% from 5.8% in the first quarter of 2008. The decrease in selling and general and administrative expenses is attributed to the actions taken by the Company's management during the first quarter of 2009 to reduce the Company's expenses by, among other things, a temporary 5% decrease in management's salaries.

Willi-Food's income before taxes for the first quarter of 2009 decreased by 35.5% to NIS 8.5 million (US $2.0 million) compared to NIS 13.1 million (US $3.1 million) recorded in the first quarter of 2008. Willi Food's net income in the first quarter of 2009 decreased by 30.0% to NIS 6.8 million (US $1.6 million) compared to NIS 9.7 million (US $2.3 million) recorded in the first quarter of 2008. Willi Food's net income related to Company Shareholders in the first quarter of 2009 decreased by 28.1% to NIS 6.2 million (US $1.5 million), or NIS 0.60 (US $0.14) per share compared to NIS 8.6 million (US $2.1 million), or NIS 0.84 (US $0.20) per share, recorded in the first quarter of 2008.

Willi-Food ended the quarter with $19.3 million in cash and securities and $4.8 million in short-term debt.

Mr. Zwi Williger, President and COO of Willi-Food commented, "We are very pleased with our first quarter 2009 results in the current challenging environment. Willi-Food's first quarter results were affected by the sharp decrease in global purchase prices, the depreciation of the NIS versus the U.S. dollar, the continued environment of uncertainty in the global financial markets, and the recession that began in our home market. Despite the economic situation and the recession that has affected our customers and the global markets, Willi Food has achieved net income of NIS 6.8 million in the first quarter of 2009 - margin of 7.1% of revenues. Willi Food has taken the appropriate measures to position the Company for a stronger fiscal 2009 and we remain focused on maximizing long-term profitability."

Mr. Williger concluded, "We continue to work to expand the footprint and brand recognition of Willi-Food globally while diversifying our product base in order to hedge against any single event impacting our results. We are looking for improved Willi-Food's results in 2009 as compared to our 2008 results."

Shamir Salads

The Company announced that, on May 14, 2009 it had received a notice from the minority shareholders of Shamir Salads (the "Sellers"), with whom the Company had entered into a January 2, 2008 agreement to purchase approximately 51% of the shares of Shamir Salads (the "Shamir Agreement"), cancelling the Shamir Agreement due to an alleged violation of the Agreement by the Company. In addition, on May 18, 2009, the Sellers notified the Company that the board of directors and the shareholders of Shamir Salads had convened without the Company's board and shareholder representatives and resolved to cancel the Shamir Agreement, change Shamir Salads' board composition and signatory rights, and replace the articles of association of Shamir Salads depriving the Company of its board representation and signatory rights in Shamir Salads.

The Company's position is that the Seller's actions referred to above are illegal, violate the Shamir Agreement and Shamir Salads' articles of association and were not properly authorized by Shamir Salids. The Company believes that the actions taken by the Sellers are in response to the claim by the Company that the Sellers return a portion of the advance payment made by the Company to the selling shareholders in connection the acquisition of shares in Shamir. The Company has claimed that the Sellers made false representations to the Company as to the 2008 financial results of Shamir, inflating the amount of the advance payment made by the Company, and the Sellers have not responded to this claim.

The Company has submitted an urgent application to the district court in Tel Aviv requesting, among other things, a declaratory judgement that the Shamir Agreement is in full force and effect and various injunctions against the Sellers. The court held a hearing on the case on May 25, 2009, and the Company is awaiting the court's decision.

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 2,500 food products manufactured by some 120 top-tier suppliers throughout the world to more than 1,500 customers. Willi-Food excels in identifying changing tastes in its markets and sourcing high-quality kosher products to address them. The Company also operates several subsidiaries: its subsidiary, Gold Frost Ltd., develops and distributes kosher chilled and frozen dairy food products internationally together with its Danish dairy distributor subsidiary; the joint venture with the Baron Family engages in the global import, export and distribution of kosher products worldwide; and Shamir Salads is a leading international manufacturer and distributor of pre-packaged chilled Mediterranean dips and spreads. For more information, please visit the Company's website at http://www.willi-food.co.il.

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 revenues, 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: changes affecting currency exchange rates, including the NIS/U.S. Dollar exchange rate, payment default by any of our major clients, the loss of one of 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, in particular Arla Foods, 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 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, 2007, filed with the Securities and Exchange Commission. 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.

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 March 31, 2009, U.S. $1.00 equals NIS 4.188. The translation was made solely for the convenience of the reader.

NOTE B: IFRS

The Company's consolidated financial results for the three-month ended March 31, 2009 are presented in accordance with International Financial Reporting Standards ("IFRS").

