Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2020 |
Entity File Number | 001-35464 |
Entity Registrant Name | CAESARSTONE LTD. |
Entity Incorporation, State or Country Code | IL |
Entity Address, Address Line One | Kibbutz Sdot-Yam |
Entity Address, City or Town | MP Menashe |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 3780400 |
Title of 12(b) Security | Ordinary Shares, par value NIS 0.04 per share |
Trading Symbol | CSTE |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Common Stock, Shares Outstanding | 34,437,296 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
ICFR Auditor Attestation Flag | true |
Entity Shell Company | false |
Entity Central Index Key | 0001504379 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Business Contact [Member] | |
Contact Personnel Name | Yuval Dagim |
Entity Address, Address Line One | Kibbutz Sdot-Yam |
Entity Address, City or Town | MP Menashe |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 3780400 |
City Area Code | 972 |
Local Phone Number | 636-4555 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 114,248 | $ 139,372 |
Short-term available for sale marketable securities | 8,112 | |
Trade receivables (net of allowance for credit loss of $6,783 and $2,497 at December 31, 2020 and 2019, respectively) | 84,822 | 78,282 |
Other accounts receivable and prepaid expenses | 26,481 | 34,066 |
Inventories | 152,073 | 122,686 |
Total current assets | 385,736 | 374,406 |
LONG-TERM ASSETS: | ||
Severance pay fund | 4,007 | 3,475 |
Other long-term receivables | 3,837 | 3,176 |
Deferred tax assets, net | 8,359 | 7,881 |
Long-term deposits and prepaid expenses | 1,675 | 2,887 |
Long-term available for sale marketable securities | 10,926 | |
Property, plant and equipment, net | 222,883 | 204,776 |
Operating lease right-of-use assets | 123,928 | 72,047 |
Intangible assets, net | 12,098 | |
Goodwill | 47,472 | 35,218 |
Total long-term assets | 435,185 | 329,460 |
Total assets | 820,921 | 703,866 |
CURRENT LIABILITIES: | ||
Short-term bank credit and current maturities of long- term bank loan | 13,122 | |
Trade payables | 55,063 | 53,072 |
Related party and other loan | 2,221 | 2,212 |
Short term legal settlements and loss contingencies | 31,039 | 28,300 |
Accrued expenses and other liabilities | 55,570 | 42,782 |
Total current liabilities | 157,015 | 126,366 |
LONG-TERM LIABILITIES: | ||
Long-term other loans and financing liability of land from related parties | 11,163 | 7,915 |
Long-term bank loan | 9,543 | |
Accrued severance pay | 5,303 | 4,333 |
Deferred tax liabilities, net | 6,943 | |
Long-term warranty provision | 1,274 | 1,385 |
Long term legal settlements and loss contingencies | 21,910 | 21,505 |
Long-term operating lease liabilities | 112,719 | 64,638 |
Total long-term liabilities | 168,855 | 99,776 |
Commitments and contingent liabilities | ||
REDEEMABLE NON-CONTROLLING INTEREST | 7,701 | |
Share capital- | ||
Ordinary shares of NIS 0.04 par value - 200,000,000 shares authorized at December 31, 2020 and 2019; 35,540,392 and 35,500,872 issued at December 31, 2020 and 2019, respectively; 34,437,296 and 34,397,776 shares outstanding at December 31, 2020 and 2019, respectively | 371 | 371 |
Additional paid-in capital | 160,083 | 157,225 |
Capital fund related to non-controlling interest | (5,587) | (5,587) |
Accumulated other comprehensive income (loss), net | 1,083 | (3,288) |
Retained earnings | 370,830 | 368,433 |
Treasury shares at cost - 1,103,096 ordinary shares at December 31, 2020 and 2019 | (39,430) | (39,430) |
Total equity | 487,350 | 477,724 |
Total liabilities and equity | $ 820,921 | $ 703,866 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for credit loss | $ | $ 6,783 | $ 2,497 |
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 |
Ordinary shares, shares issued | 35,540,392 | 35,500,872 |
Ordinary shares, shares outstanding | 34,437,296 | 34,397,776 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenues | $ 486,412 | $ 545,974 | $ 575,871 |
Cost of revenues | 352,470 | 397,335 | 412,457 |
Gross profit | 133,942 | 148,639 | 163,414 |
Operating expenses: | |||
Research and development | 3,974 | 4,146 | 3,635 |
Marketing and selling | 62,047 | 66,770 | 74,786 |
General and administrative | 39,081 | 40,681 | 43,323 |
Legal settlements and loss contingencies, net | 6,319 | 12,359 | 8,903 |
Total operating expenses | 111,421 | 123,956 | 130,647 |
Operating income | 22,521 | 24,683 | 32,767 |
Finance expenses, net | 10,199 | 5,578 | 3,639 |
Income before taxes on income | 12,322 | 19,105 | 29,128 |
Taxes on income | 4,700 | 6,243 | 4,560 |
Net income | 7,622 | 12,862 | 24,568 |
Net income attributable to non-controlling interest | 404 | 163 | |
Net income attributable to controlling interest | $ 7,218 | $ 12,862 | $ 24,405 |
Basic and Diluted net income per share of ordinary shares | $ 0.21 | $ 0.37 | $ 0.72 |
Weighted average number of ordinary shares used in computing basic income per share (in thousands) | 34,419 | 34,384 | 34,358 |
Weighted average number of ordinary shares used in computing diluted income per share (in thousands) | 34,474 | 34,460 | 34,409 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 7,622 | $ 12,862 | $ 24,568 |
Other comprehensive income (loss) before tax: | |||
Foreign currency translation adjustments | 4,386 | (608) | (4,294) |
Unrealized income (loss) on foreign currency cash flow hedge | 738 | (589) | |
Unrealized income (loss) on available for sale marketable securities | 21 | ||
Income tax benefit (expense) related to components of other comprehensive income (loss) | (8) | (241) | 92 |
Total other comprehensive income (loss), net of tax | 4,399 | (111) | (4,791) |
Comprehensive income | 12,021 | 12,751 | 19,777 |
Less - comprehensive income (loss) attributable to non-controlling interest | 432 | (768) | |
Comprehensive income attributable to controlling interest | $ 11,589 | $ 12,751 | $ 20,545 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss), net [Member] | [1] | Capital fund related to non-controlling interest [Member] | Treasury shares [Member] | Total | |||
Balance at Dec. 31, 2017 | $ 371 | $ 151,880 | $ 356,391 | $ 683 | $ (39,430) | $ 469,895 | |||||
Balance, shares at Dec. 31, 2017 | 34,338,960 | ||||||||||
Other comprehensive loss | (3,860) | (3,860) | |||||||||
Net income attributable to controlling interest | 24,405 | 24,405 | |||||||||
Equity-based compensation expense related to employees | [2] | 1,713 | 1,713 | ||||||||
Adjustment to redemption value of the non-controlling interest | 203 | 203 | |||||||||
Capital fund related to non-controlling interest | (5,587) | (5,587) | |||||||||
Dividend paid | (20,268) | (20,268) | |||||||||
Cashless exercise of options and RSUs | [3] | [3] | |||||||||
Cashless exercise of options and RSUs, shares | 24,251 | ||||||||||
Balance at Dec. 31, 2018 | $ 371 | 153,593 | 360,731 | (3,177) | (5,587) | (39,430) | 466,501 | ||||
Balance, shares at Dec. 31, 2018 | 34,363,211 | ||||||||||
Other comprehensive loss | (111) | (111) | |||||||||
Net income attributable to controlling interest | 12,862 | 12,862 | |||||||||
Equity-based compensation expense related to employees | [2] | 3,632 | 3,632 | ||||||||
Dividend paid | (5,160) | (5,160) | |||||||||
Cashless exercise of options and RSUs | [3] | [3] | |||||||||
Cashless exercise of options and RSUs, shares | 34,565 | ||||||||||
Balance at Dec. 31, 2019 | $ 371 | 157,225 | 368,433 | (3,288) | (5,587) | (39,430) | $ 477,724 | ||||
Balance, shares at Dec. 31, 2019 | 34,397,776 | 34,397,776 | |||||||||
Other comprehensive loss | 4,371 | $ 4,371 | |||||||||
Net income attributable to controlling interest | 7,218 | 7,218 | |||||||||
Equity-based compensation expense related to employees | [2] | 2,858 | 2,858 | ||||||||
Dividend paid | (4,821) | (4,821) | |||||||||
Cashless exercise of options and RSUs | [3] | [3] | |||||||||
Cashless exercise of options and RSUs, shares | 39,520 | ||||||||||
Balance at Dec. 31, 2020 | $ 371 | $ 160,083 | $ 370,830 | $ 1,083 | $ (5,587) | $ (39,430) | $ 487,350 | ||||
Balance, shares at Dec. 31, 2020 | 34,437,296 | 34,437,296 | |||||||||
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation, hedging transactions and marketable securities. | ||||||||||
[2] | See also Note 13. | ||||||||||
[3] | Less than $1. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Cash flows from operating activities: | ||||
Net income | $ 7,622 | $ 12,862 | $ 24,568 | |
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 29,460 | 28,587 | 28,591 | |
Share-based compensation expense | 2,858 | 3,632 | 1,684 | |
Accrued severance pay, net | (14) | (246) | (543) | |
Changes in deferred tax, net | (895) | (1,509) | (3,064) | |
Capital loss (gain) from sale of property, plant and equipment | 340 | 326 | 225 | |
Decrese (increase) in trade receivables | 6,070 | (5,032) | (2,637) | |
Decrease (increase) in other accounts receivable and prepaid expenses | 9,318 | (6,346) | 7,673 | |
Decrease (increase) in inventories | 313 | 35,303 | (30,607) | |
Decerease in trade payables | (17,938) | (6,663) | (16,223) | |
Increase (decrease) in warranty provision | (371) | 69 | 367 | |
Legal settlements and loss contingencies, net | 6,319 | 12,359 | 9,765 | |
Changes in right of use assets | (26,738) | 1,319 | ||
Changes in lease liabilities | 30,710 | 2,602 | ||
Amortization of premium and accretion of discount on marketable securities, net | 161 | |||
Changes in accrued interest related to marketable securities | (1) | |||
Increase (decrease) in accrued expenses and other liabilities including related party | 404 | 5,786 | (5,107) | |
Net cash provided by operating activities | 47,618 | 83,049 | 14,692 | |
Cash flows from investing activities: | ||||
Net cash paid for acquisitions | (28,962) | |||
Purchase of property, plant and equipment | (19,824) | (23,590) | (20,962) | |
Proceeds from sale of property, plant and equipment | 13 | 66 | 28 | |
Investment in marketable securities | (24,456) | |||
Sales and maturity of marketable securities | 5,271 | |||
Increase in long-term deposits | (347) | (63) | (219) | |
Net cash used in investing activities | (68,305) | (23,587) | (21,153) | |
Cash flows from financing activities: | ||||
Dividend paid | (4,821) | (5,160) | (20,268) | |
Dividend paid by subsidiary to non-controlling interest | [1] | (978) | ||
Changes in short-term bank credit and loans, net | (18) | (7,771) | 4,171 | |
Call option exercised related to non-controlling interest | (20,119) | |||
Repayment of a financing liability of land | (1,245) | (1,196) | (1,169) | |
Net cash used in financing activities | (6,084) | (14,127) | (38,363) | |
Effect of exchange rate differences on cash and cash equivalents | 1,647 | 475 | (321) | |
Increase (decrease) in cash and cash equivalents | (25,124) | 45,810 | (45,145) | |
Cash and cash equivalents at beginning of year | 139,372 | 93,562 | 138,707 | |
Cash and cash equivalents at end of year | 114,248 | 139,372 | 93,562 | |
Cash received (paid) during the year for: | ||||
Interest paid | (361) | |||
Interest received | 460 | 976 | 1,455 | |
Tax paid | (3,676) | (10,155) | (13,906) | |
Non cash activity during the year for: | ||||
Changes in trade payables balances related to purchase of property, plant and equipment | $ (356) | $ (3,235) | $ 2,688 | |
[1] | In 2018, 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, 2020 | |
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. Caesarstone Ltd. and its subsidiaries (collectively, the "Company" or "Caesarstone") develop, manufacture and market, high quality engineered quartz surfaces sold under the Company's premium Caesarstone brand. The Company's products are sold in over 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 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, United Kingdom, India and the United States which are engaged in the marketing and selling of the Company's products in different geographic areas. The Company manufacture its quartz products in three manufacturing facilities located in Kibbutz Sdot-Yam in central Israel, Bar-Lev Industrial Park in northern Israel and Richmond-Hill, Georgia in the U.S. which operates under the Company’s subsidiary in the United States, Caesarstone Technologies USA, Inc. Following the acquisition of Lioli (see also b below) the Company has a porcelain slabs manufacturing plant in India. b. Acquisition of Lioli Ceramica Pvt Ltd: On October 05, 2020, the Company completed the acquisition of 55% of the shares of Lioli Ceramica Pvt Ltd ("Lioli"), a producer of porcelain countertop slabs in the total net consideration of $13,574. The consideration includes a contingent consideration arrangement that requires the Company to pay up to approximately $10,000 of additional consideration to Lioli’s minority shareholders subject to reaching certain EBITDA achievement. If Lioli will meet the criteria, the addition consideration amount will be paid during 2021. The fair value of the contingent consideration arrangement at the acquisition date was $1,492. As of December 31, 2020, there were no significant changes to the fair value assigned to the contingent consideration. As of October 05, 2020, the fair value of the 45% non-controlling interests in Lioli amounted to $7,269. The fair value of the non-controlling interests was valued based on the transaction price and a Put Option criterion that the minority awarded in accordance with the share purchase agreement. As part of the agreement, the Company granted Lioli’s minority shareholders a put option and Lioli’s minority shareholders granted the Company a call option for its interest, each exercisable any time after April 1, 2024 and before the 20th anniversary of the acquisition date based on a mechanism as set forth in the agreement between the parties F - 14 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 1:- GENERAL (Cont.) The Lioli acquisition was accounted for as a business combination in accordance with ASC 805 "Business Combinations”. The preliminary fair value estimates for the assets acquired and liabilities assumed for Lioli’s acquisition were based upon preliminary calculations and valuations, and the estimates and assumptions for these acquisition are subject to change as the Company obtains additional information during the respective measurement period to the information that was existed as of the acquisition date (up to one year from the respective acquisition dates). The following table summarizes the purchase price allocation of Lioli Acquisition: Components of Purchase Price: Cash $ 10,197 Lioli's minority shareholders loan assumed 1,950 Contingent consideration 1,492 Total purchase price 13,639 Less: Cash acquired 65 Net for allocation 13,574 Allocation of Purchase Price: Net tangible assets (liabilities): Trade receivables, net 4,729 Prepaid expenses and other current assets 1,133 Inventories, net (1) 7,488 Property, plant and equipment, net (2) 26,937 Other non-current assets 20 Trade payables (5,007 ) Loans (net of Lioli's minority shareholders loan assumed) (3) (14,083 ) Accrued expenses and other current liabilities (2,969 ) Other non-current liabilities (4,295 ) Total net tangible assets 13,953 Identifiable intangible assets: Customer relationships (4) 2,049 Deferred tax liabilities (597 ) Total identifiable intangible assets acquired 1,452 Goodwill (5) 5,438 Non-controlling interests (7,269 ) Total purchase price allocation $ 13,574 F - 15 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 1:- GENERAL (Cont.) (1) Including additional $1,063 fair value to bring the inventory in process to its finished good stage value. Amortization period is through two quarters in accordance with the average inventory turnovers using the straight-line method. (2) Including additional $10,750 land and buildings fair value in accordance with a third-party appraiser. (3) As of October 5, 2020 Lioli had a loan from its minority shareholders (the "shareholders loan"), which included in the acquired net tangible assets. According to term of the transaction the Company will assume 55% of the shareholders loan. The assumed shareholders loan is included in the total purchase price and excluded from the loan balance in accordance to ASC 805 requirements. (4) Customer relationships represent the underlying relationships and agreements with Lioli's customer base. In assessing the value of the Customer Relationships, the Company used an income approach method. The Customer Relationships’ economic useful life is estimated at approximately 5 years, amortized using the straight-line method. (5) The goodwill is primarily attributable to expected synergies resulting from the acquisition. The Company recognized $545 of aggregate acquisition-related costs that were expensed in the consolidated statement of income in general and administrative expenses. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company’s consolidated statements of income. c. Acquisition of Omicron Supplies, LLC: On December 31, 2020, the Company, through its fully owned U.S. subsidiary, completed the acquisition of 100% of the shares of Omicron Supplies, LLC ("Omicron"), a stone supplier in the U.S., for a total net cash consideration of $18,830. The Omicron acquisition was accounted for as a business combination in accordance with ASC 805 "Business Combinations”. F - 16 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 1:- GENERAL (Cont.) The preliminary fair value estimates for the assets acquired and liabilities assumed for Omicron acquisition were based upon preliminary calculations and valuations, and the estimates and assumptions for these acquisition are subject to change as the Company obtains additional information during the respective measurement period to the information that was existed as of the acquisition date (up to one year from the respective acquisition dates).The following table summarizes the purchase price allocation of Omicron Acquisition: Components of Purchase Price: Cash $ 18,862 Less: Cash acquired 32 Net for allocation 18,830 Allocation of Purchase Price: Net tangible assets (liabilities): Trade receivables, net 6,178 Prepaid expenses and other current assets 787 Inventories, net 19,462 Property, plant and equipment, net 75 ROU assets and others 22,978 Trade payables (9,722 ) Short-term lease liability (3,567 ) Short-term loan, accrued expenses and other current liabilities (10,430 ) Long-term lease and other non-current liabilities (19,369 ) Total net tangible assets 6,392 Identifiable intangible assets: Customer relationships (1) 10,144 Deferred tax liabilities (2,637 ) Total identifiable intangible assets acquired 7,507 Goodwill (2) 4,931 Total purchase price allocation $ 18,830 (1) Customer relationships represent the underlying relationships and agreements with Omicron's customer base. In (2) The goodwill is primarily attributable to expected synergies resulting from the acquisition. The Company recognized $376 of aggregate acquisition-related costs that were expensed in the consolidated statement of income in general and administrative expenses. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company’s consolidated statements of income. F - 17 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 1:- GENERAL (Cont.) d. Major suppliers: In 2020, the Company acquired approximately 67% of its quartz consumption from Turkey, of which approximately 35% was supplied by Mikroman Madencilik San ve TIC.LTD.STI ("Mikroman"), constituting approximately 23% of Company's total quartz, and approximately 35% was supplied by Polat Maden Sanayi ve Ticaret A.Ş. (“Polat”), constituting approximately 23% of Company’s total quartz. If Mikroman or Polat cease supplying the Company with quartz or if the Company's supply of quartz generally from Turkey is adversely impacted, the Company's other suppliers may be unable to meet the Company's quartz requirements. In that case, the Company would need to locate and qualify alternate suppliers, which could take time, increase costs and require adjustments to the appearance of the Company's products. As a result, the Company may experience a delay in manufacturing, which could materially and adversely impact the Company's results of operations. e. Caesarstone Canada, Inc.: In connection with the formation of Caesarstone Canada Inc. in 2010 with the Company’s former distributor, Canadian Quartz Holdings Inc. (“Ciot”), the Company granted Ciot a put option and Ciot granted the Company a call option for its interest, each exercisable any time between July 1, 2012 and July 1, 2023 based on a mechanism as set forth in the agreement between the parties. In December 2018, the Company exercised its call option and purchased Ciot’s 45% ownership interest in Caesarstone Canada for the purchase price of $20,119 (CAD $27,300) and increased its ownership interest to 100%. The Company recorded the purchase price against the non-controlling interest balance and the access of the amounts paid over the non-controlling balance to a capital fund in its shareholders’ equity. f. The COVID-19 Pandemic: During 2020, the Company experienced disruptions to its business impacting revenues and its financial results. In order to mitigate the impact of the decline in business as a result of the pandemic, the Company implemented cost savings measures through 2020 and in addition reduced its production capacity. While the Company expect that this public health threat will be eased by global vaccination and lifted restrictions on traveling, current macro-economic environment and current uncertainties regarding the potential impact of COVID-19 may have on the Company’s business, there can be no assurance that the Company’s estimates and assumptions used in the measurement of various assets and liabilities in the financial statements will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted cash flows are not achieved, it is possible that an impairment review may be triggered and certain assets and liabilities in the financial statements may be impaired. Accordingly, the COVID-19 pandemic and the related global reaction could have a material adverse effect on the Company’s business, results of operations and financial condition. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
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 various currencies including in U.S. dollars (USD), Australian dollars (AUD), Canadian dollars (CAD), Euros (EUR), Singapore dollars (SGD), British pounds (GBP), Indian Rupee (INR) and New Israeli Shekels (NIS). In addition, most of the Company's costs are incurred in USD, NIS and EUR. 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 Company's foreign subsidiaries is the local currency in which the relevant subsidiary operates. F - 19 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) b. Financial statements in U.S. dollars (Cont.): 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 income 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 (see also Note 1). 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. Marketable securities: Marketable securities consist of corporate and governmental bonds. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments - Debt and Equity Securities”, the Company classifies marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income (expenses), net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income (expenses), net. F - 20 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) f. Marketable securities (Cont.): The Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable securities with maturities of 12 months or less are classified as short-term and marketable securities with maturities greater than 12 months are classified as long-term. The Company assessed AFS debt securities with an amortized cost basis in excess of estimated fair value to determine what amount of that difference, if any, is caused by expected credit losses in accordance with ASC 326. Allowance for credit losses on AFS debt securities are recognized as a charge of credit loss expenses (income), net, on the consolidated statements of comprehensive income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity. The Company did not record credit loss allowance on its marketable securities during the year ended December 31, 2020. g. 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. F - 21 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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 and other 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, 2020 and 2019 the Company did not have any outstanding forward NIS transactions. As of December 31, 2018 the unrealized loss recorded in accumulated other comprehensive income (loss), net of tax from the Company's currency forward NIS transactions was $497. 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 limit its exposure to foreign currencies. In addition, the Company entered into derivative instruments to partially manage its exposure to movements associated with the Styrene prices. Gains and losses related to such derivative instruments are recorded in financial expenses, net. At December 31, 2020 and 2019, the notional amount of foreign exchange and styrene forward and option contracts into which the Company entered was $100,981 and $36,608, respectively. The foreign exchange and styrene forward and options contracts will expire at various times through December, 2021. F - 22 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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, 2020 2019 Derivative assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses - 62 Total - 62 Derivative liabilities: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities (3,582 ) (425 ) Styrene forward contract Accrued expenses and other liabilities (209 ) - Total (3,791 ) (425 ) F - 23 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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: Gain (loss) 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, 2020 2019 Item 2020 2019 Derivatives designated as hedging instruments: Foreign exchange forward contract - 497 Cost of revenues and Operating expenses 2,406 1,716 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (750 ) 2,121 Styrene forward contracts - - Financial expenses, net (2,120 ) - Total - 497 (464 ) 3,837 h. 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, aging, current and historical selling prices and contractual obligations to maintain certain levels of raw material quantities. 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 which approximates actual costs on a weighted average 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. F - 24 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) h. Inventories (Cont.): The following table provides the details of the change in the Company's provision for inventory write-downs: December 31, 2020 2019 Inventory provision, beginning of year $ 18,226 $ 15,551 Assumed from business combination 1,405 - Increase in inventory provision 4,305 9,983 Write off (7,329 ) (7,308 ) Inventory provision, end of year $ 16,607 $ 18,226 i. 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 3. Depreciation is calculated using the straight-line method over the estimated useful life of the assets at the % Machinery and manufacturing equipment 4-33 (mainly 10) Office equipment and furniture 7-33 (mainly 7) Motor vehicles 10-30 (mainly 20) 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 F - 25 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) j. Leases: The Company determines if an arrangement is a lease at inception and recognize in accordance with ASC 842 “Leases”. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses incremental borrowing rates based on the Company's implied credit rating which was based on Moody's Investors Service Rating Methodology for the Building Materials Industry (such credit rating was notched up due to collateralization) at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives, if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Upon adoption as of January 1, 2019, the Company recorded right-of-use leased assets and corresponding liabilities of $73,366. See also Note 10. k. Impairment of long-lived assets: The Company's long-lived assets (assets group) to be held or used, including right of use 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. F - 26 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) l. Goodwill: 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). Following the adoption of ASU 2017-04, "Simplifying the Test for Goodwill Impairment" by the Company in January 2017, any excess of the carrying amount of the reporting unit over its fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The goodwill impairment test is performed according to the following principles: (1) An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair (2) If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its 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. The Company concluded that all of the Company's reporting units 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 Company’s fair value with its carrying value. As required by ASC 820, "Fair Value Measurements", the Company applies assumptions that marketplace participants would consider in determining the fair value of reporting unit. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates and weighted average cost of capital. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill and intangible assets with an indefinite life. No impairment of goodwill was identified during any period presented. F - 27 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) m. Warranty: The Company generally provides a standard (i.e. assurance type) warranty for its products, for various periods, 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: 2020 2019 January 1, $ 2,916 $ 2,820 Charged to costs and expenses relating to new sales 1,281 1,879 Costs of product warranty claims (1,459 ) (1,734 ) Foreign currency translation adjustments (159 ) (49 ) December 31, $ 2,579 $ 2,916 n. Revenue recognition: Revenues are recognized in accordance with ASC 606, revenue from contracts with customers when control of the promised goods or services is transferred to the customers, in an amount that the Company expects in exchange for those goods or services. The Company applies the following five steps in accordance to ASC 606: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. 1. Identify the contract with a customer: A contract is an agreement between two or more parties that creates enforceable rights and obligations. In evaluating the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration. The Company determines whether collectability is reasonably assured on a customer-by-customer basis pursuant to various criteria including Company’s historical experience, credit insurance and other inputs. 2. Identify the performance obligations in the contract: At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. The main performance obligation is a delivery of the Company’s products. F - 28 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) n. Revenue recognition (Cont.): 3. Determine the transaction price: The Company’s products that are sold through agreements with 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 in accordance with ASC 606, which is estimated, based primarily on historical experience as well as management judgment, and is recorded through a reduction of revenue. 4. Allocate the transaction price to the performance obligations in the contract: The majority of the Company’s revenues are sales of goods, therefore there is one main performance obligation that absorbs the transaction price. 5. Recognize revenue when a performance obligation is satisfied: Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers at a point in time, which affects when revenue is recorded. The majority of Company’s revenues deriving from sales of products which are recognized when control is transferred based on the agreed International Commercial terms, or “INCOTERMS”. o. Research and development costs: Research and development costs are charged to the statement of income as incurred. p. 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. F - 29 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) p. Income taxes (Cont.): 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. q. Advertising expenses: Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2020, 2019 and 2018 were $14,457, $16,233 and $20,848, respectively. r. