G. Willi-Food Reports First Quarter 2010 Financial Results; Net Income Attributable to the Owners of the Company up 18.7% to $2.0 Million

YAVNE, Israel, May 17, 2010 /PRNewswire-FirstCall/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi Food"), a global food company specializing in the development, manufacture, marketing and international distribution of kosher foods, today announced its unaudited financial results for the first quarter ended March 31, 2010.

    (Photo: http://www.newscom.com/cgi-bin/prnh/20100517/391095 )


    First Quarter Fiscal 2010 Highlights

    - Sales increased 15.5% over first quarter of 2009 to NIS 95.0
      million (US $25.6 million)
    - Gross profit increased 39.9% over first quarter of 2009 to NIS
      28.3 million (US $7.6 million)
    - Gross margins improved to 29.7% compared to 24.6% in the first
      quarter of 2009
    - Operating income increased 38.3% over first quarter of 2009 to
      NIS 10.5 million (US $2.8 million)
    - Net income attributable to the owners of the company increased
      18.7% over first quarter of 2009 to NIS 7.3 million
      (US $2.0 million)

Sales for the first quarter of fiscal 2010 increased by 15.5% to NIS 95.0 million (US $25.6 million) compared to sales of NIS 82.3 million (US $22.2 million) in the first quarter of 2009. The increase was driven by the introduction of new products as well as increased awareness of the Willi-Food brand in the Israeli market following a national media campaign launched during the quarter.

Gross profit for the first quarter of 2010 increased by 39.9% to NIS 28.3 million (US $7.6 million) compared to gross profit of NIS 20.2 million (US $5.4 million) in the first quarter of 2009. First quarter gross margin was 29.7% compared to a gross margin of 24.6% during the same period in 2009. The increase in gross margins was largely due to the introduction of higher-margin products into the product lineup.

Mr. Zwi Williger, President and COO of Willi-Food commented: "We are very pleased to report a robust first quarter with gross profit up 40 percent. Our strong performance in the quarter was driven by expanded sales volume in the Israeli market as a result of our nationwide media campaign launched in the first quarter and aimed at broadening awareness of our brand. As we see global consumer demand for kosher foods continuing to increase, we are confident that our focused marketing strategy in Israel and the introduction of higher-margin products targeted to health-conscious and kosher consumers worldwide will continue to support our growth in 2010. We will continue to pursue strategic distribution partnerships to enable us to further penetrate the U.S. markets."

Willi-Food's operating income for the first quarter of 2010 increased by 38.3% to NIS 10.5 million (US $2.8 million) compared to NIS 7.6 million (US $2.1 million) reported in the first quarter of 2009. Selling expenses as a percentage of revenues increased in the first quarter of 2010 to 12.1% compared to 9.6% in the first quarter of 2009 mainly as a result of a one-time expense related to the media campaign referred to above. General and administrative expenses as a percentage of revenue increased in the first quarter of 2010 to 6.6% from 5.8% in the first quarter of 2009.

Willi-Food's income before taxes for the first quarter of 2010 increased by 32.8% to NIS 10.1 million (US $2.7 million) compared to income before taxes of NIS 7.6 million (US $2.0 million) recorded in the first quarter of 2009. Willi Food's net income attributable to the owners of the Company in the first quarter of 2010 increased by 18.7% to NIS 7.3 million (US $2.0 million), or NIS 0.68 (US $0.18) per share compared to a net income attributable to the owners of the Company of NIS 6.2 million (US $1.7 million), or NIS 0.57 (US $0.15) per share, recorded in the first quarter of 2009.

Willi-Food ended the quarter with US $38.9 million in cash and securities and $1.4 million in short-term debt (51% of the debt of Shamir Salads).

Business Outlook

In March 2010, the Company announced a public offering that raised net proceeds of approximately $19 million. The funds raised will be used to accelerate research and development of new products, to support future growth including potential acquisitions in both Israel and the United States, for working capital, and to support the newly established Israeli-based export division seen as a key driver of organic growth internationally.

