CSTE 6-K
Caesarstone Ltd. (CSTE)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of February 2021
Commission File Number: 001-35464
Caesarstone Ltd.
(Translation of registrant’s name into English)
Kibbutz Sdot-Yam
MP Menashe
Israel 3780400
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __
EXPLANATORY NOTE
On February 24, 2021, Caesarstone Ltd. issued a press release titled “Caesarstone Reports 2020 Fourth Quarter and Full Year Financial Results”, a copy of which is furnished as Exhibit 99.1 herewith.
The GAAP financial information included in consolidated balance sheets, consolidated statements of income and condensed consolidated statements of cash flows contained in the press release attached as Exhibit 99.1 to this Report on Form 6-K is hereby incorporated by reference into (i) the Registrant’s Registration Statements on Form S-8 (Files No. 333- 180313, No. 333-210444 and 333-251642) and (ii) the Registrant’s Registration Statement on Form F-3 (File No. 333-196335).
- 2 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CAESARSTONE LTD. | ||
|---|---|---|
| Date: February 24, 2021 | By | /s/ Ron Mosberg |
| Name: Ron Mosberg | ||
| Title: General Counsel & Corporate Secretary |
- 3 -
EXHIBIT INDEX
The following exhibits are furnished as part of this Form 6-K:
| Exhibit | Description |
|---|---|
| 99.1 | Press<br> release titled “Caesarstone Reports 2020 Fourth Quarter and Full Year Financial Results” dated February 24, 2021. |
| --- | --- |
- 4 -
Exhibit 99.1
Caesarstone Reports Fourth Quarter and Full Year 2020 Financial Results
– Revenue of $136.9 Million Grew 2.3% Over Prior Year Fourth Quarter –
– Per Share Net Loss of ($0.07) and Adjusted Diluted EPS of $0.05 in the Fourth Quarter –
– Gross Margin Expanded 200 Basis Points to 28.1% in the Fourth Quarter –
– Adjusted EBITDA Grew 19.1% to $18.8 Million at a 13.7% Margin in the Fourth Quarter –
– Ended 2020 With Net Cash Position^(*)^ of $110.6 Million –
– Completed Acquisition of Lioli Ceramica, Establishing Leadership Position as a Premium, Multi-
Material Countertop Company –
– Closed Acquisition of Omicron Granite and Tile at the end of 2020, Enhancing Go-to-Market
Approach and Vertical Integration in Attractive U.S. Markets –
MP MENASHE, Israel - February 24, 2021 - Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its fourth quarter and full year ended December 31, 2020.
“We made significant progress streamlining the business in 2020 as we successfully executed on our business transformation during a year marked by unprecedented global economic challenges,” commented Yuval Dagim, Chief Executive Officer. “We now enter 2021 as a much stronger Company, with the right foundation in place to more effectively leverage Caesarstone’s world-class brand to pursue sustainable long-term growth. This includes further implementation of innovative go-to-market initiatives developed under our Global Growth Acceleration Plan to unlock value. Our strong financial position supported the successful execution of two accretive transactions in recent months that are directly aligned with our strategy to enhance our position as a leading premium, multi-material countertop company. With our dedicated focus on driving results, we are well situated to capture additional market share.”
“We were encouraged to finish 2020 with annual year-over-year improvement in gross margin and adjusted EBITDA margin,” added Ophir Yakovian, Chief Financial Officer. “Following two quarters of significant cost cutting, we increased operating expenses to a more normalized level to support our brand and future growth. Caesarstone’s strong balance sheet enabled us to successfully weather the challenges of 2020 and to further invest in accretive future growth. We are happy with our 2020 operating cash flow of $47.6 million and our significant net cash position(*) of $110.6 million that provides us with the confidence we can execute on our plan in 2021, to produce strong long-term returns for our shareholders.”
(*) Cash position is defined as cash and cash equivalents and short-term bank deposits and long and short-term investment in marketable securities less debt from financial institutions.
Fourth Quarter 2020 Results
Revenue in the fourth quarter of 2020 grew 2.3% to $136.9 million compared to $133.9 million in the prior year quarter. On a constant currency basis, fourth quarter revenue was slightly lower by 0.4% year-over-year, due primarily to pandemic related disruptions, particularly in the Americas region, partially offset by the contribution from the Lioli acquisition and growth in all other regions.