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and trade receivables. The Company's cash and cash equivalents are invested primarily in USD, mainly with major banks in Israel. The Company's debt marketable securities include investments in highly-rated corporate debentures (located mainly in U.S.) and governmental bonds. The financial institution that holds the Company's debt marketable securities is a major financial institution located in the United States. The Company believes that the its debt marketable securities portfolio is a diverse portfolio of highly-rated securities and the Company's investment policy limits the amount the Company may invest in an issuer (see Note 2f). 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 credit losses (i.e. 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 of future economic conditions. No customer represented 10% or more of the Company’s total accounts receivables, net as of December 31, 2020 and 2019. F - 30 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) r. Concentrations of credit risk (Cont.): The following table provides the detail of the change in the Company's allowance for credit loss: 2020 2019 January 1, $ 2,497 $ 1,247 Charges to expenses 3,142 2,100 Write offs (984 ) (864 ) Assumed from business combinations 2,066 - Foreign currency translation adjustments 62 14 December 31, $ 6,783 $ 2,497 s. 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. Majority of the 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, 2020, 2019 and 2018 amounted to approximately $2,292, $2,189 and $2,048, respectively. F - 31 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) t. Fair value of financial instruments: In accordance with ASC 820, the Company measures its cash equivalents, marketable securities, and derivatives at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 and Level 2, respectively, because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The following table sets forth the Company’s assets and liabilities that were measured at fair value as of December 31, 2020 and 2019 by level within the fair value hierarchy: Fair Value Fair value measurements as of December 31, Description Hierarchy 2020 2019 Measured at fair value on a recurring basis: Assets Cash equivalents: Money market mutual funds Level 1 $ 1,011 $ - Short-term marketable securities: Corporate bonds Level 2 $ 7,607 $ - Governmental bonds Level 2 $ 505 $ - Derivatives: Derivative assets Level 2 $ - $ 62 Long-term marketable securities: Corporate bonds Level 2 $ 10,434 $ - Governmental bonds Level 2 $ 492 $ - Liabilities Derivatives: Contingent Consideration Level 3 $ 1,492 $ - Derivative liabilities Level 2 $ (3,791 ) $ (425 ) The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, trade receivables, other accounts receivables, trade payables, accrued expenses and other liabilities, short term loans and short term bank credit, approximate their fair value due to the short-term maturities of such instruments. The carrying amount of long-term loan approximates its fair value. F - 32 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) u. 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, 2020, 2019 and 2018 there were 1,414,812, 1,244,500 and 1,272,781 outstanding stock options, respectively, that were excluded from the computation of Diluted EPS, that would have had an anti dilutive effect if included. v. 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 and marketable securities. The total accumulated other comprehensive income ("AOCI"), net of tax was comprised as follows: December 31, 2020 2019 Accumulated gain on marketable securities $ 13 $ - Accumulated foreign currency translation differences 1,070 (3,288 ) Total accumulated other comprehensive income loss, net $ 1,083 $ (3,288 ) F - 33 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) v. Comprehensive income and accumulated other comprehensive income (loss) (Cont.): The following table summarizes the changes in AOCI, net of taxes for the year ended: Unrealized gains (losses) on derivative instruments Unrealized gains (losses) on marketable securities Accumulated foreign currency translation differences Total Balance at January 1, 2019 (497 ) - (2,680 ) (3,177 ) Other comprehensive income (loss) before reclassifications 2,213 - (608 ) 1,605 Amounts reclassified from AOCI (1,716 ) - - (1,716 ) Net current period OCI 497 - (608 ) (111 ) Balance at December 31, 2019 - - (3,288 ) (3,288 ) Other comprehensive income (loss) before reclassifications 2,406 13 4,358 6,777 Amounts reclassified from AOCI (2,406 ) - - (2,406 ) Net current period OCI - 13 4,358 4,371 Balance at December 31, 2020 - 13 1,070 1,083 The following tabl |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 3:- MARKETABLE SECURITIES The following is a summary of available-for-sale marketable securities at December 31, 2020: Amortized cost Gross unrealized gains Gross unrealized losses Accrued Interest Fair value Available-for-sale – matures within one year: Corporate bonds $ 7,570 $ 2 $ 2 $ 37 $ 7,607 Governmental bonds 504 - - 1 505 Total $ 8,074 $ 2 $ 2 $ 38 $ 8,112 Available for-sale – matures after one year: Corporate bonds $ 10,353 $ 13 $ 2 $ 70 $ 10,434 Governmental bonds 483 2 - 7 492 Total $ 10,836 $ 15 $ 2 $ 77 $ 10,926 Total $ 18,910 $ 17 $ 4 $ 115 $ 19,038 As of December 31, 2020, the Company didn’t record an allowance for credit losses for its AFS marketable debt securities. |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 4:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2020 2019 Prepaid expenses $ 5,567 $ 3,876 Government authorities 8,176 15,850 Advances to suppliers 4,843 4,315 Derivatives - 62 Other receivables (*) 7,895 9,963 $ 26,481 $ 34,066 (*) Including mainly insurance receivables, see also note 11. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5:- INVENTORIES December 31, 2020 2019 Raw materials $ 23,023 $ 21,410 Work-in-progress 1,534 1,726 Finished goods 127,516 99,550 $ 152,073 $ 122,686 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 6:- PROPERTY, PLANT AND EQUIPMENT, NET December 31, 2020 2019 Cost: Machinery and manufacturing equipment, net (1) $ 304,679 $ 276,222 Office equipment and furniture 26,807 21,933 Motor vehicles 4,533 2,263 Buildings and leasehold improvements 139,361 119,552 Prepaid expenses related to operating lease (2) 939 939 476,319 420,909 Accumulated depreciation: Machinery and manufacturing equipment, net 185,133 159,351 Office equipment and furniture 18,571 16,087 Motor vehicles 3,362 1,356 Buildings and leasehold improvements 46,226 39,205 Prepaid expenses related to operating lease 144 134 253,436 216,133 Depreciated cost $ 222,883 $ 204,776 (1) Presented net of investment grants received in the total amount of $8,420. (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. 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 14d. During 2019 the Company recorded an amortization in the amount of approximately $1,200 of machinery and equipment with no future alternative use. Depreciation expense were $28,829, $28,587 and $26,350 for the years ended December 31, 2020, 2019 and 2018, respectively. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL [Abstract] | |
GOODWILL AND INTANGIBLES | NOTE 7:- GOODWILL AND INTANGIBLES a. Goodwill: The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: Balance as of January 1, 2019 $ 35,283 Foreign currency translation adjustments (65 ) Balance as of December 31, 2019 35,218 Acquired through business combination (*) 10,619 Foreign currency translation adjustments 1,635 Balance as of December 31, 2020 $ 47,472 (*) Deriving from Lioli and Omicron acquisitions (see also Note 1(b) and 1(c)) b. Intangible assets: December 31, 2020 2019 Original amounts: Customer relationships $ 12,193 $ - Accumulated amortization: Customer relationships (102 ) - Foreign currency translation adjustment 7 - Total intangibles assets $ 12,098 $ - (1) Amortization expense amounted to $102 for the years ended December 31, 2020. (2) Estimated amortization expenses for the following years as of December 31, 2020: 2021 $ 2,439 2022 2,439 2023 2,439 2024 2,439 2025 2,342 $ 12,098 |
SHORT-TERM BANK CREDIT AND CURR
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOAN | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Debt [Abstract] | |
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOAN | NOTE 8:- SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOAN a. Short-term bank credit and loans are classified as follows: Weighted average interest Currency December 31, December 31, 2020 2019 2020 2019 % Short-term bank credit USD 3.3 - $ 8,326 $ - Short-term bank credit INR 12.6 - $ 2,816 $ - Current maturities of Long-term bank loan and other (c) INR 12.6 - $ 1,980 $ - b. As of December 31, 2020 and 2019, the Company had short-term and revolving credit lines of approximately The Company's current credit lines, if not extended, will expire through 2021. c. Including mainly current maturities of long-term bank loan, See also Note 15. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 9:- ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2020 2019 Employees and payroll accruals $ 13,414 $ 15,690 Accrued expenses 7,855 5,871 Advances from customers 959 377 Taxes payable 6,291 6,753 Warranty provision 1,305 1,531 Derivatives 3,791 425 Sales return provision 567 797 Operating lease liability short-term 18,854 11,330 Contingent consideration liability and other 2,534 8 $ 55,570 $ 42,782 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
LEASES | NOTE 10:- LEASES a. As of December 31, 2020, the Company had operating lease agreements for facilities and vehicles in the United b. The following table summarizes the Company’s lease-related assets and liabilities recorded on the consolidated Classification December 31, 2020 December 31, 2019 Assets: Operating lease assets Operating lease right-of-use assets 123,928 72,047 Total lease assets 123,928 72,047 Liabilities: Current lease liabilities Accrued expenses and other liabilities 18,854 11,330 Long-term lease liabilities Long-term lease liabilities 112,719 64,638 Total lease liabilities 131,573 75,968 Lease term and discount rate: December 31, 2020 December 31, 2019 Weighted-average remaining lease term — operating leases 8.99 years 9.21 years Weighted-average discount rate — operating leases 4.03% 3.51% F - 45 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 10:- LEASES (Cont.) c. The components of operating lease cost for the year ended December 31, 2020 were as follows: December 31, 2020 December 31, 2019 Operating lease cost: Operating lease expense $ 16,388 $ 14,540 Variable lease expense 4,126 2,774 Short-term lease expense 158 2,787 Sublease income (776 ) (673 ) Total operating lease cost $ 19,896 $ 19,428 d. The maturity of the Company’s operating lease liabilities for contracts with lease term greater than one year as of December 31, 2021 $ 22,791 2022 20,864 2023 17,103 2024 14,781 2025 13,399 2026 and thereafter 64,496 Total future lease payments (1, 2) 153,434 Less imputed interest (21,861 ) Total $ 131,573 (1) Total lease payments have not been reduced by sublease rental payments of approximately $1,850 due in the future under non-cancelable subleases. (2) As of December 31, 2020, the Company has additional operating lease payments, not included in the table above, that have not yet commenced of approximately $3,700. These operating leases will commence during 2021 e. For additional information regarding lease transactions between related parties, refer to Note 14. F - 46 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 10:- LEASES (Cont.) f. The following table presents supplemental cash flow information related to the lease costs for operating leases: December 31, 2020 December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows for operating leases $ 16,100 $ 14,432 Right-of-use assets obtained in exchange for new operating lease liabilities: Operating leases $ 64,901 $ 82,185 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 11:- 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 by 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. F - 47 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) At the conclusion of each stage, 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. During 2018, WOMAG once again amended its claim, seeking a reduced amount of approximately Euro 5.8 million (approximately $6,640) plus interest on any capital sum awarded. In February 2019 the arbitrator has rendered an award on the merits (non-quantum), accepting the claims made by WOMAG and imposing on the Company also the legal costs of the arbitration. In July 2019, the Company appealed the award and in August 2019 hearings were held. In November 2019, the appeal panel delivered its award on the merits (the quantum is still to be decided), partially accepting the appeal and imposing 80% of the cost of arbitration and appeal on the Company. Following negotiations held during 2020 between the parties, on January 15, 2021, the Company paid WOMAG an amount of approximately Euro 7.2 million ($8,900) as part of the settlement for the majority of WOMAG’s claim for breach of contract. The remaining disputed amounts relating to the said breach, as well as WOMAG's claim for loss of profits shall be the subject of a further hearing scheduled for August 2021. The Company, also based on its legal advisors, believes it has provided an adequate reserve for this claim as of December 31, 2020. Bodily injury claims related to exposure to silica dust: Overview: The Company is subject to numerous claims mainly by fabricators, their employees or the National Insurance Institute ("NII"), 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. F - 48 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) Silicosis and other bodily: Injury claims: As of December 31, 2020, the Company is subject to 173 pending bodily injury claims (out of which 172 are individual claims and NII subrogation or related future probable 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 injurer's successors, by the NII or by others (see also table below). In addition, 30 claims are pending in Australia against the Company and other defendants. As of December 31, 2020, the Company has 13 pending pre-litigation demand letters on behalf of certain fabricators in Israel. Most of the claims in Israel do not specify a total amount of damages sought, as the plaintiff’s future damages are intended to be determined at trial. Class action in Israel: 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 $2,799) to fund certain safety related expenses at fabrication facilities in Israel, as well as plaintiff’s compensation and legal expenses. As of December 31, 2020, the settlement agreement remains subject to the approval of the Court. The Israeli State Attorney General had notified the Court of its objection to the proposed settlement. The Company expects the Court will issue its ruling during 2021. F - 49 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) In November 2015 and in May 2017, the Company entered into agreements with the State of Israel and with its main distributors in Israel, respectively, with the consent of its insurance carriers, under which the Company agreed with the State and 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 (NII claims are excluded from the Company’s agreement with the State) and on the apportionments of the total liability between the Company, the State, and the distributors, if found, in such claims. During January 2020, the State of Israel approved an additional 5 years extension to this agreement. With respect to claims filed in Australia, which the Company intends to vigorously defend, it is too early to estimate the probability of a ruling against the Company as there is still no precedent in Australia as to the liability of manufacturers and suppliers in silicosis claims. The Company updated its provision in 2020, 2019 and 2018 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. F - 50 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) Accordingly, the reserve for the bodily injury claims (including the above mentioned class action in Israel) as of December 31, 2020 and 2019 totaled to $42,345 and $39,172 respectively, of which $20,435 and $17,667 is reported in short term legal settlements and loss contingencies and $21,910 and $21,505 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: Year ended December 31, 2020 2019 2018 Outstanding claims, January 1, 156 131 105 New claims 38 45 54 Settled and dismissed claims (21 ) (20 ) (28 ) Outstanding claims, December 31 (*), (**) 173 156 131 *) Not including the legal proceedings in Australia. **) In 2020, representing 138 injured persons. 