G. Willi-Food Reports Net Income of Nis 5.3 Million for the Second Quarter of 2009...

G. Willi-Food Reports Net Income of Nis 5.3 Million for the Second Quarter of
2009 Compared to Net Loss of Nis 2.0 Million for the Second Quarter of 2008
G. Willi-Food Anticipates 2009 Second Half Profits and Profit Margins to be
Better Than in the Comparable Period in 2008 and in the First Half of 2009

YAVNE, Israel, August 27 /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 the second quarter and for first six
months ended June 30, 2009. Second Quarter Fiscal 2009 Summary

- 6.0% increase in sales over second quarter of 2008

- 6.6% increase in gross profit over second quarter of 2008

- 21.3% gross margin in second quarter of 2009 compared with 21.2% gross
margin in second quarter of 2008

- Operating income of NIS 6.2 million compared to operating expense of
NIS 1.4 million in second quarter 2008

- Income before taxes on income of NIS 6.5 million compared to expense
before taxes on income of NIS 1.1 million in second quarter 2008

- Income after taxes on income of NIS 5.3 million compared to loss after
taxes on income of NIS 1.4 million in second quarter 2008

- Net income related to Company Shareholders of NIS 5.3 million compared
to net loss related to Company Shareholders of NIS 2.0 million in
second quarter 2008