Gross margin in the fourth quarter improved 200 basis points to 28.1% compared to 26.1% in the prior year quarter. Adjusted gross margin in the fourth quarter was 28.6% compared to 26.4% in the prior year quarter. The year-over-year improvement in gross margin mainly reflects lower raw material costs, more favorable currency exchange rates, better product mix, and improved efficiency partly offset by the impact of lower sales volume, lower sale prices and less favorable regional mix.
Operating expenses in the fourth quarter were $30.4 million, or 22.2% of revenue, compared to $34.5 million, or 25.8% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies, operating expenses were 21.2% of revenue, compared to 20.4% in the prior year quarter, mainly due to increased investments to support the Company’s growth initiatives.
Operating income grew to $8.1 million compared to operating income of $0.5 million in the prior year quarter. The year-over-year growth mainly reflects higher gross margin and lower legal settlements and loss contingencies.
Adjusted EBITDA, which excludes expenses for share-based compensation, legal settlements and loss contingencies and for non-recurring items, grew 19.1% year-over-year to $18.8 million in the fourth quarter, representing a margin of 13.7%. This compares to adjusted EBITDA of $15.7 million, representing a margin of 11.8%, in the prior year quarter. The year-over-year margin improvement primarily reflects the higher gross margin.
Finance (income) expenses in the fourth quarter were $8.6 million compared to finance income of $0.6 million in the prior year quarter. The difference was mainly a result of the unfavorable impact of foreign currency exchange rates.
Net loss attributable to controlling interest for the fourth quarter was $2.4 million compared to net loss of $0.3 million in the prior year quarter. Net loss per share for the fourth quarter was $0.07 compared to net loss per share of $0.01 in the prior year quarter. Adjusted diluted net income per share for the fourth quarter was $0.05 on 34.5 million shares, compared to adjusted diluted net income per share of $0.16 on 34.6 million shares in the prior year quarter.
Full Year 2020 Results
Revenue in the full year 2020 was $486.4 million compared to $546.0 million in the prior year. On a constant currency basis, 2020 revenue was lower by 11.1% year-over-year, primarily due to pandemic related disruptions impacting our business since the second quarter of 2020.
Gross margin in 2020 expanded to 27.5% compared to 27.2% in the prior year. Adjusted gross margin in 2020 was 27.7%, compared to 27.3% in the prior year. The higher adjusted gross margin mainly reflects improved efficiency, lower raw material costs and improved product mix partly offset by the impact of lower sales volume, lower sale prices and less favorable regional mix.
Operating expenses in 2020 were $111.4 million, or 22.9% of revenue compared to $124.0 million, or 22.7% of revenue in the prior year. Excluding legal settlements and loss contingencies, operating expenses were 21.6% of revenue, compared to 20.4% of revenue in the prior year mainly due to lower revenues partly offset by cost cutting efforts to mitigate pandemic related impacts.
Operating income in 2020 was $22.5 million compared to $24.7 million in the prior year.
Adjusted EBITDA, which excludes expenses for share-based compensation, legal settlements and loss contingencies and for non-recurring items, was $62.1 million in 2020, representing a margin of 12.8%. This compares to adjusted EBITDA of $69.0 million, representing a margin of 12.6% in the prior year. This year-over-year margin improvement primarily reflects the higher gross margin.
Finance expenses in 2020 were $10.2 million compared to $5.6 million in the prior year. The difference was primarily a result of the adverse impact of foreign currency exchange rates.
Net income attributable to controlling interest for the full year 2020 was $7.2 million compared to net income of $12.9 million in the prior year. Diluted net income per share for 2020 was $0.21 compared to $0.37 in the prior year. Adjusted diluted net income per share for 2020 was $0.48 compared to $0.77 in the prior year.
Balance Sheet & Liquidity
The Company's balance sheet as of December 31, 2020 remained strong, including cash, cash equivalents and short-term bank deposits and short and long-term marketable securities of $133.2 million and total debt to financial institutions of $22.6 million.
