Greetings and welcome to the Caesarstone Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Cray, Investor Relations. Thank you. Please go ahead.

Thank you, operator, and good morning to everyone. I am joined by Yuval Dagim, Caesarstone's Chief Executive Officer; and Nahum Trost, Caesarstone's Chief Financial Officer. Certain statements in today's conference call and responses to various questions may constitute forward-looking statements. We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially. For more information, please refer to the risk factors contained in the company's most recent Annual Report on Form 20-F and subsequent filings with the SEC. In addition, on this call, the company will make reference to certain non-GAAP financial measures, including adjusted net income/loss, adjusted net income/loss per share, adjusted gross profit, adjusted EBITDA, and constant currency. The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's third quarter 2021 earnings release, which is posted on the company's Investor Relations website. Thank you. And I would now like to turn the call over to Yuval. Please go ahead.

Thank you, Brad, and good morning, everyone. Building on our solid first half 2021 performance, we were pleased to achieve third quarter results that demonstrated our ability to continue to effectively execute our global growth acceleration plan to drive business enhancements and value creation. We achieved yet another period of record quarterly revenue and our fourth sequential quarter of year-over-year revenue growth attributable to increasing demand for our best-in-class products across the U.S. and the majority of our global markets. In the U.S., we were encouraged to see significant growth in our sales driven by three areas; big box channel growth, core business growth, and the contribution of the Omicron acquisition. In the big box channel, our sales of Caesarstone branded slabs for U.S. Home Depot stores continue to be another bright spot as revenue increased nearly 50% year-over-year. We are also happy that our sales at IKEA U.S. recovered substantially during the quarter. In addition, we drove core business improvement and experienced positive contributions from our acquisition of Omicron, a premier stone supplier in the highly attractive markets of Florida and Ohio Valley. We are starting to see the benefits of synergies from Omicron. The geographic and service benefits from this acquisition have been very encouraging, and we could not be more pleased with the integration efforts of our teams. Our APAC region continues to benefit from sales related to our Lioli acquisition and we remain excited to launch an innovative new porcelain collection under the Caesarstone brand next year. As it relates to business enhancement initiatives, during the third quarter, we rolled out our innovative CS Connect platform nationally across the U.S. as planned. We view this national rollout as another critical milestone in our efforts to expand the reach of this digital platform that is helping us to simplify the consumer purchase process and create a step change in the way we communicate with our customers and consumers. Feedback received from our partners and customers has been very positive, and we are currently evaluating implementation of the platform in several of our other global regions. Separately, as we discussed last quarter, our teams are committed to effectively mitigate global supply chain and raw material cost increases impacting Caesarstone and our industry through careful cost management and other strategic actions such as price increases. So far we have been able to offset some of the rising costs through the price increases that went into effect during 2021. We recently announced additional price increases in most of our territories to be implemented on January 1, 2022. We continue to diligently monitor cost trends, and although we are taking actions to partially offset the rising costs, we do expect widespread global shipping challenges and rising input costs to continue to weigh on our margins in the coming quarters, with gradual improvement during 2022 as we realize the price increases in our markets. That said, I remain confident in the actions we are taking to enhance our operations and believe our business remains on a positive trajectory to deliver long-term value. Looking ahead, we have a strong balance sheet and cash position to continue deploying capital in an accretive manner. This will include developing, testing, and introducing premium multi-material offerings to grow our addressable market in the quarters and years to come. We'd also like to take a moment to highlight the publication of our first-ever global ESG report in October. We are pleased with our ESG accomplishments to date and are excited to have now built a prudent framework to accomplish our new ESG goals set forth in the report. We believe that our success is directly related to how well we take care of our clients, our employees, and our communities, and we are dedicated to helping create a more sustainable future for all of our stakeholders. With that, we now turn the call over to Nahum to discuss more details on our financial results and outlook.

