Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2017 |
Entity Registrant Name | Caesarstone Ltd. |
Entity Central Index Key | 1,504,379 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 34,338,960 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 138,707 | $ 106,270 | |
Trade receivables (net of allowance for doubtful accounts of $1,179 and $1,283 at December 31, 2017 and 2016, respectively) | 73,267 | 63,072 | |
Other accounts receivable and prepaid expenses | 33,053 | 39,484 | |
Inventories | 132,940 | 101,474 | |
Total current assets | 377,967 | 310,300 | |
Long-term assets: | |||
Severance pay fund | 3,887 | 3,403 | |
Other long-term receivables | 8,502 | 5,068 | |
Deferred tax assets, net | 3,965 | 444 | |
Long-term deposits and prepaid expenses | 2,743 | 2,465 | |
Property, plant and equipment, net | 216,653 | 222,818 | |
Other intangibles assets | 2,241 | 4,546 | |
Goodwill | 37,029 | 35,656 | |
Total long-term assets | 275,020 | 274,400 | |
Total assets | 652,987 | 584,700 | |
Current liabilities: | |||
Short-term bank credit | 4,191 | 8,540 | |
Trade payables | 64,021 | 48,633 | |
Related party and other loan | [1],[2] | 3,463 | 3,099 |
Short term legal settlements and loss contingencies | 25,782 | 7,355 | |
Accrued expenses and other liabilities | 30,000 | 25,710 | |
Total current liabilities | 127,457 | 93,337 | |
Long-term liabilities: | |||
Long-term loan and financing leaseback from a related party | [1] | 8,336 | 8,070 |
Accrued severance pay | 5,556 | 4,265 | |
Long-term warranty provision | 1,151 | 988 | |
Long term legal settlements and loss contingencies | 23,454 | 12,527 | |
Deferred tax liabilities, net | 657 | 14,921 | |
Total long-term liabilities | 39,154 | 40,771 | |
Redeemable non-controlling interest | 16,481 | 12,939 | |
Commitments and contingent liabilities | |||
Share capital- | |||
Ordinary shares of NIS 0.04 par value - 200,000,000 shares authorized at December 31, 2017 and 2016; 35,442,056 and 35,424,669 issued at December 31, 2017 and 2016; 34,338,960 and 34,321,573 shares outstanding at December 31, 2017 and 2016, respectively | 371 | 371 | |
Additional paid-in capital | 151,880 | 146,536 | |
Accumulated other comprehensive income (loss), net | 683 | (1,150) | |
Retained earnings | 356,391 | 331,326 | |
Treasury shares at cost - 1,103,096 ordinary shares at December 31, 2017 and 2016 | (39,430) | (39,430) | |
Total equity | 469,895 | 437,653 | |
Total liabilities and equity | $ 652,987 | $ 584,700 | |
[1] | In September, 2012, a financing leaseback of $10.9 million related to Bar-Lev transaction was granted to the Company by Kibbutz Sdot-Yam. The financing leaseback bears interest until repayment at a per annum rate equal to 6.09% and is subject to adjustment for increases in the Israeli consumer price index. | ||
[2] | On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders, CIOT and the Company, on a pro rata basis. The loan bears interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25%. The interest accrued on the loan is payable on a quarterly basis. As of December 31, 2017 the loan was classified to short term related party and other loan balance. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ | $ 1,179 | $ 1,283 |
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 |
Ordinary shares, shares issued | 35,442,056 | 35,424,669 |
Ordinary shares, shares outstanding | 34,338,960 | 34,321,573 |
Treasury shares | 1,103,096 | 1,103,096 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenues | $ 588,147 | $ 538,543 | $ 499,515 |
Cost of revenues | 390,924 | 326,057 | 299,290 |
Gross profit | 197,223 | 212,486 | 200,225 |
Operating expenses: | |||
Research and development | 4,164 | 3,290 | 3,052 |
Marketing and selling | 81,789 | 70,343 | 59,521 |
General and administrative | 45,930 | 40,181 | 36,612 |
Legal settlements and loss contingencies, net | 24,797 | 5,868 | 4,654 |
Total operating expenses | 156,680 | 119,682 | 103,839 |
Operating income | 40,543 | 92,804 | 96,386 |
Finance expenses, net | 5,583 | 3,318 | 3,085 |
Income before taxes on income | 34,960 | 89,486 | 93,301 |
Taxes on income | 7,402 | 13,003 | 13,843 |
Net income | 27,558 | 76,483 | 79,458 |
Net income attributable to non-controlling interest | 1,356 | 1,887 | 1,692 |
Net income attributable to controlling interest | $ 26,202 | $ 74,596 | $ 77,766 |
Basic net income per share of ordinary shares | $ 0.73 | $ 2.08 | $ 2.21 |
Diluted net income per share of ordinary shares | $ 0.73 | $ 2.08 | $ 2.19 |
Weighted average number of ordinary shares used in computing basic income per share (in thousands) | 34,334 | 34,706 | 35,253 |
Weighted average number of ordinary shares used in computing diluted income per share (in thousands) | 34,386 | 34,764 | 35,464 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 27,558 | $ 76,483 | $ 79,458 |
Other comprehensive income (loss) before tax: | |||
Foreign currency translation adjustments | 2,910 | 1,100 | (5,023) |
Unrealized income (loss) on foreign currency cash flow hedge | (36) | 9 | 1,590 |
Income tax benefit (expense) related to components of other comprehensive income (loss) | 8 | (161) | 509 |
Total other comprehensive income (loss), net of tax | 2,882 | 948 | (2,924) |
Comprehensive income | 30,440 | 77,431 | 76,534 |
Less: comprehensive income attributable to non-controlling interest | (2,405) | (2,093) | (126) |
Comprehensive income attributable to controlling interest | $ 28,035 | $ 75,338 | $ 76,408 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss), net [Member] | [1] | Treasury shares [Member] | Total | |||
Balance at Dec. 31, 2014 | $ 369 | $ 139,964 | $ 181,212 | $ (534) | $ 321,011 | |||||
Balance, shares at Dec. 31, 2014 | 35,132,127 | |||||||||
Other comprehensive loss | (1,358) | (1,358) | ||||||||
Net income | 77,766 | 77,766 | ||||||||
Equity-based compensation expense related to employees | 2,802 | 2,802 | ||||||||
Compensation paid by a shareholder | ||||||||||
Cashless exercise of options | $ 1 | (1) | ||||||||
Cashless exercise of options, shares | 162,628 | |||||||||
Balance at Dec. 31, 2015 | $ 370 | 142,765 | 258,978 | (1,892) | 400,221 | |||||
Balance, shares at Dec. 31, 2015 | 35,294,755 | |||||||||
Other comprehensive loss | 742 | 742 | ||||||||
Net income | 74,596 | 74,596 | ||||||||
Equity-based compensation expense related to employees | 3,506 | 3,506 | ||||||||
Compensation paid by a shareholder | [2] | 266 | 266 | |||||||
Purchase of treasury shares | (39,430) | (39,430) | ||||||||
Purchase of treasury shares, shares | (1,103,096) | |||||||||
Adjustment to redemption value of the non-controlling interest | (2,248) | (2,248) | ||||||||
Cashless exercise of options | $ 1 | (1) | ||||||||
Cashless exercise of options, shares | 129,914 | |||||||||
Balance at Dec. 31, 2016 | $ 371 | 146,536 | 331,326 | (1,150) | (39,430) | 437,653 | ||||
Balance, shares at Dec. 31, 2016 | 34,321,573 | |||||||||
Other comprehensive loss | 1,833 | 1,833 | ||||||||
Net income | 26,202 | 26,202 | ||||||||
Equity-based compensation expense related to employees | [3] | 5,344 | 5,344 | |||||||
Compensation paid by a shareholder | ||||||||||
Adjustment to redemption value of the non-controlling interest | (1,137) | (1,137) | ||||||||
Cashless exercise of options | [4] | [4] | ||||||||
Cashless exercise of options, shares | 17,387 | |||||||||
Balance at Dec. 31, 2017 | $ 371 | $ 151,880 | $ 356,391 | $ 683 | $ (39,430) | $ 469,895 | ||||
Balance, shares at Dec. 31, 2017 | 34,338,960 | |||||||||
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation and hedging transactions. | |||||||||
[2] | A bonus paid by the Company's shareholder to its employees. | |||||||||
[3] | See also note 12. | |||||||||
[4] | Less than $1. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash flows from operating activities: | ||||
Net income | $ 27,558 | $ 76,483 | $ 79,458 | |
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 29,926 | 28,254 | 22,334 | |
Share-based compensation expense | 5,277 | 3,068 | 2,293 | |
Accrued severance pay, net | 788 | (150) | 540 | |
Changes in deferred tax, net | (6,376) | (963) | 7,051 | |
Capital loss (gain) from sale of property, plant and equipment | (7) | 32 | ||
Compensation paid by a shareholder | 266 | [1] | ||
Increase in trade receivables | (7,573) | (4,184) | (2,968) | |
Increase in other accounts receivable and prepaid expenses | (5,436) | (5,617) | (3,069) | |
Increase in inventories | (27,833) | (5,376) | (15,267) | |
Increase (decrease) in trade payables | 13,853 | 1,424 | (8,659) | |
Increase (decrease) in warranty provision | 234 | 100 | (447) | |
Legal settlements and loss contingencies, net | 24,797 | 5,868 | 4,654 | |
Increase (decrease) in accrued expenses and other liabilities including related party | 5,809 | 2,314 | (259) | |
Net cash provided by operating activities | 61,017 | 101,519 | 85,661 | |
Cash flows from investing activities: | ||||
Redemption of short-term deposits | 60 | 11,987 | ||
Purchase of property, plant and equipment | (22,675) | (22,943) | (76,495) | |
Proceeds from sale of property, plant and equipment | 11 | 22 | ||
Increase in long-term deposits | (102) | (452) | (1,228) | |
Net cash used in investing activities | (22,766) | (23,313) | (65,736) | |
Cash flows from financing activities: | ||||
Dividends paid | (243) | [2] | ||
Short-term bank credit and loans, net | (5,095) | 5,157 | 3,241 | |
Purchase of treasury shares | (39,430) | |||
Repayment of a financing leaseback | (1,172) | (1,100) | (1,092) | |
Net cash provided by (used in) financing activities | (6,267) | (35,616) | 2,149 | |
Effect of exchange rate differences on cash and cash equivalents | 453 | 933 | (1,607) | |
Increase in cash and cash equivalents | 32,437 | 43,523 | 20,467 | |
Cash and cash equivalents at beginning of year | 106,270 | 62,747 | 42,280 | |
Cash and cash equivalents at end of year | 138,707 | 106,270 | 62,747 | |
Cash received (paid) during the year for: | ||||
Interest paid | (259) | (210) | (180) | |
Interest received | 1,006 | 153 | 45 | |
Tax paid | (23,448) | (17,684) | (16,372) | |
Non cash activity during the year for: | ||||
Changes in trade payables balances related to purchase of property, plant and equipment | $ (1,552) | $ (403) | $ (4,389) | |
[1] | A bonus paid by the Company's shareholder to its employees. | |||
[2] | In 2016, dividend payment made by Company's subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. General: Caesarstone Ltd. (formerly Caesarstone Sdot-Yam Ltd.), incorporated under the laws of the State of Israel, was founded in 1987. On June 9, 2016, the Company changed its name from Caesarstone Sdot-Yam Ltd. to Caesarstone Ltd. Caesarstone Ltd. and its subsidiaries (collectively, the "Company" or "Caesarstone") manufacture high quality engineered quartz surfaces sold under the Company's premium Caesarstone brand. The Company's products consist of engineered quartz slabs that are currently sold in approximately 50 countries through a combination of direct sales in certain markets and indirectly through a network of independent distributors in other markets. The Company's products are primarily used as kitchen countertops in the renovation and remodeling end markets and in the new buildings construction market. Other applications include vanity tops, wall panels, back splashes, floor tiles, stairs and other interior surfaces that are used in a variety of residential and non-residential applications. The Company has subsidiaries in Australia, Singapore, Canada and the United States which are engaged in the marketing and selling of the Company's products in different geographic areas. In January 2017, the Company commenced direct marketing and sales operations in the United Kingdom through its fully owned subsidiary Caesarstone (UK) Ltd. In addition, the Company has a subsidiary in the United States, Caesarstone Technologies USA, Inc., which is engaged in the manufacturing of the Company's products. b. Major suppliers: In 2017, the Company acquired approximately 69% of its quartz consumption from Turkey, of which approximately 42% was supplied by Mikroman Madencilik San ve TIC.LTD.STI ("Mikroman"), constituting approximately 29% of Company's total quartz, and approximately 34 % was supplied by Polat Maden Sanayi ve Ticaret A.Ş. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. b. Financial statements in U.S. dollars: The Company's revenues are generated in U.S. dollars (USD), Australian dollars (AUD), Canadian dollars (CAD), Euros (EUR), Singapore dollars (SGD), British pound (GBP) and New Israeli Shekels (NIS). In addition, most of the Company's costs are incurred in USD, NIS, EUR, CAD, AUD and SGD. The Company’s management believes that the USD is the primary currency of the economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the USD. The functional currency of the majority of the Company's foreign subsidiaries is the local currency in which the relevant subsidiary operates. Accordingly, monetary accounts maintained in currencies other than the USD are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") 830, "Foreign Currency Matters" (ASC 830). All transaction gains and losses resulting from the re-measurement of monetary balance sheet items denominated in non-USD currencies are reflected in the statements of operations as financial income or expenses as appropriate. The financial statements of the Company’s subsidiaries of which the functional currency is not the USD have been translated into the USD. All amounts on the balance sheets have been translated into the USD using the exchange rates in effect on the relevant balance sheet dates. All amounts in the statements of operations have been translated into the USD using the monthly average exchange rate in accordance with ASC 830. The resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss), net in shareholders' equity. c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries. Inter-company transactions and balances, including profit from inter-company sales not yet realized outside of the Company, have been eliminated upon consolidation. d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired. e. Short-term bank deposits: Short-term bank deposits are deposits with original maturities of more than three months but less than one year. Short-term bank deposits are presented at their cost, which approximates their fair value. f. Derivatives: ASC 815, “Derivative and Hedging” ("ASC 815"), requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. Derivative instruments designated as hedging instruments For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. To hedge against the risk of overall changes in cash flows resulting from foreign currency salary and other recurring payments during the periods, the Company has instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted salary expenses denominated in NIS. These forward contracts are designated as cash flow hedges, as defined by ASC 815, and are all effective, as their critical terms match the underlying transactions being hedged. As of December 31, 2017 the Company did not have any outstanding forward NIS transactions. As of December 31, 2016 the unrealized gain recorded in accumulated other comprehensive income (loss) from the Company's currency forward NIS transactions were $28. At December 31, 2016, the notional amounts of foreign exchange forward contracts which the Company entered into were $13,303. Derivative instruments not designated as hedging instruments In addition to the derivatives that are designated as hedges as discussed above, the Company enters into certain foreign exchange forward and options contracts to . Gains and losses related to such derivative instruments are recorded in financial expenses, net. At December 31, 2017 and 2016, the notional amount of foreign exchange forward and option contracts into which the Company entered was $114,582 and $131,470, respectively. The foreign exchange forward and options contracts will expire at various times through December, 2018. The following tables present fair value amounts of, and gains and losses recorded in relation to, the Company's derivative instruments and related hedged items: Balance Sheet Fair Value of Derivative Instruments Year ended December 31, 2017 2016 Derivative Assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses $ 717 $ 2,539 Derivatives designated as hedging instruments: Foreign exchange forward contracts Other accounts receivable and prepaid expenses $ - $ 31 Total $ 717 $ 2,570 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities $ (921 ) $ (533 ) Derivatives designated as hedging instruments: Foreign exchange forward contracts Accrued expenses and other liabilities $ - $ (3 ) Total $ (921 ) $ (536 ) Gain Recognized in Other Comprehensive Income (loss), net Gain (loss) Recognized in Statements of Income Year ended December 31, Statements of Income Year ended December 31, 2017 2016 Item 2017 2016 Derivatives designated as hedging instruments Foreign exchange forward contract $ - $ 28 Cost of revenues and Operating expenses $ 1,142 $ 111 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (1,756 ) 1,261 Total $ - $ 28 $ (614 ) $ 1,372 g. Inventories: Inventories are stated at the lower of cost and net realizable value. The Company periodically evaluates the quantities on hand relative to historical and projected sales volumes, current and historical selling prices and contractual obligations to maintain certain levels of raw material quanteties. Based on these evaluations, inventory provision is provided to cover risks arising from slow-moving items, discontinued products, excess inventories, net realizable value lower than cost and adjusted revenue forecasts. Cost is determined as follows: Raw Materials - cost is determined on a standard cost basis Work-in-progress and finished products - are based on standard cost (which approximates actual cost on a weighted average basis) which includes raw materials cost, labor and manufacturing overhead. Finished goods are stated at the lower of cost and net realizable value. The following table provides the details of the change in the Company's provision for inventory: December 31, 2017 2016 Inventory provision, beginning of year $ 10,183 $ 8,985 Increase in inventory provision 13,585 4,168 Write off (12,405 ) (2,970 ) Inventory provision, end of year $ 11,363 $ 10,183 h. Property, plant and equipment, net: 1. Property, plant and equipment are stated at cost, net of accumulated depreciation and investment grants. 2. Costs recorded prior to a production line completion are reflected as construction in progress, which are recorded to land, building and machinery assets at the date of purchase. Construction in progress includes direct expenditures for the construction of the production line and is stated at cost. Capitalized costs include costs incurred under the construction contract: advisory, consulting and direct internal costs (including labor) and operating costs incurred during the construction and installation phase. 3. Depreciation is calculated by the straight-line method over the estimated useful life of the assets at the following annual rates: % Machinery and manufacturing equipment 4-33 Office equipment and furniture 7-33 Motor vehicles 10-30 Buildings 4-5 Prepaid expenses related to operating lease 1 Leasehold improvements Over the shorter of the term of the lease or the life of the asset The Company has accounted for its assets that are under a capital lease arrangement in accordance with ASC 840 "Leases" ("ASC 840"). Accordingly, assets under a capital lease are stated as assets of the Company on the basis of ordinary purchase prices (without the financing component), and depreciated according to the shorter of the lease term and the usual depreciation rates applicable to such assets. Lease payments payable in forthcoming years, net of the interest component included in them, are included in liabilities. The interest in respect of such amounts is accrued on a current basis and is charged to earnings. i. Impairment of long-lived assets: The Company's long-lived assets, tangible and finite-lived intangible assets (other than goodwill), are reviewed for impairment in accordance with ASC 360 "Property, Plant and Equipment" ("ASC 360") whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses were identified during any period presented. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. j. Goodwill and other intangibles assets: Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired in the acquisition. Under ASC 350, "Intangibles-Goodwill and Other" ("ASC 350") goodwill is not amortized but instead is tested for impairment at least annually (or more frequently if impairment indicators arise). In the evaluation of goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In the first phase of impairment testing, goodwill attributable to the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second phase is then performed. The second phase of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company performs an annual goodwill impairment test during the fourth quarter of each fiscal year, or more frequently, if impairment indicators are present. The Company operates in one operating segment. Each of the Company's subsidiaries could be considered to be reporting units; however, the Company concluded that all of the Company's components should be aggregated and deemed as a single reporting unit for the purpose of performing the goodwill impairment test in accordance with ASC 350-20-35-35, since they have similar economic characteristics. Goodwill was tested for impairment by comparing its fair value with its carrying value. As required by ASC 820, "Fair Value Measurements", the Company applies assumptions that market place participants would consider in determining the fair value of reporting unit. No impairment of goodwill was identified during any period presented. Acquired intangible assets other than goodwill are amortized over their weighted average amortization period unless they are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish the carrying value. The fair value of acquired intangible assets is determined using common techniques, and the Company employs assumptions developed using the perspective of a market participant. k. Warranty : The Company generally provides a standard warranty of three to ten years for its products, depending on the type of product and the country in which the Company does business. The Company records a provision for the estimated cost to repair or replace products under warranty at the time of sale. Factors that affect the Company's warranty reserve include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair. The following table provides the details of the change in the Company's warranty accrual: 2017 2016 January 1, $ 2,275 $ 2,173 Charged to costs and expenses relating to new sales 1,816 1,325 Costs of product warranty claims (1,446 ) (1,225 ) Foreign currency translation adjustments (51 ) 2 December 31, $ 2,594 $ 2,275 l. Revenue recognition: The Company derives its revenues from sales of quartz surfaces mostly through a combination of direct sales in certain markets and indirectly through a network of distributors in other markets. Revenues are recognized in accordance with ASC 605, "Revenue Recognition" (ASC 605) when delivery has occurred, persuasive evidence of an agreement exists, the fee is fixed and determinable, collectability is probable and no further obligations exist. The Company's products that are sold through agreements with exclusive distributors are non-exchangeable, non-refundable, non-returnable and without any rights of price protection or stock rotation. Accordingly, the Company considers all the distributors to be end-consumers. For certain revenue transactions with specific customers, the Company is responsible also for the fabrication and installation of its products. The Company recognizes such revenues upon receipt of acceptance evidence from the end consumer which occurs upon completion of the installation. Although, in general, the Company does not grant rights of return, there are certain instances where such rights are granted. The Company maintains a provision for returns rebates and discounts to costumers in accordance with ASC 605, which is estimated, based primarily on historical experience as well as management judgment, and is recorded through a reduction of revenue. m. Research and development costs: Research and development costs are charged to the statement of income as incurred. n. Income taxes: The Company and its subsidiaries account for income taxes in accordance with ASC 740, "Income Taxes" (ASC 740). This statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Commencing January 1, 2017 the Company adopted ASU 2015-17, pursuant to such ASU, as of December 31, 2017 deferred tax assets and liabilities are presented as noncurrent items on Company’s balance sheet. Prior periods were not retrospectively adjusted. The Company accounts for its uncertain tax positions in accordance with ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest and penalties on income taxes as taxes on income. o. Advertising expenses: Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were $28,047, $25,582 and $22,380, respectively. p. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits and trade receivables. The Company's cash and cash equivalents are invested primarily in USD, mainly with major banks in Israel. The Company's trade receivables are derived from sales to customers located mainly in the United States, Australia, Canada, Israel and Europe. The Company performs ongoing credit evaluations of its customers and to date has not experienced any substantial losses. In certain circumstances, the Company requires letters of credit or prepayments. An allowance for doubtful accounts is provided with respect to specific receivables that the Company has determined to be doubtful of collection. For those receivables not specifically reviewed, provisions are recorded at a specific rate, based upon the age of the receivable, the collection history, current economic trends and management estimates. No customer represented 10% or more of the Company’s total accounts receivables, net as of December 31, 2017 and 2016. The following table provides the detail of the change in the Company's allowance for doubtful accounts: 2017 2016 January 1, $ 1,283 $ 1,221 Charges to expenses 164 172 Write offs (325 ) (116 ) Foreign currency translation adjustments 57 6 December 31, $ 1,179 $ 1,283 q. Severance pay: The Company's liability for severance pay, with respect to its Israeli employees, is calculated pursuant to Israeli severance pay law and employee agreements based on the most recent salary of the employees. The Company's liability for all of its Israeli employees is provided for by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset on the Company's balance sheet. The deposited funds include profits or losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli severance pay law or labor agreements. Some agreements with employees specifically state, in accordance with section 14 of the Severance Pay Law, 1963 ("Section 14"), that the Company's contributions for severance pay shall be instead of severance compensation and that upon release of the policy to the employee, no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, since the Company has signed agreements with its employees under Section 14, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as they are legally released from obligation to employees once the deposit amounts have been paid. Severance pay expenses for the years ended December 31, 2017, 2016 and 2015 amounted to approximately $1,813, $1,576 and $1,451, respectively. r. Fair value of financial instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (meaning, the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3- Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The following table presents the Company's assets and (liabilities) measured at fair value on a recurring basis at December 31, 2017 and 2016: December 31, 2017 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 717 $ - $ 717 Foreign currencies derivative liabilities $ - $ (921 ) $ - $ (921 ) Total $ - $ (204 ) $ - $ (204 ) December 31, 2016 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 2,570 $ - $ 2,570 Foreign currencies derivative liabilities $ - $ (536 ) $ - $ (536 ) Total $ - $ 2,034 $ - $ 2,034 The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, short-term bank deposits, trade receivables, trade payables and short term loans, approximate their fair value due to the short-term maturities of such instruments. The carrying amount of long-term loans approximates their fair value. s. Basic and diluted net income per share: Basic net income per share ("Basic EPS") is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share ("Diluted EPS") gives effect to all dilutive potential ordinary shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. The dilutive effect of outstanding stock options is computed using the treasury stock method. For the years ended December 31, 2017, 2016 and 2015 there were 1,060,000, 804,000 and 786,900 outstanding stock options, respectively, that were excluded from the computation of Diluted EPS, that would have had an anti dilutive effect if included. t. Comprehensive income and accumulated other comprehensive income (loss): Comprehensive income consists of two components, net income and other comprehensive income ("OCI"). OCI refers to revenue, expenses, and gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Company’s OCI consists of foreign currency translation adjustments from those subsidiaries not using the USD as their functional currency and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges. The total accumulated other comprehensive income ("AOCI"), net was comprised as follows: December 31, 2017 2016 Accumulated gains on derivative instruments $ - $ 28 Accumulated foreign currency translation differences 683 (1,178 ) Total accumulated other comprehensive income (loss), net $ 683 $ (1,150 ) The following table summarizes the changes in AOCI, net of taxes for the year ended: Unrealized gains (losses) on derivative instruments Accumulated foreign currency translation differences Total Balance at December 31, 2015 $ 20 $ (1,912 ) $ (1,892 ) Other comprehensive income (loss) before reclassifications 119 734 853 Amounts reclassified from AOCI (111 ) - (111 ) Net current period OCI 8 734 742 Balance at December 31, 2016 $ 28 $ (1,178 ) $ (1,150 ) Other comprehensive income (loss) before reclassifications 1,114 1,861 2,975 Amounts reclassified from AOCI (1,142 ) - (1,142 ) Net current period OCI (28 ) 1,861 1,833 Balance at December 31, 2017 $ - $ 683 $ 683 The following table shows the amounts reclassified from AOCI into the Consolidated Statements of Income, and the associated financial statement line item, for 2017 and 2016: December 31, Affected line item in the consolidated statements of income 2017 2016 Cost of revenues $ 914 $ 90 Research and development 23 2 Marketing and selling 91 9 General and administrative 114 10 Total gain $ 1,142 $ 111 u. Accounting for stock-based compensation: 1. Equity share based payment: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company accounts for employees and direcotrs’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period. The Company elected to recognize compensation expense for an award that has a graded vesting schedule using the accelerated method. The Company adopted ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting” in the first quarter of fiscal year 2017 and elected to account for forfeitures as they occur The exercise price of each option is generally Company's stock price on the date of the grant. Options generally become exercisable over approximately three to four-year period, subject to the continued employment. All options expire after 7 years from the date of grant. In addition, commencing in 2015 the Company granted certain of its employees and officers with restricted stock units ("RSUs"), vesting over approximately a four-year period from the grant date. RSUs fair value is measured at the grant date based on the market value of Company's common stock. RSUs that are cancelled or forfeited become available for future grants. In 2017 and 2016, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 43.9 % 40.9 % Risk-free interest rate 2.1 % 1.1 % Expected life (in years) 6.13 4.78 The Company used volatility data in accordance with ASC 718. Commencing 2016 volatility calculation was based on Company's historical data. For grants made until 2015, the computation of historical volatility was derived from a combination of Company's historical volatility and comparable companies' historical volatility for similar contractual terms. The computation of risk free interest rate is based on the rate available on the date of grant of a zero-coupon U.S. government bond with a remaining term equal to the expected term of the option. The expected term of options granted is calculated using the simplified method (being the average between the vesting periods and the contractual life of the options). The Company currently uses the simplified method as adequate historical experience is not available to provide a reasonable estimate. The dividend yield is zero, due to a dividend adjustment mechanism with respect to the exercise price upon payment of a dividend. 2. Phantom share-based payment: During 2014, the Company granted several of its employees a right to a bonus payment based on an increase in the Company’s share value (the "phantom award") under which the employees are entitled to receive in cash or shares the difference between exercise price, subject to adjustments for dividend distributions made until the actual payment of the bonus and the value of the Company’s ordinary shares with such bonus right vesting over a four-year period on an annual basis. According to ASC 718-10, “instruments that are required to be cash-settled (e.g., cash-settled stock appreciation rights) or require cash settlement on the occurrence of a contingent event that is considered probable” should be treated as a liability. As such, in this case the share-based compensation is accounted for as a liability award. According to ASC 718-10, in connection with the measurement of the liability settlement, the value of the award should be measured each reporting date until settlement. The fair value of the phantom award was calculated using the Binominal option pricing model. On October 27, 2015, the Company's board of directors approved the grant of stock options and RSUs as a partial replacement for the phantom awards previously granted during 2014. A change in the terms or conditions of the phantom awards is accounted for as a modification under ASC 718. On the date of modification, the amounts previously recorded as a share-based compensation liability are reclassified and recorded as a component of equity by a credit to additional paid-in capital. The Company reclassified during the year ended December 31, 2015 an amount of approximately $195 pursuant to the modification. Any incremental fair value, if any, of the modified award over the fair value of the original award immediately before its terms are modified is recognized over the remaining requisite service period. The Company estimated the fair value of the remaining phantom awards, using the binominal option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 45.5 % 46.9 % Risk-free interest rate 2.0 % 1.8 % Expected life (in years) 3.3 4.3 As of December 31, 2017 and 2016, the Phantom liability balance was $32 and $100, respectively. As of December 31, 2016, compensation cost related to the phantom award was fully recognized. v. Redeemable non-controlling interest: The Company is party to a put and call arrangement with respect to the remaining 45% non-controlling interest in Caesarstone Canada, Inc. Due to the existing put and call arrangements, the non-controlling interest is considered to be redeemable and is recorded on the balance sheet as a redeemable non-controlling interest outside of permanent equity. The redeemable non-controlling interest is recognized at the higher of: i) the accumulated earnings associated with the non-controlling interest, or ii) the redemption value as of the balance sheet date. The following |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 3:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2017 2016 Prepaid expenses $ 2,859 $ 3,101 Government authorities 20,196 13,991 Deferred tax assets (see also Note 2n) - 11,409 Advances to suppliers 3,103 2,831 Derivatives 717 2,570 Other receivables (see also Note 10) 6,178 5,582 $ 33,053 $ 39,484 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4:- INVENTORIES December 31, 2017 2016 Raw materials $ 27,856 $ 24,306 Work-in-progress 4,680 1,348 Finished goods 100,404 75,820 $ 132,940 $ 101,474 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5:- PROPERTY, PLANT AND EQUIPMENT, NET December 31, 2017 2016 Cost: Machinery and manufacturing equipment, net (1) $ 247,437 $ 231,914 Office equipment and furniture 17,423 14,828 Motor vehicles 1,693 1,043 Buildings and leasehold improvements 111,630 106,422 Prepaid expenses related to operating lease (2) 939 939 379,122 355,146 Accumulated depreciation: Machinery and manufacturing equipment, net $ 121,621 $ 101,909 Office equipment and furniture 12,331 9,367 Motor vehicles 1,226 812 Buildings and leasehold improvements 27,176 20,135 Prepaid expenses related to operating lease 115 105 162,469 132,328 Depreciated cost $ 216,653 $ 222,818 (1) Presented net of investment grants received in the total amount of $7,830. (2) Until 2012, the Company leased land from the Israel Lands Administration ("ILA") for its Bar-Lev manufacturing facility. The lease term started on February 6, 2005. The lease is for an initial non-cancellable term of 49 years, with a renewal option of an additional 49 years. The Company analyzed the conditions set forth in ASC 840-10 and classified the land as an operating lease (since the land is not transferred to the Company at the end of the lease nor is there any option to buy the land from the ILA at any point). All payments on account of the initial term were paid in advance (based on discounted values) at the beginning of the lease, and included in the minimum lease payments to be amortized. The prepaid expenses are amortized through the term of the lease, based on the straight-line method (including the bargain renewal option term). See also Note 13(d). During 2017, the Company recorded a reduction of approximately $2,321 to the cost and accumulated depreciation of fully depreciated equipment and leasehold improvements no longer in use. Depreciation expense were $27,621, $25,929 and $19,243 for the years ended December 31, 2017, 2016 and 2015, respectively. |
OTHER INTANGIBLES ASSETS
OTHER INTANGIBLES ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
OTHER INTANGIBLES ASSETS | NOTE 6:- OTHER INTANGIBLES ASSETS December 31, 2017 2016 Original amounts: Non-compete agreement $ 1,573 $ 1,462 Distribution relationships 1,653 1,584 Customer relationships 6,273 6,006 Distribution agreement 14,606 14,606 24,105 23,658 Accumulated amortization: Non-compete agreement (1,573 ) (1,455 ) Distribution relationships (1,558 ) (1,392 ) Customer relationships (5,971 ) (5,395 ) Distribution agreement (12,762 ) (10,870 ) (21,864 ) (19,112 ) Total other intangibles assets $ 2,241 $ 4,546 (1) Amortization expense amounted to $2,305, $2,325 and $3,091 for the years ended December 31, 2017, 2016 and 2015, respectively. (2) Estimated amortization expenses for the year ended December 31, 2018 are $2,241. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL [Abstract] | |
GOODWILL | NOTE 7:- GOODWILL The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows: Balance as of December 31, 2015 $ 35,821 Foreign currency translation adjustments (165 ) Balance as of December 31, 2016 $ 35,656 Foreign currency translation adjustments 1,373 Balance as of December 31, 2017 $ 37,029 |
SHORT-TERM BANK CREDIT
SHORT-TERM BANK CREDIT | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
SHORT-TERM BANK CREDIT | NOTE 8:- SHORT-TERM BANK CREDIT a. Short-term bank credit and loans are classified as follows: Weighted average interest Currency December 31, December 31, 2017 2016 2017 2016 % Short-term bank credit CAD 3.20 2.95 $ 4,191 $ 8,540 b. As of December 31, 2017 and 2016, the Company had short-term and revolving credit lines of approximately $14,560 and $13,542 (out of which $4,191 and $8,540 respectively were utilized as presented in the table above), respectively, from Israeli and Canadian banks. The Company's current credit lines, if not extended, will expire in December 2018 in the Israeli banks and in July 2018 in the Canadian bank. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 9:- ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2017 2016 Employees and payroll accruals $ 15,837 $ 12,251 Accrued expenses 6,064 7,005 Advances from customers 356 1,022 Taxes payable 4,923 3,091 Warranty provision 1,443 1,287 Derivatives 921 536 Phantom share based payment 32 100 Other 424 418 $ 30,000 $ 25,710 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 10:- COMMITMENTS AND CONTINGENT LIABILITIES a. Legal proceedings and contingencies: Claim by former South African distributor In December 2007, the Company terminated its agency agreement with its former South African agent, World of Marble and Granite (“WOMAG”), on the basis that WOMAG had breached the agreement. In the same month, the Company filed a claim for NIS 1.0 million (approximately $257) in the Israeli District Court in Haifa based on such breach. WOMAG has contested jurisdiction of the Israeli District Court, but subsequent appellate courts have dismissed WOMAG’s claims. In January 2008, WOMAG filed suit in South Africa seeking Euro 15.7 million (approximately $17,060). In September 2013, the South African Court determined that since a proceeding on the same facts was pending before another court (lis alibis pendens), the South African Court will stay the matter until the conclusion of the Israeli action. In December 2013, the magistrate’s court in Israel held that the Company was not entitled to terminate the agreement with WOMAG as it was not breached by WOMAG. In October 2015, WOMAG amended its claim, seeking a reduced amount of approximately Euro 7.1 million (approximately $7,727) and approximately South Africa RAND 43.7 million (approximately $2,808). In June 2016, WOMAG further amended its claim, seeking a reduced amount of Euro 6.2 million (approximately $6,520) and South Africa RAND 51.2 million (approximately $3,700) plus interest on any capital sum awarded. As the district court dismissed the Company’s appeal of the decision of the magistrate’s court, the Company has agreed with WOMAG to submit the matter to arbitration, for which hearings commenced in South Africa in September 2016. The arbitration is divided into two stages. Both stages relate to the quantum of damages payable to the Company; the first stage in respect of the merits and the second in respect of the quantum of claim if WOMAG succeeds with its disputed claim on the merits. After both phases, if any of the parties is not satisfied with the arbitrator’s decision, that party may lodge an appeal to a panel of three arbitrators to be appointed by the parties. The expected timeframe for resolution of the claim currently cannot be estimated with precision. While the Company expects that the arbitration phase will end in 2018, with the possibility of appeals in 2019. Should it remain necessary to run the second phase of the arbitration on quantum, it is anticipated that this phase may only be finalized in 2020. Although the Company believes that it submitted vigorous defenses against WOMAG’s. The Company continues to monitor and estimate the possible loss deriving from this claim based on new information available from time to time and believes that it recorded an adequate reserve for this claim. Bodily injury claims related to exposure to silica dust Overview The Company is subject to a number of claims mainly by fabricators, their employees or the National Insurance Institute ("NII") in Israel, alleging that fabricators contracted illnesses, including silicosis, through exposure to silica particles during cutting, polishing, sawing, grinding, breaking, crushing, drilling, sanding or sculpting Company's products. Silicosis and other bodily Injury Claims As of December 31, 2017, the Company is subject to 105 pending bodily injury claims (out of which 104 are individual claims including NII subrogation claims, and one claim with a motion to be recognized as a class action) that have been submitted in Israel since 2008 against the Company directly, or that have named the Company as third-party defendant by fabricators or their employees in Israel, by the injured's successors, by the NII or by others (see also table below). In addition one lawsuit and two motions for conciliation were filed in Spain and one pre-litigation notice received in Australia against the Company and other defendants. As of December 31, 2017, the Company has 7 pending pre-litigation demand letters on behalf of certain fabricators in Israel. Each of the claims named other defendants, such as fabricators that employed the plaintiffs, the Israeli Ministry of Industry, Trade and Employment, distributors of the Company's products, insurance companies and insurance brokers. Various arguments are raised in the claims, including among others product liability arguments and failure to provide warnings regarding the risks associated with silica dust generated by the fabrication of the Company's products. Most of the claims do not specify a total amount of damages sought, as the plaintiff’s future damages will be determined at trial. A claim filed with the Magistrates court in Israel is limited to a maximum of NIS 2.5 million (approximately $721) plus any fees, and among the 105 pending claims filed against the Company in Israel, 67 claims were filed in the Magistrates court. A claim filed in the District court is not subject to such limitation. As a result, there is uncertainty regarding the total amount of damages that may ultimately be claimed. As of December 31, 2017 each claim may be subject or referred to mediation, settled by the parties or resolved by a court decision and may also be appealed and therefore the time frame for the resolution for each claim may significantly vary. Class action In April 27, 2014, a lawsuit by a single plaintiff and a motion for the recognition of this lawsuit as a class action was filed against the Company in the Central District Court in Israel. The plaintiff alleges that, if the lawsuit is recognized as a class action, the claim against the Company is estimated to be NIS 216 million (approximately $56,180). In addition, the claim includes an unstated sum in compensation for special and general damages. On January 4, 2018, the Company and the plaintiff submitted to the Israeli District Court a settlement agreement. If the settlement agreement is approved by the Court, the claim will be dismissed and the Company will make payments on a one time basis, without any admission of liability, in an aggregate amount of approximately NIS 9.0 million (approximately $2,600) to fund certain safety related expenses at fabrication facilities in Israel, as well as plaintiff’s compensation and legal expenses. The settlement agreement remains subject to the approval of the Court. The Israeli State Attorney General and other interested parties may notify the Court if they have any objection thereto. During 2015, the Company reassessed the expected outcome of the individual bodily injury claims following Company's consent to several settlements. In addition the Company entered into an agreement with the State of Israel, with the approval of its insurance carriers, related to individual bodily injury claims (not including the claim seeking class action status). Under the agreement, without admitting any liability, the Company and the State of Israel have agreed to cooperate in dealing with the claims. Such agreement initially signed in November 2015 and extended on March 5, 2018. If either the Company or the State of Israel is found liable for damages, the Company has agreed to an apportionment of those damages. Based on the above, the Company assessed, based also on its legal advisors’ opinion, that contingent losses related to the individual bodily injury claims in Israel are probable, pursuant to ASC 450, an initial accrual has been recorded during 2015 for the loss contingencies related to such outstanding individual claims. In addition in May 2017 the Company signed also an agreement with each of its main distributors to cooperate, subject to certain terms, with respect to the management of the individual claims that have been filed and claims that may be submitted during a certain time period. Under the agreement the Company and each distributor agreed to an apportionment of damages for each filed claim. The Company updated its provision in 2017 to reflect the outstanding claims in the below table, and provided a provision for related NII unasserted claims, taking into consideration new claims filed, settlements reached and other new information available. In order to reasonably estimate the losses for bodily injury claims reflected in the table below, the Company performed a case-by-case analysis with its legal advisors of the relevant facts that were reasonably available to it, related to the claims filed, including, among other things, the specific known or estimated health condition of the claimants, their ages, salaries, related probable future subrogation claims from the NII, and other factors that might have an impact on the final outcome of such claims. The Company will continue to regularly monitor changes in facts for each claim and will update its best estimate if required. Accordingly, the reserve for the bodily injury claims as of December 31, 2017 and 2016 totaled to $32,958 and $17,682 respectively, of which $9,504 and $5,155 is reported in accrued expenses and other liabilities and $23,454 and $12,527 is reported in long-term liabilities. The Company cannot estimate the number of claimants that may file claims in the future or the nature of their claims in order to conclude probability or the range of loss. The Company currently does not expect to incur additional material losses with respect to the outstanding bodily injury claims, that might have a material impact on its financial position, results of operations and cash flows. A summary of bodily injury claims activity follows: 2017 2016 2015 Outstanding claims, January 1 87 70 56 New claims (*) 34 31 16 Settled and dismissed claims (16 ) (14 ) (2 ) Outstanding claims, December 31 (**) 105 87 70 (*) Representing 19, 30 and 16 injured persons in 2017, 2016 and 2015, respectively. (**) Not including the pre-litigation notice received by Company's subsidiary in Australia and a legal proceedings in Spain which are in preliminary stages and as of December 31, 2017, the Company cannot estimate loss probability associated with such proceedings. The Company maintains insurance for product liability claims, including for bodily injury claims related to exposure to silica dust. The Company has purchased insurance policies for the period from 2008-and to date from several insurance carriers that provide coverage for product liability losses, subject to certain terms and conditions, and the related defense costs up to a certain limit per case and per policy year. The available limits of these policies as it relates to the claims reflected in the table above, exceed the recorded insurance receivable balance. Commencing April 2014, the Company’s Israeli insurance policies have significant per claim deductibles. Commencing April 2015, the first layer of insurance in Israel, of $5,000 was not renewed. Since that time, the Company’s insurance covers claims in Israel in excess of $5,000 (commencing October 2017 in excess of $6,000) up to an amount of $35,000 per claim or per period. Those policies include a significant deductible per claim and cover only illnesses diagnosed after February 2010. However, with respect to the claim which was required to be recognized as a class action, Company's insurer at the time of the filing of such claim, has rejected coverage for this claim. The Company records insurance receivables for the amounts that are covered by insurance less deductibles. During 2017 and 2016, as in prior years, the Company's insurance carriers made payments to all settled product liability claims that were under the policies. The Company paid the deductible amounts for the settled claims per policy. The collectability of the Company's insurance receivables is regularly evaluated and the amounts recorded are probable of collection. This conclusion is based on analysis of the terms of the underlying insurance policies, experience in successfully recovering individual product liability claims from Company's insurers, the insurance carrier was party to the agreement with the State of Israel and the financial ability of the insurance carriers to pay the claims and the relevant facts and applicable law. As of December 31, 2017 and 2016, the insurance receivable totaled to $12,380 and $7,509 respectively, of which $3,878 and $2,441 is reported in the other accounts receivable and prepaid expenses and $8,502 and $5,068 is in other long-term receivables. In 2017 and 2016, the legal settlements and loss contingencies expenses related to the bodily injury claims related to exposure to silica dust totaled to $9,552 and $5,868, respectively, which reflects the deductible amounts for claims covered by insurance policies, claims not covered and the impact of settlements. Arbitration proceeding with Microgil Agricultural Cooperative Society Ltd In November 2011, Kfar Giladi and Microgil (the “claimants”), initiated arbitration proceedings against the Company that commenced in April 2012. The claimants filed a claim against the Company in arbitration for NIS 232.8 million ($60,500) for alleged damages and losses incurred by them in connection with a breach of Processing Agreement by the Company. In August 2012, the Company filed a claim against the claimants in arbitration for NIS 76.6 million ($19,900) for damages incurred by the Company in connection with claimants malfunctioning operations, breach of the agreement and the understanding between the parties regarding the agreement after it was terminated, inventory which was not returned to the Company and was unaccounted for and an unpaid loan, which was granted by the Company to the claimants, and the adverse impact on the valuation in our IPO caused by their actions. On January 17, 2018, the arbitrator provided its judgment, pursuant to which the Company is required to pay the claimants approximately NIS 48.2 million (approximately $13,900), including damages, interest, linkage to the Israeli Consumer Price index and legal fees. The Company recorded this amount in 2017 as part of the legal settlements and loss contingencies, net line item in its Consolidated Statement of Income. Claim by the Israeli Ministry of Environmental Protection ("IMEP") The Company has been required by the IMEP to comply with the applicable requirements under the law and regulations related to styrene gas emission at both of its plants in Israel. In December 2013, the Company completed the installation of a system in its Bar-Lev manufacturing facility to reduce styrene emission and following which the Company has better control of the styrene emission in the Bar-Lev manufacturing facility and the Company presented to IMEP a plan to further improve its control of styrene emission and comply with the styrene gas emission standards With respect to the Sdot-Yam manufacturing facility the IMEP has summoned the Company in January 2014 to a hearing to address allegations that, based on the IMEP’s procurement of several gas emission samplings, the Company exceeded the air ambient standards. Following the hearing, and although the IMEP acknowledged that the Company was in the process of installing measures to comply with the styrene gas emission standards, the IMEP decided to recommend the conducting of investigation with respect to the allegation that the Company exceeded from the threshold of styrene air ambient standards during 2013. During 2014, the Company applied measures to correct the styrene air ambient standards which the Company believe should conclusively solve any exceeded emission of styrene gas. Throughout 2016 and 2017, the Company continued to control styrene emission levels through strict maintenance and compliance with work processes. From time to time, the IMEP visits Company's Sdot-Yam facility and provides it with a summary report of its findings. The Company is in ongoing discussions with the IMEP and intend to continue monitoring, and, if necessary, applying corrective measures to control the styrene emissions at its facilities. If the Company is not fully complied with the styrene emission standards, Company's business license may be revoked, facilities may be shutdown and the Company may be subject to civil and criminal sanctions. Securities Class Action Claim On August 25, 2015, a purported purchaser of Company’s ordinary shares filed a proposed class action in the United States District Court for the Southern District of New York asserting, among other things, that the Company and two of its officers violated Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b–5 promulgated under the Exchange Act, by allegedly making false and misleading statements about the Company’s business. The complaint seeks an unspecified amount of damages on behalf of purchasers of Company’s securities between March 25, 2013 and August 18, 2015. On January 15, 2016, the plaintiff filed an amended complaint that asserted similar claims, but that seeks damages on behalf of purchasers of the Company’s securities between February 12, 2014 and August 18, 2015. On February 26, 2016, the Company filed a motion to dismiss the amended complaint. Expenses incurred as a result of this claim will be covered under the Company’s directors and officers liability insurance policy, subject to deductible and to coverage terms and limits. On January 30, 2017, the Company reached an agreement in principle with the lead plaintiffs to settle the litigation, to be paid by the Company’s insurance carrier into a settlement fund for distribution to the plaintiff class,subject to the completion of definitive documentation and approval of the court. In August 2017, the court approved the settlement agreement. General From time to time, the Company is involved in other legal proceedings and claims in the ordinary course of business related to a range of matters. While the outcome of these other claims cannot be predicted with certainty, the Company's management does not believe that any such claims or all of them together will have a material effect on the Company's consolidated financial statements. b. Operating lease commitments: The land and certain of the Company's facilities and vehicles are leased under operating lease agreements. Future minimum lease commitments under non-cancellable operating leases for the specified periods ending after December 31, 2017 are as follows: 2018 $ 15,150 2019 14,145 2020 10,806 2021 9,659 2022 8,275 2023 and thereafter 45,435 Total $ 103,470 Lease expenses for the years ended December 31, 2017, 2016 and 2015 were approximately $16,200, $13,479 and $12,109, respectively. c. Purchase obligation: The Company's significant contractual obligations and commitments as of December 31, 2017 are summarized in the following table: 2018 (1) $ 38,530 2019 and thereafter - $ 38,530 (1) Consists of purchase obligations to certain suppliers. d. Pledges and guarantees: 1. As of December 31, 2017, the Company had outstanding guarantees and letters of credit with various expiration dates in a principal amount of approximately $1,425 related to facilities, vehicle leases and other miscellaneous guarantees. 2. Company's credit facilities provided by banks in Israel are secured with a “Negative floating pledge”, whereby the Company committed not to pledge or charge and not to undertake to pledge or charge its general floating assets. 3. To secure the Company's liabilities to a bank in Canada, Caesarstone Canada Inc. has provided a security interest on certain of its inventory and other tangible and intangible assets. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 11:- TAXES ON INCOME a. Israeli taxation: 1. Corporate tax rate: The corporate tax rate in Israel was 24% in 2017, 25% in 2016 and 26.5% in 2015. On December 31, 2016, the Israeli Parliament's Plenum approved by a second and third reading the Bill for Amending the Income Tax Ordinance (No. 217) (Reduction of Corporate Tax Rate) which consists of the reduction of the corporate tax rate for development area A (relates to Company's manufacturing plant in Bar-Lev industrial zone) from 9% to 7.5%, effective January, 2017 (tax rate for Company's manufacturing plant in Sdot-Yam will remain unchanged at 16%). In addition starting January, 2018, the regular tax rate in Israel was reduced to 23%. 2. Foreign Exchange Regulations: Commencing in taxable year 2014, the Company has elected to measure its taxable income in Israel and file its tax return under the Israeli Income Foreign Tax Regulations (the “Foreign Exchange Regulations”). Under the Foreign Exchange Regulations, an Israeli company must calculate its tax liability in U.S. Dollars according to certain orders and then translated into NIS according to the exchange rate as of December 31 of each year. For taxable years up to 2013, the Company measured its taxable income and filed its tax returns in NIS. 3. Tax benefits under Israel's Law for the Encouragement of Industry (Taxes), 1969: The Company is an "Industrial Company," as defined by the Law for the Encouragement of Industry (Taxes), 1969, and as such, the Company is entitled to certain tax benefits, primarily amortization of costs relating to know-how and patents over eight years, accelerated depreciation and the right to deduct public issuance expenses for tax purposes. 4. Tax benefits under the Law for the Encouragement of Capital Investments, 1959: According to the Law for the Encouragement of Capital Investments, 1959 (the "Encouragement Law"), the Company is entitled to various tax benefits by virtue of the "Preferred Enterprise" status granted to its enterprises, in accordance with the Encouragement Law. The Company chose to be taxed according to the "Preferred Enterprise" track under Amendment No. 68 to the Encouragement Law (the "Amendment No. 68"). In order to implement Amendment No. 68 and to be taxed under the "Preferred Enterprise" track, the Company waived the tax benefits of the previous tracks -"Approved Enterprise" and "Beneficiary Enterprise" - under the Encouragement Law, starting from the 2011 tax year. The principal benefits by virtue of the Encouragement Law are the following: Tax benefits and reduced tax rates under the Preferred Enterprise track: In order to receive benefits as a "Preferred Enterprise," Amendment No. 68 states certain conditions must be met. The basic condition for receiving the benefits under Amendment No. 68 is that the enterprise contributes to the country's economic growth and is a competitive factor for the gross domestic product (a "competitive enterprise"). In order to comply with this condition, the Encouragement Law prescribes various requirements. As for industrial enterprises, in each tax year, one of the following conditions must be met: 1. Its main field of activity is biotechnology or nanotechnology as approved by the Head of the Administration of Industrial Research and Development. 2. The industrial enterprise's sales revenues in a specific market during the tax year do not exceed 75% of its total sales for that tax year. A "market" is defined as a separate country or customs territory. 3. At least 25% of the industrial enterprise's overall revenues during the tax year were generated from the enterprise's sales in a specific market with a population of at least 14 million starting from 2012 tax year. The tax rate on preferred income form a Preferred Enterprise in 2014 and onwards was 16% (relates to Company's manufacturing plant in Sdot-Yam) and in development area A - 9%. In 2017, the tax rate on preferred income from a Preferred Enterprise will be 16% and in development area A – 7.5% (relates to Company's manufacturing plant in Bar-Lev industrial zone). Amendment No. 68 also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise's earnings as above will be subject to tax at a rate of 20% from 2014 and onwards (or a reduced rate under an applicable double tax treaty). Upon a distribution of a dividend to an Israeli company, no withholding tax is remitted. Since the Company chose to apply the provisions of Amendment No. 68, by submitting the waiver form before June 30, 2015, the Company is eligible to distribute taxed earnings derived from a Beneficiary Enterprise and/or Approved Enterprise to an Israeli company without being subject to withholding tax. In development area A, in addition to the tax benefits, as mentioned above, some of the Company's facilities are eligible for grants at rate of 20% and/or loans, subject to an approval of the Israeli Investment Center. Accelerated depreciation: The Company is eligible for a deduction of accelerated depreciation on machinery and equipment used by the Approved Enterprise or the Beneficiary Enterprise or the Preferred Enterprise at a rate of 200% (or 400% for buildings) from the first year of the asset's operation. Conditions for entitlement to benefits: The above mentioned benefits are contingent upon the fulfillment of the conditions stipulated by the Encouragement Law, regulations published thereunder and the letters of approval for the investments in the Preferred Enterprises, as discussed above. Non-compliance with the conditions may cancel all or part of the benefits and require a refund of the amount of the benefits, including interest. The Company's management believes that the Company is meeting the aforementioned conditions. Of the Company's retained earnings as of December 31, 2017, approximately $22,316 is tax-exempt earnings attributable to its Approved Enterprise programs and $17,438 is tax-exempt earnings attributable to its Beneficiary Enterprise program. The tax-exempt income attributable to the Approved and Beneficiary Enterprises cannot be distributed to shareholders without subjecting the Company to taxes. If dividends are distributed out of tax-exempt profits, the Company will then become liable for tax at the rate applicable to its profits from the Approved Enterprise in the year in which the income was earned, as if it was not under the "Alternative benefits track" (taxed at the rate of no more than 24% as of December 31, 2017). Under the Encouragement Law, tax-exempt income generated under the Beneficiary Enterprise status or the Approved Enterprise status will be taxed, among other things, upon a dividend distribution or complete liquidation in accordance with the Encouragement Law. The Company's policy is not to distribute such dividends from tax-exempt income derived from Approved/Beneficiary Enterprises. As of December 31, 2017, if the income attributed to the Approved Enterprise would have been distributed as a dividend, the Company would have incurred a tax liability of approximately $5,356. If income attributed to the Beneficiary Enterprise would have been distributed as a dividend, including upon liquidation, the Company would have incurred a tax liability of approximately $4,185. These amounts would be recorded as an income tax expense in the period in which the Company decides to declare the dividend. b. Non-Israeli subsidiaries taxation: Non-Israeli subsidiaries are taxed based on tax laws in their countries of residence. Statutory tax rates for Non-Israeli subsidiaries are as follows: Company incorporated in United States - 40% tax rate (federal and state). Company incorporated in Australia - 30% tax rate. Company incorporated in Singapore - 17% tax rate. Company incorporated in Canada – 26.5% tax rate. Company incorporated in England – 20% tax rate. Israeli income taxes and foreign withholding taxes were not provided for undistributed earnings of the Company's foreign subsidiaries (excluding the Company's subsidiary in Canada). The Company intends to reinvest these earnings indefinitely in the foreign subsidiaries. Accordingly, no deferred income taxes have been provided. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act of 2017 (“TCJA”) into legislation. The TCJA includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction takes effect on January 1, 2018. The Company recognized a net tax benefit of $1,026 associated with enactment of the TCJA in Income tax expense in its Consolidated Statements of Income of 2017, due to a re-measurement of deferred tax assets and liabilities. c. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2017 2016 Deferred tax assets (liabilities): Intangible assets $ 461 $ 474 Other temporary differences (1) 5,776 6,264 Temporary differences related to inventory (2) 6,544 6,917 Carryforward losses, deductions and credits (3) 1,162 390 Less-valuation allowance (903 ) (390 ) Total net deferred tax assets 13,040 13,655 Deferred tax liabilities Property and equipment ( ) (14,654 ) Intangible assets ( ) (1,949 ) Other temporary differences ( ) (120 ) Total deferred tax liabilities ( ) (16,723 ) Deferred tax $ 3,308 $ (3,068 ) (1) Deriving mainly from provision for bad debts, labor related and warranty provision. The increase mainly related to provision for loss contingencies and settlement with the Israeli tax authorities. (2) Deriving mainly from the provision for slow moving inventory and IRS section 263(a). (3) Certain subsidiaries have tax loss carry-forwards totaling approximately $5,850 which can be carried forward and offset against taxable income, these carry-forward tax losses have no expiration date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the schedule of reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. d. A reconciliation of the Company's effective tax rate to the statutory tax rate in Israel is as follows: Year ended December 31, 201 7 2016 2015 Income before taxes on income $ 34,960 $ 89,486 $ 93,301 Statutory tax rate in Israel 24 % 25 % 26.5 % Income taxes at statutory rate $ 8,390 $ 22,372 $ 24,725 Increase (decrease) in tax expenses resulting from: Tax benefit arising from reduced rate as an "Preferred Enterprise" (4,832 ) (11,904 ) (13,232 ) Non-deductible expenses, net 1,604 1,560 1,073 Adjustment for change in tax law (1,026 ) - - Increase (decrease) in taxes from prior years (104 ) 44 (513 ) Increase (decrease) in taxes resulting from tax settlement with tax authorities - (151 ) - Tax adjustment in respect of foreign subsidiaries' different tax rates 1,593 1,320 693 Uncertain tax position 1,453 (158 ) 1,034 Changes in valuation allowance 502 52 (21 ) Others (178 ) (132 ) 84 Income tax expense $ 7,402 $ 13,003 $ 13,843 Effective tax rate 21 % 15 % 15 % Per share amounts (basic) of the tax benefit resulting from an "Preferred Enterprise" $ (0.14 ) $ (0.34 ) $ (0.38 ) Per share amounts (diluted) of the tax benefit resulting from an "Preferred Enterprise" $ (0.14 ) $ (0.34 ) $ (0.37 ) e. Income before taxes on income is comprised as follows: Year ended December 31, 2017 2016 2015 Domestic $ 24,451 $ 75,729 $ 81,020 Foreign 10,509 13,757 12,281 $ 34,960 $ 89,486 $ 93,301 f. Tax expenses on income are comprised as follows: Year ended December 31, 2017 2016 2015 Current taxes $ 13,778 $ 13,966 $ 6,792 Deferred taxes (6,376 ) (963 ) 7,051 $ 7,402 $ 13,003 $ 13,843 Domestic $ 3,838 $ 8,319 $ 9,892 Foreign 3,564 4,684 3,951 $ 7,402 $ 13,003 $ 13,843 g. Tax assessments: The Company operates in multiple jurisdictions throughout the world, and its tax returns are periodically audited or subject to review by both domestic and foreign authorities. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The following describes the open tax years, by major tax jurisdiction, as of December 31, 2017: Israel 2015-present Australia 2012-present Canada 2010-present United States 2015-present Singapore 2011-present England 2016-present h. Uncertain tax positions: The balances at December 31, 2017 and 2016 include a liability for unrecognized tax benefits of $2,737 and $1,284, respectively, for tax positions which are uncertain of being sustained. A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: Gross tax liabilities at January 1, 2015 $ 417 Increase in tax positions for current year 493 Increase of tax position of prior years 541 Foreign currency adjustments (9 ) Gross tax liabilities at December 31, 2015 1,442 Increase in tax positions for current year 594 Increase in tax position of prior years 270 Decrease related to settlement with the tax authorities (1,022 ) Gross tax liabilities at December 31, 2016 1,284 Increase in tax positions for current year 1,201 Increase of tax position of prior years 252 Gross tax liabilities at December 31, 2017 $ 2,737 The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management's expectations, the Company could be required to adjust the provision for income taxes in the period such resolution occurs. The Company does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which is difficult to estimate. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12:- SHAREHOLDERS' EQUITY a. The Company's share capital consisted of the following as of December 31, 2017 and 2016: Authorized Outstanding December 31, December 31, 2017 2016 2017 2016 Shares of NIS 0.04 par value: Ordinary shares 200,000,000 200,000,000 34,338,960 34,321,573 b. Ordinary shares-ordinary shares confer on their holders voting rights and the right to receive dividends. c. Dividends: The Company paid dividends in the amount of $20,025 in 2014, out of non-tax exempt profit under the Approved Enterprise or beneficiary enterprise. See also Note 16. d. Repurchase of shares: On February 9, 2016 the Company’s Board of Directors approved a share repurchase plan authorizing the repurchase of up to $40,000 of the Company’s outstanding ordinary shares which was complete on August 3, 2016. Following the authorization the Company repurchased 1,103,096 ordinary shares at an average price of $35.74 per share (excluding broker and transaction fees). The Company recorded shares repurchased at cost as part of its equity statement. e. Compensation plan: On January 1, 2011, the Board of Directors adopted the Caesarstone Ltd 2011 Incentive Compensation Plan (the “Plan”) pursuant to which non-employee directors, officers, employees and consultants In December 2015, Company's Board of Directors approved an amendment to the Plan increasing the number of ordinary shares that may be granted under such plan by 900,000 shares (from the previously 2,375,000 ordinary shares registered during 2012). As of December 31, 2017, there were 1,209,979 options and restricted stock units (RSUs) outstanding under the Plan and 988,215 shares available or reserved for future issuance under the plan. As of December 31, 2017, there was $7,057 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees and directors under the Plan. That cost is expected to be recognized over a weighted-average period of 1.1 years. The following is a summary of activities relating to the Company’s stock options granted to employees under the Company’s plan during the year ended December 31, 2017: Number of options Weighted average exercise price Aggregate intrinsic value Outstanding - beginning of the year 826,704 $ 37.26 Granted 549,000 30.49 Exercised (22,000 ) 34.60 Forfeited (225,000 ) 39.93 Outstanding - end of the year 1,128,704 $ 33.48 $ 179 Options exercisable at the end of the year 290,704 $ 37.38 $ 179 Vested and expected to vest 1,128,704 $ 33.48 $ 179 The weighted average fair value of options granted during 2017, 2016 and 2015 was $14.9, $13.2 and $12.3 per option. The intrinsic value of options exercised during 2017, 2016 and 2015 was $122, $1,761 and $6,465. The intrinsic value of exercisable options (the difference between the Company’s closing share price on the last trading day in fiscal 2017 and the average exercise price of in-the-money options, multiplied by the number of in-the-money options) included above represents the amount that would have been received by the option holders had all option holders exercised their options on December 31, 2017. This amount changes based on the fair market value of the Company’s ordinary shares. The following is a summary of activities relating to the Company’s RSUs granted to employees under the Plan during the year ended December 31, 2017: Number of RSUs Weighted average fair value Aggregate intrinsic value Outstanding - beginning of the year 55,500 $ 35.16 Granted 46,000 32.13 Exercised (13,875 ) 35.16 Forfeited (6,350 ) 34.6 Outstanding - end of the year 81,275 $ 33.50 $ 1,787 RSUs exercisable at the end of the year - $ - $ - Vested and expected to vest 81,275 $ 33.5 $ 1,787 The awards outstanding as of December 31, 2017 have been separated into ranges of exercise price, as follows: Awards outstanding Awards exercisable Exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price per share Number of options Weighted average remaining contractual life (years) Weighted average exercise price $ 0.01 (RSUs) 81,275 5.61 $ 0.01 - - - $ 9.85 2,704 1.22 $ 9.85 2,704 1.22 9.85 $ 14.69 20,000 1.85 $ 14.69 20,000 1.85 14.69 $ 28.65-29.00 91,000 6.61 $ 28.76 - - - $ 30.65-36.71 815,000 5.59 $ 32.56 83,000 5.59 34.77 $ 41.37-42.96 200,000 2.43 $ 41.53 185,000 2.22 41.41 1,209,979 290,704 Compensation expenses related to options and RSUs granted were recorded in the consolidated statements of operations, as follows: December 31, 2017 2016 Cost of revenues $ 285 $ 452 Research 162 183 Marketing and selling expenses 898 727 General and administrative expenses 3,999 2,144 Total $ 5,344 $ 3,506 |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN | NOTE 13:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN The Company's controlling shareholder, Kibbutz Sdot-Yam ("the Kibbutz"), has an ownership interest in the Company of approximately 30.4%, as of December 31, 2017. On September 5, 2016, Kibbutz Sdot-Yam entered into a term sheet with Tene Investment in Projects 2016 Limited P , the parties agreed, among other things, to vote at general meetings of the shareholders of the Company in the same manner, following discussions intended to reach an agreement on any matters proposed to be voted upon, with Tene determining the manner in which both parties shall vote if no agreement is reached, except with respect to certain carved-out matters, with respect to which, Mifalei Sdot-Yam will determine the manner in which both parties shall vote if no agreement is reached. The term sheet provides for the sale of 1,000,000 ordinary shares by Kibbutz Sdot-Yam to Tene as well as a call option conferring upon Tene for a period of five years the right to purchase from Mifalei Sdot-Yam up to 2,000,000 ordinary shares (On February 20, 2018, the term of the call option was extended by an additional two year period). The Company is party to a series of agreements with the Kibbutz that govern different aspects of the Company's relationship and are described below. a. Manpower Agreement with the Kibbutz: On July 2011, the Company entered into a manpower agreement with Kibbutz Sdot-Yam for a term of 10 years that will be automatically renewed, unless one of the parties gives six months’ prior notice, for additional one-year periods. On July 30, 2015, following the approval of Company's audit committee, compensation committee and board of directors, Company's shareholders approved an addendum to the Manpower Agreement by and between Kibbutz Sdot-Yam and the Company, with respect to the engagement of office holders affiliated with Kibbutz Sdot-Yam, for an additional three-year term as of the date of the shareholders’ approval. Under the manpower agreement and its addendum, Kibbutz Sdot-Yam will provide the Company with labor services staffed by Kibbutz members, candidates for Kibbutz membership and Kibbutz residents (“Kibbutz Appointees”). The consideration to be paid for each Kibbutz Appointee will be based on the Company's total cost of employment for a non-Kibbutz Appointee employee performing a similar role. The number of Kibbutz Appointees may change in accordance with the Company's needs. Under the manpower agreement, the Company will notify Kibbutz Sdot-Yam of any roles that require staffing, and if the Kibbutz offers candidates with skills similar to other candidates, the Company will give preference to hiring of the relevant Kibbutz members. Kibbutz Sdot-Yam is entitled under this agreement, at its sole discretion, to discontinue the engagement of any Kibbutz Appointee of manpower services through his or her employment by Kibbutz Sdot-Yam and require such appointee to become employed directly by the Company. The Company will contribute monetarily to assist with the implementation of a professional reserve plan to encourage young Kibbutz members to obtain the necessary education for future employment with the Company. The Company will provide up to NIS 250,000 ($64) per annum for this plan linked to changes in the Israeli consumer price index plus VAT. The Company will also implement a policy that prioritizes the hiring of such young Kibbutz members as the Company's employees upon their graduation. The manpower agreement and addendum also includes Kibbutz Sdot-Yam’s obligation to customary liability, insurance, indemnification and confidentiality and intellectual property provisions. Office holders who are Kibbutz Appointees shall have all benefits applicable to Company's other office holders, including without limitation, directors’ and officers’ liability insurance, and Company's indemnification and exemption undertaking. Manpower service net fees paid were $2,896, $3,145 and $3,425 for the years ended December 31, 2017, 2016 and 2015, respectively. b. Services from the Kibbutz: On July 20, 2011 the Company signed a service agreement with the Kibbutz that was further amended on February 13, 2012 (the “original services agreement”). Pursuant to the agreement, the Kibbutz provided various services related to Company’s operational needs. The original services agreement also outlined the distribution mechanism between the Company and Kibbutz Sdot-Yam, for certain expenses and payments due to local authorities, such as taxes and fees in connection with Company’s business facilities. The agreement expired on March 21, 2015. On July 30, 2015, following the approval of the audit committee and the board, Company’s shareholders approved an amended services agreement (the “amended services agreement”) pursuant to which, Kibbutz Sdot-Yam will continue to provide various services it provides in the ordinary course of Company's business, for a period of three years commencing as of the date of approval by the shareholders. The amended services agreement grants Kibbutz Sdot-Yam a right of first refusal with respect to such services following a review procedure that the Company is entitled to conduct once a year. Under this review procedure, the Company may seek independent third-party proposals through a competitive bidding process, in order to verify that the Kibbutz’s services are provided at market terms. The amount that the Company pays to Kibbutz Sdot-Yam under the amended services agreement depends on the scope of services the Company will receive and is based on rates specified in such agreement which were determined based on market terms, taking into account the added value of consuming services from Kibbutz Sdot-Yam, considering its physical proximity to Company’s manufacturing plant in Sdot-Yam and its expertise. The amounts the Company pays for the services are subject to certain adjustments for increases in the Israeli consumer price index. In addition, the amended services agreement grants Kibbutz Sdot-Yam the right to adjust the rates of the metal workshop services and the meals it provides to Company’s employees once a year, in the event that raw material prices related to such services significantly increase during the term of the agreement. In such case, the Company is entitled to conduct a review procedure with respect to such services, in which the Kibbutz shall have the right of first refusal to provide the services on terms identical to the best terms offered to the Company by a third party bidder. Each party may terminate such agreement upon a material breach, following a 30-day prior notice, or upon liquidation of the other party, following a 45-days’ prior notice. The Company's net service fees paid to the Kibbutz pursuant to the original and amended services agreements were $1,445 ,$ 1,413 and $ 1,806 for the years ended December 31, 2017, 2016 and 2015, respectively. c. Land Use Agreement with the Kibbutz: The Company's principal offices and research and development facilities, as well as one of its two manufacturing facilities, are located on the grounds of the Kibbutz and include buildings spaces of approximately 30,744 square meters and unbuilt areas of approximately 60,870 square meters. The Company signed a land use agreement with the Kibbutz, which has a term of 20 years commencing on April 1, 2012. Under the land use agreement, Kibbutz Sdot-Yam permits the Company to use approximately 100,000 square meters of land, consisting of facilities and unbuilt areas, in consideration for an annual fee of NIS 12.9 million (approximately $3,500) in 2013, (this amount does not include approximately NIS 62,000 (approximately $18) for an additional area that the Company has leased on the grounds of Kibbutz Sdot-Yam due to the Company's needs and Kibbutz Sdot-Yam's consent under the same terms as the land use agreement), plus VAT, adjusted every six months based on any increase of the Israeli consumer price index compared to the index as of January 2011. The annual fee may be adjusted after January 1, 2021 (or after January 1, 2018 if the Kibbutz is required to pay significantly higher lease fees to the Israeli land authorities or Caesarea Development Corporation Ltd.) and every three years thereafter, if Kibbutz Sdot-Yam chooses to obtain an appraisal. The appraiser will be mutually agreed upon or, in the absence of agreement, will be chosen by Kibbutz Sdot-Yam out of the list of appraisers recommended at that time by Bank Leumi Le-Israel ("Bank Leumi"). During January, 2018, the Kibbutz has notified the Company that it intends to increase the fees due to it, pursuant to the land lease agreement based on alleged additional buildings on the leased land and due to alleged material increase in the Kibbutz payments to the Israel Lands Administration and Caesarea Development Corporation. The Company is examining the request for renegotiation of the fees under such agreement. Under the land use agreement, the Company may not terminate the operation of either of its two production lines at its plant in Kibbutz Sdot-Yam as long as the Company continues to operate production lines elsewhere in Israel, and its headquarters must remain at Kibbutz Sdot-Yam. The Company may also not decrease or return to Kibbutz Sdot-Yam any part of the land underlying the land use agreement; however, it may submit a written request to Kibbutz Sdot-Yam to return certain lands. Kibbutz Sdot-Yam will have three months to accept or reject such request, in its sole discretion, provided that if it does not respond within such three-month period, the Company will be entitled to sublease such lands to a person approved in advance by Kibbutz Sdot-Yam. In such event, the Company will continue to be liable to Kibbutz Sdot-Yam with respect to such lands. Pursuant to the land use agreement, if the Company needs additional facilities on the land that the Company is permitted to use in Kibbutz Sdot-Yam, subject to obtaining the permits required by law, Kibbutz Sdot-Yam will build such facilities for the Company, by using the proceeds of a loan that the Company will make to Kibbutz Sdot-Yam, which loan shall be repaid to the Company by off-setting the monthly additional payment that the Company will pay for such new facilities and, if not fully repaid during the land use agreement term, upon termination thereof. Starting from January 1, 2014 and until September 30, 2016 the Company used an additional office space in Kibbutz Sdot-Yam of approximately 400 square meters, for an annual payment of NIS 116,643 (approximately $30) in 2015 and 2016. Such additional land was used by the Company under the same terms as the land use agreement, and the Company returned such land to the Kibbutz in September 2016. Starting from September 2014, the Company uses an additional approximately 9,000 square meters based on its needs and Kibbutz Sdot-Yam’s consent under the same terms as the land use agreement, for an additional monthly fee of NIS 10,000 (approximately $3) which is not based on the original rates. However, the Company has the right to return these premises to Kibbutz Sdot-Yam earlier, following a 90-day prior written notice. In addition, the Company has committed to fund the cost of construction, up to a maximum of NIS 3.3 million (approximately $950) plus VAT, required to change the access road leading to Kibbutz Sdot-Yam and its facilities, such that the entrance of the Company's facilities will be separated from the entrance into Kibbutz Sdot-Yam. In addition, the Company has committed to pay NIS 200,000 (approximately $58) plus VAT to cover the cost of paving an area of land leased from Kibbutz Sdot-Yam with such payment to be deducted in monthly installments over a four-year period beginning in 2013 from the lease payments to be made to Kibbutz Sdot-Yam under the land use agreement related to the Company's Sdot-Yam facility. Pursuant to agreement for arranging for additional accord between the Company and Kibbutz Sdot-Yam dated July 20, 2011, if the Company wishes to acquire or lease any additional lands, whether on the grounds of the Company's Bar-Lev manufacturing facility, or elsewhere in Israel, for the purpose of establishing new plants or production lines: (i) Kibbutz Sdot-Yam will purchase the land and build the required facilities’ structure on such land at its own expense in accordance with the Company's needs; (ii) the Company will perform any necessary building adjustments at the Company's expense; and (iii) Kibbutz Sdot-Yam will lease the land and the facility to the Company under a long-term lease agreement with terms to be negotiated in accordance with the then prevailing market price. In addition, under this agreement, Kibbutz Sdot-Yam has agreed not to compete with the Company as long as it holds more than 10% of the Company's shares. This agreement terminated on October 20, 2017. Pursuant to the above agreement, the Company has entered into an agreement with Kibbutz Sdot-Yam dated August 6, 2013, under which Kibbutz Sdot-Yam acquired additional land of approximately 12,800 square meters on the grounds near the Company's Bar-Lev facility, which the Company required in connection with the construction of the fifth production line at the Company's Bar-Lev manufacturing facility, leased it to the Company for a monthly fee of approximately NIS 70,000 (approximately $20). Under the agreement, Kibbutz Sdot-Yam committed to (i) acquire the long-term leasing rights of the Additional Bar-Lev Land from the ILA, (ii) perform preparation work and construction, in conjunction with the administrative body of Bar-Lev industrial park and other contractors according to Company’s plans, (iii) build a warehouse according Company’s plans, and (iv) obtain all permits and approvals required for performing the preparation work of the Additional Bar-Lev Land and for the building of the warehouse. The warehouse in Bar-Lev will be situated both on the current and new land. The finance of the building of the warehouse will be made through a loan that will be granted by the Company to Kibbutz Sdot-Yam, in the amount of the total cost related to the building of the warehouse and such loan, including principle and interest, shall be repaid by setoff of the lease due to Kibbutz Sdot Yam by the Company for its use of the warehouse. The principle amount of such loan will bear an interest at a rate of 5.3% a year. On November 30, 2015 the land preparation work had been completed and the holding of the Additional Bar-Lev Land was delivered to the Company. As of December 31, 2017, the construction of the warehouse has not started yet. Pursuant to an agreement dated January 4, 2012, for the settlement of reimbursement for building expenses incurred by the Company from January 2012, NIS 82,900 (approximately $24) and NIS 43,000 (approximately $12) will not be included in the land use fees until the year 2020 and was not included for the years until 2015, respectively. The Company's payments pursuant to the land use agreement totaled $3,990, $3,325 and $3,564 for the years ended December 31, 2017, 2016 and 2015, respectively. d. Land Purchase Agreement and Leaseback: Pursuant to a land purchase and leaseback agreement, dated as of March 31, 2011, which became effective upon the Company’s IPO, between the Company and Kibbutz Sdot-Yam, the Company completed the selling of the rights in the lands and facilities of the Bar-Lev Industrial Center (the "Bar-Lev Grounds") to Kibbutz Sdot-Yam in consideration for NIS 43.7 million (approximately $10,900). The land purchase agreement was executed simultaneously with the execution of a land use agreement. Pursuant to the land use agreement, Kibbutz Sdot-Yam permits the Company to use the Bar-Lev Grounds for a period of 10 years commencing on September 2012 that will be automatically renewed, unless the Company gives two years prior notice, for a ten-year term in consideration for an annual fee of NIS 4.1 million (approximately $1,200) to be linked to increases in the Israeli consumer price index. The fee is subject to adjustment following January 1, 2021 and every three years thereafter at the option of Kibbutz Sdot-Yam if Kibbutz Sdot-Yam chooses to obtain an appraisal that supports such an increase. The appraiser would be mutually agreed upon or, in the absence of agreement, will be chosen by Kibbutz Sdot-Yam from a list of assessors recommended at that time by Bank Leumi. The Company's equipment that resides within the premises is considered integral equipment (as defined in ASC 360-20-15-4) due to the significant costs involved in relocating such equipment. Since the Company did not sell this equipment to Kibbutz Sdot-Yam as part of the transaction, the transaction is considered a partial sale and leaseback of real estate. As a result, the transaction does not qualify for "sale lease-back" accounting (as it is a failed sale from an accounting perspective) and the Company recorded the entire amount received as consideration as a liability while the land and building will remain on its books until the end of the lease term under the provisions of ASC 840-40. If amounts to be paid under the arrangement were to be accreted as a liability based on the Company's incremental borrowing rate, the resulting liability would not cover the anticipated depreciated cost of the building and land at the end of the lease (thereby creating a built-in loss). The entire amount that was paid was accreted to the full anticipated book value of the land and building at the end of the lease term using a higher effective interest rate that will equalize the amounts paid to the full anticipated book value of the land and building at the end of the lease. As of December 31, 2017, the Company’s liability as a result of this transaction is in the amount of $9,644. The financing leaseback from related party 2018 $ 664 2019 703 2020 745 2021 790 2022 6,742 $ 9,644 The balance at December 31, 2017 and 2016, includes $539 and $628 of deferred tax assets on the Company liability and a $738 and $827 deferred tax liability on the buildings depreciation during the next years due to temporary differences between the carrying amounts of the property and the liability for financial reporting purposes and the amounts used for income tax purposes. The Company's payments pursuant to the land purchase agreement and leaseback totaled $1,161, $1,098 and $1,092 for the years ended December 31, 2017, 2016 and 2015, respectively. e. Bonus paid: During 2016, the Company recorded a compensation expense in the amount of $266 in the statements of income. Such compensation expense relates to a bonus paid by the Kibbutz to Company's employees. f. Details on transactions and balances with related parties and other loan 1. The Company has, from time to time, entered into transactions with its shareholders (the Kibbutz). The following table summarizes such transactions: Year ended December 31, 2017 2016 2015 Cost of revenues $ 6,936 $ 6,004 $ 7,638 Research and development $ 179 $ 176 $ 180 Selling and marketing $ 776 $ 855 $ 691 General and administrative $ 1,654 $ 1,683 $ 1,828 Finance expenses, net $ 564 $ 569 $ 597 2. Balances with related party and other loan: December 31, 2017 2016 Related party and other loan (1,2) $ 3,463 $ 3,099 Long-term loan and financing leaseback from a related party (2) $ 8,336 $ 8,070 (1) On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders, CIOT and the Company, on a pro rata basis. The loan bears interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25%. The interest accrued on the loan is payable on a quarterly basis. As of December 31, 2017 the loan was classified to Related party and other loan balance. (2) In September, 2012, a financing leaseback of $10,900 related to Bar-Lev transaction was granted to the Company by Kibbutz Sdot-Yam. The financing leaseback bears interest until repayment at a per annum rate equal to 6.09% and is subject to adjustment for increases in the Israeli consumer price index. |
MAJOR CUSTOMER AND GEOGRAPHIC I
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION | NOTE 14:- MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION a. The Company manages its business on the basis of one reportable segment. The data is presented in accordance with Accounting Standard Codification 280, "Segments Reporting" ("ASC 280"). The following is a summary of revenue and long-lived assets by geographic area. Revenues are attributed to geographic areas based on the location of end customers. The following table presents total revenues for the years ended December 31, 2017, 2016 and 2015, respectively: Year ended December 31, 2017 2016 2015 USA $ 245,361 $ 222,597 $ 223,341 Australia (including New Zealand) 137,559 130,910 110,290 Canada 97,838 85,740 70,739 Israel 44,489 42,545 39,645 Europe 28,679 25,606 23,949 Rest of World 34,221 31,145 31,551 $ 588,147 $ 538,543 $ 499,515 For the year ended December 31, 2017 the Company had one customer accounted for approximately 11% of its revenues. No customer represented 10% or more of the Company’s revenues for the years ended December 31, 2016 and 2015. b. The following table presents total long-lived assets as of December 31, 2017 and 2016: December 31, 2017 2016 Israel $ 90,811 $ 90,924 Australia 1,974 1,971 USA 121,515 128,099 Canada 1,394 1,660 Rest of World 959 164 $ 216,653 $ 222,818 |
SELECTED SUPPLEMENTARY STATEMEN
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Income Statement Elements [Abstract] | |
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA | NOTE 15:- SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA a. Finance expense, net: Year ended December 31, 2017 2016 2015 Finance expenses: Interest in respect of short-term loans and bank fees 3,518 3,285 2,792 Interest in respect of loans to related parties 608 610 640 Changes in derivatives fair value 2,237 - - Foreign exchange transactions losses 2,752 970 2,972 9,115 4,865 6,404 Finance income: Changes in derivatives fair value - 1,395 1,060 Interest in respect of cash and cash equivalent and short-term bank deposits 1,035 152 77 Foreign exchange transactions gains 2,497 - 2,182 3,532 1,547 3,319 Finance expenses, net $ 5,583 $ 3,318 $ 3,085 b. Net earnings per share: The following table sets forth the computation of basic and diluted net earnings per share: Numerator Year ended December 31, 2017 2016 2015 Net income attributable to controlling interest, as reported $ 26,202 $ 74,596 $ 77,766 Adjustment to redemption value of non-controlling interest (1,137 ) (2,248 ) - Numerator for basic and diluted net income per share $ 25,065 $ 72,348 $ 77,766 Denominator Year ended December 31, 2017 2016 2015 Denominator for basic income per share 34,334 34,706 35,253 Effect of dilutive stock based awards 52 58 211 Denominator for diluted income per share 34,386 34,764 35,464 Earnings Per Share Year ended December 31, 2017 2016 2015 Basic earnings per share $ 0.73 $ 2.08 $ 2.21 Diluted earnings per share $ 0.73 $ 2.08 $ 2.19 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16:- SUBSEQUENT EVENTS On February 7, 2018, the Company declared a special cash dividend of $0.29 per ordinary share to be paid to shareholders of record as of February 21, 2018, payable on March 14, 2018. The dividend payment is subject to withholding tax of 20%. The Company also adopted a dividend policy pursuant to which it intends to pay a quarterly cash dividend in the range of $0.10-$0.15 per share up to the lesser of 50% of the reported net income attributable to controlling interest (i) on a quarterly basis or (ii) on a year-to-date basis, subject in each case to approval by its board of directors. |
