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G. Willi-Food Reports 15% Increase in Revenues and 44% Increase in Operating Income for Fiscal 2006

Posted on: Monday, 19 March 2007, 12:00 CDT

YAVNE, Israel, March 19 /PRNewswire-FirstCall/ -- G. Willi-Food International Ltd. (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 fiscal year ended December 31, 2006.

Highlights - 15% increase in 2006 revenues over 2005 revenues - 44% increase in 2006 operating income over 2005 operating income - Successful IPO of Gold Frost subsidiary - Launched new dairy products - Completed US acquisition - Signed agreement to import select dairy products into US

Mr. Zwi Williger, President and COO of Willi-Food commented, "We believe that our success in 2006 has built a solid foundation for future growth. We have seen strong market response to our expanded product lines and continue to develop new innovations. We launched several new products in 2006 including Bloose, Fetina, and Light Lurpak butter."

Revenues for the year ended December 31, 2006 increased 15% to NIS 191.5 million (US$45.3 million) compared to NIS 166.3 million (US$39.4 million) in 2005. This increase was driven primarily by increased sales in the private sector and growing demand for dairy chilled products. Gross profits for the year increased 26% to NIS 47.9 million (US$11.3 million) compared to NIS 38.1 million (US$9.0 million) in the prior year. Fiscal 2006 gross margins improved to 25% compared to 23% in 2005.

2006 operating income increased 44% to NIS 12.6 million (US$3.0 million) from NIS 8.8 million (US$2.1 million) reported last year. Sales and marketing expenses for the year increased to NIS 21.1 million (US$5.0 million), or 11% of sales, from NIS 15.8 million (US$3.7 million), or 9.5% of sales for 2005. This increase was mainly attributable to advertising campaigns and other costs associated with several new product launches over the course of the year. In addition, 2006 operating income includes a NIS 1.8 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.

2006 income before taxes increased to NIS 35.8 million (US$8.5 million) compared to NIS 11.3 million (US$2.7 million) recorded in 2005. Income after taxes and before minority interest for the year increased to NIS 30.4 million (US$7.2 million) compared to NIS 7.7 million (US$1.8 million) for the prior year. Net income for 2006 increased to NIS 28.6 million (US$6.8 million), or NIS 3.17 (US$0.75) per share compared to net income of NIS 7.7 million (US$1.8 million), or NIS 0.90 (US$0.21) per share, recorded in 2005. Net income for 2006 includes a net one-time unrealized capital gain of NIS 18.2 million (US$4.3 million), or NIS 2.02 (US$0.48) per share, resulting from the public listing of the shares of Gold Frost Ltd.

The Company's Gold Frost subsidiary reported a 30% increase in 2006 revenues to $10.7 million from $8.2 million in the prior year. The subsidiary's gross profits for the year increased 33% to $5.2 million compared to $3.9 million in 2005. Gold Frost's 2006 gross margins improved to 48.3% compared to 47.5% in 2005. 2006 operating income for Gold Frost increased 35% to $2.8 million from $2.1 million last year. Gold Frost's income before taxes increased 59% to $3.5 million compared to $2.2 million in 2005. Net income for Gold Frost in 2006 increased 60% to $2.4 million from $1.5 million in 2005.

Willi-Food ended the year with $25 million in cash, cash equivalents and marketable securities and no debt. In September 2006, the Company raised $10 million through a private placement with US investors. The primary use of proceeds from the transaction was to build a new distribution center that would increase Willi-Food's capacity and enable the Company to progress its strategy of international expansion.

The Company recently announced an agreement with Arla Foods, Inc. to import kosher Lurpak butter and Brie and Camembert cheeses into the US for distribution by the Company's subsidiary Gold Frost. Shipments of these products to the US may commence once Gold Frost has produced new product labeling in compliance with USDA regulations.

In January, Willi-Food acquired the operations and assets of Laish Israeli Food Products Ltd., a US importer and distributor of kosher food products. Laish Israeli has been in business for 15 years and currently distributes kosher products such as canned foods and candies to groceries, independent supermarkets and supermarket chains in the Tri-State area. Its 2006 revenues were approximately $7.5 million.

In February, the Company announced an agreement with a kosher food exporter located in Israel to form a joint global kosher trade and export company. Under the terms of the agreement, Willi-Food would hold a 50.1% interest and all of the current food export operations of the existing company would be executed under the new entity. Kosher products are currently exported from more than 100 suppliers, predominantly located in Israel, to the US, Canada, England, Belgium, France, Switzerland, Australia, South Africa, Mexico, Argentina and Chile. Current anticipated trade volume for the new entity in 2007 is approximately $10.0 million. The closing of the transaction is subject to customary closing conditions, including approval of the Israeli Anti-Trust Authorities and completion of exhibits.