Dividend
The Company’s dividend policy provides for a quarterly cash dividend of up to 50% of reported net income on a year-to-date basis, less any amount already paid as dividend for the respective period (the “calculated dividend”), subject in each case to approval by the Company’s board of directors. No dividend is paid if it would be less than $0.10 per share. Pursuant to the Company’s dividend policy, the Company does not intend to pay a dividend for the fourth quarter of 2020, based on its reported net loss attributable to controlling interest for the period.
Outlook
The Company anticipates 2021 revenue and Adjusted EBITDA to be higher year-over-year. The company anticipates revenue to grow faster than EBITDA in 2021 mainly due to headwinds from higher shipping and raw material costs, coupled with a return to more normalized levels of sales and marketing expenses and other investments to support the Company’s growth initiatives. The Company’s outlook includes the investment costs associated with its Global Growth Acceleration Plan. The Company’s outlook also assumes the pandemic related business restrictions will fade as the year progresses.
Webcast and Conference Call Details
The Company will host a live webcast and conference call today at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast of the call can be accessed at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible by dialing 1-877-407-4018 (domestic) or +1-201-689-8471 (international). The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone Fourth Quarter Earnings Call.
To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter pass code 13715282. The replay will be available beginning at 11:30 a.m. ET on Wednesday, February 24, 2021 and will last through 11:59 p.m. ET on Wednesday, March 3, 2021.
About Caesarstone
Caesarstone is a concept and lifestyle-driven company with a customer-centered approach to designing, developing, and producing high-end engineered stone countertops, used in residential and commercial buildings. Our products offer superior aesthetic appeal and perfected functionality through a distinct variety of colors, styles, textures, and finishes used in diverse countertop applications, marked by inherent longevity. Strong commitment to service has fostered growing customer loyalty in over 50 countries where the Caesarstone product collections are available: Classico, Supernatural, Metropolitan and Outdoor. For more information please visit our website: www.caesarstone.com.
Non-GAAP Financial Measures
The non-GAAP measures presented by the Company should be considered in addition to, and not as a substitute for, comparable GAAP measures. Reconciliations of GAAP gross profit to adjusted gross profit, GAAP net income (loss) to adjusted net income (loss) and net income (loss) to Adjusted EBITDA are provided in the schedules to this release. To calculate revenues growth rates that exclude the impact of changes in foreign currency exchange rates, the Company converts actual reported results from local currency to U.S. dollars using constant foreign currency exchange rates in the current and comparable period. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company's operating performance.