SIGNIFICANT ACCOUNTING POLICI24
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of estimates | a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. |
Financial statements in U.S. dollars | b. Financial statements in U.S. dollars: The Company's revenues are generated in U.S. dollars (USD), Australian dollars (AUD), Canadian dollars (CAD), Euros (EUR), Singapore dollars (SGD), British pound (GBP) and New Israeli Shekels (NIS). In addition, most of the Company's costs are incurred in USD, NIS, EUR, CAD, AUD and SGD. The Company’s management believes that the USD is the primary currency of the economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the USD. The functional currency of the majority of the Company's foreign subsidiaries is the local currency in which the relevant subsidiary operates. Accordingly, monetary accounts maintained in currencies other than the USD are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") 830, "Foreign Currency Matters" (ASC 830). All transaction gains and losses resulting from the re-measurement of monetary balance sheet items denominated in non-USD currencies are reflected in the statements of operations as financial income or expenses as appropriate. The financial statements of the Company’s subsidiaries of which the functional currency is not the USD have been translated into the USD. All amounts on the balance sheets have been translated into the USD using the exchange rates in effect on the relevant balance sheet dates. All amounts in the statements of operations have been translated into the USD using the monthly average exchange rate in accordance with ASC 830. The resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss), net in shareholders' equity. |
Principles of consolidation | c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries. Inter-company transactions and balances, including profit from inter-company sales not yet realized outside of the Company, have been eliminated upon consolidation. |
Cash equivalents | d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired. |
Short-term bank deposits | e. Short-term bank deposits: Short-term bank deposits are deposits with original maturities of more than three months but less than one year. Short-term bank deposits are presented at their cost, which approximates their fair value. |
Derivatives | f. Derivatives: ASC 815, “Derivative and Hedging” ("ASC 815"), requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. Derivative instruments designated as hedging instruments For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. To hedge against the risk of overall changes in cash flows resulting from foreign currency salary and other recurring payments during the periods, the Company has instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted salary expenses denominated in NIS. These forward contracts are designated as cash flow hedges, as defined by ASC 815, and are all effective, as their critical terms match the underlying transactions being hedged. As of December 31, 2017 the Company did not have any outstanding forward NIS transactions. As of December 31, 2016 the unrealized gain recorded in accumulated other comprehensive income (loss) from the Company's currency forward NIS transactions were $28. At December 31, 2016, the notional amounts of foreign exchange forward contracts which the Company entered into were $13,303. Derivative instruments not designated as hedging instruments In addition to the derivatives that are designated as hedges as discussed above, the Company enters into certain foreign exchange forward and options contracts to . Gains and losses related to such derivative instruments are recorded in financial expenses, net. At December 31, 2017 and 2016, the notional amount of foreign exchange forward and option contracts into which the Company entered was $114,582 and $131,470, respectively. The foreign exchange forward and options contracts will expire at various times through December, 2018. The following tables present fair value amounts of, and gains and losses recorded in relation to, the Company's derivative instruments and related hedged items: Balance Sheet Fair Value of Derivative Instruments Year ended December 31, 2017 2016 Derivative Assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses $ 717 $ 2,539 Derivatives designated as hedging instruments: Foreign exchange forward contracts Other accounts receivable and prepaid expenses $ - $ 31 Total $ 717 $ 2,570 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities $ (921 ) $ (533 ) Derivatives designated as hedging instruments: Foreign exchange forward contracts Accrued expenses and other liabilities $ - $ (3 ) Total $ (921 ) $ (536 ) Gain Recognized in Other Comprehensive Income (loss), net Gain (loss) Recognized in Statements of Income Year ended December 31, Statements of Income Year ended December 31, 2017 2016 Item 2017 2016 Derivatives designated as hedging instruments Foreign exchange forward contract $ - $ 28 Cost of revenues and Operating expenses $ 1,142 $ 111 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (1,756 ) 1,261 Total $ - $ 28 $ (614 ) $ 1,372 |
Inventories | g. Inventories: Inventories are stated at the lower of cost and net realizable value. The Company periodically evaluates the quantities on hand relative to historical and projected sales volumes, current and historical selling prices and contractual obligations to maintain certain levels of raw material quanteties. Based on these evaluations, inventory provision is provided to cover risks arising from slow-moving items, discontinued products, excess inventories, net realizable value lower than cost and adjusted revenue forecasts. Cost is determined as follows: Raw Materials - cost is determined on a standard cost basis Work-in-progress and finished products - are based on standard cost (which approximates actual cost on a weighted average basis) which includes raw materials cost, labor and manufacturing overhead. Finished goods are stated at the lower of cost and net realizable value. The following table provides the details of the change in the Company's provision for inventory: December 31, 2017 2016 Inventory provision, beginning of year $ 10,183 $ 8,985 Increase in inventory provision 13,585 4,168 Write off (12,405 ) (2,970 ) Inventory provision, end of year $ 11,363 $ 10,183 |
Property, plant and equipment, net | h. Property, plant and equipment, net: 1. Property, plant and equipment are stated at cost, net of accumulated depreciation and investment grants. 2. Costs recorded prior to a production line completion are reflected as construction in progress, which are recorded to land, building and machinery assets at the date of purchase. Construction in progress includes direct expenditures for the construction of the production line and is stated at cost. Capitalized costs include costs incurred under the construction contract: advisory, consulting and direct internal costs (including labor) and operating costs incurred during the construction and installation phase. 3. Depreciation is calculated by the straight-line method over the estimated useful life of the assets at the following annual rates: % Machinery and manufacturing equipment 4-33 Office equipment and furniture 7-33 Motor vehicles 10-30 Buildings 4-5 Prepaid expenses related to operating lease 1 Leasehold improvements Over the shorter of the term of the lease or the life of the asset The Company has accounted for its assets that are under a capital lease arrangement in accordance with ASC 840 "Leases" ("ASC 840"). Accordingly, assets under a capital lease are stated as assets of the Company on the basis of ordinary purchase prices (without the financing component), and depreciated according to the shorter of the lease term and the usual depreciation rates applicable to such assets. Lease payments payable in forthcoming years, net of the interest component included in them, are included in liabilities. The interest in respect of such amounts is accrued on a current basis and is charged to earnings. |
Impairment of long-lived assets | i. Impairment of long-lived assets: The Company's long-lived assets, tangible and finite-lived intangible assets (other than goodwill), are reviewed for impairment in accordance with ASC 360 "Property, Plant and Equipment" ("ASC 360") whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses were identified during any period presented. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. |
Goodwill and other intangibles assets | j. Goodwill and other intangibles assets: Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired in the acquisition. Under ASC 350, "Intangibles-Goodwill and Other" ("ASC 350") goodwill is not amortized but instead is tested for impairment at least annually (or more frequently if impairment indicators arise). In the evaluation of goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In the first phase of impairment testing, goodwill attributable to the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second phase is then performed. The second phase of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company performs an annual goodwill impairment test during the fourth quarter of each fiscal year, or more frequently, if impairment indicators are present. The Company operates in one operating segment. Each of the Company's subsidiaries could be considered to be reporting units; however, the Company concluded that all of the Company's components should be aggregated and deemed as a single reporting unit for the purpose of performing the goodwill impairment test in accordance with ASC 350-20-35-35, since they have similar economic characteristics. Goodwill was tested for impairment by comparing its fair value with its carrying value. As required by ASC 820, "Fair Value Measurements", the Company applies assumptions that market place participants would consider in determining the fair value of reporting unit. No impairment of goodwill was identified during any period presented. Acquired intangible assets other than goodwill are amortized over their weighted average amortization period unless they are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish the carrying value. The fair value of acquired intangible assets is determined using common techniques, and the Company employs assumptions developed using the perspective of a market participant. |
Warranty | k. Warranty : The Company generally provides a standard warranty of three to ten years for its products, depending on the type of product and the country in which the Company does business. The Company records a provision for the estimated cost to repair or replace products under warranty at the time of sale. Factors that affect the Company's warranty reserve include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair. The following table provides the details of the change in the Company's warranty accrual: 2017 2016 January 1, $ 2,275 $ 2,173 Charged to costs and expenses relating to new sales 1,816 1,325 Costs of product warranty claims (1,446 ) (1,225 ) Foreign currency translation adjustments (51 ) 2 December 31, $ 2,594 $ 2,275 |
Revenue recognition | l. Revenue recognition: The Company derives its revenues from sales of quartz surfaces mostly through a combination of direct sales in certain markets and indirectly through a network of distributors in other markets. Revenues are recognized in accordance with ASC 605, "Revenue Recognition" (ASC 605) when delivery has occurred, persuasive evidence of an agreement exists, the fee is fixed and determinable, collectability is probable and no further obligations exist. The Company's products that are sold through agreements with exclusive distributors are non-exchangeable, non-refundable, non-returnable and without any rights of price protection or stock rotation. Accordingly, the Company considers all the distributors to be end-consumers. For certain revenue transactions with specific customers, the Company is responsible also for the fabrication and installation of its products. The Company recognizes such revenues upon receipt of acceptance evidence from the end consumer which occurs upon completion of the installation. Although, in general, the Company does not grant rights of return, there are certain instances where such rights are granted. The Company maintains a provision for returns rebates and discounts to costumers in accordance with ASC 605, which is estimated, based primarily on historical experience as well as management judgment, and is recorded through a reduction of revenue. |
Research and development costs | m. Research and development costs: Research and development costs are charged to the statement of income as incurred. |
Income taxes | n. Income taxes: The Company and its subsidiaries account for income taxes in accordance with ASC 740, "Income Taxes" (ASC 740). This statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Commencing January 1, 2017 the Company adopted ASU 2015-17, pursuant to such ASU, as of December 31, 2017 deferred tax assets and liabilities are presented as noncurrent items on Company’s balance sheet. Prior periods were not retrospectively adjusted. The Company accounts for its uncertain tax positions in accordance with ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest and penalties on income taxes as taxes on income. |
Advertising expenses | o. Advertising expenses: Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were $28,047, $25,582 and $22,380, respectively. |
Concentrations of credit risk | p. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits and trade receivables. The Company's cash and cash equivalents are invested primarily in USD, mainly with major banks in Israel. The Company's trade receivables are derived from sales to customers located mainly in the United States, Australia, Canada, Israel and Europe. The Company performs ongoing credit evaluations of its customers and to date has not experienced any substantial losses. In certain circumstances, the Company requires letters of credit or prepayments. An allowance for doubtful accounts is provided with respect to specific receivables that the Company has determined to be doubtful of collection. For those receivables not specifically reviewed, provisions are recorded at a specific rate, based upon the age of the receivable, the collection history, current economic trends and management estimates. No customer represented 10% or more of the Company’s total accounts receivables, net as of December 31, 2017 and 2016. The following table provides the detail of the change in the Company's allowance for doubtful accounts: 2017 2016 January 1, $ 1,283 $ 1,221 Charges to expenses 164 172 Write offs (325 ) (116 ) Foreign currency translation adjustments 57 6 December 31, $ 1,179 $ 1,283 |
Severance pay | q. Severance pay: The Company's liability for severance pay, with respect to its Israeli employees, is calculated pursuant to Israeli severance pay law and employee agreements based on the most recent salary of the employees. The Company's liability for all of its Israeli employees is provided for by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset on the Company's balance sheet. The deposited funds include profits or losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli severance pay law or labor agreements. Some agreements with employees specifically state, in accordance with section 14 of the Severance Pay Law, 1963 ("Section 14"), that the Company's contributions for severance pay shall be instead of severance compensation and that upon release of the policy to the employee, no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, since the Company has signed agreements with its employees under Section 14, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as they are legally released from obligation to employees once the deposit amounts have been paid. Severance pay expenses for the years ended December 31, 2017, 2016 and 2015 amounted to approximately $1,813, $1,576 and $1,451, respectively. |
Fair value of financial instruments | r. Fair value of financial instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (meaning, the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3- Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The following table presents the Company's assets and (liabilities) measured at fair value on a recurring basis at December 31, 2017 and 2016: December 31, 2017 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 717 $ - $ 717 Foreign currencies derivative liabilities $ - $ (921 ) $ - $ (921 ) Total $ - $ (204 ) $ - $ (204 ) December 31, 2016 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 2,570 $ - $ 2,570 Foreign currencies derivative liabilities $ - $ (536 ) $ - $ (536 ) Total $ - $ 2,034 $ - $ 2,034 The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, short-term bank deposits, trade receivables, trade payables and short term loans, approximate their fair value due to the short-term maturities of such instruments. The carrying amount of long-term loans approximates their fair value. |
Basic and diluted net income per share | s. Basic and diluted net income per share: Basic net income per share ("Basic EPS") is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share ("Diluted EPS") gives effect to all dilutive potential ordinary shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. The dilutive effect of outstanding stock options is computed using the treasury stock method. For the years ended December 31, 2017, 2016 and 2015 there were 1,060,000, 804,000 and 786,900 outstanding stock options, respectively, that were excluded from the computation of Diluted EPS, that would have had an anti dilutive effect if included. |
Comprehensive income and accumulated other comprehensive income | t. Comprehensive income and accumulated other comprehensive income (loss): Comprehensive income consists of two components, net income and other comprehensive income ("OCI"). OCI refers to revenue, expenses, and gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Company’s OCI consists of foreign currency translation adjustments from those subsidiaries not using the USD as their functional currency and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges. The total accumulated other comprehensive income ("AOCI"), net was comprised as follows: December 31, 2017 2016 Accumulated gains on derivative instruments $ - $ 28 Accumulated foreign currency translation differences 683 (1,178 ) Total accumulated other comprehensive income (loss), net $ 683 $ (1,150 ) The following table summarizes the changes in AOCI, net of taxes for the year ended: Unrealized gains (losses) on derivative instruments Accumulated foreign currency translation differences Total Balance at December 31, 2015 $ 20 $ (1,912 ) $ (1,892 ) Other comprehensive income (loss) before reclassifications 119 734 853 Amounts reclassified from AOCI (111 ) - (111 ) Net current period OCI 8 734 742 Balance at December 31, 2016 $ 28 $ (1,178 ) $ (1,150 ) Other comprehensive income (loss) before reclassifications 1,114 1,861 2,975 Amounts reclassified from AOCI (1,142 ) - (1,142 ) Net current period OCI (28 ) 1,861 1,833 Balance at December 31, 2017 $ - $ 683 $ 683 The following table shows the amounts reclassified from AOCI into the Consolidated Statements of Income, and the associated financial statement line item, for 2017 and 2016: December 31, Affected line item in the consolidated statements of income 2017 2016 Cost of revenues $ 914 $ 90 Research and development 23 2 Marketing and selling 91 9 General and administrative 114 10 Total gain $ 1,142 $ 111 |
Accounting for stock-based compensation | u. Accounting for stock-based compensation: 1. Equity share based payment: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company accounts for employees and direcotrs’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period. The Company elected to recognize compensation expense for an award that has a graded vesting schedule using the accelerated method. The Company adopted ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting” in the first quarter of fiscal year 2017 and elected to account for forfeitures as they occur The exercise price of each option is generally Company's stock price on the date of the grant. Options generally become exercisable over approximately three to four-year period, subject to the continued employment. All options expire after 7 years from the date of grant. In addition, commencing in 2015 the Company granted certain of its employees and officers with restricted stock units ("RSUs"), vesting over approximately a four-year period from the grant date. RSUs fair value is measured at the grant date based on the market value of Company's common stock. RSUs that are cancelled or forfeited become available for future grants. In 2017 and 2016, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 43.9 % 40.9 % Risk-free interest rate 2.1 % 1.1 % Expected life (in years) 6.13 4.78 The Company used volatility data in accordance with ASC 718. Commencing 2016 volatility calculation was based on Company's historical data. For grants made until 2015, the computation of historical volatility was derived from a combination of Company's historical volatility and comparable companies' historical volatility for similar contractual terms. The computation of risk free interest rate is based on the rate available on the date of grant of a zero-coupon U.S. government bond with a remaining term equal to the expected term of the option. The expected term of options granted is calculated using the simplified method (being the average between the vesting periods and the contractual life of the options). The Company currently uses the simplified method as adequate historical experience is not available to provide a reasonable estimate. The dividend yield is zero, due to a dividend adjustment mechanism with respect to the exercise price upon payment of a dividend. 2. Phantom share-based payment: During 2014, the Company granted several of its employees a right to a bonus payment based on an increase in the Company’s share value (the "phantom award") under which the employees are entitled to receive in cash or shares the difference between exercise price, subject to adjustments for dividend distributions made until the actual payment of the bonus and the value of the Company’s ordinary shares with such bonus right vesting over a four-year period on an annual basis. According to ASC 718-10, “instruments that are required to be cash-settled (e.g., cash-settled stock appreciation rights) or require cash settlement on the occurrence of a contingent event that is considered probable” should be treated as a liability. As such, in this case the share-based compensation is accounted for as a liability award. According to ASC 718-10, in connection with the measurement of the liability settlement, the value of the award should be measured each reporting date until settlement. The fair value of the phantom award was calculated using the Binominal option pricing model. On October 27, 2015, the Company's board of directors approved the grant of stock options and RSUs as a partial replacement for the phantom awards previously granted during 2014. A change in the terms or conditions of the phantom awards is accounted for as a modification under ASC 718. On the date of modification, the amounts previously recorded as a share-based compensation liability are reclassified and recorded as a component of equity by a credit to additional paid-in capital. The Company reclassified during the year ended December 31, 2015 an amount of approximately $195 pursuant to the modification. Any incremental fair value, if any, of the modified award over the fair value of the original award immediately before its terms are modified is recognized over the remaining requisite service period. The Company estimated the fair value of the remaining phantom awards, using the binominal option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 45.5 % 46.9 % Risk-free interest rate 2.0 % 1.8 % Expected life (in years) 3.3 4.3 As of December 31, 2017 and 2016, the Phantom liability balance was $32 and $100, respectively. As of December 31, 2016, compensation cost related to the phantom award was fully recognized. |
Redeemable non-controlling interest | v. Redeemable non-controlling interest: The Company is party to a put and call arrangement with respect to the remaining 45% non-controlling interest in Caesarstone Canada, Inc. Due to the existing put and call arrangements, the non-controlling interest is considered to be redeemable and is recorded on the balance sheet as a redeemable non-controlling interest outside of permanent equity. The redeemable non-controlling interest is recognized at the higher of: i) the accumulated earnings associated with the non-controlling interest, or ii) the redemption value as of the balance sheet date. The following table provides a reconciliation of the redeemable non-controlling interest: December 31, 2017 2016 2015 Beginning of the year $ 12,939 $ 8,841 $ 8,715 Net income attributable to non-controlling interest 1,356 1,887 1,692 Dividend paid (*) - (243 ) - Adjustment to redemption value 1,137 2,248 - Foreign currency translation adjustments 1,049 206 (1,566 ) Redeemable non-controlling interest - end of the year $ 16,481 $ 12,939 $ 8,841 (*) In 2016 dividend payment was made by Company’s subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. |
