KIBBUTZ SHAMIR, Israel--For the first quarter ended March 31, 2006, Shamir Optical Industry Ltd (Nasdaq: SHMR) reported revenues of $23.1 million, an increase of 11.9 percent compared to first quarter of 2005. Gross profit for the quarter was $13.3 million, or 57.5 percent of revenues, an increase of 21.4 percent from gross profit of $10.9 million, or 53 percent of revenues in the same period last year.

Operating income was $2.4 million or 10.4 percent of revenues for the first quarter of 2006, a decrease of 36.2 percent from operating income of $3.8 million, or 18.2 percent of revenues in the same period last year. Efforts to solidify Shamir’s new operations in Turkey and France resulted in a decrease in operating income of approximately $1.2 million in the quarter, according to the company. Excluding the effects of non-cash stock-based compensation expenses, for the first quarter of 2006, operating income was $2.7 million, or 11.6 percent of revenues. This was a decrease of 29.8 percent from operating income of $3.8 million, or 18.5 percent of revenues in the year-ago period.

Net income for the quarter was $2.1 million compared to $1.9 million for the comparable period in 2005. Excluding the effects of non-cash stock-based compensation expenses, and in 2005 also excluding the non-cash tax expense related to change of tax status, net income for the quarter was $2.4 million, the same as the comparable period in 2005.

Commenting on the results, Giora Ben-Zeev, chief executive officer of Shamir Optical said, “Our results this quarter reflected positive momentum companywide. We achieved our overall financial objectives, and we made considerable progress relative to operational goals in several of our business units.”

Ben-Zeev noted that Shamir’s U.S. subsidiary, Shamir Insight, continued to experience significant revenue growth, and the performance from Shamir’s European division was “according to plan.” He added that Shamir is in the process of acquiring up to a 51 percent interest in a laboratory in Thailand. “We are excited about this opportunity, which will not only allow us to penetrate the Thai market, but will also serve as a platform to support our worldwide operations,” he said.