Forward-Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company's plans, objectives and expectations for future operations, including estimations relating to the impact of the COVID-19 pandemic and mitigation measures in connection thereto, expectations of the results of the Company’s business optimization initiative and its projected results of operations. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties, both known or unknown. These factors include, but are not limited to: the impact of the COVID-19 pandemic on end-consumers, the global economy and the Company’s business and results of operations; the ability of the company to realign aspects of its business based on the business optimization initiative, the strength of the home renovation and construction sectors; intense competitive pressures; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with exposure to silica dust; manufacturing of existing products and managing required changes in production and supply chain; economic conditions within any of our key existing markets changes in raw material prices; fluctuations in currency exchange rates; the success of our expansion efforts in the United States; unpredictability of seasonal fluctuations in revenues; disturbances to the Company’s operations or the operations of its suppliers, distributors, customers or other third parties and other factors discussed under the heading "Risk Factors" in our most recent annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts:
Investor Relations:
ICR, Inc. - Rodny Nacier
+1 646 277-1237
| Caesarstone Ltd. and its subsidiaries<br><br> Condensed consolidated balance sheets | ||||||
|---|---|---|---|---|---|---|
| As of | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| U.S. dollars in thousands | December 31, 2020 | December 31, 2019 | ||||
| (Unaudited) | (Audited) | |||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents and short-term bank deposits | $ | 114,248 | $ | 139,372 | ||
| Short-term available for sale marketable securities | 8,112 | - | ||||
| Trade receivables, net | 84,822 | 78,282 | ||||
| Other accounts receivable and prepaid expenses | 26,481 | 34,066 | ||||
| Inventories | 152,073 | 122,686 | ||||
| Total current assets | 385,736 | 374,406 | ||||
| LONG-TERM ASSETS: | ||||||
| Severance pay fund | 4,007 | 3,475 | ||||
| Other long-term receivables | 3,837 | 3,176 | ||||
| Deferred tax assets, net | 8,359 | 7,881 | ||||
| Long-term deposits and prepaid expenses | 1,675 | 2,887 | ||||
| Operating lease right-of-use assets | 123,928 | 72,047 | ||||
| Long-term available for sale marketable securities | 10,926 | - | ||||
| Property, plant and equipment, net | 222,883 | 204,776 | ||||
| Goodwill and intangible assets, net | 59,570 | 35,218 | ||||
| Total long-term assets | 435,185 | 329,460 | ||||
| Total assets | $ | 820,921 | $ | 703,866 | ||
| LIABILITIES AND EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Short-term bank credit | $ | 13,122 | $ | - | ||
| Trade payables | 55,063 | 53,072 | ||||
| Related parties and other loans | 2,221 | 2,212 | ||||
| Short term legal settlements and loss contingencies | 31,039 | 28,300 | ||||
| Accrued expenses and other liabilities | 55,570 | 42,782 | ||||
| Total current liabilities | 157,015 | 126,366 | ||||
| LONG-TERM LIABILITIES: | ||||||
| Long-term loan and financing liability of land from a related party | 20,706 | 7,915 | ||||
| Legal settlements and loss contingencies long-term | 21,910 | 21,505 | ||||
| Deferred tax liabilities, net | 6,943 | |||||
| Long-term lease liabilities | 112,719 | 64,638 | ||||
| Accrued severance pay | 5,303 | 4,333 | ||||
| Long-term warranty provision | 1,274 | 1,385 | ||||
| Total long-term liabilities | 168,855 | 99,776 | ||||
| REDEEMABLE NON-CONTROLLING INTEREST | 7,701 | - | ||||
| EQUITY: | ||||||
| Ordinary shares | 371 | 371 | ||||
| Treasury shares - at cost | (39,430 | ) | (39,430 | ) | ||
| Additional paid-in capital | 160,083 | 157,225 | ||||
| Capital fund related to non-controlling interest | (5,587 | ) | (5,587 | ) | ||
| Accumulated other comprehensive loss | 1,083 | (3,288 | ) | |||
| Retained earnings | 370,830 | 368,433 | ||||
| Total equity | 487,350 | 477,724 | ||||
| Total liabilities and equity | $ | 820,921 | $ | 703,866 |