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. The Company currently have global product liability insurance, which applies, subject to certain terms and limitations, to claims that may be submitted against the Company worldwide during the insurance policy term. This policy covers claims that are beyond $20 million per claim and per aggregate during the policy term from October 1, 2020 to April 1, 2022, up to an amount of $35 million per claim and per year. Company’s global product liability insurance policy is effective until April 2022. The policy covers only illnesses diagnosed after February 2010. Although the Company will seek to renew its product liability insurance to cover silicosis related claims, there is no assurance that the Company will be successful in its renewal. In addition to the global product liability policy, the Company has regional product liability insurance policies in the United States, Canada and Australia, with a coverage of up to $20, $20 and $50 million respectively, per claim or per year, each in its relevant local currency, subject to certain terms and limitations, with relatively low deductibles. Commencing October 2020, the coverage in Australia excluded the bodily injury claims related to exposure to silica dust. In India, the Company has a regional product liability policy in the amount of INR 40 million ($0.6 million) effective until April 23, 2021. F - 51 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) The Company records insurance receivables for the amounts that are covered by insurance. During 2020, 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, 2020 and 2019, the insurance receivable totaled to $7,958 and $9,517, respectively, of which $6,283 and $6,340 is reported in the other accounts receivable and prepaid expenses and $1,675 and $3,176 is in other long-term receivables. In 2020 and 2019, the legal settlements and loss contingencies expenses related to the bodily injury claims related to exposure to silica dust totaled to $5,299 and $7,258, respectively, which reflects the deductible amounts for claims covered by insurance policies, claims not covered and the impact of settlements including the related legal costs. 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 Company’s 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 and paid such amount during March 2018. F - 52 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) 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 monitors and estimates the possible loss deriving from these claims based on new information available and based on its legal advisors, and believes that it recorded an adequate reserve for these claims in accordance with ASC 450. b. Purchase obligation: The Company's significant contractual obligations and commitments as of December 31, 2020 are for purchase obligations to certain suppliers and amounted to $27,732 for the fiscal year 2021. c. Pledges and guarantees: 1. As of December 31, 2020, the Company had outstanding guarantees and letters of credit with various expiration 2. Company's credit facilities provided by banks in Israel are secured with a “Negative floating pledge”, whereby 3. See also note 15 for long-term debt. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 12:- TAXES ON INCOME a. Israeli taxation: 1. Corporate tax rate: The corporate tax rate in Israel was 23% in 2020 and 2019, and 2018. F - 53 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) 2. Foreign Exchange Regulations: Under the Foreign Exchange Regulations, Caesarstone Ltd. calculates its tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars is translated into New Israeli Shekels according to the exchange rate as of December 31st of each year. 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: The tax rate on preferred income from a Preferred Enterprise in 2014 and onwards was 16% (relates to Company's manufacturing plant in Sdot-Yam) and in development area A - 9%. Commencing 2017, the tax rate on preferred income from a Preferred Enterprise is 16% and in development area A – 7.5% (relates to Company's manufacturing plant in Bar-Lev industrial zone). 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. F - 54 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) 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 2. The industrial enterprise's sales revenues in a specific market during the tax year do not exceed 3. At least Amendment No. 68 also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise's earnings as discussed 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. F - 55 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) 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 meets the aforementioned conditions. Of the Company's retained earnings as of December 31, 2020, approximately $24,065 is tax-exempt earnings attributable to its Approved Enterprise programs and $18,805 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 23% as of December 31, 2020). 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 (see also Note 13c). As of December 31, 2020, 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 $5,535. 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 $4,325. 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 – 26.1% tax rate (federal and state). Company incorporated in Australia - 30% tax rate. Company incorporated in Singapore - 17% tax rate. Company incorporated in Canada – 26.6% tax rate (federal and state). Company incorporated in England – 19% tax rate. Company incorporated in India – 28% tax rate. F - 56 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) 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). For 2020 and 2019 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. 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, 2020 2019 Deferred tax assets: Goodwill and Intangible assets $ 327 $ 358 Other temporary differences (1) 14,300 8,664 Temporary differences related to inventory (2) 6,083 6,962 Carryforward losses, deductions and credits (3) 1,102 868 Less-valuation allowance (1,102 ) (822 ) Total deferred tax assets 20,710 16,030 Deferred tax liabilities: Property and equipment (9,143 ) (8,149 ) Intangible liabilities (6,504 ) - Other temporary differences (3,648 ) - Total deferred tax liabilities (19,295 ) (8,149 ) Deferred tax assets, net $ 1,415 $ 7,881 (1) Deriving mainly from provision for labor related and warranty provision. The increase mainly related to provision for loss contingencies and lease accounting in accordance with ASC842 F - 57 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) (2) Deriving mainly from the provision for slow moving inventory and IRS section 263(a). Certain subsidiaries have tax loss carry-forwards totaling approximately $2,881 which can be carried forward and offset against taxable income, these carry-forward tax losses have no expiration date. In addition to the above, the Company carried back its 2020 U.S. subsidiaries losses in accordance with the CARES act. 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, 2020 2019 2018 Income before taxes on income $ 12,322 $ 19,105 $ 29,128 Statutory tax rate in Israel 23 % 23 % 23 % Income taxes at statutory rate $ 2,834 $ 4,394 $ 6,699 Increase (decrease) in tax expenses resulting from: Tax benefit arising from reduced rate as an "Preferred Enterprise" (120 ) (2,646 ) (2,527 ) Non-deductible expenses, net 1,764 2,025 701 Increase (decrease) in taxes from prior years, also related to settlement with tax authorities (868 ) 707 (670 ) Tax adjustment in respect of foreign subsidiaries' different tax rates (251 ) 772 (453 ) Uncertain tax position 1,659 1,037 482 Changes in valuation allowance (280 ) 112 184 Others (38 ) (158 ) 144 Income tax expense $ 4,700 $ 6,243 $ 4,560 Effective tax rate 38 % 33 % 16 % Per share amounts (basic and diluted) of the tax benefit resulting from an "Preferred Enterprise" $ (0.00 ) $ (0.08 ) $ (0.07 ) F - 58 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) e. Income before taxes on income is comprised as follows: Year ended December 31, 2020 2019 2018 Domestic $ 12,859 $ 5,329 $ 18,424 Foreign (537 ) 13,776 10,704 $ 12,322 $ 19,105 $ 29,128 f. Tax expenses on income are comprised as follows: Year ended December 31, 2020 2019 2018 Current taxes $ 5,597 $ 7,752 $ 7,624 Deferred taxes (897 ) (1,509 ) (3,064 ) $ 4,700 $ 6,243 $ 4,560 Domestic $ 3,886 $ 2,874 $ 2,726 Foreign 814 3,369 1,834 $ 4,700 $ 6,243 $ 4,560 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, 2020: Israel 2019 – present (*) Australia 2015 - present Canada 2016 - present United States 2017 - present Singapore 2016 - present England 2016 – present India 2018 - present (*) During 2020 the Company’s Israeli tax return for the years 2015-2018 were examined and the examination’s results are reflected in its tax expenses. F - 59 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- TAXES ON INCOME (Cont.) h. Uncertain tax positions: The balances at December 31, 2020 and 2019 include a liability for unrecognized tax benefits of $3,663 and $4,913, 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, 2018 $ 2,737 Increase in tax positions for current year 482 Increase in tax position of prior years 657 Gross tax liabilities at December 31, 2018 3,876 Increase in tax positions for current year 1,037 Gross tax liabilities at December 31, 2019 4,913 Increase in tax positions for current year 1,659 Addition of tax position of prior years 118 Decrease in tax position resulting from settlement (3,027 ) Gross tax liabilities at December 31, 2020 $ 3,663 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, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 13:- SHAREHOLDERS' EQUITY a. The Company's share capital consisted of the following as of December 31, 2020 and 2019: Authorized Outstanding December 31, December 31, 2020 2019 2020 2019 Number of shares Ordinary shares of NIS 0.04 par value each 200,000,000 200,000,000 34,437,296 34,397,776 b. Ordinary shares: Ordinary shares confer on their holders voting rights and the right to receive dividends. c. Dividends: In February 2018, the Company 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. In February 2020 the Company revised its dividend policy so that cash dividend will be distributed up to 50% of the year to date reported net income attributable to controlling interest less any amounts already paid as dividend for the respective period, provided that such calculated dividend is not less than $0.10. Any dividend payment is subject to approval by the Company’s board of directors. Pursuant to the above policy the Company paid a total amount of $4,821 and $5,160 in 2020 and 2019, respectively, of dividend out of its non-tax exempt profit under the beneficiary enterprise. 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. During 2019 the Israeli tax authorities examined Company’s withholding tax filings and asserted that the Company’s buyback should be defined as dividend payment and as such is subject to 20% withholding tax. The Company denied such claim and during January 2020 the tax authorities issued a request for payment of approximately $11 million (approximately NIS 38 million) plus interest and fines. The Company submitted its response and intends to vigorously defend its position that the share repurchase should not be defined as dividend. The Company believes that the loss probability in this case is remote. F - 61 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 13:- SHAREHOLDERS' EQUITY (Cont.) e. Compensation plan: On January 1, 2011, the Board of Directors adopted the Caesarstone Ltd 2011 Incentive Compensation Plan (the “2011 Plan”) pursuant to which non-employee directors, officers, employees and consultants may receive stock options and RSUs exercisable for ordinary shares, if certain conditions are met. Under the plan the Company can grant up to 3,275,000 ordinary shares. On September 17, 2020 the Board of Directors adopted Caesarstone Ltd 2020 Share incentive plan (the “2020 Plan”). Under the 2020 Plan up to 2,500,000 ordinary shares may be granted. In addition, any shares that remain available for issuance under the 2011 Plan, as of the Effective Date, which shall not exceed 1,000,000 Shares, may also be granted under the 2020 Plan. As of December 31, 2020, there were 1,499,224 options and restricted stock units (RSUs) outstanding under the Plan and 601,593 shares available or reserved for future issuance under the plan. As of December 31, 2020, there was $2,744 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 1.5 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, 2020: Number of options Weighted average exercise price Aggregate intrinsic value Outstanding - beginning of the year 1,410,750 19.16 776 Granted 141,500 11.42 Exercised - - Forfeited 137,750 19.21 Outstanding - end of the year 1,414,500 18.11 257 Options exercisable at the end of the year 645,750 22.32 24 Vested and expected to vest 1,414,500 18.11 257 The weighted average fair value of options granted during 2020, 2019 and 2018 was $4.9, $6.2 and $7.2 per option. The weighted average fair value of options vested during 2020, 2019 and 2018 was $8.32, $14.18 and $12.95 per option. The intrinsic value of options exercised during 2020, 2019 and 2018 was $0, $35 and $0. F - 62 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 13:- SHAREHOLDERS' EQUITY (Cont.) The intrinsic value of exercisable options (the difference between the Company’s closing share price on the last trading day in fiscal year 2020 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, 2020. 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, 2020: Number of RSUs Weighted average fair value Aggregate intrinsic value Outstanding - beginning of the year 120,786 16.90 1,556 Granted 11,100 11.21 Exercised (39,520 ) 19.23 Forfeited (7,642 ) 14.55 Outstanding - end of the year 84,724 15.30 1,091 RSUs exercisable at the end of the year - - - Vested and expected to vest 84,724 15.30 1,091 The awards outstanding as of December 31, 2020 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) 84,724 5.28 $ 0.01 - - - $ 10.4-14.5 566,500 5.48 $ 13.02 140,625 4.91 13.33 $ 15.3-17.7 520,500 5.16 $ 15.60 213,625 5.05 15.59 $ 20.2-30.0 165,500 3.59 $ 27.24 129,500 3.55 27.73 $ 30.1-42.2 162,000 1.93 $ 34.69 162,000 1.93 34.69 1,499,224 645,750 F - 63 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 13:- SHAREHOLDERS' EQUITY (Cont.) Compensation expenses related to options and RSUs granted were recorded in the consolidated statements of operations, as follows: December 31, 2020 2019 Cost of revenues $ 416 $ 284 Research and development expenses 176 173 Marketing and selling expenses 465 315 General and administrative expenses 1,801 2,860 Total $ 2,858 $ 3,632 |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN | NOTE 14:- 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 30.3%, as of December 31, 2020. On September 5, 2016, Kibbutz Sdot-Yam entered into a term sheet with Tene Investment in Projects 2016 Limited Partnership (“Tene”), pursuant to which both the Kibbutz and Tene are deemed the Company’s controlling shareholders under the Israeli Companies Law. Pursuant to the agreement, 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 As of December 31, 2020 the Kibbutz and Tene beneficially own 14,029,494 ordinary shares. 