Mr. Williger commented: "For the third consecutive quarter, Willi-Food continued to achieve gross margins of about 30 percent due to the introduction of great-tasting, higher profit margin food products into the product mix lineup. We are very pleased with our strong performance in the first quarter of 2010, and especially with our almost 40 percent increase in operating income over the first quarter of 2009. This increase represents a more than 70 percent increase over the previous quarter, the fourth quarter of 2009, despite the fact that we had a one-time expense of over NIS 1.5 million (US $0.4 million) in the first quarter for the media campaign to expand awareness of the Willi-Food brand, a campaign, as the direct result of which we continue to see expanding sales volume."

"Revenue from new products introduced in the quarter also continues to maintain good momentum. Sales generated by our newly established export division in Israel are also adding to our top line. We are optimistic about the rest of 2010 and believe we can continue to benefit from a multi-channel approach and broad kosher product base that addresses a trend toward more health-conscious food choices. We will continue to focus on controlling expenses and production costs to keep our prices competitive, and we will continue our efforts to expand our reach to retail and wholesale markets in the U.S. We remain committed to our strategy of expanding marketing channels for our higher-margin products in the U.S. and Israeli markets and on promoting our broad base of kosher products to health-conscious consumers across Europe, Israel and in the United States."

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, 2010, U.S. $1.00 equals NIS 3.713. The translation was made solely for the convenience of the reader.

NOTE B: IFRS

The Company's consolidated financial results for the three-month period ended March 31, 2010 are presented in accordance with International Financial Reporting Standards ("IFRS").

NOTE C: Discontinued Operations

Discontinued operations are measured and presented in accordance with the provisions of IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations".

The results of discontinued operations are presented in the income statement in a separate item below income from continuing operations. The comparative income from discontinued operations has been re-casted to include those operations classified as discontinued in the current period.

About G. Willi-Food International Ltd.

G. Willi-Food International Ltd. (http://www.willi-food.co.il) is an Israeli-based company specializing in high-quality, great-tasting kosher food products. Willi-Food is engaged directly and through its subsidiaries in the design, import, manufacture, marketing and distribution of over 1,000 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,500 customers in Israel and around the world including large retail and private supermarket chains, wholesalers and institutional consumers. The company's operating divisions include Willi-Food in Israel; Gold Frost, a wholly owned subsidiary who designs, develops and distributes branded kosher, dairy-food products; and Shamir Salads, an Israeli manufacturer and distributor of a broad line of over 400 Mediterranean-style chilled salads.

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 sales, 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: monetary risks including changes in currency exchange rates- especially 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, our inability to successfully integrate our recent acquisitions, insurance coverage not sufficient enough to cover losses of product liability claims 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 Amendment No. 5 to Form F-1, filed with the Securities and Exchange Commission on March 11, 2010. 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.

                       G. WILLI-FOOD INTERNATIONAL LTD.

                    CONDENSED CONSOLIDATED BALANCE SHEETS

                              March 31,  December 31, March 31,  December 31,
                               2 0 1 0     2 0 0 9     2 0 1 0    2 0 0 9
                                        NIS              US dollars (*)
                                           (in thousands)
    ASSETS
    Current assets
    Cash and cash equivalents    131,024       87,104     35,288    23,459
    Financial assets carried at
     fair value through profit or
     loss                         13,594       11,356      3,661     3,058
    Trade receivables             94,550       77,752     25,465    20,941
    Other receivables and prepaid
     expenses                      1,554        1,990        418       536
    Inventories                   56,026       44,810     15,089    12,068
    Total current assets         296,748      223,012     79,921    60,062

    Non-current assets
    Property, plant and equipment 67,109       67,120     18,074    18,077
    Less -Accumulated
     depreciation                 18,405       17,542      4,957     4,724
                                  48,704       49,578     13,117    13,353