Willi-Food's operating divisions include Willi-Food in Israel, wholly
owned Gold Frost - a designer, developer and distributor of branded kosher
dairy food products, 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. As previously reported by the
Company on July 27, 2009, the Company now holds 100% of the shares of Gold
Frost following completion of its tender offer for Gold Frost shares, and
Gold Frost also sold of its 51% interest in the Danish dairy distributor.
Revenues for the second quarter of 2009 increased by 6.0% to NIS 83.8
million (US$ 21.4 million) compared to revenues of NIS 79.0 million (US$ 20.2
million) in the second quarter of 2008. The Company achieved this increase
despite the cessation of the operations of Laish Israeli - the Company's U.S.
subsidiary during July 2008, as reported by the Company on July 14, 2008. The
increase was mainly due to expanded product lines that the Company had
launched and increasing sales of existing products to new and existing
customers.
Gross profit for the second quarter of 2009 increased by 6.6% to NIS 17.9
million (US$ 4.6 million) compared to gross profit of NIS 16.8 million (US$
4.3 million) in the second quarter of 2008. Second quarter gross margin was
21.3% compared to gross margin of 21.2% for the same period in 2008.
Since the beginning of the recent recession, the Company has identified
pressures in the market to lower prices and a movement of consumers to lower
priced products; the Company prepared for this from the beginning of 2009.
Due to the Company's lower price products for which the Company believes
demand has grown, the Company's expectations have grown for increased sales
and improved profits.
The Company anticipates 2009 second half profits and profit margins to be
better than in the comparable period in 2008 and in the first half of 2009
for a number of reasons. First, the Company has been successful in adjusting
the selling prices of its products to consumers in accordance with product
prices of the Company's suppliers, which has enabled the Company to increase
its gross profits margins. Second, during the last five months, the U.S.
dollar has depreciated against the New Israeli Shekel by approximately 10%,
which has lowered the product purchase prices that the Company pay in NIS to
its suppliers.
Willi-Food's operating income for the second quarter of 2009 was NIS 6.2
million (US$ 1.6 million) compared to operating expenses of NIS 1.4 million
(US$ 0.4 million) reported in the comparable quarter of last year. Selling
expenses as a percentage of revenues decreased in the second quarter of 2009
to 8.9% compared to 10.7% in the second quarter of 2008. General and
administrative expenses as a percentage of revenue decreased in the second
quarter of 2009 to 6.5% from 9.8% in the second quarter of 2008. Part of the
decrease in selling and general and administrative expenses was attributed to
the actions taken by the Company's management during the first quarter of
2009 to reduce the Company's expenses.
Willi-Food's income before taxes for the second quarter of 2009 was NIS
6.5 million (US$ 1.7 million) compared to loss before taxes of NIS 1.1
million (US$ 0.3 million) recorded in the second quarter of 2008.
Willi-Food's net income in the second quarter of 2009 was NIS 5.3 million
(US$ 1.4 million) compared to net loss of NIS 1.4 million (US$ 0.4 million)
recorded in the second quarter of 2008. Willi- Food's net income related to
Company Shareholders in the second quarter of 2009 was NIS 5.3 million (US$
1.4 million), or NIS 0.52(US$ 0.13) per share compared to net loss related
to Company Shareholders of NIS 2.0 million (US$ 0.5 million), or NIS 0.19(US$
0.05) per share, recorded in the second quarter of 2008.
Willi-Food ended the quarter with $27.4 million in cash and securities
and $4.2 million in short-term debt. Six-Month Results
Willi-Food's revenues for the six-month period ended June 30, 2009
decreased by 3.3% to NIS 179.3 million (US$ 45.8 million) compared to
revenues of NIS 185.5 million (US$ 47.3 million) in the first half of 2008.
Gross profit for the period decreased 15.3% to NIS 39.7 million (US$ 10.1
million) compared to gross profit of NIS 46.8 million (US$ 11.9 million) for
the six month period in 2008. 2009 first half gross margins were 22.1%
compared to gross margins of 25.2% in the same period in 2008.
Operating income for the first half of 2009 increased by 9.5% to NIS 14.7
million (US$ 3.7 million) from NIS 13.4 million (US$ 3.4 million) reported in
the comparable period of last year. First half 2009 income before taxes was
NIS 15.0 million (US$ 3.8 million) compared to NIS 12.0 million (US$ 3.1
million) recorded in the first half of 2008. Net income related to Company
Shareholders for the first half of 2009 increased by 73.9% to NIS 11.5
million (US$ 2.9 million), or NIS 1.12(US$ 0.29) per share compared to net
income related to Company Shareholders for the first half of 2008 of NIS 6.6
million (US$ 1.7 million), or NIS 0.64(US$ 0.16) per share.
Outlook
Mr. Zwi Williger, President and COO of Willi-Food commented, "We are very
pleased with our strong second quarter 2009 results in the current
challenging environment. We have been able to grow revenues, despite the
closing of Laish in July 2008, through successfully launching new items into
our product line, as well as increasing sales of existing products to new and
existing customers, and we were able to contain costs to an acceptable degree
despite the immediate challenges. We have seen strong market response to our
expanded product lines. We expect to launch additional new product lines in
the second half of 2009, and we continue to develop new innovations food
products."
"Willi-Food achieved net income related to Company Shareholders of NIS
5.3 million in the second quarter of 2009 - margin of 6.4% of revenues. The
net income related to Company Shareholders without the effect of our
subsidiaries - Shamir salads and Baron joint venture, that together achieved
net loss of NIS 0.85 million in 2009 second quarter, would have been higher.
Our strong financial results for the second quarter of 2009 demonstrate
Willi-Food's ability to capitalize on what we believe to be the growing
interest of consumers in the kosher market. We are able to differentiate our
company through our success at becoming a high margin business in a low
margin industry. We are pleased to consistently deliver significantly higher
margins than those generated by most other companies in our industry."
"We analyzed the recession that began in our home market and in fact, the
economic indicators, as well as the feedback from our customers, showing that
the measures that we took is putting us in a good position for future growth.
Willi-Food has taken the appropriate measures to position the Company for a
stronger fiscal 2009 and 2010 and we remain focused on maximizing long-term
profitability."
"We are carefully reviewing our merger and acquisition strategy. The U.S.
remains a strategic region of interest for Willi-Food, and for now, we are
seeking more customers to distribute our products; customers who wish to grow
their volume and diversify their line of premium kosher products. Our line of
products includes over 600 products exclusively distributed by Willi-Food and
Shamir Salads. The dynamics of the industry are driving demand for innovative
kosher products, and we believe that Willi-Food has the infrastructure and
development expertise to deliver. 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 for both
kosher and health consumers in the U.S. The health benefits of eliminating
animal fats in the 'kosherizing' process, in our dairy products, make our
products attractive to consumers looking for better tasting low-cholesterol
and low-fat alternatives."
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 the second half of 2009 as
compared to our 2008 second half results and as compared to 2009 first half
results."
Update on Shamir Salads
As previously announced on June 1, 2009, the district court in Tel Aviv
issued a temporary injunction against 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"). Pursuant to the injunction issued by the court, the
Sellers are prohibited from taking any action not in accordance with the
signatory rights in Shamir Salads in effect prior to May 18th, performing any
disposition of the shares of Shamir Salads held by the Company, taking any
action not in accordance with the articles of association of Shamir Salads as
in effect prior to May 18th, 2009, and/or interfering with the functions of
Shamir Salads' board of directors as composed prior to May 18th, 2009. In
addition, pursuant to the injunction, the Sellers are prohibited from
interfering with the functions of the co-CEO of Shamir Salads nominated by
the Company and/or from preventing the deputy CFO of Shamir Salads' from
participating in the discussions to approve the financial statements of
Shamir Salads.
On June 17, 2009, the Sellers petitioned the district court in Tel Aviv
for temporary relief against the Company and others, a declaratory judgement
and other relief in connection with an alleged fundamental breach by the
Company of the Shamir Agreement and for the return of the shares in Shamir
Salads and the consideration paid therefore. On June 22, 2009, an arbitrator
was chosen to address all disputes between the parties. As part of the
arbitration proceeding, the Sellers and the Company each submitted a
complaint against the other for damages on August 4, 2009. The Company
intends to vigorously defend its rights in this matter. Until the arbitration
procedures will end, the temporary injunction against the Sellers will remain
in effect.
Joint venture with the Baron Family
It has recently been discovered that a customer that owes Baron
approximately Euro 0.4 million, terminated its operations. Baron has security
interests on this debt, including a first priority lien on a portion of the
house of the customer, and as a result no reserve has been set aside for this
debt in 2009 second quarter. At this time the Company is examining the nature
of the security interests, and following such examination, the Company will
decide if there is a need to set aside a reserve for this debt in the third
quarter of this year. In the event the Company decides that there is a need
to set aside a reserve, the Company will consider making a claim against the
Baron family on the damage they caused to the Company in their capacity as
managers, due to the fact that they breached their fiduciary duties against
the joint venture and sold to a customer without approval and against the
decision of the board of directors of the joint venture.
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 wholly owned subsidiary, Gold Frost Ltd., develops
and distributes kosher chilled and frozen dairy food products
internationally; 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, 2008, 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 June 30, 2009, U.S.
$1.00 equals NIS 3.919. The translation was made solely for the convenience
of the reader.
NOTE B: IFRS
The Company's consolidated financial results for the six-month and
three-month ended June 30, 2009 are presented in accordance with
International Financial Reporting Standards ("IFRS").