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 such was automatically renewed during 2020 for additional one year term, and will be automatically renewed again, unless one of the parties gives six months one-year F - 64 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) 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. On November 27, 2018, following the approval of Company’s audit committee, compensation committee and board of directors, Company’s shareholders approved a second addendum to such agreement 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 ($77) 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 fees paid were $2,106, $2,408 and $2,548 for the years ended December 31, 2020, 2019 and 2018, respectively. F - 65 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) b. Services from the Kibbutz: On July 20, 2011 the Company entered into a services agreement with the Kibbutz that was further amended on February 13, 2012 (the “Original Services Agreement”). Pursuant to the Original Services 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 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. On November 27, 2018, following the approval of the audit committee and the board, Company’s shareholders approved a further amended services agreement (“Amended Services Agreement”) for an additional period of three years. 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 right of first proposal in special projects with respect to the metal workshop services. The amended services agreement also outlines the distribution mechanism between the Company and the Kibbutz for certain expenses and payments due to local authorities, such as certain taxes and fees in connection with the Company’s business facilities. 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 $1,315, $ 1,451 and $ 1,285 for the years ended December 31, 2020, 2019 and 2018, respectively. F - 66 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) c. Land Use Agreement with the Kibbutz: Land leased to Kibbutz Sdot-Yam by the ILA and the Caesarea Development Corporation 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 $4,000) in 2013 and thereafter, (this amount does not include approximately NIS 62,000 (approximately $19) 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, at the election of Kibbutz Sdot-Yam by obtaining an updated 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"). The parties are in the process of obtaining such land appraisal to assess and adjust the fees for 2021 onwards. During January 2018, the Kibbutz requested to increase the fees due to it, pursuant to the land lease agreement. Following the assessment of an appointed appraiser and negotiations between the Company and the Kibbutz, it was agreed to increase the fees under such agreement, such that for the year 2018 the Company paid additional amount of NIS 950,000 (approximately $250), and commencing 2019 and on the Company is paying an additional annual amount of NIS 1,100,000 (approximately $342). 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. F - 67 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) 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. In addition, the Company has committed to fund the cost of construction, up to a maximum of NIS 3.3 million (approximately $1,000) 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 $62) 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 the year that the construction completed, 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 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 $22) was deducted from the land use fees until end of 2020. F - 68 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) d. Financing liability of land: Pursuant to the Land Use 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 $22). 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, 2020, the construction of the warehouse has not started yet. The Company's payments pursuant to the land use agreement totaled $4,690, $4,459 and $4,286 for the years ended December 31, 2020, 2019 and 2018, respectively. F - 69 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) 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 parties are in the process of obtaining such land appraisal to assess and adjust the fees for 2021 onwards. The transaction was not qualified as "sale lease-back" accounting under both ASC 840 and ASC 842 and the Company recorded the entire amount received as consideration as a liability. The financing liability of land from a related party mature as follows, as of December 31, 2020: 2021 853 2022 7,272 8,125 The balance at December 31, 2020 and 2019, includes $247 and $367 of deferred tax assets on the Company liability and a $725 and $760 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 $1,244, $1,189 and $1,174 for the years ended December 31, 2020, 2019 and 2018, respectively. F - 70 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) e. 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 Year ended December 31, 2020 2019 2018 Cost of revenues $ 7,200 $ 6,890 $ 6,607 Research and development $ 406 $ 301 $ 185 Selling and marketing $ 638 $ 708 $ 779 General and administrative $ 913 $ 1,283 $ 1,341 Finance expenses, net $ 491 $ 511 $ 531 2. Balances with related party and other loan: December 31, 2020 2019 Financing liability of land from related party- current maturities (1) $ 1,746 $ 1,736 Long-term financing liability of land from a related party (1) $ 6,723 $ 6,994 Other loans (2) $ 4,440 $ 921 (1) 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 6.28% and is subject to adjustment for increases in the Israeli consumer price index. F - 71 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) 2. Balances with related party and other loan (Cont.): (2) Other loans: a. On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders at that time CIOT and the Company, on a pro rata basis. Although the Company acquired CIOT ownership interest in Caesarstone Canada Inc. during December, 2018, the loan continues to bear interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25% (See also note 1e). The interest accrued on the loan is payable on a quarterly basis. Such loan is repaid in three equal annual installments commencing 2020. b. As part of the liabilities assumed in the acquisition of Lioli’s majority holdings the Company also assumed a shareholders loan and as of December 31, 2020 such loan is in the amount of approximately $3,969. Subject to certain conditions and regulatory approvals to be met by Lioli, the Company will have to transfer a loan in accordance with its holdings to replace current loan. Such loan will be repaid after 5 years from closing or extended period based on mutual agreement. The interest on such loan is Libor plus 4.5% |
LONG-TERM BANK LOAN
LONG-TERM BANK LOAN | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM BANK LOAN | NOTE 15:- LONG-TERM BANK LOAN a. As part of the Lioli’s acquisition the Company assumed also a bank loan from commercial banks in India. The b. Repayment schedule in the table below are the future scheduled dates for repayment of the long-term loan: December 31, 2021 $ 1,639 2022 1,788 2023 1,994 2024 2,175 2025 and thereafter 3,586 Total $ 11,182 c. The long-term loan is secured by substantially all of the Lioli’s assets. Lioli is committed not to pledge or charge |
MAJOR CUSTOMER AND GEOGRAPHIC I
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION | NOTE 16:- 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 The following table presents total revenues for the years ended December 31, 2020, 2019 and 2018, respectively: Year ended December 31, 2020 2019 2018 USA $ 207,496 $ 250,471 $ 239,241 Canada 72,492 85,979 99,679 Latin America 2,149 4,115 5,397 Australia 103,587 108,149 131,085 Asia 14,566 15,514 17,715 EMEA 45,201 43,054 42,861 Israel 40,921 38,692 39,893 $ 486,412 $ 545,974 $ 575,871 No customer represented 10% or more of the Company’s revenues for the years ended December 31, 2020, 2019 and 2018. b. The following table presents total long-lived assets as of December 31, 2020 and 2019: December 31, 2020 2019 USA $ 167,370 $ 118,458 Canada 5,384 5,676 Australia 14,947 7,669 Asia 29,955 400 EMEA 8,398 8,583 Israel 132,855 136,037 $ 358,909 $ 276,823 |
SELECTED SUPPLEMENTARY STATEMEN
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Income Statement Elements [Abstract] | |
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA | NOTE 17:- SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA a. Finance expense, net: Year ended December 31, 2020 2019 2018 Finance expenses: Interest in respect of short-term loans, credit cards and bank fees $ 3,254 $ 3,342 $ 3,591 Interest in respect of loans to related parties 1,053 568 585 Amortization/accretion of premium/discount on marketable securities 161 - - Realized gain/loss from marketable securities 11 - - Changes in derivatives fair value 3,427 - 193 Foreign exchange transactions losses 7,128 6,578 6,259 15,034 10,488 10,628 Finance income: Interest in respect of cash and cash equivalent and short-term bank deposits 657 1,018 1,472 Changes in derivatives fair value - 33 - Interest income from marketable securities 213 - - Foreign exchange transactions gains 3,965 3,859 5,517 4,835 4,910 6,989 Finance expenses, net $ 10,199 $ 5,578 $ 3,639 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, 2020 2019 2018 Net income attributable to controlling interest, as reported $ 7,218 $ 12,862 $ 24,405 Adjustment to redemption value of non-controlling interest - - 203 Numerator for basic and diluted net income per share $ 7,218 $ 12,862 $ 24,608 F - 74 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 17:- SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Cont.) Denominator: Year ended December 31, 2020 2019 2018 Denominator for basic income per share 34,419 34,384 34,358 Effect of dilutive stock based awards 55 76 51 Denominator for diluted income per share 34,474 34,460 34,409 Earnings per share: Basic and diluted earnings per share $ 0.21 $ 0.37 $ 0.72 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 various currencies including in U.S. dollars (USD), Australian dollars (AUD), Canadian dollars (CAD), Euros (EUR), Singapore dollars (SGD), British pounds (GBP), Indian Rupee (INR) and New Israeli Shekels (NIS). In addition, most of the Company's costs are incurred in USD, NIS and EUR. 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 Company's foreign subsidiaries is the local currency in which the relevant subsidiary operates. F - 19 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) b. Financial statements in U.S. dollars (Cont.): 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 income 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 (see also Note 1). 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. |
Marketable securities | f. Marketable securities: Marketable securities consist of corporate and governmental bonds. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments - Debt and Equity Securities”, the Company classifies marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income (expenses), net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income (expenses), net. F - 20 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) f. Marketable securities (Cont.): The Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable securities with maturities of 12 months or less are classified as short-term and marketable securities with maturities greater than 12 months are classified as long-term. The Company assessed AFS debt securities with an amortized cost basis in excess of estimated fair value to determine what amount of that difference, if any, is caused by expected credit losses in accordance with ASC 326. Allowance for credit losses on AFS debt securities are recognized as a charge of credit loss expenses (income), net, on the consolidated statements of comprehensive income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity. The Company did not record credit loss allowance on its marketable securities during the year ended December 31, 2020. |
Derivatives | g. 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. F - 21 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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 and other 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, 2020 and 2019 the Company did not have any outstanding forward NIS transactions. As of December 31, 2018 the unrealized loss recorded in accumulated other comprehensive income (loss), net of tax from the Company's currency forward NIS transactions was $497. 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 limit its exposure to foreign currencies. In addition, the Company entered into derivative instruments to partially manage its exposure to movements associated with the Styrene prices. Gains and losses related to such derivative instruments are recorded in financial expenses, net. At December 31, 2020 and 2019, the notional amount of foreign exchange and styrene forward and option contracts into which the Company entered was $100,981 and $36,608, respectively. The foreign exchange and styrene forward and options contracts will expire at various times through December, 2021. F - 22 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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, 2020 2019 Derivative assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses - 62 Total - 62 Derivative liabilities: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities (3,582 ) (425 ) Styrene forward contract Accrued expenses and other liabilities (209 ) - Total (3,791 ) (425 ) F - 23 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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: Gain (loss) 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, 2020 2019 Item 2020 2019 Derivatives designated as hedging instruments: Foreign exchange forward contract - 497 Cost of revenues and Operating expenses 2,406 1,716 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (750 ) 2,121 Styrene forward contracts - - Financial expenses, net (2,120 ) - Total - 497 (464 ) 3,837 |
Inventories | h. 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, aging, current and historical selling prices and contractual obligations to maintain certain levels of raw material quantities. 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 which approximates actual costs on a weighted average 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. F - 24 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) h. Inventories (Cont.): The following table provides the details of the change in the Company's provision for inventory write-downs: December 31, 2020 2019 Inventory provision, beginning of year $ 18,226 $ 15,551 Assumed from business combination 1,405 - Increase in inventory provision 4,305 9,983 Write off (7,329 ) (7,308 ) Inventory provision, end of year $ 16,607 $ 18,226 |
Property, plant and equipment, net | i. 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 3. Depreciation is calculated using the straight-line method over the estimated useful life of the assets at the % Machinery and manufacturing equipment 4-33 (mainly 10) Office equipment and furniture 7-33 (mainly 7) Motor vehicles 10-30 (mainly 20) 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 |
Leases | j. Leases: The Company determines if an arrangement is a lease at inception and recognize in accordance with ASC 842 “Leases”. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses incremental borrowing rates based on the Company's implied credit rating which was based on Moody's Investors Service Rating Methodology for the Building Materials Industry (such credit rating was notched up due to collateralization) at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives, if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Upon adoption as of January 1, 2019, the Company recorded right-of-use leased assets and corresponding liabilities of $73,366. See also Note 10. |
Impairment of long-lived assets | k. Impairment of long-lived assets: The Company's long-lived assets (assets group) to be held or used, including right of use 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 | l. Goodwill: 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). Following the adoption of ASU 2017-04, "Simplifying the Test for Goodwill Impairment" by the Company in January 2017, any excess of the carrying amount of the reporting unit over its fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The goodwill impairment test is performed according to the following principles: (1) An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair (2) If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its 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. The Company concluded that all of the Company's reporting units 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 Company’s fair value with its carrying value. As required by ASC 820, "Fair Value Measurements", the Company applies assumptions that marketplace participants would consider in determining the fair value of reporting unit. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates and weighted average cost of capital. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill and intangible assets with an indefinite life. No impairment of goodwill was identified during any period presented. |