    Long term receivables            480          760        129       205
    Prepaid expenses               2,258        2,384        608       642
    Goodwill                       1,936        1,936        521       521
    Intangible assets              4,522        4,674      1,218     1,259
    Deferred taxes                   383          375        103       101
    Total non-current assets      58,283       59,707     15,696    16,081

                                 355,031      282,719     95,617 76,143
    EQUITY AND LIABILITIES
    Current liabilities
    Short-term bank credit        10,076       10,372      2,714     2,793
    Trade payables                46,251       49,382     12,457    13,300
    Accruals                         475          145        128        39
    Current tax liabilities        5,157        2,801      1,389       754
    Other payables and accrued
     expenses                      3,870        8,976      1,042     2,418
    Employees Benefits             3,443        2,977        927       802
    Total current liabilities     69,272       74,653     18,657    20,106

    Non-current liabilities
    Long-term bank loans              75           97         20        26
    Deferred taxes                   390          445        105       120
    Employees Benefits             1,082        1,044        291       281
    Total non-current liabilities  1,547        1,586        416       427

    Shareholders' equity
    Share capital NIS 0.10 par
     value (authorized -
     50,000,000 shares, issued
     and outstanding -
     13,573,678 shares at March
     31, 2010; 10,267,893 shares
     at December 31, 2009)         1,444        1,113        389       300
    Additional paid in capital   128,978       59,056     34,737    15,905
    Capital fund                     247          247         66        66
    Foreign currency translation
     reserve                         687          639        185       172
    Retained earnings            149,212      141,883     40,186    38,213
    Noncontrolling interest        3,644        3,542        981       954
                                 284,212      206,480     76,544    55,610

                                 355,031      282,719     95,617    76,143

    (*)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 1 0    2 0 0 9    2 0 1 0    2 0 0 9
                                          NIS             US dollars (*)
                                     (in thousands, except per share and
                                                 share data)

    Sales                            95,039     82,292     25,596     22,163

    Cost of sales                    66,782     62,088     17,986     16,722

    Gross profit                     28,257     20,204      7,610      5,441

    Selling expenses                 11,466      7,883      3,088      2,123
    General and administrative
     expenses                         6,273      4,796      1,689      1,292

    Other Income                        (17)       (95)        (4)       (26)

    Total operating expenses         17,722     12,584      4,773      3,389

    Operating income                 10,535      7,620      2,837      2,052

    Financial income                   (153)        662       (41)       178
    Financial expense                   291        683         79        184

    Income before taxes on income    10,091      7,599      2,717      2,046

    Taxes on income                   2,660      1,532        716        412

    Income from continuing            7,431      6,067
     operations                                             2,001      1,634

    Income from discontinued
     operations                           -        691          -        186

    Net income                        7,431      6,758      2,001      1,820

    Attributable to:
    Owners of the company             7,329      6,176      1,974      1,663

    Non - controlling interests         102        582         27        157

    Net income                        7,431      6,758      2,001      1,820

    Earnings per share data:
    Earnings per share:

    Basic from continuing
     operations                        0.68       0.57       0.18       0.15

    Basic from discontinued
     operations                           -       0.03          -       0.01

    Basic                              0.68       0.60       0.18       0.16

    Diluted from continuing
     operations                        0.68       0.57       0.18       0.15

    Diluted from discontinued
     operations                           -       0.03          -       0.01

    Diluted                            0.68       0.60       0.18       0.16

    Shares used in computing basic
     and diluted earnings per
     ordinary share:             10,745,395 10,267,893 10,745,395 10,267,893

(*) Convenience translation into U.S. dollars

This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.

    Contact:
    At the Company:

    G. Willi Food International Ltd.
    Ety Sabach, CFO
    +972-8-932-1000
    [email protected]

    Investor Relations:
    RedChip Companies, Inc.
    Dave Gentry
    +1-800-733-2447, Ext. 104
    +1-407-644-4256, Ext. 104
    [email protected]

SOURCE G. Willi-Food International Ltd