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

June 30, December 31, June 30, December
31,
2009 2008 2009 2008
NIS US dollars (*)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents 95,250 78,749 24,305 20,094
Financial assets carried at
fair value through profit or
loss 12,150 9,367 3,100 2,390
Trade receivables 82,383 79,599 21,021 20,311
Other receivables and prepaid
expenses 4,230 3,987 1,079 1,017
Current tax assets 351 2,456 90 627
Inventories 20,513 34,417 5,234 8,782
Total current assets 214,877 208,575 54,829 53,221

Fixed assets
Cost 56,056 55,574 14,304 14,181
Less: accumulated depreciation 15,069 13,467 3,845 3,436
and amortization
40,987 42,107 10,459 10,745

Prepaid expenses 12,975 12,539 3,311 3,199
Goodwill 3,829 3,829 977 977
Intangible assets 4,961 5,181 1,266 1,322
Deferred taxes 454 1,111 116 283
Total non-current assets 63,206 64,767 16,129 16,526

278,083 273,342 70,958 69,747
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Short-term bank credit 16,498 17,562 4,210 4,481
Trade payables 46,568 53,728 11,883 13,710
Accruals 5,328 6,197 1,360 1,581
Current tax liabilities 2,054 1,050 524 268
Other payables and accrued
expenses 6,607 4,971 1,685 1,268
Employees Benefits 2,384 2,544 608 649
Total current liabilities 79,439 86,052 20,270 21,957

Non-current liabilities
Long-term bank loans 144 267 37 68
Deferred taxes 259 442 66 113
Warrants to issue shares - 5 - 1
Employees Benefits 1,005 994 256 254
Total long term liabilities 1,408 1,708 359 436

Shareholders' equity
Share capital NIS 0.10 par
value
(authorized - 50,000,000
shares, issued
and outstanding - 10,267,893
shares 1,113 1,113 284 284
Premium 59,056 59,056 15,069 15,069
Capital fund 247 247 63 63
Foreign currency translation
reserve 324 369 83 94
Retained earnings 122,942 111,447 31,371 28,438
Noncontrolling interest 13,554 13,350 3,459 3,406
197,236 185,582 50,329 47,354

278,083 273,342 70,958 69,747

(*)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,
2009 2008 2009 2008 2009 2008
NIS US dollars (*)
In thousands (except per share and share data)

Sales 179,328 185,481 83,758 79,036 45,758 47,328
Cost of sales 139,674 138,659 65,893 62,271 35,640 35,381

Gross profit 39,654 46,822 17,865 16,765 10,118 11,947

Selling
expenses 15,427 17,538 7,462 8,436 3,936 4,475
General and
administrative
expenses 10,887 13,901 5,463 7,752 2,778 3,547
Other (Income)

Expense (1,333) 1,981 (1,238) 1,981 (340) 505

Total
operating
expenses 24,981 33,420 11,687 18,169 6,374 8,527

Operating
income
(Expense) 14,673 13,402 6,178 (1,404) 3,744 3,420

Financial income 935 (1,514) 263 (771) 239 (386)

Financial expense 646 (75) (69) (1,042) 165 (19)

Income 14,962 11,963 6,510 (1,133) 3,818 3,053
(expense
before
taxes on
income
Taxes on
income 2,883 3,750 1,189 312 736 957

Income (loss) 12,079 8,213 5,321 (1,445) 3,082 2,096
after taxes on
income

Related to:
Company 11,495 6,609 5,319 (1,986) 2,933 1,687
Shareholders'
Minority 584 1,604 2 541 149 409
interest

Net income 12,079 8,213 5,321 (1,445) 3,082 2,096
(loss)

Earnings per
share data:

Earnings per
share:

Basic 1.12 0.64 0.52 (0.19) 0.29 0.16

Diluted 1.12 0.64 0.52 (0.19) 0.29 0.16

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

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