Warranty | m. Warranty: The Company generally provides a standard (i.e. assurance type) warranty for its products, for various periods, 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: 2020 2019 January 1, $ 2,916 $ 2,820 Charged to costs and expenses relating to new sales 1,281 1,879 Costs of product warranty claims (1,459 ) (1,734 ) Foreign currency translation adjustments (159 ) (49 ) December 31, $ 2,579 $ 2,916 |
Revenue recognition | n. Revenue recognition: Revenues are recognized in accordance with ASC 606, revenue from contracts with customers when control of the promised goods or services is transferred to the customers, in an amount that the Company expects in exchange for those goods or services. The Company applies the following five steps in accordance to ASC 606: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. 1. Identify the contract with a customer: A contract is an agreement between two or more parties that creates enforceable rights and obligations. In evaluating the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration. The Company determines whether collectability is reasonably assured on a customer-by-customer basis pursuant to various criteria including Company’s historical experience, credit insurance and other inputs. 2. Identify the performance obligations in the contract: At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. The main performance obligation is a delivery of the Company’s products. F - 28 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) n. Revenue recognition (Cont.): 3. Determine the transaction price: The Company’s products that are sold through agreements with 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 in accordance with ASC 606, which is estimated, based primarily on historical experience as well as management judgment, and is recorded through a reduction of revenue. 4. Allocate the transaction price to the performance obligations in the contract: The majority of the Company’s revenues are sales of goods, therefore there is one main performance obligation that absorbs the transaction price. 5. Recognize revenue when a performance obligation is satisfied: Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers at a point in time, which affects when revenue is recorded. The majority of Company’s revenues deriving from sales of products which are recognized when control is transferred based on the agreed International Commercial terms, or “INCOTERMS”. |
Research and development costs | o. Research and development costs: Research and development costs are charged to the statement of income as incurred. |
Income taxes | p. 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. F - 29 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) p. Income taxes (Cont.): 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 | q. Advertising expenses: Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2020, 2019 and 2018 were $14,457, $16,233 and $20,848, respectively. |
Concentrations of credit risk | r. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and trade receivables. The Company's cash and cash equivalents are invested primarily in USD, mainly with major banks in Israel. The Company's debt marketable securities include investments in highly-rated corporate debentures (located mainly in U.S.) and governmental bonds. The financial institution that holds the Company's debt marketable securities is a major financial institution located in the United States. The Company believes that the its debt marketable securities portfolio is a diverse portfolio of highly-rated securities and the Company's investment policy limits the amount the Company may invest in an issuer (see Note 2f). 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 credit losses (i.e. 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 of future economic conditions. No customer represented 10% or more of the Company’s total accounts receivables, net as of December 31, 2020 and 2019. F - 30 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) r. Concentrations of credit risk (Cont.): The following table provides the detail of the change in the Company's allowance for credit loss: 2020 2019 January 1, $ 2,497 $ 1,247 Charges to expenses 3,142 2,100 Write offs (984 ) (864 ) Assumed from business combinations 2,066 - Foreign currency translation adjustments 62 14 December 31, $ 6,783 $ 2,497 |
Severance pay | s. 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. Majority of the 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, 2020, 2019 and 2018 amounted to approximately $2,292, $2,189 and $2,048, respectively. |
Fair value of financial instruments | t. Fair value of financial instruments: In accordance with ASC 820, the Company measures its cash equivalents, marketable securities, and derivatives at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 and Level 2, respectively, because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The following table sets forth the Company’s assets and liabilities that were measured at fair value as of December 31, 2020 and 2019 by level within the fair value hierarchy: Fair Value Fair value measurements as of December 31, Description Hierarchy 2020 2019 Measured at fair value on a recurring basis: Assets Cash equivalents: Money market mutual funds Level 1 $ 1,011 $ - Short-term marketable securities: Corporate bonds Level 2 $ 7,607 $ - Governmental bonds Level 2 $ 505 $ - Derivatives: Derivative assets Level 2 $ - $ 62 Long-term marketable securities: Corporate bonds Level 2 $ 10,434 $ - Governmental bonds Level 2 $ 492 $ - Liabilities Derivatives: Contingent Consideration Level 3 $ 1,492 $ - Derivative liabilities Level 2 $ (3,791 ) $ (425 ) The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, trade receivables, other accounts receivables, trade payables, accrued expenses and other liabilities, short term loans and short term bank credit, approximate their fair value due to the short-term maturities of such instruments. The carrying amount of long-term loan approximates its fair value. |
Basic and diluted net income per share | u. 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, 2020, 2019 and 2018 there were 1,414,812, 1,244,500 and 1,272,781 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 (loss) | v. 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 and marketable securities. The total accumulated other comprehensive income ("AOCI"), net of tax was comprised as follows: December 31, 2020 2019 Accumulated gain on marketable securities $ 13 $ - Accumulated foreign currency translation differences 1,070 (3,288 ) Total accumulated other comprehensive income loss, net $ 1,083 $ (3,288 ) F - 33 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) v. Comprehensive income and accumulated other comprehensive income (loss) (Cont.): The following table summarizes the changes in AOCI, net of taxes for the year ended: Unrealized gains (losses) on derivative instruments Unrealized gains (losses) on marketable securities Accumulated foreign currency translation differences Total Balance at January 1, 2019 (497 ) - (2,680 ) (3,177 ) Other comprehensive income (loss) before reclassifications 2,213 - (608 ) 1,605 Amounts reclassified from AOCI (1,716 ) - - (1,716 ) Net current period OCI 497 - (608 ) (111 ) Balance at December 31, 2019 - - (3,288 ) (3,288 ) Other comprehensive income (loss) before reclassifications 2,406 13 4,358 6,777 Amounts reclassified from AOCI (2,406 ) - - (2,406 ) Net current period OCI - 13 4,358 4,371 Balance at December 31, 2020 - 13 1,070 1,083 The following table shows the amounts reclassified from AOCI into the Consolidated Statements of Income, and the associated financial statement line item, for 2020 and 2019: December 31, 2020 2019 Affected line item in the consolidated statements of income Cost of revenues $ 1,857 $ 1,328 Research and development 61 40 Marketing and selling 217 161 General and administrative 271 187 Total gain $ 2,406 $ 1,716 F - 34 CAESARSTONE LTD. AND ITS SUBSIDIARIES |
Accounting for stock-based compensation | w. Accounting for stock-based compensation: 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 directors’ 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 and the Company’s accounting policy is 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 In 2020 and 2019, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2020 2019 Dividend yield 0-3% 0-3% Expected volatility 46.0% 47.4% Risk-free interest rate 0.7% 1.9% Expected life (in years) 5.1 4.3 The Company used volatility data in accordance with ASC 718 and based on Company's historical data. 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. F - 35 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) w. Accounting for stock-based compensation (Cont.): 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). For the vast majority of the options granted in 2020 and 2019, the dividend yield is zero, due to adjustment mechanism with respect to the exercise price upon payment of a dividend. For those options granted without adjustment mechanism, the dividend yield applied is 3%. |
Redeemable non-controlling interest | x. Redeemable non-controlling interest: (1) The Company was party to a put and call arrangement with respect to the remaining 45% non-controlling On December 27, 2018, the Company acquired the remaining 45% ownership interest in its Canadian subsidiary (2) Following the acquisition of Lioli during 2020, the Company is party to a put and call arrangement with respect The redeemable non-controlling interest is recognized at the higher of: i) the accumulated earnings associated F - 36 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) x. Redeemable non-controlling interest (Cont.): The following table provides a reconciliation of the redeemable non-controlling interest: Year ended December 31, 2020 2019 2018 Beginning of the year $ - $ - $ 16,481 Assuming the non controlling interest due to acquisition 7,269 - - Net income attributable to non-controlling interest 404 - 163 Dividend paid (*) - - (978 ) Adjustment to redemption value - - (203 ) Foreign currency translation adjustments 28 - (931 ) Adjustment to Call option value (**) - - 5,587 Call option exercise (**) - - (20,119 ) Redeemable non-controlling interest - end of the year $ 7,701 $ - $ - *) In 2018 dividend payment was made by Company’s subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. **) See also Note 1e. |
Contingencies | y. 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. |
Business combination | z. Business combination: The Company accounts for business combinations by applying the provisions of ASC 805, Business Combination, and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to future expected cash flows from acquired customer relationship and acquired trademarks from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which does not exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the finalization of the measurement period, any subsequent adjustments are recorded to earnings. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. |
Impact of recently issued accounting standards | aa. Impact of recently issued accounting standards: Recently issued and adopted accounting standards: 1. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) This standard limits the amount of credit losses to be recognized for AFS debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company adopted Topic 326 effective January 1, 2020, based on the composition of the Company’s trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. 2. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), simplifying the F - 39 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) aa. Impact of recently issued accounting standards (Cont.) Recently issued and adopted accounting standards (Cont.) 3. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Recently issued accounting standards and not yet adopted by the Company: 1. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. ASU 2. In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and |
GENERAL (Tables)
GENERAL (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lioli Ceramica Pvt Ltd [Member] | |
Schedule of Purchase Price Allocation | Components of Purchase Price: Cash $ 10,197 Lioli's minority shareholders loan assumed 1,950 Contingent consideration 1,492 Total purchase price 13,639 Less: Cash acquired 65 Net for allocation 13,574 Allocation of Purchase Price: Net tangible assets (liabilities): Trade receivables, net 4,729 Prepaid expenses and other current assets 1,133 Inventories, net (1) 7,488 Property, plant and equipment, net (2) 26,937 Other non-current assets 20 Trade payables (5,007 ) Loans (net of Lioli's minority shareholders loan assumed) (3) (14,083 ) Accrued expenses and other current liabilities (2,969 ) Other non-current liabilities (4,295 ) Total net tangible assets 13,953 Identifiable intangible assets: Customer relationships (4) 2,049 Deferred tax liabilities (597 ) Total identifiable intangible assets acquired 1,452 Goodwill (5) 5,438 Non-controlling interests (7,269 ) Total purchase price allocation $ 13,574 F - 15 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 1:- GENERAL (Cont.) (1) Including additional $1,063 fair value to bring the inventory in process to its finished good stage value. Amortization period is through two quarters in accordance with the average inventory turnovers using the straight-line method. (2) Including additional $10,750 land and buildings fair value in accordance with a third-party appraiser. (3) As of October 5, 2020 Lioli had a loan from its minority shareholders (the "shareholders loan"), which included in the acquired net tangible assets. According to term of the transaction the Company will assume 55% of the shareholders loan. The assumed shareholders loan is included in the total purchase price and excluded from the loan balance in accordance to ASC 805 requirements. (4) Customer relationships represent the underlying relationships and agreements with Lioli's customer base. In assessing the value of the Customer Relationships, the Company used an income approach method. The Customer Relationships’ economic useful life is estimated at approximately 5 years, amortized using the straight-line method. (5) The goodwill is primarily attributable to expected synergies resulting from the acquisition. |
Omicron Acquisition [Member] | |
Schedule of Purchase Price Allocation | Components of Purchase Price: Cash $ 18,862 Less: Cash acquired 32 Net for allocation 18,830 Allocation of Purchase Price: Net tangible assets (liabilities): Trade receivables, net 6,178 Prepaid expenses and other current assets 787 Inventories, net 19,462 Property, plant and equipment, net 75 ROU assets and others 22,978 Trade payables (9,722 ) Short-term lease liability (3,567 ) Short-term loan, accrued expenses and other current liabilities (10,430 ) Long-term lease and other non-current liabilities (19,369 ) Total net tangible assets 6,392 Identifiable intangible assets: Customer relationships (1) 10,144 Deferred tax liabilities (2,637 ) Total identifiable intangible assets acquired 7,507 Goodwill (2) 4,931 Total purchase price allocation $ 18,830 (1) Customer relationships represent the underlying relationships and agreements with Omicron's customer base. In (2) The goodwill is primarily attributable to expected synergies resulting from the acquisition. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Derivative assets: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Other accounts receivable and prepaid expenses - 62 Total - 62 Derivative liabilities: Derivatives not designated as hedging instruments: Foreign exchange option and forward contracts Accrued expenses and other liabilities (3,582 ) (425 ) Styrene forward contract Accrued expenses and other liabilities (209 ) - Total (3,791 ) (425 ) F - 23 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) g. Derivatives (Cont.): 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: Gain (loss) 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, 2020 2019 Item 2020 2019 Derivatives designated as hedging instruments: Foreign exchange forward contract - 497 Cost of revenues and Operating expenses 2,406 1,716 Derivatives not designated as hedging instruments: Foreign exchange forward and options contracts - - Financial expenses, net (750 ) 2,121 Styrene forward contracts - - Financial expenses, net (2,120 ) - Total - 497 (464 ) 3,837 |