"Our strategy is to leverage Willi-Food's global supplier relationships and expertise in product development to capitalize on the growing demand for innovative kosher products," stated Mr. Williger. "We intend to drive profitable growth both internationally and domestically through expanded distribution channels and a premium product offering. The Laish acquisition and agreement with Arla Foods to import certain dairy products into the US are significant steps towards establishing a footprint for the Willi-Food brand in the US market and providing a platform to expand retailer relationships. Moreover, we are looking for the joint trade and export venture to enhance our US initiatives, while adding several new markets and complementary product lines."

"We are excited by Willi-Food's growth prospects in 2007," concluded Mr. Williger. "We believe that we will achieve revenue growth of approximately 20-25% in fiscal 2007, driven by organic growth, the Laish acquisition, the global kosher trade and export company and the initiation of dairy imports into the US market with Arla."

The Company will host a conference call to discuss fourth quarter and fiscal 2006 results on March 19 at 3:00 PM EDT. Interested parties may participate in the conference call by dialing 800-374-2501 (US), or +1-706-634-2468 (International) and giving conference ID# 2516655 5-10 minutes prior to the start of the call. A replay of the conference call will be available from 6:00 PM EDT on March 19 through 12:00 AM EDT on March 26, by dialing 800-642-1687 (US), or +1-706-645-9291 (International), and entering conference ID# 2516655. A live and archived webcast of the conference call will be available on the Willi-Food website at http://www.willi-food.co.il/.

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 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/US 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 amba, loss of one or more of our principal clients, 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, 2005, filed with the Securities and Exchange Commission on May 31, 2006. 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 US dollars was made at the rate of exchange prevailing on December 31, 2006: US $1.00 equals NIS 4.225. The translation was made solely for the convenience of the reader.

Company Contact: G. Willi Food International Ltd. Chen Shlein, CFO +972-8-932-2233 chen@willi-food.co.il Investor Relations Contact: The Global Consulting Group Christopher Chu +1-646-284-9426 cchu@hfgcg.com FINANCIAL TABLES FOLLOW G. WILLI-FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED BALANCE SHEETS December 31, Note 2 0 0 6 2 0 0 5 2 0 0 6 (*) NIS US dollars ASSETS (in thousands) Current assets Cash and cash equivalents 91,398 30,431 21,633 Marketable securities 13,945 3,229 3,301 Trade accounts receivable 48,163 48,396 11,399 Receivables and other current Assets 3 4,499 7,673 1,065 Inventories 19,101 30,798 4,521 Total current assets 177,106 120,527 41,919 Fixed assets 4 Cost 49,213 23,343 11,648 Less: accumulated depreciation amortization 6,442 6,686 1,525 42,771 16,657 10,123 Other assets, net 5 94 90 22 219,971 137,274 52,064 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Trade accounts payable 20,137 19,938 4,766 Due to related parties 5,677 2,193 1,344 Payables and other current liabilities 6 6,969 12,977 1,650 Total current liabilities 32,783 35,108 7,760 Accrued severance pay, net 7 347 299 82 Commitments and contingent liabilities 8 Warrants to issue shares of subsidiary 348 - 82 Minority interest 14,754 - 3,492 Shareholders' equity 9 Share capital: Ordinary shares NIS 0.10 par value (authorized - 50,000,000 shares and outstanding - 10,267,893 shares at December 31, 2006; 8,615,000 shares at December 31, 2005) 1,113 948 263 Additional paid-in capital 61,350 20,258 14,521 Retained earnings 109,276 80,661 25,864 171,739 101,867 40,648 219,971 137,274 52,064 (*) Convenience translation into US dollars. G. WILLI-FOOD INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, Note 2 0 0 6 2 0 0 5 2 0 0 4 2 0 0 6 (*) NIS US dollars (in thousands, except for share data) Sales 12 191,460 166,282 170,982 45,316 Cost of sales 12 143,581 128,215 130,292 33,984 Gross profit 47,879 38,067 40,690 11,332 Operating expenses: Sales and marketing 21,100 15,771 15,632 4,994 General and administrative 12 14,151 13,544 9,134 3,349 Total operating expenses 35,251 29,315 24,766 8,343 Operating income 12,628 8,752 15,924 2,989 Financing income, net 12 4,925 2,501 1,121 1,166 Other income, net 18,248 35 34 4,319 Income before income taxes 35,801 11,288 17,079 8,474 Income taxes 10 5,379 3,567 5,886 1,273 Income after taxes on income 30,422 7,721 11,193 7,201 Minority interest 1,807 - - 428 Net income 28,615 7,721 11,193 6,773 Earnings per share (EPS) Basic 3.17 0.9 1.3 0.75 Diluted 3.12 0.9 1.3 0.74 Shares used in computation of basic and diluted EPS 9,028,223 8,615,000 8,600,000 9,028,223 (*) Convenience translation into US dollars.

G. Willi-Food International Ltd

CONTACT: Company Contact: G. Willi Food International Ltd., ChenShlein, CFO, +972-8-932-2233, chen@willi-food.co.il, Investor RelationsContact: The Global Consulting Group, Christopher Chu, +1-646-284-9426,cchu@hfgcg.com

Source: PRNewswire-FirstCall

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