Capitalized software costs | w. Capitalized software costs: The Company follows the accounting guidance specified in ASC 350-40, “Internal-Use Software”. The Company capitalizes costs incurred in the acquisition or development of software for internal use, including the costs of the software, materials, and consultants incurred in developing internal-use computer software, once final selection of the software is made. Costs incurred prior to the final selection of software and costs not qualifying for capitalization are charged to expense. Capitalized software costs are amortized on a straight-line basis over its useful life. |
Contingencies | x. Contingencies: The Company is involved in various product liability, commercial, government investigations, environmental claims and other legal proceedings that arise from time to time in the course of business. The Company records accruals for these types of contingencies to the extent that the Company concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Company will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. The Company records anticipated recoveries under existing insurance contracts that are probable of occurring at the amount that is expected to be collected. Legal costs are expensed as incurred. For unasserted claims or assessments, the Company followed the accounting guidance in ASC 450-20-50-6, 450-20-25-2 and 450-20-55-2 in which the Company must first determine that the probability that an assertion will be made is likely, then, a determination as to the likelihood of an unfavorable outcome and the ability to reasonably estimate the potential loss is made. |
Treasury shares | y. Treasury shares: During the year ended December 31, 2016, the Company repurchased its common stock pursuant to a board-authorized share repurchase program through open market purchases The repurchases of common shares are accounted for as treasury shares, and resulted in a reduction of stockholders’ equity. The Company presents the cost to repurchase treasury shares as a separate component of shareholders' equity. |
Impact of recently issued accounting standards | z. Impact of recently issued accounting standards: Recently issued and not yet adopted accounting standards: 1. In May 2014, the FASB issued a new standard related to revenue recognition. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flow arising from contracts with customers. The guidance permits two methods of modification: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method.). The guidance became effective for the Company as of January 1, 2018. The Company elected modified retrospective method applied to those contracts which were not substantially completed as of January 1, 2018. There will be no cumulative adjustment to the Company’s retained earnings. The Company identified that the main impact of the standard on the Company’s financial statements relates to the presentation of the provision for sales return which requires a gross presentation. 2. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that will supersede current guidance related to accounting for leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard will be effective for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted. The standard is required to be adopted using the modified retrospective approach. The Company is evaluating the impact that adopting this guidance will have on its consolidated financial statements. 3. In August 2016, the FASB issued ASU No. 2016-15 which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and is applied retrospectively. Early adoption is permitted including adoption in an interim period. The Company will adopt the new standard effective January 1, 2018, and does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. 4. In June 2016, the FASB issued ASU 2016-13 amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. 5. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment. With ASU 2017-04, an entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. ASU 2017-04 is not expected to have a material impact to the Company's consolidated financial position, results of operations or cash flows. 6. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company will adopt the new standard effective January 1, 2018 and adoption of this standard is not expected to have a material impact on the consolidated financial statements. 7. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), which targeted improvements to accounting for hedging activities, to simplify certain aspects of hedge accounting for both non-financial and financial risks and better align the recognition and measurement of hedge results with an entity’s risk management activities. ASU 2017-12 also amends certain presentation and disclosure requirements for hedging activities and changes how an entity assesses hedge effectiveness. ASU 2017-12 is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact ASU 2017-12 will have on its consolidated financial statements and associated disclosures. Recently issued and adopted accounting standards: 1. In November 2015, the FASB issued ASU No. 2015-17 2. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The Company adopted ASU 2016-09 in the first quarter of fiscal year 2017. The Company elected to account for forfeitures as they occur. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. |
Reclassifications | aa. Reclassifications: Certain amounts previously reported in the consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications did not affect net income, shareholders’ equity or cash flows. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Fair Value Amounts and Gains and Losses Recorded in Relation to the Derivative Instruments | The following tables present fair value amounts of, and gains and losses recorded in relation to, the Company's derivative instruments and related hedged items: Balance Sheet Fair Value of Derivative Instruments Year ended December 31, 2017 2016 Derivative Assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses $ 717 $ 2,539 Derivatives designated as hedging instruments: Foreign exchange forward contracts Other accounts receivable and prepaid expenses $ - $ 31 Total $ 717 $ 2,570 Derivative Liabilities Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities $ (921 ) $ (533 ) Derivatives designated as hedging instruments: Foreign exchange forward contracts Accrued expenses and other liabilities $ - $ (3 ) Total $ (921 ) $ (536 ) Gain Recognized in Other Comprehensive Income (loss), net Gain (loss) Recognized in Statements of Income Year ended December 31, Statements of Income Year ended December 31, 2017 2016 Item 2017 2016 Derivatives designated as hedging instruments Foreign exchange forward contract $ - $ 28 Cost of revenues and Operating expenses $ 1,142 $ 111 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (1,756 ) 1,261 Total $ - $ 28 $ (614 ) $ 1,372 |
Schedule of Change in Provision for Inventory | The following table provides the details of the change in the Company's provision for inventory: December 31, 2017 2016 Inventory provision, beginning of year $ 10,183 $ 8,985 Increase in inventory provision 13,585 4,168 Write off (12,405 ) (2,970 ) Inventory provision, end of year $ 11,363 $ 10,183 |
Schedule of Property, Plant and Equipment Depreciation Rates | Depreciation is calculated by the straight-line method over the estimated useful life of the assets at the following annual rates: % Machinery and manufacturing equipment 4-33 Office equipment and furniture 7-33 Motor vehicles 10-30 Buildings 4-5 Prepaid expenses related to operating lease 1 Leasehold improvements Over the shorter of the term of the lease or the life of the asset |
Schedule of Changes in Warranty Accrual | The following table provides the details of the change in the Company's warranty accrual: 2017 2016 January 1, $ 2,275 $ 2,173 Charged to costs and expenses relating to new sales 1,816 1,325 Costs of product warranty claims (1,446 ) (1,225 ) Foreign currency translation adjustments (51 ) 2 December 31, $ 2,594 $ 2,275 |
Schedule of Change in Provision for Doubtful Debts | The following table provides the detail of the change in the Company's allowance for doubtful accounts: 2017 2016 January 1, $ 1,283 $ 1,221 Charges to expenses 164 172 Write offs (325 ) (116 ) Foreign currency translation adjustments 57 6 December 31, $ 1,179 $ 1,283 |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the Company's assets and (liabilities) measured at fair value on a recurring basis at December 31, 2017 and 2016: December 31, 2017 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 717 $ - $ 717 Foreign currencies derivative liabilities $ - $ (921 ) $ - $ (921 ) Total $ - $ (204 ) $ - $ (204 ) December 31, 2016 Level 1 Level 2 Level 3 Total Derivatives: Foreign currencies derivative assets $ - $ 2,570 $ - $ 2,570 Foreign currencies derivative liabilities $ - $ (536 ) $ - $ (536 ) Total $ - $ 2,034 $ - $ 2,034 |
Schedule of Accumulated Other Comprehensive Income, Net | The total accumulated other comprehensive income ("AOCI"), net was comprised as follows: December 31, 2017 2016 Accumulated gains on derivative instruments $ - $ 28 Accumulated foreign currency translation differences 683 (1,178 ) Total accumulated other comprehensive income (loss), net $ 683 $ (1,150 ) |
Schedule of Changes in Accumulated Balances of Other Comprehensive Income | The following table summarizes the changes in AOCI, net of taxes for the year ended: Unrealized gains (losses) on derivative instruments Accumulated foreign currency translation differences Total Balance at December 31, 2015 $ 20 $ (1,912 ) $ (1,892 ) Other comprehensive income (loss) before reclassifications 119 734 853 Amounts reclassified from AOCI (111 ) - (111 ) Net current period OCI 8 734 742 Balance at December 31, 2016 $ 28 $ (1,178 ) $ (1,150 ) Other comprehensive income (loss) before reclassifications 1,114 1,861 2,975 Amounts reclassified from AOCI (1,142 ) - (1,142 ) Net current period OCI (28 ) 1,861 1,833 Balance at December 31, 2017 $ - $ 683 $ 683 |
Schedule of Losses on Cash Flow Hedge Reclassified Out of Accumulated Other Comprehensive Income | The following table shows the amounts reclassified from AOCI into the Consolidated Statements of Income, and the associated financial statement line item, for 2017 and 2016: December 31, Affected line item in the consolidated statements of income 2017 2016 Cost of revenues $ 914 $ 90 Research and development 23 2 Marketing and selling 91 9 General and administrative 114 10 Total gain $ 1,142 $ 111 |
Schedule of Assumptions Used to Estimate Fair Value | In 2017 and 2016, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 43.9 % 40.9 % Risk-free interest rate 2.1 % 1.1 % Expected life (in years) 6.13 4.78 |
Reconciliation of Redeemable Non-controlling Interest | The following table provides a reconciliation of the redeemable non-controlling interest: December 31, 2017 2016 2015 Beginning of the year $ 12,939 $ 8,841 $ 8,715 Net income attributable to non-controlling interest 1,356 1,887 1,692 Dividend paid (*) - (243 ) - Adjustment to redemption value 1,137 2,248 - Foreign currency translation adjustments 1,049 206 (1,566 ) Redeemable non-controlling interest - end of the year $ 16,481 $ 12,939 $ 8,841 (*) In 2016 dividend payment was made by Company’s subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used to Estimate Fair Value | The Company estimated the fair value of the remaining phantom awards, using the binominal option pricing model with the following December 31, 2017 2016 Dividend yield 0 % 0 % Expected volatility 45.5 % 46.9 % Risk-free interest rate 2.0 % 1.8 % Expected life (in years) 3.3 4.3 |
OTHER ACCOUNTS RECEIVABLE AND26
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Accounts Receivable and Prepaid Expenses | December 31, 2017 2016 Prepaid expenses $ 2,859 $ 3,101 Government authorities 20,196 13,991 Deferred tax assets (see also Note 2n) - 11,409 Advances to suppliers 3,103 2,831 Derivatives 717 2,570 Other receivables (see also Note 10) 6,178 5,582 $ 33,053 $ 39,484 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | December 31, 2017 2016 Raw materials $ 27,856 $ 24,306 Work-in-progress 4,680 1,348 Finished goods 100,404 75,820 $ 132,940 $ 101,474 |
PROPERTY, PLANT AND EQUIPMENT28
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | December 31, 2017 2016 Cost: Machinery and manufacturing equipment, net (1) $ 247,437 $ 231,914 Office equipment and furniture 17,423 14,828 Motor vehicles 1,693 1,043 Buildings and leasehold improvements 111,630 106,422 Prepaid expenses related to operating lease (2) 939 939 379,122 355,146 Accumulated depreciation: Machinery and manufacturing equipment, net $ 121,621 $ 101,909 Office equipment and furniture 12,331 9,367 Motor vehicles 1,226 812 Buildings and leasehold improvements 27,176 20,135 Prepaid expenses related to operating lease 115 105 162,469 132,328 Depreciated cost $ 216,653 $ 222,818 (1) Presented net of investment grants received in the total amount of $7,830. (2) Until 2012, the Company leased land from the Israel Lands Administration ("ILA") for its Bar-Lev manufacturing facility. The lease term started on February 6, 2005. The lease is for an initial non-cancellable term of 49 years, with a renewal option of an additional 49 years. The Company analyzed the conditions set forth in ASC 840-10 and classified the land as an operating lease (since the land is not transferred to the Company at the end of the lease nor is there any option to buy the land from the ILA at any point). All payments on account of the initial term were paid in advance (based on discounted values) at the beginning of the lease, and included in the minimum lease payments to be amortized. The prepaid expenses are amortized through the term of the lease, based on the straight-line method (including the bargain renewal option term). See also Note 13(d). |
OTHER INTANGIBLES ASSETS (Table
OTHER INTANGIBLES ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Other Intangible Assets, Net | December 31, 2017 2016 Original amounts: Non-compete agreement $ 1,573 $ 1,462 Distribution relationships 1,653 1,584 Customer relationships 6,273 6,006 Distribution agreement 14,606 14,606 24,105 23,658 Accumulated amortization: Non-compete agreement (1,573 ) (1,455 ) Distribution relationships (1,558 ) (1,392 ) Customer relationships (5,971 ) (5,395 ) Distribution agreement (12,762 ) (10,870 ) (21,864 ) (19,112 ) Total other intangibles assets $ 2,241 $ 4,546 (1) Amortization expense amounted to $2,305, $2,325 and $3,091 for the years ended December 31, 2017, 2016 and 2015, respectively. (2) Estimated amortization expenses for the year ended December 31, 2018 are $2,241. |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows: Balance as of December 31, 2015 $ 35,821 Foreign currency translation adjustments (165 ) Balance as of December 31, 2016 $ 35,656 Foreign currency translation adjustments 1,373 Balance as of December 31, 2017 $ 37,029 |
SHORT-TERM BANK CREDIT (Tables)
SHORT-TERM BANK CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
Schedule of Short-Term Bank Credit | Short-term bank credit and loans are classified as follows: Weighted average interest Currency December 31, December 31, 2017 2016 2017 2016 % Short-term bank credit CAD 3.20 2.95 $ 4,191 $ 8,540 |
ACCRUED EXPENSES AND OTHER LI32
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2017 2016 Employees and payroll accruals $ 15,837 $ 12,251 Accrued expenses 6,064 7,005 Advances from customers 356 1,022 Taxes payable 4,923 3,091 Warranty provision 1,443 1,287 Derivatives 921 536 Phantom share based payment 32 100 Other 424 418 $ 30,000 $ 25,710 |
COMMITMENTS AND CONTINGENT LI33
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Cumulative Product claims Activity | A summary of bodily injury claims activity follows: 2017 2016 2015 Outstanding claims, January 1 87 70 56 New claims (*) 34 31 16 Settled and dismissed claims (16 ) (14 ) (2 ) Outstanding claims, December 31 (**) 105 87 70 (*) Representing 19, 30 and 16 injured persons in 2017, 2016 and 2015, respectively. (**) Not including the pre-litigation notice received by Company's subsidiary in Australia and a legal proceedings in Spain which are in preliminary stages and as of December 31, 2017, the Company cannot estimate loss probability associated with such proceedings. |
Schedule of Future Minimum Lease Commitments | The land and certain of the Company's facilities and vehicles are leased under operating lease agreements. Future minimum lease commitments under non-cancellable operating leases for the specified periods ending after December 31, 2017 are as follows: 2018 $ 15,150 2019 14,145 2020 10,806 2021 9,659 2022 8,275 2023 and thereafter 45,435 Total $ 103,470 |
Schedule of Significant Contractual Obligations and Commitments | The Company's significant contractual obligations and commitments as of December 31, 2017 are summarized in the following table: 2018 (1) $ 38,530 2019 and thereafter - $ 38,530 (1) Consists of purchase obligations to certain suppliers. |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Taxes | Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2017 2016 Deferred tax assets (liabilities): Intangible assets $ 461 $ 474 Other temporary differences (1) 5,776 6,264 Temporary differences related to inventory (2) 6,544 6,917 Carryforward losses, deductions and credits (3) 1,162 390 Less-valuation allowance (903 ) (390 ) Total net deferred tax assets 13,040 13,655 Deferred tax liabilities Property and equipment ( ) (14,654 ) Intangible assets ( ) (1,949 ) Other temporary differences ( ) (120 ) Total deferred tax liabilities ( ) (16,723 ) Deferred tax $ 3,308 $ (3,068 ) (1) Deriving mainly from provision for bad debts, labor related and warranty provision. The increase mainly related to provision for loss contingencies and settlement with the Israeli tax authorities. (2) Deriving mainly from the provision for slow moving inventory and IRS section 263(a). (3) Certain subsidiaries have tax loss carry-forwards totaling approximately $5,850 which can be carried forward and offset against taxable income, these carry-forward tax losses have no expiration date. |
Reconciliation of Effective Tax Rate to Statutory Tax Rate | A reconciliation of the Company's effective tax rate to the statutory tax rate in Israel is as follows: Year ended December 31, 201 7 2016 2015 Income before taxes on income $ 34,960 $ 89,486 $ 93,301 Statutory tax rate in Israel 24 % 25 % 26.5 % Income taxes at statutory rate $ 8,390 $ 22,372 $ 24,725 Increase (decrease) in tax expenses resulting from: Tax benefit arising from reduced rate as an "Preferred Enterprise" (4,832 ) (11,904 ) (13,232 ) Non-deductible expenses, net 1,604 1,560 1,073 Adjustment for change in tax law (1,026 ) - - Increase (decrease) in taxes from prior years (104 ) 44 (513 ) Increase (decrease) in taxes resulting from tax settlement with tax authorities - (151 ) - Tax adjustment in respect of foreign subsidiaries' different tax rates 1,593 1,320 693 Uncertain tax position 1,453 (158 ) 1,034 Changes in valuation allowance 502 52 (21 ) Others (178 ) (132 ) 84 Income tax expense $ 7,402 $ 13,003 $ 13,843 Effective tax rate 21 % 15 % 15 % Per share amounts (basic) of the tax benefit resulting from an "Preferred Enterprise" $ (0.14 ) $ (0.34 ) $ (0.38 ) Per share amounts (diluted) of the tax benefit resulting from an "Preferred Enterprise" $ (0.14 ) $ (0.34 ) $ (0.37 ) |
Schedule of Income before Taxes on Income | Income before taxes on income is comprised as follows: Year ended December 31, 2017 2016 2015 Domestic $ 24,451 $ 75,729 $ 81,020 Foreign 10,509 13,757 12,281 $ 34,960 $ 89,486 $ 93,301 |
Schedule of Tax Expenses on Income | Tax expenses on income are comprised as follows: Year ended December 31, 2017 2016 2015 Current taxes $ 13,778 $ 13,966 $ 6,792 Deferred taxes (6,376 ) (963 ) 7,051 $ 7,402 $ 13,003 $ 13,843 Domestic $ 3,838 $ 8,319 $ 9,892 Foreign 3,564 4,684 3,951 $ 7,402 $ 13,003 $ 13,843 |
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: Gross tax liabilities at January 1, 2015 $ 417 Increase in tax positions for current year 493 Increase of tax position of prior years 541 Foreign currency adjustments (9 ) Gross tax liabilities at December 31, 2015 1,442 Increase in tax positions for current year 594 Increase in tax position of prior years 270 Decrease related to settlement with the tax authorities (1,022 ) Gross tax liabilities at December 31, 2016 1,284 Increase in tax positions for current year 1,201 Increase of tax position of prior years 252 Gross tax liabilities at December 31, 2017 $ 2,737 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Capital | The Company's share capital consisted of the following as of December 31, 2017 and 2016: Authorized Outstanding December 31, December 31, 2017 2016 2017 2016 Shares of NIS 0.04 par value: Ordinary shares 200,000,000 200,000,000 34,338,960 34,321,573 |
Summary of Stock Option Activity | The following is a summary of activities relating to the Company’s stock options granted to employees under the Company’s plan during the year ended December 31, 2017: Number of options Weighted average exercise price Aggregate intrinsic value Outstanding - beginning of the year 826,704 $ 37.26 Granted 549,000 30.49 Exercised (22,000 ) 34.60 Forfeited (225,000 ) 39.93 Outstanding - end of the year 1,128,704 $ 33.48 $ 179 Options exercisable at the end of the year 290,704 $ 37.38 $ 179 Vested and expected to vest 1,128,704 $ 33.48 $ 179 |
Summary of Activities Relating to Company's RSUs Granted to Employees | The following is a summary of activities relating to the Company’s RSUs granted to employees under the Plan during the year ended December 31, 2017: Number of RSUs Weighted average fair value Aggregate intrinsic value Outstanding - beginning of the year 55,500 $ 35.16 Granted 46,000 32.13 Exercised (13,875 ) 35.16 Forfeited (6,350 ) 34.6 Outstanding - end of the year 81,275 $ 33.50 $ 1,787 RSUs exercisable at the end of the year - $ - $ - Vested and expected to vest 81,275 $ 33.5 $ 1,787 |
Schedule of Awards Outstanding | The awards outstanding as of December 31, 2017 have been separated into ranges of exercise price, as follows: Awards outstanding Awards exercisable Exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price per share Number of options Weighted average remaining contractual life (years) Weighted average exercise price $ 0.01 (RSUs) 81,275 5.61 $ 0.01 - - - $ 9.85 2,704 1.22 $ 9.85 2,704 1.22 9.85 $ 14.69 20,000 1.85 $ 14.69 20,000 1.85 14.69 $ 28.65-29.00 91,000 6.61 $ 28.76 - - - $ 30.65-36.71 815,000 5.59 $ 32.56 83,000 5.59 34.77 $ 41.37-42.96 200,000 2.43 $ 41.53 185,000 2.22 41.41 1,209,979 290,704 |
Schedule of Compensation Expenses | Compensation expenses related to options and RSUs granted were recorded in the consolidated statements of operations, as follows: December 31, 2017 2016 Cost of revenues $ 285 $ 452 Research 162 183 Marketing and selling expenses 898 727 General and administrative expenses 3,999 2,144 Total $ 5,344 $ 3,506 |
TRANSACTIONS WITH RELATED PAR36
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Maturity of Debt Obligations | The financing leaseback from related party 2018 $ 664 2019 703 2020 745 2021 790 2022 6,742 $ 9,644 |
Schedule of Transactions and Balances with Related Party and Other Loan | The Company has, from time to time, entered into transactions with its shareholders (the Kibbutz). The following table summarizes such transactions: Year ended December 31, 2017 2016 2015 Cost of revenues $ 6,936 $ 6,004 $ 7,638 Research and development $ 179 $ 176 $ 180 Selling and marketing $ 776 $ 855 $ 691 General and administrative $ 1,654 $ 1,683 $ 1,828 Finance expenses, net $ 564 $ 569 $ 597 Balances with related party and other loan: December 31, 2017 2016 Related party and other loan (1,2) $ 3,463 $ 3,099 Long-term loan and financing leaseback from a related party (2) $ 8,336 $ 8,070 (1) On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders, CIOT and the Company, on a pro rata basis. The loan bears interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25%. The interest accrued on the loan is payable on a quarterly basis. As of December 31, 2017 the loan was classified to Related party and other loan balance. (2) In September, 2012, a financing leaseback of $10,900 related to Bar-Lev transaction was granted to the Company by Kibbutz Sdot-Yam. The financing leaseback bears interest until repayment at a per annum rate equal to 6.09% and is subject to adjustment for increases in the Israeli consumer price index. |
MAJOR CUSTOMER AND GEOGRAPHIC37
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenues | The following table presents total revenues for the years ended December 31, 2017, 2016 and 2015, respectively: Year ended December 31, 2017 2016 2015 USA $ 245,361 $ 222,597 $ 223,341 Australia (including New Zealand) 137,559 130,910 110,290 Canada 97,838 85,740 70,739 Israel 44,489 42,545 39,645 Europe 28,679 25,606 23,949 Rest of World 34,221 31,145 31,551 $ 588,147 $ 538,543 $ 499,515 |
Schedule of Long-Lived Assets | The following table presents total long-lived assets as of December 31, 2017 and 2016: December 31, 2017 2016 Israel $ 90,811 $ 90,924 Australia 1,974 1,971 USA 121,515 128,099 Canada 1,394 1,660 Rest of World 959 164 $ 216,653 $ 222,818 |