Schedule of Change in Provision for Inventory | The following table provides the details of the change in the Company's provision for inventory write-downs: December 31, 2020 2019 Inventory provision, beginning of year $ 18,226 $ 15,551 Assumed from business combination 1,405 - Increase in inventory provision 4,305 9,983 Write off (7,329 ) (7,308 ) Inventory provision, end of year $ 16,607 $ 18,226 |
Schedule of Property, Plant and Equipment Depreciation Rates | 3. Depreciation is calculated using the straight-line method over the estimated useful life of the assets at the % Machinery and manufacturing equipment 4-33 (mainly 10) Office equipment and furniture 7-33 (mainly 7) Motor vehicles 10-30 (mainly 20) 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: 2020 2019 January 1, $ 2,916 $ 2,820 Charged to costs and expenses relating to new sales 1,281 1,879 Costs of product warranty claims (1,459 ) (1,734 ) Foreign currency translation adjustments (159 ) (49 ) December 31, $ 2,579 $ 2,916 |
Schedule of Change in Provision for Doubtful Debts | The following table provides the detail of the change in the Company's allowance for credit loss: 2020 2019 January 1, $ 2,497 $ 1,247 Charges to expenses 3,142 2,100 Write offs (984 ) (864 ) Assumed from business combinations 2,066 - Foreign currency translation adjustments 62 14 December 31, $ 6,783 $ 2,497 |
Schedule of Assets and Liabilities Measured at Fair Value | The following table sets forth the Company’s assets and liabilities that were measured at fair value as of December 31, 2020 and 2019 by level within the fair value hierarchy: Fair Value Fair value measurements as of December 31, Description Hierarchy 2020 2019 Measured at fair value on a recurring basis: Assets Cash equivalents: Money market mutual funds Level 1 $ 1,011 $ - Short-term marketable securities: Corporate bonds Level 2 $ 7,607 $ - Governmental bonds Level 2 $ 505 $ - Derivatives: Derivative assets Level 2 $ - $ 62 Long-term marketable securities: Corporate bonds Level 2 $ 10,434 $ - Governmental bonds Level 2 $ 492 $ - Liabilities Derivatives: Contingent Consideration Level 3 $ 1,492 $ - Derivative liabilities Level 2 $ (3,791 ) $ (425 ) |
Schedule of Accumulated Other Comprehensive Income, Net | The total accumulated other comprehensive income ("AOCI"), net of tax was comprised as follows: December 31, 2020 2019 Accumulated gain on marketable securities $ 13 $ - Accumulated foreign currency translation differences 1,070 (3,288 ) Total accumulated other comprehensive income loss, net $ 1,083 $ (3,288 ) |
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 Unrealized gains (losses) on marketable securities Accumulated foreign currency translation differences Total Balance at January 1, 2019 (497 ) - (2,680 ) (3,177 ) Other comprehensive income (loss) before reclassifications 2,213 - (608 ) 1,605 Amounts reclassified from AOCI (1,716 ) - - (1,716 ) Net current period OCI 497 - (608 ) (111 ) Balance at December 31, 2019 - - (3,288 ) (3,288 ) Other comprehensive income (loss) before reclassifications 2,406 13 4,358 6,777 Amounts reclassified from AOCI (2,406 ) - - (2,406 ) Net current period OCI - 13 4,358 4,371 Balance at December 31, 2020 - 13 1,070 1,083 |
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 2020 and 2019: December 31, 2020 2019 Affected line item in the consolidated statements of income Cost of revenues $ 1,857 $ 1,328 Research and development 61 40 Marketing and selling 217 161 General and administrative 271 187 Total gain $ 2,406 $ 1,716 |
Reconciliation of Redeemable Non-controlling Interest | The following table provides a reconciliation of the redeemable non-controlling interest: Year ended December 31, 2020 2019 2018 Beginning of the year $ - $ - $ 16,481 Assuming the non controlling interest due to acquisition 7,269 - - Net income attributable to non-controlling interest 404 - 163 Dividend paid (*) - - (978 ) Adjustment to redemption value - - (203 ) Foreign currency translation adjustments 28 - (931 ) Adjustment to Call option value (**) - - 5,587 Call option exercise (**) - - (20,119 ) Redeemable non-controlling interest - end of the year $ 7,701 $ - $ - *) In 2018 dividend payment was made by Company’s subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. **) See also Note 1e. |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Losses on Cash Flow Hedge Reclassified Out of Accumulated Other Comprehensive Income | In 2020 and 2019, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2020 2019 Dividend yield 0-3% 0-3% Expected volatility 46.0% 47.4% Risk-free interest rate 0.7% 1.9% Expected life (in years) 5.1 4.3 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-sale Marketable Securities | The following is a summary of available-for-sale marketable securities at December 31, 2020: Amortized cost Gross unrealized gains Gross unrealized losses Accrued Interest Fair value Available-for-sale – matures within one year: Corporate bonds $ 7,570 $ 2 $ 2 $ 37 $ 7,607 Governmental bonds 504 - - 1 505 Total $ 8,074 $ 2 $ 2 $ 38 $ 8,112 Available for-sale – matures after one year: Corporate bonds $ 10,353 $ 13 $ 2 $ 70 $ 10,434 Governmental bonds 483 2 - 7 492 Total $ 10,836 $ 15 $ 2 $ 77 $ 10,926 Total $ 18,910 $ 17 $ 4 $ 115 $ 19,038 As of December 31, 2020, the Company didn’t record an allowance for credit losses for its AFS marketable debt securities. |
OTHER ACCOUNTS RECEIVABLE AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Accounts Receivable and Prepaid Expenses | December 31, 2020 2019 Prepaid expenses $ 5,567 $ 3,876 Government authorities 8,176 15,850 Advances to suppliers 4,843 4,315 Derivatives - 62 Other receivables (*) 7,895 9,963 $ 26,481 $ 34,066 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | December 31, 2020 2019 Raw materials $ 23,023 $ 21,410 Work-in-progress 1,534 1,726 Finished goods 127,516 99,550 $ 152,073 $ 122,686 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | December 31, 2020 2019 Cost: Machinery and manufacturing equipment, net (1) $ 304,679 $ 276,222 Office equipment and furniture 26,807 21,933 Motor vehicles 4,533 2,263 Buildings and leasehold improvements 139,361 119,552 Prepaid expenses related to operating lease (2) 939 939 476,319 420,909 Accumulated depreciation: Machinery and manufacturing equipment, net 185,133 159,351 Office equipment and furniture 18,571 16,087 Motor vehicles 3,362 1,356 Buildings and leasehold improvements 46,226 39,205 Prepaid expenses related to operating lease 144 134 253,436 216,133 Depreciated cost $ 222,883 $ 204,776 (1) Presented net of investment grants received in the total amount of $8,420. (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. 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 14d. During 2019 the Company recorded an amortization in the amount of approximately $1,200 of machinery and equipment with no future alternative use. Depreciation expense were $28,829, $28,587 and $26,350 for the years ended December 31, 2020, 2019 and 2018, respectively. |
OTHER INTANGIBLES ASSETS (Table
OTHER INTANGIBLES ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Estimated Amortization Expenses | 2021 $ 2,439 2022 2,439 2023 2,439 2024 2,439 2025 2,342 $ 12,098 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: Balance as of January 1, 2019 $ 35,283 Foreign currency translation adjustments (65 ) Balance as of December 31, 2019 35,218 Acquired through business combination (*) 10,619 Foreign currency translation adjustments 1,635 Balance as of December 31, 2020 $ 47,472 (*) Deriving from Lioli and Omicron acquisitions (see also Note 1(b) and 1(c)) |
Schedule of Intangible Assets | b. Intangible assets: December 31, 2020 2019 Original amounts: Customer relationships $ 12,193 $ - Accumulated amortization: Customer relationships (102 ) - Foreign currency translation adjustment 7 - Total intangibles assets $ 12,098 $ - (1) Amortization expense amounted to $102 for the years ended December 31, 2020. (2) Estimated amortization expenses for the following years as of December 31, 2020: |
Schedule of Estimated Amortization Expenses | 2021 $ 2,439 2022 2,439 2023 2,439 2024 2,439 2025 2,342 $ 12,098 |
SHORT-TERM BANK CREDIT AND CU_2
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOAN (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Debt [Abstract] | |
Schedule of Short-Term Bank Credit | a. Short-term bank credit and loans are classified as follows: Weighted average interest Currency December 31, December 31, 2020 2019 2020 2019 % Short-term bank credit USD 3.3 - $ 8,326 $ - Short-term bank credit INR 12.6 - $ 2,816 $ - Current maturities of Long-term bank loan and other (c) INR 12.6 - $ 1,980 $ - |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2020 2019 Employees and payroll accruals $ 13,414 $ 15,690 Accrued expenses 7,855 5,871 Advances from customers 959 377 Taxes payable 6,291 6,753 Warranty provision 1,305 1,531 Derivatives 3,791 425 Sales return provision 567 797 Operating lease liability short-term 18,854 11,330 Contingent consideration liability and other 2,534 8 $ 55,570 $ 42,782 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Lease-Related Assets and Liabilities | b. The following table summarizes the Company’s lease-related assets and liabilities recorded on the consolidated Classification December 31, 2020 December 31, 2019 Assets: Operating lease assets Operating lease right-of-use assets 123,928 72,047 Total lease assets 123,928 72,047 Liabilities: Current lease liabilities Accrued expenses and other liabilities 18,854 11,330 Long-term lease liabilities Long-term lease liabilities 112,719 64,638 Total lease liabilities 131,573 75,968 Lease term and discount rate: December 31, 2020 December 31, 2019 Weighted-average remaining lease term — operating leases 8.99 years 9.21 years Weighted-average discount rate — operating leases 4.03% 3.51% F - 45 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 10:- LEASES (Cont.) |
Schedule of Components of Operating Lease Cost | c. The components of operating lease cost for the year ended December 31, 2020 were as follows: December 31, 2020 December 31, 2019 Operating lease cost: Operating lease expense $ 16,388 $ 14,540 Variable lease expense 4,126 2,774 Short-term lease expense 158 2,787 Sublease income (776 ) (673 ) Total operating lease cost $ 19,896 $ 19,428 |
Schedule of Operating Lease Liabilities | d. The maturity of the Company’s operating lease liabilities for contracts with lease term greater than one year as of December 31, 2021 $ 22,791 2022 20,864 2023 17,103 2024 14,781 2025 13,399 2026 and thereafter 64,496 Total future lease payments (1, 2) 153,434 Less imputed interest (21,861 ) Total $ 131,573 (1) Total lease payments have not been reduced by sublease rental payments of approximately $1,850 due in the future under non-cancelable subleases. (2) As of December 31, 2020, the Company has additional operating lease payments, not included in the table above, that have not yet commenced of approximately $3,700. These operating leases will commence during 2021 |
Schedule of Supplemental Cash Flow Information | f. The following table presents supplemental cash flow information related to the lease costs for operating leases: December 31, 2020 December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows for operating leases $ 16,100 $ 14,432 Right-of-use assets obtained in exchange for new operating lease liabilities: Operating leases $ 64,901 $ 82,185 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Cumulative Product claims Activity | A summary of bodily injury claims activity follows: Year ended December 31, 2020 2019 2018 Outstanding claims, January 1, 156 131 105 New claims 38 45 54 Settled and dismissed claims (21 ) (20 ) (28 ) Outstanding claims, December 31 (*), (**) 173 156 131 *) Not including the legal proceedings in Australia. **) In 2020, representing 138 injured persons. |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of 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, 2020 2019 Deferred tax assets: Goodwill and Intangible assets $ 327 $ 358 Other temporary differences (1) 14,300 8,664 Temporary differences related to inventory (2) 6,083 6,962 Carryforward losses, deductions and credits (3) 1,102 868 Less-valuation allowance (1,102 ) (822 ) Total deferred tax assets 20,710 16,030 Deferred tax liabilities: Property and equipment (9,143 ) (8,149 ) Intangible liabilities (6,504 ) - Other temporary differences (3,648 ) - Total deferred tax liabilities (19,295 ) (8,149 ) Deferred tax assets, net $ 1,415 $ 7,881 (1) Deriving mainly from provision for labor related and warranty provision. The increase mainly related to provision for loss contingencies and lease accounting in accordance with ASC842 |
Reconciliation of Effective Tax Rate to Statutory Tax Rate | d. A reconciliation of the Company's effective tax rate to the statutory tax rate in Israel is as follows: Year ended December 31, 2020 2019 2018 Income before taxes on income $ 12,322 $ 19,105 $ 29,128 Statutory tax rate in Israel 23 % 23 % 23 % Income taxes at statutory rate $ 2,834 $ 4,394 $ 6,699 Increase (decrease) in tax expenses resulting from: Tax benefit arising from reduced rate as an "Preferred Enterprise" (120 ) (2,646 ) (2,527 ) Non-deductible expenses, net 1,764 2,025 701 Increase (decrease) in taxes from prior years, also related to settlement with tax authorities (868 ) 707 (670 ) Tax adjustment in respect of foreign subsidiaries' different tax rates (251 ) 772 (453 ) Uncertain tax position 1,659 1,037 482 Changes in valuation allowance (280 ) 112 184 Others (38 ) (158 ) 144 Income tax expense $ 4,700 $ 6,243 $ 4,560 Effective tax rate 38 % 33 % 16 % Per share amounts (basic and diluted) of the tax benefit resulting from an "Preferred Enterprise" $ (0.00 ) $ (0.08 ) $ (0.07 ) |
Schedule of Income before Taxes on Income | e. Income before taxes on income is comprised as follows: Year ended December 31, 2020 2019 2018 Domestic $ 12,859 $ 5,329 $ 18,424 Foreign (537 ) 13,776 10,704 $ 12,322 $ 19,105 $ 29,128 |
Schedule of Tax Expenses on Income | f. Tax expenses on income are comprised as follows: Year ended December 31, 2020 2019 2018 Current taxes $ 5,597 $ 7,752 $ 7,624 Deferred taxes (897 ) (1,509 ) (3,064 ) $ 4,700 $ 6,243 $ 4,560 Domestic $ 3,886 $ 2,874 $ 2,726 Foreign 814 3,369 1,834 $ 4,700 $ 6,243 $ 4,560 |
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, 2018 $ 2,737 Increase in tax positions for current year 482 Increase in tax position of prior years 657 Gross tax liabilities at December 31, 2018 3,876 Increase in tax positions for current year 1,037 Gross tax liabilities at December 31, 2019 4,913 Increase in tax positions for current year 1,659 Addition of tax position of prior years 118 Decrease in tax position resulting from settlement (3,027 ) Gross tax liabilities at December 31, 2020 $ 3,663 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Capital | a. The Company's share capital consisted of the following as of December 31, 2020 and 2019: Authorized Outstanding December 31, December 31, 2020 2019 2020 2019 Number of shares Ordinary shares of NIS 0.04 par value each 200,000,000 200,000,000 34,437,296 34,397,776 |
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, 2020: Number of options Weighted average exercise price Aggregate intrinsic value Outstanding - beginning of the year 1,410,750 19.16 776 Granted 141,500 11.42 Exercised - - Forfeited 137,750 19.21 Outstanding - end of the year 1,414,500 18.11 257 Options exercisable at the end of the year 645,750 22.32 24 Vested and expected to vest 1,414,500 18.11 257 |