| Caesarstone Ltd. and its subsidiaries<br><br> Condensed consolidated statements of income | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. dollars in thousands (except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | ||||||||
| Revenues | $ | 136,896 | $ | 133,867 | $ | 486,412 | $ | 545,974 | |||
| Cost of revenues | 98,381 | 98,884 | 352,470 | 397,335 | |||||||
| Gross profit | 38,515 | 34,983 | 133,942 | 148,639 | |||||||
| Operating expenses: | |||||||||||
| Research and development | 1,501 | 962 | 3,974 | 4,146 | |||||||
| Marketing and selling | 17,752 | 16,698 | 62,047 | 66,770 | |||||||
| General and administrative | 9,779 | 9,625 | 39,081 | 40,681 | |||||||
| Legal settlements and loss contingencies, net | 1,392 | 7,201 | 6,319 | 12,359 | |||||||
| Total operating expenses | 30,424 | 34,486 | 111,421 | 123,956 | |||||||
| Operating income | 8,091 | 497 | 22,521 | 24,683 | |||||||
| Finance (income) expenses, net | 8,613 | (622 | ) | 10,199 | 5,578 | ||||||
| Income (loss) before taxes | (522 | ) | 1,119 | 12,322 | 19,105 | ||||||
| Taxes on income | 1,459 | 1,394 | 4,700 | 6,243 | |||||||
| Net income (loss) | $ | (1,981 | ) | $ | (275 | ) | $ | 7,622 | $ | 12,862 | |
| Net Income attributable to non-controlling interest | (404 | ) | - | (404 | ) | - | |||||
| Net income (loss) attributable to controlling interest | $ | (2,385 | ) | $ | (275 | ) | $ | 7,218 | $ | 12,862 | |
| Basic net income (loss) per ordinary share | $ | (0.07 | ) | $ | (0.01 | ) | $ | 0.21 | $ | 0.37 | |
| Diluted net income (loss) per ordinary share | $ | (0.07 | ) | $ | (0.01 | ) | $ | 0.21 | $ | 0.37 | |
| Weighted average number of ordinary shares used in computing basic income (loss) per ordinary share | 34,436,345 | 34,397,410 | 34,419,129 | 34,383,895 | |||||||
| Weighted average number of ordinary shares used in computing diluted income (loss) per ordinary share | 34,436,345 | 34,397,410 | 34,473,911 | 34,459,599 |
| Caesarstone Ltd. and its subsidiaries<br><br> Selected Condensed consolidated statements of cash flows | ||||||
|---|---|---|---|---|---|---|
| Twelve months ended December 31, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| U.S. dollars in thousands | 2020 | 2019 | ||||
| (Unaudited) | (Audited) | |||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 7,622 | $ | 12,862 | ||
| Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 29,460 | 28,587 | ||||
| Share-based compensation expense | 2,858 | 3,632 | ||||
| Accrued severance pay, net | (14 | ) | (246 | ) | ||
| Changes in deferred tax, net | (895 | ) | (1,509 | ) | ||
| Capital loss | 340 | 326 | ||||
| Legal settlemnets and loss contingencies, net | 6,319 | 12,359 | ||||
| Decrease (increase) in trade receivables | 6,070 | (5,032 | ) | |||
| Decrease (increase) in other accounts receivable and prepaid expenses | 9,318 | (6,346 | ) | |||
| Decrerase in inventories | 313 | 35,303 | ||||
| Decrease in trade payables | (17,938 | ) | (6,663 | ) | ||
| Increase (decrease) in warranty provision | (371 | ) | 69 | |||
| Changes in right of use assets | (26,738 | ) | 1,319 | |||
| Changes in lease liabilities | 30,710 | 2,602 | ||||
| Amortization of premium and accretion of discount on marketable securities, net | 161 | - | ||||
| Changes in Accrued interest related to Marketable Securities | (1 | ) | - | |||
| Increase in accrued expenses and other liabilities including related parties | 404 | 5,786 | ||||
| Net cash provided by operating activities | 47,618 | 83,049 | ||||
| Cash flows from investing activities: | ||||||
| Net cash paid for acquisitions | (28,962 | ) | - | |||
| Purchase of property, plant and equipment | (19,824 | ) | (23,590 | ) | ||
| Proceeds from sale of property, plant and equipment | 13 | 66 | ||||
| Investment in marketable securities | (19,185 | ) | - | |||