SELECTED SUPPLEMENTARY STATEM38
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Income Statement Elements [Abstract] | |
Schedule of Financial and Other Income (Expenses), Net | Finance expense, net: Year ended December 31, 2017 2016 2015 Finance expenses: Interest in respect of short-term loans and bank fees 3,518 3,285 2,792 Interest in respect of loans to related parties 608 610 640 Changes in derivatives fair value 2,237 - - Foreign exchange transactions losses 2,752 970 2,972 9,115 4,865 6,404 Finance income: Changes in derivatives fair value - 1,395 1,060 Interest in respect of cash and cash equivalent and short-term bank deposits 1,035 152 77 Foreign exchange transactions gains 2,497 - 2,182 3,532 1,547 3,319 Finance expenses, net $ 5,583 $ 3,318 $ 3,085 |
Computation of Basic and Diluted Net Earnings Per Share | The following table sets forth the computation of basic and diluted net earnings per share: Numerator Year ended December 31, 2017 2016 2015 Net income attributable to controlling interest, as reported $ 26,202 $ 74,596 $ 77,766 Adjustment to redemption value of non-controlling interest (1,137 ) (2,248 ) - Numerator for basic and diluted net income per share $ 25,065 $ 72,348 $ 77,766 Denominator Year ended December 31, 2017 2016 2015 Denominator for basic income per share 34,334 34,706 35,253 Effect of dilutive stock based awards 52 58 211 Denominator for diluted income per share 34,386 34,764 35,464 Earnings Per Share Year ended December 31, 2017 2016 2015 Basic earnings per share $ 0.73 $ 2.08 $ 2.21 Diluted earnings per share $ 0.73 $ 2.08 $ 2.19 |
GENERAL (Major suppliers) (Deta
GENERAL (Major suppliers) (Details) | 12 Months Ended |
Dec. 31, 2017countries | |
Concentration Risk [Line Items] | |
Number of countries in which entity sells products | 50 |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 69.00% |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | Mikroman [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 42.00% |
Quartz purchases from single vendor as a percentage of total quartz purchases of the Company | 29.00% |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | Polat [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 34.00% |
Quartz purchases from single vendor as a percentage of total quartz purchases of the Company | 23.00% |
SIGNIFICANT ACCOUNTING POLICI40
SIGNIFICANT ACCOUNTING POLICIES (Derivatives) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Unrealized gain (loss) recorded in accumulated other comprehensive income | $ 28 | |
Derivative Assets | 717 | 2,570 |
Derivative Liabilities | (921) | (536) |
Gain Recognized in Other Comprehensive Income (loss), net | 28 | |
Gain (loss) Recognized in Statements of Income | (614) | 1,372 |
Foreign Exchange Forward Contracts [Member] | Designated As Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 13,303 | |
Gain Recognized in Other Comprehensive Income (loss), net | 28 | |
Foreign Exchange Forward Contracts [Member] | Designated As Hedging [Member] | Other Accounts Receivable and Prepaid Expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 31 | |
Foreign Exchange Forward Contracts [Member] | Designated As Hedging [Member] | Accrued expenses and other liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (3) | |
Foreign Exchange Forward Contracts [Member] | Designated As Hedging [Member] | Cost of revenues and Operating expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gain (loss) Recognized in Statements of Income | 1,142 | 111 |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 114,582 | 131,470 |
Gain Recognized in Other Comprehensive Income (loss), net | ||
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Accounts Receivable and Prepaid Expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 717 | 2,539 |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (921) | (533) |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Financial expenses, net [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gain (loss) Recognized in Statements of Income | $ (1,756) | $ 1,261 |
SIGNIFICANT ACCOUNTING POLICI41
SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) - Inventory Valuation Reserve [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at the beginning of the year | $ 10,183 | $ 8,985 |
Increase in inventory provision | 13,585 | 4,168 |
Write off | (12,405) | (2,970) |
Balance at end of the year | $ 11,363 | $ 10,183 |
SIGNIFICANT ACCOUNTING POLICI42
SIGNIFICANT ACCOUNTING POLICIES (Property, plant and equipment, net) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Machinery and Manufacturing Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 4.00% |
Machinery and Manufacturing Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 33.00% |
Office Equipment and Furniture [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 7.00% |
Office Equipment and Furniture [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 33.00% |
Motor Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 10.00% |
Motor Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 30.00% |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 4.00% |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 5.00% |
Prepaid Expenses Related to Operating Lease [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 1.00% |
SIGNIFICANT ACCOUNTING POLICI43
SIGNIFICANT ACCOUNTING POLICIES (Warranty) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranty Liability [Line Items] | ||
January 1 | $ 2,275 | $ 2,173 |
Charged to costs and expenses relating to new sales | 1,816 | 1,325 |
Costs of product warranty claims | (1,446) | (1,225) |
Foreign currency translation adjustments | (51) | 2 |
December 31 | $ 2,594 | $ 2,275 |
Minimum [Member] | ||
Product Warranty Liability [Line Items] | ||
Warranty term | 3 years | |
Maximum [Member] | ||
Product Warranty Liability [Line Items] | ||
Warranty term | 10 years |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES (Other Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising expenses: | |||
Advertising expenses | $ 28,047 | $ 25,582 | $ 22,380 |
Severance pay: | |||
Severance pay expense | $ 1,813 | $ 1,576 | $ 1,451 |
Basic and diluted net income per share: | |||
Anti-dilutive stock options excluded from the calculations of Diluted EPS | 1,060,000 | 804,000 | 786,900 |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES (Concentrations of credit risk) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
January 1 | $ 1,283 | $ 1,221 |
Charges to expenses | 164 | 172 |
Write offs | (325) | (116) |
Foreign currency translation adjustments | 57 | 6 |
December 31 | $ 1,179 | $ 1,283 |
SIGNIFICANT ACCOUNTING POLICI46
SIGNIFICANT ACCOUNTING POLICIES (Fair value of financial instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | $ 717 | $ 2,570 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | 717 | 2,570 |
Foreign currencies derivatives liabilities | (921) | (536) |
Total | (204) | 2,034 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | ||
Foreign currencies derivatives liabilities | ||
Total | ||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | 717 | 2,570 |
Foreign currencies derivatives liabilities | (921) | (536) |
Total | (204) | 2,034 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | ||
Foreign currencies derivatives liabilities | ||
Total |
SIGNIFICANT ACCOUNTING POLICI47
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive loss, net | $ 469,895 | $ 437,653 | $ 400,221 | $ 321,011 | |
Accumulated gains on Derivative Instruments [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive loss, net | 28 | 20 | |||
Accumulated Foreign Currency Translation Differences [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive loss, net | 683 | (1,178) | (1,912) | ||
Accumulated other comprehensive income (loss), net [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive loss, net | [1] | $ 683 | $ (1,150) | $ (1,892) | $ (534) |
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation and hedging transactions. |
SIGNIFICANT ACCOUNTING POLICI48
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Changes in Accumulated Balances of Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | $ 437,653 | $ 400,221 | $ 321,011 | |
Total other comprehensive income (loss), net of tax | 2,882 | 948 | (2,924) | |
Balance | 469,895 | 437,653 | 400,221 | |
Accumulated gains on Derivative Instruments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | 28 | 20 | ||
Other comprehensive income (loss) before reclassifications | 1,114 | 119 | ||
Amounts reclassified from AOCI | (1,142) | (111) | ||
Total other comprehensive income (loss), net of tax | (28) | 8 | ||
Balance | 28 | 20 | ||
Accumulated Foreign Currency Translation Differences [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | (1,178) | (1,912) | ||
Other comprehensive income (loss) before reclassifications | 1,861 | 734 | ||
Amounts reclassified from AOCI | ||||
Total other comprehensive income (loss), net of tax | 1,861 | 734 | ||
Balance | 683 | (1,178) | (1,912) | |
Accumulated other comprehensive income (loss), net [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | [1] | (1,150) | (1,892) | (534) |
Other comprehensive income (loss) before reclassifications | 2,975 | 853 | ||
Amounts reclassified from AOCI | (1,142) | (111) | ||
Total other comprehensive income (loss), net of tax | 1,833 | 742 | ||
Balance | [1] | $ 683 | $ (1,150) | $ (1,892) |
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation and hedging transactions. |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Losses Reclassified Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of revenues | $ 390,924 | $ 326,057 | $ 299,290 |
Research and development | 4,164 | 3,290 | 3,052 |
Marketing and selling | 81,789 | 70,343 | 59,521 |
General and administrative | 45,930 | 40,181 | 36,612 |
Total gain | (27,558) | (76,483) | $ (79,458) |
Reclassification of AOCI [Member] | Accumulated gains on Derivative Instruments [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of revenues | 914 | 90 | |
Research and development | 23 | 2 | |
Marketing and selling | 91 | 9 | |
General and administrative | 114 | 10 | |
Total gain | $ 1,142 | $ 111 |
SIGNIFICANT ACCOUNTING POLICI50
SIGNIFICANT ACCOUNTING POLICIES (Accounting for stock-based compensation) (Details) - USD ($) $ in Thousands | Oct. 27, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Stock Option [Member] | |||
The fair value of each stock option award is estimated at the date of grant with the following weighted average assumptions: | |||
Dividend yield | 0.00% | 0.00% | |
Expected volatility | 43.90% | 40.90% | |
Risk-free interest rate | 2.10% | 1.10% | |
Expected life (years) | 6 years 1 month 16 days | 4 years 9 months 11 days | |
Vesting period | 4 years | ||
Stock options, expiration period | 7 years | ||
Employee Stock Option [Member] | Minimum [Member] | |||
The fair value of each stock option award is estimated at the date of grant with the following weighted average assumptions: | |||
Vesting period | 3 years | ||
Employee Stock Option [Member] | Maximum [Member] | |||
The fair value of each stock option award is estimated at the date of grant with the following weighted average assumptions: | |||
Vesting period | 4 years | ||
Phantom Share Based Payment [Member] | |||
The fair value of each stock option award is estimated at the date of grant with the following weighted average assumptions: | |||
Dividend yield | 0.00% | 0.00% | |
Expected volatility | 45.50% | 46.90% | |
Risk-free interest rate | 2.00% | 1.80% | |
Expected life (years) | 3 years 3 months 19 days | 4 years 3 months 19 days | |
Reclassified amount pursuant to modification | $ 195 | ||
Phantom share based payment | $ 32 | $ 100 | |
RSUs [Member] | |||
The fair value of each stock option award is estimated at the date of grant with the following weighted average assumptions: | |||
Vesting period | 4 years |
SIGNIFICANT ACCOUNTING POLICI51
SIGNIFICANT ACCOUNTING POLICIES (Redeemable Non-Controlling Interest) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning of the year | $ 12,939 | $ 8,841 | $ 8,715 | |
Net income attributable to non-controlling interest | 1,356 | 1,887 | 1,692 | |
Dividend paid | [1] | (243) | ||
Adjustment to redemption value | 1,137 | 2,248 | ||
Foreign currency translation adjustments | 1,049 | 206 | (1,566) | |
Redeemable non-controlling interest-end of the year | $ 16,481 | $ 12,939 | $ 8,841 | |
Canadian Quartz Holdings Inc. [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Equity interest held by CIOT | 45.00% | |||
[1] | In 2016 dividend payment was made by Company's subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. |
OTHER ACCOUNTS RECEIVABLE AND52
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Schedule of Other Accounts Receivable and Prepaid Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 2,859 | $ 3,101 |
Government authorities | 20,196 | 13,991 |
Deferred tax assets (see also Note 2n) | 11,409 | |
Advances to suppliers | 3,103 | 2,831 |
Derivatives | 717 | 2,570 |
Other receivables (see also Note 10) | 6,178 | 5,582 |
Other accounts receivables and prepaid expenses | $ 33,053 | $ 39,484 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 27,856 | $ 24,306 |
Work-in-progress | 4,680 | 1,348 |
Finished goods | 100,404 | 75,820 |
Inventories | $ 132,940 | $ 101,474 |
PROPERTY, PLANT AND EQUIPMENT54
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Property, Plant and Equipment [Line Items] | ||||
Cost | $ 379,122 | $ 355,146 | ||
Accumulated depreciation | 162,469 | 132,328 | ||
Depreciated cost | 216,653 | 222,818 | ||
Reduction in cost and accumulated depreciation of fully depreciated equipment and leasehold improvements no longer in use | 2,321 | |||
Depreciation expense | 27,621 | 25,929 | $ 19,243 | |
Machinery and Manufacturing Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | [1] | 247,437 | 231,914 | |
Accumulated depreciation | 121,621 | 101,909 | ||
Investment grants received | 7,830 | |||
Office Equipment and Furniture [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 17,423 | 14,828 | ||
Accumulated depreciation | 12,331 | 9,367 | ||
Motor Vehicles [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 1,693 | 1,043 | ||
Accumulated depreciation | 1,226 | 812 | ||
Buildings and Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 111,630 | 106,422 | ||
Accumulated depreciation | 27,176 | 20,135 | ||
Prepaid Expenses Related to Operating Lease [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | [2] | 939 | 939 | |
Accumulated depreciation | $ 115 | $ 105 | ||
Operating lease term | 49 years | |||
Operating lease renewal term | 49 years | |||
[1] | Presented net of investment grants received in the total amount of $7,830. | |||
[2] | Until 2012, the Company leased land from the Israel Lands Administration ("ILA") for its Bar-Lev manufacturing facility. The lease term started on February 6, 2005. The lease is for an initial non-cancellable term of 49 years, with a renewal option of an additional 49 years. The Company analyzed the conditions set forth in ASC 840-10 and classified the land as an operating lease (since the land is not transferred to the Company at the end of the lease nor is there any option to buy the land from the ILA at any point). All payments on account of the initial term were paid in advance (based on discounted values) at the beginning of the lease, and included in the minimum lease payments to be amortized. The prepaid expenses are amortized through the term of the lease, based on the straight-line method (including the bargain renewal option term). See also note 13(d). |
OTHER INTANGIBLES ASSETS (Detai
OTHER INTANGIBLES ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | $ 24,105 | $ 23,658 | |
Accumulated amortization | (21,864) | (19,112) | |
Total other intangibles assets | 2,241 | 4,546 | |
Amortization expense | 2,305 | 2,325 | $ 3,091 |
Estimated amortization expenses for the following years: | |||
2,018 | 2,241 | ||
Non-compete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 1,573 | 1,462 | |
Accumulated amortization | (1,573) | (1,455) | |
Distribution Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 1,653 | 1,584 | |
Accumulated amortization | (1,558) | (1,392) | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 6,273 | 6,006 | |
Accumulated amortization | (5,971) | (5,395) | |
Distribution Agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 14,606 | 14,606 | |
Accumulated amortization | $ (12,762) | $ (10,870) |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
GOODWILL [Abstract] | ||
Beginning balance | $ 35,656 | $ 35,821 |
Foreign currency translation adjustments | 1,373 | (165) |
Ending balance | $ 37,029 | $ 35,656 |
SHORT-TERM BANK CREDIT (Details
SHORT-TERM BANK CREDIT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Short-term Debt [Line Items] | ||
Short-term bank credit | $ 4,191 | $ 8,540 |
Weighted average interest | ||
Short-term bank credit | 3.20% | 2.95% |
Short-term and revolving credit lines | $ 14,560 | $ 13,542 |
ILS [Member] | ||
Weighted average interest | ||
Short-term and revolving credit lines, expiration date | Dec. 31, 2018 | |
Canada [Member] | ||
Weighted average interest | ||
Short-term and revolving credit lines, expiration date | Jul. 31, 2018 |
ACCRUED EXPENSES AND OTHER LI58
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Employees and payroll accruals | $ 15,837 | $ 12,251 |
Accrued expenses | 6,064 | 7,005 |
Advances from customers | 356 | 1,022 |
Taxes payable | 4,923 | 3,091 |
Warranty provision | 1,443 | 1,287 |
Derivatives | 921 | 536 |
Phantom share based payment | 32 | 100 |
Other | 424 | 418 |
Accrued expenses and other liabilities | $ 30,000 | $ 25,710 |
COMMITMENTS AND CONTINGENT LI59
COMMITMENTS AND CONTINGENT LIABILITIES (Legal proceedings and contingencies) (Details) € in Thousands, ₪ in Thousands, R in Thousands, $ in Thousands | Jan. 04, 2018USD ($) | Jan. 04, 2018ILS (₪) | Jan. 17, 2018USD ($) | Jan. 17, 2018ILS (₪) | Dec. 31, 2017USD ($)claims | Dec. 31, 2017ILS (₪)claims | Dec. 31, 2016USD ($)claims | Dec. 31, 2015USD ($)claims | Dec. 31, 2017USD ($)claims | Oct. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Jun. 30, 2016ZAR (R) | Oct. 31, 2015USD ($) | Oct. 31, 2015EUR (€) | Oct. 31, 2015ZAR (R) | Dec. 31, 2014claims | Apr. 27, 2014USD ($) | Apr. 27, 2014ILS (₪) | Aug. 31, 2012USD ($) | Aug. 31, 2012ILS (₪) | Apr. 30, 2012USD ($) | Apr. 30, 2012ILS (₪) | Jan. 31, 2008USD ($) | Jan. 31, 2008EUR (€) | Dec. 31, 2007USD ($) | Dec. 31, 2007ILS (₪) | |||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | $ 17,060 | $ 257 | ||||||||||||||||||||||||||||||
Total liability imposed | $ 24,797 | $ 5,868 | $ 4,654 | |||||||||||||||||||||||||||||
Loss contingency liability, current | 25,782 | 7,355 | $ 25,782 | |||||||||||||||||||||||||||||
Loss contingency liability, non-current | 23,454 | 12,527 | 23,454 | |||||||||||||||||||||||||||||
Non-current insurance receivable | $ 8,502 | $ 5,068 | $ 8,502 | |||||||||||||||||||||||||||||
Breach of Contract with Agent [Member] | Europe [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | $ 6,520 | $ 7,727 | ||||||||||||||||||||||||||||||
Breach of Contract with Agent [Member] | South Africa [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | $ 3,700 | $ 2,808 | ||||||||||||||||||||||||||||||
Health Claims [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Number of claims filed | claims | 105 | |||||||||||||||||||||||||||||||
Indivifual Claims [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Number of claims filed | claims | 104 | |||||||||||||||||||||||||||||||
Motion to be recognized as a class action Claims [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Number of claims filed | claims | 1 | |||||||||||||||||||||||||||||||
Health Claims Filed in Magistrate Court [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Number of claims pending | claims | 67 | 67 | ||||||||||||||||||||||||||||||
Maximum amount per claim | $ 721 | |||||||||||||||||||||||||||||||
New Silicosis Claim [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Number of claims filed | claims | [1] | 34 | 34 | 31 | 16 | |||||||||||||||||||||||||||
Number of claims pending | claims | 105 | [2] | 87 | [2] | 70 | [2] | 105 | [2] | 56 | |||||||||||||||||||||||
Estimate of possible loss | $ 56,180 | |||||||||||||||||||||||||||||||
Legal settelments and loss contingencies | $ 9,552 | $ 5,868 | ||||||||||||||||||||||||||||||
Loss contingency liability | 32,958 | 17,682 | $ 32,958 | |||||||||||||||||||||||||||||
Loss contingency liability, current | 9,504 | 5,155 | 9,504 | |||||||||||||||||||||||||||||
Loss contingency liability, non-current | 23,454 | 12,527 | 23,454 | |||||||||||||||||||||||||||||
Insurance receivable | 12,380 | 7,509 | 12,380 | |||||||||||||||||||||||||||||
Current insurance receivable | 3,878 | 2,441 | 3,878 | |||||||||||||||||||||||||||||
Non-current insurance receivable | 8,502 | $ 5,068 | 8,502 | |||||||||||||||||||||||||||||
Amount of unrenewed insurance | 5 | 5 | $ 6 | |||||||||||||||||||||||||||||
Amount Israel insurance policy covers, minimum | 5 | 5 | ||||||||||||||||||||||||||||||
Amount Israel insurance policy covers, maximum | $ 35 | $ 35 | ||||||||||||||||||||||||||||||
Breach of Contract Lawsuit Filed by Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | $ 60,500 | |||||||||||||||||||||||||||||||
Breach of Contract Lawsuit Filed Against Microgil and Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | $ 19,900 | |||||||||||||||||||||||||||||||
ILS [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 1,000 | |||||||||||||||||||||||||||||||
ILS [Member] | Health Claims Filed in Magistrate Court [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Maximum amount per claim | ₪ | ₪ 2,500 | |||||||||||||||||||||||||||||||
ILS [Member] | New Silicosis Claim [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 216,000 | |||||||||||||||||||||||||||||||
ILS [Member] | Breach of Contract Lawsuit Filed by Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 232,800 | |||||||||||||||||||||||||||||||
ILS [Member] | Breach of Contract Lawsuit Filed Against Microgil and Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 76,600 | |||||||||||||||||||||||||||||||
Euro [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | € | € 15,700 | |||||||||||||||||||||||||||||||
Euro [Member] | Breach of Contract with Agent [Member] | Europe [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | € | € 6,200 | € 7,100 | ||||||||||||||||||||||||||||||
South African Rand [Member] | Breach of Contract with Agent [Member] | South Africa [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Estimate of possible loss | R | R 51,200 | R 43,700 | ||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Settlement amount for claims | $ 2,600 | $ 13,900 | ||||||||||||||||||||||||||||||
Subsequent Event [Member] | ILS [Member] | ||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||
Settlement amount for claims | ₪ | ₪ 9,000 | ₪ 48,000 | ||||||||||||||||||||||||||||||
[1] | Representing 19, 30 and 16 injured persons in 2017, 2016 and 2015, respectively. | |||||||||||||||||||||||||||||||
[2] | Not including the pre-litigation notice received by Company's subsidiary in Australia and a legal proceedings in Spain which are in preliminary stages and as of December 31, 2017, the Company cannot estimate loss probability associated with such proceedings. |
COMMITMENTS AND CONTINGENT LI60
COMMITMENTS AND CONTINGENT LIABILITIES (Summary Of Cumulative product Claims Activity) (Details) - New Silicosis Claim [Member] | 12 Months Ended | |||||
Dec. 31, 2017claimsPersons | Dec. 31, 2016claimsPersons | Dec. 31, 2015claimsPersons | ||||
Loss Contingency Pending Claims Numer Roll Forward | ||||||
Outstanding claims, January 1 | 87 | [1] | 70 | [1] | 56 | |
New claims | [2] | 34 | 31 | 16 | ||
Settled and dismissed claims | (16) | (14) | (2) | |||
Outstanding claims, December 31 | [1] | 105 | 87 | 70 | ||
Number of injured persons from claims made during period | Persons | 19 | 30 | 16 | |||
[1] | Not including the pre-litigation notice received by Company's subsidiary in Australia and a legal proceedings in Spain which are in preliminary stages and as of December 31, 2017, the Company cannot estimate loss probability associated with such proceedings. | |||||
[2] | Representing 19, 30 and 16 injured persons in 2017, 2016 and 2015, respectively. |
COMMITMENTS AND CONTINGENT LI61
COMMITMENTS AND CONTINGENT LIABILITIES (Operating lease commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
2,018 | $ 15,150 | ||
2,019 | 14,145 | ||
2,020 | 10,806 | ||
2,021 | 9,659 | ||
2,022 | 8,275 | ||
2023 and thereafter | 45,435 | ||
Total | 103,470 | ||
Lease expenses, net | $ 16,200 | $ 13,479 | $ 12,109 |
COMMITMENTS AND CONTINGENT LI62
COMMITMENTS AND CONTINGENT LIABILITIES (Purchase obligation) (Details) $ in Thousands | Dec. 31, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
2,018 | $ 38,530 | |
2019 and thereafter | ||
Total | $ 38,530 | [1] |
[1] | Consists of purchase obligations to certain suppliers. |
COMMITMENTS AND CONTINGENT LI63
COMMITMENTS AND CONTINGENT LIABILITIES (Guarantees and Obligations) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees outstanding | $ 1,425 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | Jan. 02, 2017 | Jun. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Contingency [Line Items] | |||||||