                       G. WILLI-FOOD INTERNATIONAL LTD.
                    CONDENSED CONSOLIDATED BALANCE SHEETS


                                 March 31,  December 31, March 31,  December
                                                                        31,
                                  2 0 0 9     2 0 0 8     2 0 0 9    2 0 0 8
                                           NIS              US dollars (*)
                                                (in thousands)
    ASSETS
    Current assets
    Cash and cash equivalents       68,563       78,749     16,371    18,804
    Financial assets carried at
    fair value through profit or
    loss                            12,240        9,367      2,923     2,237
    Trade receivables               93,423       79,599     22,307    19,006
    Other receivables and prepaid    2,304        3,987        550       952
    expenses
    Current tax assets                 752        2,456        180       586
    Inventories                     34,493       34,417      8,236     8,218
    Total current assets           211,775      208,575     50,567    49,803

    Non-current assets
    Property, plant and equipment   56,185       55,574     13,416    13,270
    Less -Accumulated
    depreciation                    14,083       13,467      3,363     3,216
                                    42,102       42,107     10,053    10,054

    Prepaid expenses                12,421       12,539      2,966     2,994
    Goodwill                         3,829        3,829        914       914
    Intangible assets                5,077        5,181      1,212     1,237
    Deferred taxes                     407        1,111         97       265
    Total non-current assets        63,836       64,767     15,242    15,464

                                   275,611      273,342     65,809    65,267
    EQUITY AND LIABILITIES
    Current liabilities
    Short-term bank credit          20,052       17,562      4,788     4,193
    Trade payables                  46,544       53,728     11,114    12,829
    Accruals                         5,159        6,197      1,232     1,480
    Current tax liabilities          1,601        1,050        382       251
    Other payables and accrued
    expenses                         5,083        4,971      1,213     1,187
    Employees Benefits               2,886        2,544        689       607
    Total current liabilities       81,325       86,052     19,418    20,547

    Non-current liabilities
    Long-term bank loans               252          267         60        64
    Deferred taxes                     512          442        122       105
    Warrants to issue shares             -            5          -         1
    Employees Benefits               1,039          994        248       237
    Total non-current liabilities    1,803        1,708        430       407

    Shareholders' equity
    Share capital NIS 0.10 par
    value
    (authorized - 50,000,000
    shares, issued
    and outstanding - 10,267,893
    shares                           1,113        1,113        266       266
    Premium                         59,056       59,056     14,101    14,101
    Capital fund                       247          247         59        59
    Foreign currency translation
    reserve                            204          369         49        88
    Retained earnings              117,623      111,447     28,086    26,611
    Noncontrolling interest         14,240       13,350      3,400     3,188
                                   192,483      185,582     45,961    44,313

                                   275,611      273,342     65,809    65,267


    (*)Convenience translation into U.S. dollars

                       G. WILLI-FOOD INTERNATIONAL LTD.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   Three months ended    Three months ended
                                        March 31              March 31
                                    2 0 0 9    2 0 0 8    2 0 0 9    2 0 0 8
                                           NIS             US dollars (*)
                                      (in thousands, except per share and
                                                  share data)

    Sales                            95,570    106,445     22,820     25,417

    Cost of sales                    73,781     76,094     17,617     18,170

    Gross profit                     21,789     30,351      5,203      7,247

    Selling expenses                  7,965      9,396      1,902      2,244
    General and administrative
    expenses                          5,424      6,149      1,295      1,468

    Other Income                         95          -         23          -

    Total operating expenses         13,294     15,545      3,174      3,712

    Operating income                  8,495     14,806      2,029      3,535

    Financial income                    672      (743)        160      (177)
    Financial expense                   715        967        171        231

    Income before taxes
    on income                         8,452     13,096      2,018      3,127

    Taxes on income                   1,694      3,438        404        821

    Income after taxes
    on income                         6,758      9,658      1,614      2,306

    Related to:
    Company Shareholders'             6,176      8,595      1,475      2,052

    Minority interest                   582      1,063        139        254

    Net income                        6,758      9,658      1,614      2,306

    Earnings per share data:

    Earnings per share:

    Basic                              0.60       0.84       0.14       0.20

    Diluted                            0.60       0.84       0.14       0.20

    Shares used in computing
    basic and diluted earnings
    per ordinary share:          10,267,893 10,267,893 10,267,893 10,267,893

    (*) Convenience translation into U.S. dollars

    Company Contact:
    G. Willi Food International Ltd.
    Ety Sabach, CFO
    +972-8-932-1000
    ety@willi-food.co.il

SOURCE G. Willi-Food International Ltd