| Increase in long term deposits | (347 | ) | (63 | ) | ||
| Net cash used in investing activities | (68,305 | ) | (23,587 | ) | ||
| Cash flows from financing activities: | ||||||
| Dividend paid | (4,821 | ) | (5,160 | ) | ||
| Changes in short-term bank credit and loans, net | (18 | ) | (7,771 | ) | ||
| Repayment of a financing leaseback related to Bar-Lev transaction | (1,245 | ) | (1,196 | ) | ||
| Net cash used in financing activities | (6,084 | ) | (14,127 | ) | ||
| Effect of exchange rate differences on cash and cash equivalents | 1,647 | 475 | ||||
| Increase (decrease) in cash and cash equivalents and short-term bank deposits | (25,124 | ) | 45,810 | |||
| Cash and cash equivalents and short-term bank deposits at beginning of the period | 139,372 | 93,562 | ||||
| Cash and cash equivalents and short-term bank deposits at end of the period | $ | 114,248 | $ | 139,372 | ||
| Non - cash investing: | ||||||
| Changes in trade payables balances related to purchase of fixed assets | (356 | ) | (3,235 | ) |
| Caesarstone Ltd. and its subsidiaries | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| U.S. dollars in thousands | 2020 | 2019 | 2020 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||||
| Reconciliation of Gross profit to Adjusted Gross profit: | |||||||||||
| Gross profit | $ | 38,515 | $ | 34,983 | $ | 133,942 | $ | 148,639 | |||
| Share-based compensation expense (a) | 63 | 10 | 416 | 285 | |||||||
| Non-recurring import related income | - | - | - | (1,501 | ) | ||||||
| Amortization of assets related to acquisitions | 529 | - | 529 | - | |||||||
| Other non-recurring items (b) | - | 294 | - | 1,661 | |||||||
| Adjusted Gross profit (Non-GAAP) | $ | 39,107 | $ | 35,287 | $ | 134,887 | $ | 149,084 | |||
| (a) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. | ||||||||||
| --- | --- | ||||||||||
| (b) | In 2019, relates mainly to one time amortization of machinery equipment with no future alternative use, and one time inventory write down due to discontinuation<br><br> <br>of certain product group manufacturing. | ||||||||||
| Caesarstone Ltd. and its subsidiaries | |||||||||||
| --- | |||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. dollars in thousands | 2020 | 2019 | 2020 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||||
| Reconciliation of Net Income (loss) to Adjusted EBITDA: | |||||||||||
| Net income (loss) | $ | (1,981 | ) | $ | (275 | ) | $ | 7,622 | $ | 12,862 | |
| Finance (income) expenses, net | 8,613 | (622 | ) | 10,199 | 5,578 | ||||||
| Taxes on income | 1,459 | 1,394 | 4,700 | 6,243 | |||||||
| Depreciation and amortization related to acquisitions | 8,300 | 6,970 | 29,460 | 28,587 | |||||||
| Legal settlements and loss contingencies, net (a) | 1,392 | 7,201 | 6,319 | 12,359 | |||||||
| Share-based compensation expense (b) | 523 | 779 | 2,858 | 3,632 | |||||||
| Non-recurring import related income | - | - | - | (1,501 | ) | ||||||
| Acquisitions related expenses | 444 | - | 921 | - | |||||||
| Other non-recurring items (c) | - | 294 | - | 1,286 | |||||||
| Adjusted EBITDA (Non-GAAP) | $ | 18,750 | $ | 15,741 | $ | 62,079 | $ | 69,046 | |||
| (a) | Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees. | ||||||||||
| --- | --- | ||||||||||
| (b) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. | ||||||||||
| (c) | In 2019, relates mainly to non-recurring expenses related to North American region establishment, one time charge related to reduction in headcount and certain activities including<br><br> <br>discontinuation of certain product group manufacturing. |
| Caesarstone Ltd. and its subsidiaries | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. dollars in thousands (except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||||