Liability for unrecognized tax benefits | $ 2,737 | $ 1,284 | |||||
Corporate tax rate | 24.00% | 25.00% | 26.50% | ||||
Corporate statutory tax rate for 2018 | 23.00% | ||||||
Population of enterprise sales in a specific market | 14 million | ||||||
Tax loss carry-forwards | $ 5,850 | ||||||
Machinery and Manufacturing Equipment [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Accelerated depreciation rate | 200.00% | ||||||
Buildings [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Accelerated depreciation rate | 400.00% | ||||||
Minimum [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Percentage of industrial enterprise sales revenues | 25.00% | ||||||
Minimum [Member] | Subsequent Event [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 21.00% | ||||||
Maximum [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Percentage of industrial enterprise sales revenues | 75.00% | ||||||
Maximum [Member] | Subsequent Event [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 35.00% | ||||||
Attributable to Approved Enterprise Programs [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Tax-exempt earnings | $ 22,316 | ||||||
Tax liability, if distributed | 5,356 | ||||||
Attributable to Beneficiary Enterprise Program [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Tax-exempt earnings | 17,438 | ||||||
Tax liability, if distributed | $ 4,185 | ||||||
Internal Revenue Service (IRS) [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 40.00% | ||||||
Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,015 | ||||||
Australian Taxation Office [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 30.00% | ||||||
Australian Taxation Office [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,012 | ||||||
Inland Revenue, Singapore (IRAS) [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 17.00% | ||||||
Inland Revenue, Singapore (IRAS) [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,011 | ||||||
Canada Revenue Agency [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 26.50% | ||||||
Canada Revenue Agency [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,010 | ||||||
England [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 20.00% | ||||||
England [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,016 | ||||||
Israel Tax Authority [Member] | Earliest Tax Year [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Open tax year | 2,015 | ||||||
Development Area A [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 7.50% | 20.00% | 9.00% | ||||
Tax rate for Company's manufacturing plant in Sdot-Yam | 16.00% | ||||||
Foreign residents from the preferred enterprise earnings [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Corporate tax rate | 20.00% |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets (liabilities): | |||
Intangible assets | $ 461 | $ 474 | |
Other temporary differences | [1] | 5,776 | 6,264 |
Temporary differences related to inventory | [2] | 6,544 | 6,917 |
Carryforward losses, deductions and credits | [3] | 1,162 | 390 |
Less-valuation allowance | (903) | (390) | |
Total net deferred tax assets | 13,040 | 13,655 | |
Deferred tax liabilities | |||
Property and equipment | (8,919) | (14,654) | |
Intangible assets | (591) | (1,949) | |
Other temporary differences | (222) | (120) | |
Total deferred tax liabilities | (9,732) | (16,723) | |
Deferred tax assets (liabilities), net | $ 3,308 | $ (3,068) | |
[1] | Deriving mainly from provision for bad debts, labor related and warranty provision. The increase mainly related to provision for loss contingencies and settlement with the Israeli tax authorities. | ||
[2] | Deriving mainly from the provision for slow moving inventory and IRS section 263(a). | ||
[3] | Certain subsidiaries have tax loss carry-forwards totaling approximately $5,850 which can be carried forward and offset against taxable income, these carry-forward tax losses have no expiration date. |
TAXES ON INCOME (Reconciliation
TAXES ON INCOME (Reconciliation of Company's Effective Tax Rate to Statutory Tax Rate) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income before taxes on income | $ 34,960 | $ 89,486 | $ 93,301 |
Statutory tax rate in Israel | 24.00% | 25.00% | 26.50% |
Income taxes at statutory rate | $ 8,390 | $ 22,372 | $ 24,725 |
Increase (decrease) in tax expenses resulting from: | |||
Tax benefit arising from reduced rate as an "Preferred Enterprise" | (4,832) | (11,904) | (13,232) |
Non-deductible expenses, net | 1,604 | 1,560 | 1,073 |
Adjustment for change in tax law | (1,026) | ||
Increase (decrease) in taxes from prior years | (104) | 44 | (513) |
Increase (decrease) in taxes resulting from tax settlement with tax authorities | (151) | ||
Tax adjustment in respect of foreign subsidiaries' different tax rates | 1,593 | 1,320 | 693 |
Uncertain tax position | 1,453 | (158) | 1,034 |
Changes in valuation allowance | 502 | 52 | (21) |
Others | (178) | (132) | 84 |
Income tax expense | $ 7,402 | $ 13,003 | $ 13,843 |
Effective tax rate | 21.00% | 15.00% | 15.00% |
Per share amounts (basic) of the tax benefit resulting from an "Preferred Enterprise" | $ (0.14) | $ (0.34) | $ (0.38) |
Per share amounts (diluted) of the tax benefit resulting from an "Preferred Enterprise" | $ (0.14) | $ (0.34) | $ (0.37) |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income Before Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 24,451 | $ 75,729 | $ 81,020 |
Foreign | 10,509 | 13,757 | 12,281 |
Income before taxes on income | $ 34,960 | $ 89,486 | $ 93,301 |
TAXES ON INCOME (Schedule of Ta
TAXES ON INCOME (Schedule of Tax Expenses on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | $ 13,778 | $ 13,966 | $ 6,792 |
Deferred taxes | (6,376) | (963) | 7,051 |
Income tax expense | 7,402 | 13,003 | 13,843 |
Domestic | 3,838 | 8,319 | 9,892 |
Foreign | 3,564 | 4,684 | 3,951 |
Taxes in respect of prior years | $ 7,402 | $ 13,003 | $ 13,843 |
TAXES ON INCOME (Reconciliati69
TAXES ON INCOME (Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Gross tax liabilities, beginning balance | $ 1,284 | $ 1,442 | $ 417 |
Increase in tax positions for current year | 1,201 | 594 | 493 |
Increase of tax position of prior years | 252 | 270 | 541 |
Decrease related to settlement with the tax authorities | (1,022) | ||
Decrease in foreign currency adjustments | (9) | ||
Gross tax liabilities, ending balance | $ 2,737 | $ 1,284 | $ 1,442 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Share Capital) (Details) - ₪ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity Note [Abstract] | ||
Ordinary shares, par value per share | ₪ 0.04 | ₪ 0.04 |
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 |
Ordinary shares, shares outstanding | 34,338,960 | 34,321,573 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Dividends paid | $ 243 | [1] | $ 20,025 | ||||
Repurchase of ordinary shares, authorized amount | $ 40,000 | ||||||
Ordinary shares repurchased during the period | 1,103,096 | ||||||
Stock repurchased, price paid per share excluding brokerage and transaction fees | $ 35.74 | ||||||
Incentive Compensation Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares authorized | 900,000 | ||||||
Number of ordinary shares registered under Plan | 2,375,000 | ||||||
Options and restricted stock units outstanding | 1,209,979 | ||||||
Ordinary shares reserved for issuance | 988,215 | ||||||
Employee Stock Option [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted-average grant-date fair value of options granted | $ 14.9 | $ 13.2 | $ 12.3 | ||||
Intrinsic value of options exercised | $ 122 | $ 1,761 | $ 6,465 | ||||
Unrecognized compensation cost | $ 7,057 | ||||||
Unrecognized compensation cost, weighted-average recognition period | 1 year 1 month 6 days | ||||||
[1] | In 2016, dividend payment made by Company's subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. |
SHAREHOLDERS' EQUITY (Summary o
SHAREHOLDERS' EQUITY (Summary of Stock Option Activity) (Details) - Employee Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of options | |
Outstanding - beginning of the year | shares | 826,704 |
Granted | shares | 549,000 |
Exercised | shares | (22,000) |
Forfeited | shares | (225,000) |
Outstanding - end of the year | shares | 1,128,704 |
Options exercisable at the end of the year | shares | 290,704 |
Vested and expected to vest | shares | 1,128,704 |
Weighted average exercise price | |
Outstanding - beginning of the year | $ / shares | $ 37.26 |
Granted | $ / shares | 30.49 |
Exercised | $ / shares | 34.60 |
Forfeited | $ / shares | 39.93 |
Outstanding - end of the year | $ / shares | 33.48 |
Options exercisable at the end of the year | $ / shares | 37.38 |
Vested and expected to vest | $ / shares | $ 33.48 |
Aggregate intrinsic value | |
Outstanding - end of the year | $ | $ 179 |
Options exercisable at the end of the year | $ | 179 |
Vested and expected to vest | $ | $ 179 |
SHAREHOLDERS' EQUITY (Summary73
SHAREHOLDERS' EQUITY (Summary of Activities Relating to Company's RSUs Granted to Employees) (Details) - RSUs [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of RSUs | |
Outstanding - beginning of the year | shares | 55,500 |
Granted | shares | 46,000 |
Exercised | shares | (13,875) |
Forfeited | shares | (6,350) |
Outstanding - end of the year | shares | 81,275 |
RSUs exercisable at the end of the year | shares | |
Vested and expected to vest | shares | 81,275 |
Weighted average fair value | |
Outstanding - beginning of the year | $ / shares | $ 35.16 |
Granted | $ / shares | 32.13 |
Exercised | $ / shares | 35.16 |
Forfeited | $ / shares | 34.6 |
Outstanding - end of the year | $ / shares | 33.50 |
RSUs exercisable at the end of the year | $ / shares | |
Vested and expected to vest | $ / shares | $ 33.5 |
Aggregate intrinsic value | |
Outstanding - end of the year | $ | $ 1,787 |
RSUs exercisable at the end of the year | $ | |
Vested and expected to vest | $ | $ 1,787 |
SHAREHOLDERS' EQUITY (Schedul74
SHAREHOLDERS' EQUITY (Schedule of Awards Outstanding) (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding | shares | 1,209,979 |
Number of options exercisable | shares | 290,704 |
$9.85 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price | $ 9.85 |
Number of options outstanding | shares | 2,704 |
Awards outstanding, weighted average remaining contractual life (years) | 1 year 2 months 19 days |
Awards outstanding, weighted average exercise price per share | $ 9.85 |
Number of options exercisable | shares | 2,704 |
Awards exercisable, weighted average remaining contractual life (years) | 1 year 2 months 19 days |
Awards exercisable, weighted average exercise price | $ 9.85 |
$ 14.69 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price | $ 14.69 |
Number of options outstanding | shares | 20,000 |
Awards outstanding, weighted average remaining contractual life (years) | 1 year 10 months 6 days |
Awards outstanding, weighted average exercise price per share | $ 14.69 |
Number of options exercisable | shares | 20,000 |
Awards exercisable, weighted average remaining contractual life (years) | 1 year 10 months 6 days |
Awards exercisable, weighted average exercise price | $ 14.69 |
$ 28.65-29.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, minimum | 28.65 |
Exercise price, maximum | $ 29 |
Number of options outstanding | shares | 91,000 |
Awards outstanding, weighted average remaining contractual life (years) | 6 years 7 months 10 days |
Awards outstanding, weighted average exercise price per share | $ 28.76 |
Number of options exercisable | shares | |
Awards exercisable, weighted average remaining contractual life (years) | 0 years |
Awards exercisable, weighted average exercise price | |
$ 30.65-36.71 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, minimum | 30.65 |
Exercise price, maximum | $ 36.71 |
Number of options outstanding | shares | 815,000 |
Awards outstanding, weighted average remaining contractual life (years) | 5 years 7 months 2 days |
Awards outstanding, weighted average exercise price per share | $ 32.56 |
Number of options exercisable | shares | 83,000 |
Awards exercisable, weighted average remaining contractual life (years) | 5 years 7 months 2 days |
Awards exercisable, weighted average exercise price | $ 34.77 |
$ 28.65-29.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, minimum | 41.37 |
Exercise price, maximum | $ 42.96 |
Number of options outstanding | shares | 200,000 |
Awards outstanding, weighted average remaining contractual life (years) | 2 years 5 months 5 days |
Awards outstanding, weighted average exercise price per share | $ 41.53 |
Number of options exercisable | shares | 185,000 |
Awards exercisable, weighted average remaining contractual life (years) | 2 years 2 months 19 days |
Awards exercisable, weighted average exercise price | $ 41.41 |
RSUs [Member] | 0.01 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price | $ 0.01 |
Number of options outstanding | shares | 81,275 |
Awards outstanding, weighted average remaining contractual life (years) | 5 years 7 months 10 days |
Awards outstanding, weighted average exercise price per share | $ 0.01 |
Number of options exercisable | shares | |
Awards exercisable, weighted average remaining contractual life (years) | 0 years |
Awards exercisable, weighted average exercise price |
SHAREHOLDERS' EQUITY (Schedul75
SHAREHOLDERS' EQUITY (Schedule Compensation Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 5,344 | $ 3,506 |
Cost of Revenues [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 285 | 452 |
Research and Development Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 162 | 183 |
Marketing and selling expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 898 | 727 |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 3,999 | $ 2,144 |
TRANSACTIONS WITH RELATED PAR76
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Kibbutz Sdot-Yam) (Details) ₪ in Thousands, $ in Thousands | Sep. 05, 2016shares | Aug. 06, 2013USD ($) | Aug. 06, 2013ILS (₪) | Jan. 17, 2011 | Jul. 31, 2015 | Sep. 30, 2014USD ($) | Sep. 30, 2014ILS (₪) | Dec. 31, 2017USD ($)m² | Dec. 31, 2017ILS (₪) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015ILS (₪) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2012ILS (₪) | Dec. 31, 2011m²properties | Dec. 31, 2017ILS (₪)m² | Sep. 02, 2014m² | Jan. 02, 2014m² | |
Related Party Transaction [Line Items] | ||||||||||||||||||||
Area of property | m² | 30,744 | |||||||||||||||||||
Consideration for annual fee payment for the year 2013 | $ 38,530 | |||||||||||||||||||
Amount of agreement | [1] | $ 38,530 | ||||||||||||||||||
Kibbutz Sdot-Yam [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Percentage of ownership | 30.40% | 30.40% | ||||||||||||||||||
Notice period to cancel automatic renewal of agreement | 6 months | |||||||||||||||||||
Sale Lease back Transaction Additional Renewal Termo of Lease | 1 year | |||||||||||||||||||
Interest rate | 6.09% | 6.09% | ||||||||||||||||||
Proceeds from sale-leaseback transaction | $ 10,900 | |||||||||||||||||||
Lease term | 10 years | 10 years | ||||||||||||||||||
Annual rent | $ 1,200 | |||||||||||||||||||
Liability arising from partial sale-leaseback | $ 9,644 | |||||||||||||||||||
Deferred tax asset | 539 | $ 628 | ||||||||||||||||||
Deferred tax liability | 738 | 827 | ||||||||||||||||||
Compensation expenses related to bonus paid | 266 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Purchase Agreement and Leaseback [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Agreement amount | $ 1,161 | 1,098 | $ 1,092 | |||||||||||||||||
Kibbutz Sdot-Yam [Member] | ILS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Proceeds from sale-leaseback transaction | ₪ | ₪ 43,700 | |||||||||||||||||||
Annual rent | ₪ | ₪ 4,100 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Manpower Agreement [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Contract term | 10 years | 10 years | ||||||||||||||||||
Additional contract term | 3 years | 3 years | ||||||||||||||||||
Expenses with related party | $ 2,896 | 3,145 | $ 3,425 | |||||||||||||||||
Agreement amount | 64 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Manpower Agreement [Member] | ILS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Agreement amount | ₪ | ₪ 250 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Kibbutz Services [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Contract term | 8 years | 8 years | ||||||||||||||||||
Expenses with related party | $ 1,445 | 1,413 | $ 1,806 | |||||||||||||||||
Notice period to cancel agreement upon a material breach | 30 days | 30 days | ||||||||||||||||||
Notice period to cancel agreement upon liquidation of the other party | 45 days | 45 days | ||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Contract term | 20 years | 20 years | 3 years | |||||||||||||||||
Notice period to cancel agreement upon liquidation of the other party | 90 days | 90 days | ||||||||||||||||||
Number of facilities | properties | 1 | |||||||||||||||||||
Area of property | m² | 100,000 | 100,000 | 9,000 | 400 | ||||||||||||||||
Fee for land use agreement | $ 20 | $ 3 | $ 30 | 30 | $ 20 | |||||||||||||||
Payments for land use right | 3,990 | $ 3,325 | $ 3,564 | $ 3,847 | ||||||||||||||||
Consideration for annual fee payment for the year 2013 | 3,500 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Additional Leased Area [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Agreement amount | $ 18 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Warehouse Site [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Interest rate | 5.30% | 5.30% | ||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Scenario One [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Building expenses not included in land use fees | $ 24 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Scenario Two [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Building expenses not included in land use fees | 12 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | ILS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Fee for land use agreement | ₪ | ₪ 70,000 | ₪ 10 | ₪ 116,643 | ₪ 116,643 | ||||||||||||||||
Consideration for annual fee payment for the year 2013 | ₪ | ₪ 12,900 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | ILS [Member] | Additional Leased Area [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Agreement amount | ₪ | 62 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | ILS [Member] | Scenario One [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Building expenses not included in land use fees | ₪ | 82,900 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | ILS [Member] | Scenario Two [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Building expenses not included in land use fees | ₪ | ₪ 43 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Construction of Access Road [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Amount of agreement | 950 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Construction of Access Road [Member] | ILS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Amount of agreement | ₪ | 3,300 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Paving Commitment [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Amount of agreement | $ 58 | |||||||||||||||||||
Kibbutz Sdot-Yam [Member] | Paving Commitment [Member] | ILS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Amount of agreement | ₪ | ₪ 200 | |||||||||||||||||||
Tene [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Number of ordinary shares held for sale under term sheet agreement with related party | shares | 1,000,000 | |||||||||||||||||||
Number of shares which entity has shared voting power | shares | 11,440,000 | |||||||||||||||||||
Mifalei Sdot-Yam [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Purchase period for ordinary shares held for sale under term sheet agreement | 5 years | |||||||||||||||||||
Maximum number of ordinary shares allowed for purchase | shares | 2,000,000 | |||||||||||||||||||
Caesarstone Canada Inc [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Interest rate | 0.25% | |||||||||||||||||||
[1] | Consists of purchase obligations to certain suppliers. |
TRANSACTIONS WITH RELATED PAR77
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Financing Leaseback) (Details) - Kibbutz Sdot-Yam [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
2,018 | $ 664 |
2,019 | 703 |
2,020 | 745 |
2,021 | 790 |
2,022 | 6,742 |
Total long-term loans | $ 9,644 |
TRANSACTIONS WITH RELATED PAR78
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Transactions with Related Parties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |||
Cost of revenues | $ 6,936 | $ 6,004 | $ 7,638 |
Research and development | 179 | 176 | 180 |
Selling and marketing | 776 | 855 | 691 |
General and administrative | 1,654 | 1,683 | 1,828 |
Finance expenses, net | $ 564 | $ 569 | $ 597 |
TRANSACTIONS WITH RELATED PAR79
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Balances with Related Parties) (Details) $ in Thousands, $ in Thousands | Jan. 17, 2011CAD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||||
Related party and other loan | [1],[2] | $ 3,463 | $ 3,099 | ||
Long-term loan and financing leaseback from a related party | [1] | $ 8,336 | $ 8,070 | ||
Caesarstone Canada Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Long-term loan and financing leaseback from a related party | $ 4,000 | ||||
Related party transaction, interest rate | 0.25% | ||||
Kibbutz Sdot-Yam [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from financing leaseback | $ 10,900 | ||||
Related party transaction, interest rate | 6.09% | ||||
[1] | In September, 2012, a financing leaseback of $10.9 million related to Bar-Lev transaction was granted to the Company by Kibbutz Sdot-Yam. The financing leaseback bears interest until repayment at a per annum rate equal to 6.09% and is subject to adjustment for increases in the Israeli consumer price index. | ||||
[2] | On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders, CIOT and the Company, on a pro rata basis. The loan bears interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25%. The interest accrued on the loan is payable on a quarterly basis. As of December 31, 2017 the loan was classified to short term related party and other loan balance. |
MAJOR CUSTOMER AND GEOGRAPHIC80
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Schedule of Revenues) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 588,147 | $ 538,543 | $ 499,515 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 245,361 | 222,597 | 223,341 |
Australia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 137,559 | 130,910 | 110,290 |
Canada [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 97,838 | 85,740 | 70,739 |
ILS [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 44,489 | 42,545 | 39,645 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 28,679 | 25,606 | 23,949 |
Rest of World [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 34,221 | $ 31,145 | $ 31,551 |
MAJOR CUSTOMER AND GEOGRAPHIC81
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Schedule of Long-Lived Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 216,653 | $ 222,818 |
ILS [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 90,811 | 90,924 |
Australia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,974 | 1,971 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 121,515 | 128,099 |
Canada [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,394 | 1,660 |
Rest of World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 959 | $ 164 |
SELECTED SUPPLEMENTARY STATEM82
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finance expenses: | |||
Interest in respect of short-term loans and bank fees | $ 3,518 | $ 3,285 | $ 2,792 |
Interest in respect of loans to related parties | 608 | 610 | 640 |
Changes in derivatives fair value | 2,237 | ||
Foreign exchange transactions losses | 2,752 | 970 | 2,972 |
Finance expenses | 9,115 | 4,865 | 6,404 |
Finance income: | |||
Changes in derivatives fair value | 1,395 | 1,060 | |
Interest in respect of cash and cash equivalent and short-term bank deposits | 1,035 | 152 | 77 |
Foreign exchange transactions gains | 2,497 | 2,182 | |
Finance income | 3,532 | 1,547 | 3,319 |
Finance expenses, net | 5,583 | 3,318 | 3,085 |
Numerator: | |||
Net income attributable to controlling interest, as reported | 26,202 | 74,596 | 77,766 |
Adjustment to redemption value of non-controlling interest | (1,137) | (2,248) | |
Numerator for basic and diluted net income per share | $ 25,065 | $ 72,348 | $ 77,766 |
Denominator: | |||
Denominator for basic income per share | 34,334 | 34,706 | 35,253 |
Effect of dilutive stock based awards | 52 | 58 | 211 |
Denominator for diluted income per share | 34,386 | 34,764 | 35,464 |
Earnings Per Share | |||
Basic earnings per share | $ 0.73 | $ 2.08 | $ 2.21 |
Diluted earnings per share | $ 0.73 | $ 2.08 | $ 2.19 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Feb. 07, 2018$ / shares |
Subsequent Event [Line Items] | |
Dividend declared | $ 0.29 |
Dividend record date | Feb. 21, 2018 |
Dividend payable date | Mar. 14, 2018 |
Dividend payment withholding tax rate | 20.00% |
Percentage of reported net income attributable to controlling interest | 50.00% |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Cash dividend | $ 0.10 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Cash dividend | $ 0.15 |