Thank you, Yuval, and good morning, everyone. I will start by discussing our third quarter results. So in the third quarter of 2021, global revenue increased to a third-quarter record of $163.3 million, representing 31.8% growth compared to the prior year period. On a constant currency basis, third quarter revenue was higher by 29.2% compared to the same period last year, primarily due to improved demand in most of our regions, of course, our global footprint. Revenue for the period also included approximately $22.8 million in contributions from our acquisitions of Omicron and Lioli Ceramica that we completed during Q4 last year. Now looking at our regions; in the Americas, constant currency sales were up 42.6%, mainly due to growth in the U.S. In the U.S., sales were up 51.8% driven by the acquisition of Omicron, core business improvement, and strong growth in the big box channel. Our sales in Home Depot stores were up nearly 50% year-on-year for the third quarter, and we also experienced increased activity at the IKEA stores in the U.S., which led to a strong recovery in sales with this retailer. In Canada, sales were up 11% on a constant currency basis, driven by stronger core business performance, and a slight increase in our sales to IKEA. In the APAC region, constant currency sales grew 16.3%. In Australia, which accounts for the majority of our sales in the region, growth was driven by import demand despite rigid COVID-19 related restrictions that continued in most of the quarter and into October. Contributions from our business in Southeast Asia in Lioli were also additive to the APAC region sales in the third quarter. In the EMEA region, constant currency sales grew 18.2% as we experienced strong demand in the UK and the indirect sales channel. In Israel, on a constant currency basis, sales were down 12.2% in the third quarter, primarily related to competitive market conditions in the region, together with a lower number of selling days compared to the prior year quarter due to the timing of the Jewish holidays. Looking at our third-quarter P&L performance; our gross margin was 26.2% for the quarter. Adjusted gross margin was 26.3% compared to 31.4% in the prior year quarter. The year-over-year difference in gross margin was in line with our expectations, and primarily reflected higher raw material prices, many in polyester, in addition to increasing shipping prices, which was partially offset by price increases and a more favorable product mix and exchange rates. As many industries have experienced, pressure from raw material costs has increased as the year progressed, given the ongoing tight supply environment impacting our industry. We experienced material impact from rising costs in the third quarter of 2021, particularly in the polyester and shipping prices. Operating expenses, excluding legal settlements and loss contingencies, were 21% of revenues compared to 18.8% in the prior year quarter. The increase was mainly due to a return to normalized levels of marketing and selling expenses and investments related to initiatives under our Global Growth Acceleration Plan. Adjusted EBITDA in the third quarter was $17.7 million, representing a margin of 10.8% compared to $23.7 million or a margin of 19.1% in the prior year quarter. The year-over-year difference in margin primarily reflects the lower gross margins, together with higher operating expenses compared to last year. Adjusted diluted earnings per share in the quarter were $0.20 on 34.6 million shares compared to adjusted earnings per share of $0.41 in the same period last year on 34.5 million shares. Turning to our balance sheet. As of September 30, 2021, we had cash, cash equivalents, short-term bank deposits, and short and long-term marketable securities of $104.7 million, with a total debt to financial institutions of $13.2 million, providing us with a strong cash position of $91.5 million. The resiliency of our balance sheet continues to give us confidence in our ability to execute towards the initiatives under our global growth acceleration plan. In accordance with our dividend policy, and based on our net income performance during the third quarter and the nine-month period of 2021, our Board declared a dividend of $0.10 per share with a record date of November 17, 2021, and payment date of November 30, 2021. Moving to our outlook. Based on our performance year-to-date, we are reiterating our expectations for revenue and adjusted EBITDA to be higher year-over-year in 2021 with the expectation that revenue will grow faster than EBITDA. This outlook assumes slightly lower annual gross margin compared to 2020, with a more favorable mix and higher revenue being offset by the higher raw material and shipping costs that I discussed earlier. In the fourth quarter, we expect that higher raw material and shipping costs will be an even more significant headwind to our margins. We expect to partially mitigate this impact through additional price increases and other cost-cutting initiatives. As Yuval discussed, on November 1st, we announced the price increase in most of our markets to take effect on January 1, 2022. Additionally, we expect operating expenses to remain elevated on a year-over-year basis as we continue to invest in sales and marketing at normalized levels to support our brand and future goals. These costs have returned as we have ramped up investments in our growth initiatives following a temporary reduction in investment during 2020 in an effort to mitigate pandemic-related impacts.

Thank you, Nahum. In closing, our third quarter results represented continued progress against our strategic plan, and we remain encouraged by our performance year-to-date. Our successful national rollout of the CS Connect platform in the U.S., strong synergies from our Omicron business, and our planned porcelain product launches give us optimism in the trajectory of our business as we make meaningful, tangible progress on our global growth acceleration plan. Looking to the remainder of the year, we have a strong cash position to continue with prudent investments in our marketing capabilities as we utilize our world-class Caesarstone brand to build additional value for our shareholders. Thank you. And we are now ready to open the call for questions.

Thank you. The floor is now open for questions. Our first question is coming from Stanley Elliott of Stifel. Please go ahead.

Hey, good morning. This is Andrew for Stanley. I'm wondering if you could maybe bucket the margin headwinds in the quarter related to materials or shipping logistics or plant inefficiencies?

Maybe I would start. Generally speaking, I think margins came quite aligned to what we advised in the second quarter. We haven't seen anything in addition to what we already saw in our cost in raw materials and shipping costs during our production schedules into Q2 before servicing the markets in Q3. So all in all, not great surprises, very much in line with what we expected to have.

So, the 5% decrease can be attributed to 240 basis points relating to the higher raw material costs; 210 basis points related to the increase in landed cost. And 250 basis points relate to the lower throughput that we had in our Israeli plants; those three items will partially offset by higher revenue input for that regional mix of around 280 basis points.

Perfect, thank you. And I guess on Q4, what sort of margin headwinds would you expect there? And when do you think price costs would turn positive for you all? And when do you expect to see year-over-year margin growth either for gross margins or EBITDA margins?

We do believe that the fourth quarter will be a continuation of what we see in Q3 with some adjustments as we see the products coming from the balance sheet to the P&L. Yet we are expecting to demonstrate some gross margin recovery on the back of all the global price increases that we recently announced.

So the price increase will offset partially in Q4 but will have a higher impact during next year. As we said, the percentage will be - the majority of it will be effective January 1st. In addition, keep in mind that Q4, given our seasonality, is a bit slower quarter in terms of revenues, given holidays, Christmas; so it will also impact our margins in Q4.

Thank you. And last one on CS Connect. I was wondering if you could maybe provide any metrics around that; maybe what percent of the U.S. is trained in using this and does it give you any better visibility into 2022?

Yes. The CS Connect platform has been launched two quarters ago, and since then we are distributing or expanding the spread and the presence of CS Connect in the market, especially with our kitchen and bath partners. So far we are very pleased with the take-up of this platform, but it's very early days to provide the metrics and financial expectations around it. We are expecting way more insights in 2022, and I'll be more than happy to report on the progress in the coming quarters.

Awesome. That's all I got. Thank you.

Thank you very much, Andrew.

We're showing no additional questions at this time. I would like to turn the floor back over to Mr. Dagim for closing comments.

Thank you for your attention this morning. We look forward to updating you on our progress next quarter. Thank you.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.