| Reconciliation of net income (loss) attributable to controlling interest to adjusted net income attributable to controlling interest: | |||||||||||
| Net income (loss) attributable to controlling interest | $ | (2,385 | ) | $ | (275 | ) | $ | 7,218 | $ | 12,862 | |
| Legal settlements and loss contingencies, net (a) | 1,392 | 7,201 | 6,319 | 12,359 | |||||||
| Amortization of assets related to acquisitions, net of tax | 446 | - | 446 | - | |||||||
| Share-based compensation expense (b) | 523 | 779 | 2,858 | 3,632 | |||||||
| Non cash revaluation of lease liabilities (c) | 3,177 | 266 | 3,189 | 3,615 | |||||||
| Non-recurring import related income (d) | - | - | - | (1,501 | ) | ||||||
| Acquisitions related expenses | 444 | - | 921 | - | |||||||
| Other non-recurring items (e) | - | 294 | - | 2,486 | |||||||
| Total adjustments | 5,982 | 8,540 | 13,733 | 20,591 | |||||||
| Less tax on non-tax adjustments (f) | 1,955 | 2,791 | 4,488 | 6,729 | |||||||
| Total adjustments after tax | 4,027 | 5,749 | 9,245 | 13,862 | |||||||
| Adjusted net income attributable to controlling interest (Non-GAAP) | $ | 1,642 | $ | 5,474 | $ | 16,463 | $ | 26,724 | |||
| Adjusted diluted EPS (g) | $ | 0.05 | $ | 0.16 | $ | 0.48 | $ | 0.77 | |||
| (a) | Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims,<br> including related legal fees. | ||||||||||
| --- | --- | ||||||||||
| (b) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. | ||||||||||
| (c) | Exchange rate diffrences deriving from revaluation of lease contracts in accoradance with FASB ASC 842. | ||||||||||
| (d) | In 2019, relates mainly to non-recurring import related expenses and relocation expenses of Caesarstone USA headquarters, the Company's subsidiary. | ||||||||||
| (e) | In 2019, relates to non-recurring expenses related to North American region establishment, one time charge related to reduction in headcount and certain activities including<br><br> <br>discontinuation of certain product group manufacturing and one time amortization of machinery equipment with no future alternative use. | ||||||||||
| (f) | Tax adjustments for the three and twelve months ended December 31, 2020, based on the effective tax rates of the comparative periods. | ||||||||||
| (g) | In calculating adjusted diluted (Non-GAAP) EPS for the three and twelve months ended December 31, 2020, the diluted weighted average number of shares outstanding<br> excludes the effects<br><br> <br>of share-based compensation expense in accordance with FASB ASC 718. | ||||||||||
| Caesarstone Ltd. and its subsidiaries | |||||||||||
| --- | |||||||||||
| Geographic breakdown of revenues by region | |||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| U.S. dollars in thousands | 2020 | 2019 | 2020 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||||
| USA | $ | 53,618 | $ | 64,659 | $ | 207,496 | $ | 250,471 | |||
| Canada | 20,325 | 20,575 | 72,492 | 85,979 | |||||||
| Latin America | 1,387 | 735 | 2,149 | 4,115 | |||||||
| America's | 75,330 | 85,969 | 282,137 | 340,565 | |||||||
| Australia | 29,953 | 26,002 | 103,587 | 108,149 | |||||||
| Asia | 7,122 | 3,931 | 14,566 | 15,514 | |||||||
| APAC | 37,075 | 29,933 | 118,153 | 123,663 | |||||||
| EMEA | 14,408 | 9,463 | 45,201 | 43,054 | |||||||
| Israel | 10,083 | 8,502 | 40,921 | 38,692 | |||||||
| Total Revenues | $ | 136,896 | $ | 133,867 | $ | 486,412 | $ | 545,974 |
| Caesarstone Ltd. and its subsidiaries | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Geographic breakdown of revenues by region - Supplemental data | ||||||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| U.S. dollars in thousands | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/30/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||
| USA | $ | 53,618 | $ | 52,097 | $ | 41,726 | $ | 60,055 | $ | 64,659 | $ | 64,805 | $ | 64,590 | $ | 56,417 | $ | 60,200 | $ | 61,933 | $ | 60,358 | ||||||||||||||
| Canada | 20,325 | 19,174 | 14,435 | 18,558 | 20,575 | 21,881 | 23,341 | 20,178 | 23,834 | 25,140 | 27,349 | |||||||||||||||||||||||||
| Latin America | 1,387 | 124 | 132 | 506 | 735 | 1,434 | 1,351 | 596 | 1,212 | 1,635 | 1,738 | |||||||||||||||||||||||||
| America's | 75,330 | 71,395 | 56,293 | 79,119 | 85,969 | 88,120 | 89,282 | 77,191 | 85,246 | 88,708 | 89,445 | |||||||||||||||||||||||||
| Australia | 29,953 | 27,746 | 23,534 | 22,354 | 26,000 | 28,642 | 28,294 | 25,214 | 33,484 | 33,968 | 34,731 | |||||||||||||||||||||||||
| Asia | 7,122 | 2,881 | 1,732 | 2,831 | 3,932 | 3,675 | 3,311 | 4,596 | 4,929 | 4,189 | 4,221 | |||||||||||||||||||||||||
| APAC | 37,075 | 30,627 | 25,266 | 25,185 | 29,932 | 32,317 | 31,605 | 29,810 | 38,413 | 38,157 | 38,952 | |||||||||||||||||||||||||
| EMEA | 14,408 | 11,422 | 8,031 | 11,340 | 9,464 | 11,719 | 11,418 | 10,455 | 9,954 | 11,115 | 11,721 | |||||||||||||||||||||||||
| Israel | 10,083 | 10,478 | 9,447 | 10,913 | 8,502 | 10,683 | 8,766 | 10,741 | 9,268 | 9,709 | 9,125 | |||||||||||||||||||||||||
| Total Revenues | $ | 136,896 | $ | 123,922 | $ | 99,037 | $ | 126,557 | $ | 133,867 | $ | 142,839 | $ | 141,071 | $ | 128,197 | $ | 142,881 | $ | 147,689 | $ | 149,243 | ||||||||||||||
| YoY % change | YoY % Constant Currency change (*) | |||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||
| USA | (17.1 | )% | (19.6 | )% | (35.4 | )% | 6.4 | % | 7.4 | % | 4.6 | % | 7.0 | % | (17.1 | )% | (19.6 | )% | (35.4 | )% | 6.4 | % | 7.4 | % | ||||||||||||
| Canada | (1.2 | )% | (12.4 | )% | (38.2 | )% | (8.0 | )% | (13.7 | )% | (13.0 | )% | (14.7 | )% | (2.4 | )% | (11.7 | )% | (36.0 | )% | (7.1 | )% | (13.6 | )% | ||||||||||||
| Latin America | 88.8 | % | (91.4 | )% | (90.2 | )% | (15.1 | )% | (39.4 | )% | (12.3 | )% | (22.3 | )% | 88.7 | % | (91.3 | )% | (90.2 | )% | (15.2 | )% | (39.4 | )% | ||||||||||||
| America's | (12.4 | )% | (19.0 | )% | (36.9 | )% | 2.5 | % | 0.8 | % | (0.7 | )% | (0.2 | )% | (12.7 | )% | (18.8 | )% | (36.4 | )% | 2.7 | % | 0.9 | % | ||||||||||||
| Australia | 15.2 | % | (3.1 | )% | (16.8 | )% | (11.3 | )% | (22.3 | )% | (15.7 | )% | (18.5 | )% | 7.9 | % | (7.1 | )% | (11.5 | )% | (3.3 | )% | (18.2 | )% | ||||||||||||
| Asia | 81.1 | % | (21.6 | )% | (47.7 | )% | (38.4 | )% | (20.2 | )% | (12.3 | )% | (21.5 | )% | 80.7 | % | (21.2 | )% | (45.9 | )% | (37.1 | )% | (14.7 | )% | ||||||||||||
| APAC | 23.9 | % | (5.2 | )% | (20.1 | )% | (15.5 | )% | (22.1 | )% | (15.3 | )% | (18.9 | )% | 17.5 | % | (8.7 | )% | (15.1 | )% | (8.5 | )% | (17.8 | )% | ||||||||||||
| EMEA | 52.2 | % | (2.5 | )% | (29.7 | )% | 8.5 | % | (4.9 | )% | 5.4 | % | (2.6 | )% | 45.8 | % | (5.9 | )% | (26.9 | )% | 11.4 | % | (4.4 | )% | ||||||||||||
| Israel | 18.6 | % | (1.9 | )% | 7.8 | % | 1.6 | % | (8.3 | )% | 10.0 | % | (3.9 | )% | 9.4 | % | (4.5 | )% | 4.5 | % | (1.5 | )% | (14.0 | )% | ||||||||||||
| Total Revenues | 2.3 | % | (13.2 | )% | (29.8 | )% | (1.3 | )% | (6.3 | )% | (3.3 | )% | (5.5 | )% | (0.4 | )% | (14.4 | )% | (28.3 | )% | 0.5 | % | (5.5 | )% | ||||||||||||
| (*) Change in revenues at constant currency is calculated so that revenues can be viewed without the impact of fluctuations s in foreign currency exchange rates, thereby facilitating period-to-period<br> comparisons of business performance. Change in revenues adjusted for currency are calculated by translating current period activity in local currency using the comparable prior-year period’s currency conversion rate. Exchange rates used,<br> are the representative exchange rate published by the Bank of Israel for the relevant periods. | ||||||||||||||||||||||||||||||||||||
| --- |