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, 2020: Number of RSUs Weighted average fair value Aggregate intrinsic value Outstanding - beginning of the year 120,786 16.90 1,556 Granted 11,100 11.21 Exercised (39,520 ) 19.23 Forfeited (7,642 ) 14.55 Outstanding - end of the year 84,724 15.30 1,091 RSUs exercisable at the end of the year - - - Vested and expected to vest 84,724 15.30 1,091 |
Schedule of Awards Outstanding | The awards outstanding as of December 31, 2020 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) 84,724 5.28 $ 0.01 - - - $ 10.4-14.5 566,500 5.48 $ 13.02 140,625 4.91 13.33 $ 15.3-17.7 520,500 5.16 $ 15.60 213,625 5.05 15.59 $ 20.2-30.0 165,500 3.59 $ 27.24 129,500 3.55 27.73 $ 30.1-42.2 162,000 1.93 $ 34.69 162,000 1.93 34.69 1,499,224 645,750 |
Schedule of Compensation Expenses | Compensation expenses related to options and RSUs granted were recorded in the consolidated statements of operations, as follows: December 31, 2020 2019 Cost of revenues $ 416 $ 284 Research and development expenses 176 173 Marketing and selling expenses 465 315 General and administrative expenses 1,801 2,860 Total $ 2,858 $ 3,632 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Maturity of Debt Obligations | The financing liability of land from a related party mature as follows, as of December 31, 2020: 2021 853 2022 7,272 8,125 |
Schedule of Transactions and Balances with Related Party and Other Loan | 1. The Company has, from time to time, entered into transactions with its shareholders (the Kibbutz). The Year ended December 31, 2020 2019 2018 Cost of revenues $ 7,200 $ 6,890 $ 6,607 Research and development $ 406 $ 301 $ 185 Selling and marketing $ 638 $ 708 $ 779 General and administrative $ 913 $ 1,283 $ 1,341 Finance expenses, net $ 491 $ 511 $ 531 2. Balances with related party and other loan: December 31, 2020 2019 Financing liability of land from related party- current maturities (1) $ 1,746 $ 1,736 Long-term financing liability of land from a related party (1) $ 6,723 $ 6,994 Other loans (2) $ 4,440 $ 921 (1) 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 6.28% and is subject to adjustment for increases in the Israeli consumer price index. F - 71 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Cont.) 2. Balances with related party and other loan (Cont.): (2) Other loans: a. On January 17, 2011 a loan of 4 million Canadian dollars was made to Caesarstone Canada Inc. by its shareholders at that time CIOT and the Company, on a pro rata basis. Although the Company acquired CIOT ownership interest in Caesarstone Canada Inc. during December, 2018, the loan continues to bear interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25% (See also note 1e). The interest accrued on the loan is payable on a quarterly basis. Such loan is repaid in three equal annual installments commencing 2020. b. As part of the liabilities assumed in the acquisition of Lioli’s majority holdings the Company also assumed a shareholders loan and as of December 31, 2020 such loan is in the amount of approximately $3,969. Subject to certain conditions and regulatory approvals to be met by Lioli, the Company will have to transfer a loan in accordance with its holdings to replace current loan. Such loan will be repaid after 5 years from closing or extended period based on mutual agreement. The interest on such loan is Libor plus 4.5% |
LONG-TERM BANK LOAN (Tables)
LONG-TERM BANK LOAN (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Bank Loan | b. Repayment schedule in the table below are the future scheduled dates for repayment of the long-term loan: December 31, 2021 $ 1,639 2022 1,788 2023 1,994 2024 2,175 2025 and thereafter 3,586 Total $ 11,182 |
MAJOR CUSTOMER AND GEOGRAPHIC_2
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenues | The following table presents total revenues for the years ended December 31, 2020, 2019 and 2018, respectively: Year ended December 31, 2020 2019 2018 USA $ 207,496 $ 250,471 $ 239,241 Canada 72,492 85,979 99,679 Latin America 2,149 4,115 5,397 Australia 103,587 108,149 131,085 Asia 14,566 15,514 17,715 EMEA 45,201 43,054 42,861 Israel 40,921 38,692 39,893 $ 486,412 $ 545,974 $ 575,871 |
Schedule of Long-Lived Assets | b. The following table presents total long-lived assets as of December 31, 2020 and 2019: December 31, 2020 2019 USA $ 167,370 $ 118,458 Canada 5,384 5,676 Australia 14,947 7,669 Asia 29,955 400 EMEA 8,398 8,583 Israel 132,855 136,037 $ 358,909 $ 276,823 |
SELECTED SUPPLEMENTARY STATEM_2
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Income Statement Elements [Abstract] | |
Schedule of Financial and Other Income (Expenses), Net | a. Finance expense, net: Year ended December 31, 2020 2019 2018 Finance expenses: Interest in respect of short-term loans, credit cards and bank fees $ 3,254 $ 3,342 $ 3,591 Interest in respect of loans to related parties 1,053 568 585 Amortization/accretion of premium/discount on marketable securities 161 - - Realized gain/loss from marketable securities 11 - - Changes in derivatives fair value 3,427 - 193 Foreign exchange transactions losses 7,128 6,578 6,259 15,034 10,488 10,628 Finance income: Interest in respect of cash and cash equivalent and short-term bank deposits 657 1,018 1,472 Changes in derivatives fair value - 33 - Interest income from marketable securities 213 - - Foreign exchange transactions gains 3,965 3,859 5,517 4,835 4,910 6,989 Finance expenses, net $ 10,199 $ 5,578 $ 3,639 |
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, 2020 2019 2018 Net income attributable to controlling interest, as reported $ 7,218 $ 12,862 $ 24,405 Adjustment to redemption value of non-controlling interest - - 203 Numerator for basic and diluted net income per share $ 7,218 $ 12,862 $ 24,608 F - 74 CAESARSTONE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 17:- SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Cont.) Denominator: Year ended December 31, 2020 2019 2018 Denominator for basic income per share 34,419 34,384 34,358 Effect of dilutive stock based awards 55 76 51 Denominator for diluted income per share 34,474 34,460 34,409 Earnings per share: Basic and diluted earnings per share $ 0.21 $ 0.37 $ 0.72 |
GENERAL (Acquisition of Lioli C
GENERAL (Acquisition of Lioli Ceramica Pvt Ltd) (Details) $ in Thousands | Oct. 05, 2020USD ($) | Dec. 31, 2020countries |
Business Acquisition [Line Items] | ||
Number of countries in which entity sells products | countries | 50 | |
Lioli Ceramica Pvt Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Ownership interest, percentage | 55.00% | |
Net consideration | $ 13,574 | |
Contingent consideration | 10,000 | |
Fair value of contingent consideration | $ 1,492 | |
Percentage of non-controlling interests | 45.00% | |
Fair value of non-controlling interests | $ 7,269 | |
Fair value of inventory process in finished | 1,063 | |
Fair value of land | $ 10,750 | |
Percentage of shareholders loan | 55.00% | |
Acquisition costs | $ 545 | |
Lioli Ceramica Pvt Ltd [Member] | Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Useful life | 5 years |
GENERAL (Schedule of Purchase P
GENERAL (Schedule of Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Oct. 05, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Identifiable intangible assets: | |||||
Goodwill | $ 47,472 | $ 35,218 | $ 35,283 | ||
Lioli Ceramica Pvt Ltd [Member] | |||||
Components of Purchase Price: | |||||
Cash | $ 10,197 | ||||
Lioli's minority shareholders loan assumed | 1,950 | ||||
Contingent consideration | 1,492 | ||||
Total purchase price | 13,639 | ||||
Less: Cash acquired | 65 | ||||
Net for allocation | 13,574 | ||||
Net tangible assets (liabilities): | |||||
Trade receivables, net | 4,729 | ||||
Prepaid expenses and other current assets | 1,133 | ||||
Inventories, net | [1] | 7,488 | |||
Property, plant and equipment, net | [2] | 26,937 | |||
Other non-current assets | 20 | ||||
Trade payables | (5,007) | ||||
Loans (net of Lioli's minority sharolders loan assumed) | [3] | (14,083) | |||
Accrued expenses and other current liabilities | (2,969) | ||||
Other non-current liabilities | (4,295) | ||||
Total net tangible assets | 13,953 | ||||
Identifiable intangible assets: | |||||
Customer relationships | [4] | 2,049 | |||
Deferred tax liabilities | (597) | ||||
Total identifiable intangible assets acquired | 1,452 | ||||
Goodwill | [5] | 5,438 | |||
Non-controlling interests | (7,269) | ||||
Total purchase price allocation | $ 13,574 | ||||
Omicron Acquisition [Member] | |||||
Components of Purchase Price: | |||||
Total purchase price | 18,862 | ||||
Less: Cash acquired | 32 | ||||
Net for allocation | 18,830 | ||||
Net tangible assets (liabilities): | |||||
Trade receivables, net | 6,178 | ||||
Prepaid expenses and other current assets | 787 | ||||
Inventories, net | 19,462 | ||||
Property, plant and equipment, net | 75 | ||||
ROU assets and others | 22,978 | ||||
Trade payables | (9,722) | ||||
Short-term lease liability | (3,567) | ||||
Short-term loan, accrued expenses and other current liabilities | (10,430) | ||||
Long-term lease and other non-current liabilities | (19,369) | ||||
Total net tangible assets | 6,392 | ||||
Identifiable intangible assets: | |||||
Customer relationships | [6] | 10,144 | |||
Deferred tax liabilities | (2,637) | ||||
Total identifiable intangible assets acquired | 7,507 | ||||
Goodwill | [5] | 4,931 | |||
Total purchase price allocation | $ 18,830 | ||||
[1] | Including additional $1,063 fair value to bring the inventory in process to its finished good stage value. Amortization period is through two quarters in accordance with the average inventory turnovers using the straight-line method. | ||||
[2] | Including additional $10,750 land and buildings fair value in accordance with a third-party appraiser. | ||||
[3] | As of October 5, 2020 Lioli had a loan from its minority shareholders (the "shareholders loan"), which included in the acquired net tangible assets. According to term of the transaction the Company will assume 55% of the shareholders loan. The assumed shareholders loan is included in the total purchase price and excluded from the loan balance in accordance to ASC 805 requirements. | ||||
[4] | Customer relationships represent the underlying relationships and agreements with Lioli's customer base. In assessing the value of the Customer Relationships, the Company used an income approach method. The Customer Relationships’ economic useful life is estimated at approximately 5 years, amortized using the straight-line method. | ||||
[5] | The goodwill is primarily attributable to expected synergies resulting from the acquisition. | ||||
[6] | Customer relationships represent the underlying relationships and agreements with Omicron's customer base. In |
GENERAL (Acquisition of Omicron
GENERAL (Acquisition of Omicron Supplies, LLC) (Details) - Omicron Acquisition [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Business Acquisition [Line Items] | |
Ownership interest, percentage | 100.00% |
Net consideration | $ 18,830 |
Acquisition costs | $ 376 |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Useful life | 5 years |
GENERAL (Major suppliers) (Deta
GENERAL (Major suppliers) (Details) - Cost of Goods, Total [Member] - Supplier Concentration Risk [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 67.00% |
Mikroman [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 35.00% |
Quartz purchases from single vendor as a percentage of total quartz purchases of the Company | 23.00% |
Polat [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 35.00% |
Quartz purchases from single vendor as a percentage of total quartz purchases of the Company | 23.00% |
GENERAL (Caesarstone Canada, In
GENERAL (Caesarstone Canada, Inc) (Details) - Caesarstone Canada Inc [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2010 | Dec. 31, 2020 | |
Ownership interest, percentage | 45.00% | |
Purchase price | $ 20,119 | |
CAD [Member] | ||
Purchase price | $ 27,300 | |
Maximum [Member] | ||
Exercisable period | Jul. 1, 2023 | |
Ownership interest, percentage | 100.00% | |
Minimum [Member] | ||
Exercisable period | Jul. 1, 2012 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Derivatives) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives, Fair Value [Line Items] | |||
Unrealized loss recorded in accumulated other comprehensive income (loss) | $ (497) | ||
Derivative Assets | $ 62 | ||
Derivative Liabilities | (3,791) | (425) | |
Gain (loss) recognized in other comprehensive income (loss), net | 497 | ||
Gain (loss) recognized in statements of income | (464) | 3,837 | |
Foreign Exchange Forward Contracts [Member] | Designated As Hedging [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recognized in other comprehensive income (loss), net | 497 | ||
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 | 2,406 | 1,716 | |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount | 100,981 | 36,608 | |
Gain (loss) recognized in other comprehensive income (loss), net | |||
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 | (750) | 2,121 | |
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 | (2,120) | ||
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Accounts Receivable and Prepaid Expenses [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 62 | ||
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | (3,582) | (425) | |
Styrene forward contract [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recognized in other comprehensive income (loss), net | |||
Styrene forward contract [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | $ (209) |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) - Inventory Valuation Reserve [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at the beginning of the year | $ 18,226 | $ 15,551 |
Assumed from business combination | 1,405 | |
Increase in inventory provision | 4,305 | 9,983 |
Write off | (7,329) | (7,308) |
Balance at end of the year | $ 16,607 | $ 18,226 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Property, plant and equipment, net) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Machinery and Manufacturing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 10.00% |
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] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 7.00% |
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] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 20.00% |
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% |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation (in percent) | 4.00% |
Building [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 POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (lease) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 |
Accounting Policies [Abstract] | |||
Operating lease right-of-use assets | $ 123,928 | $ 72,047 | $ 73,366 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Warranty) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
January 1, | $ 2,916 | $ 2,820 |
Charged to costs and expenses relating to new sales | 1,281 | 1,879 |
Costs of product warranty claims | (1,459) | (1,734) |
Foreign currency translation adjustments | (159) | (49) |
December 31, | $ 2,579 | $ 2,916 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Other Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Advertising expenses: | |||
Advertising expenses | $ 14,457 | $ 16,233 | $ 20,848 |
Severance pay: | |||
Severance pay expense | $ 2,292 | $ 2,189 | $ 2,048 |
Basic and diluted net income per share: | |||
Anti-dilutive stock options excluded from the calculations of Diluted EPS | 1,414,812 | 1,244,500 | 1,272,781 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES (Concentrations of credit risk) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
January 1, | $ 2,497 | $ 1,247 |
Charges to expenses | 3,142 | 2,100 |
Write offs | (984) | (864) |
Assumed from business combinations | 2,066 | |
Foreign currency translation adjustments | 62 | 14 |
December 31, | $ 6,783 | $ 2,497 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES (Fair value of financial instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Derivative assets | $ 62 | |
Liabilities | ||
Derivative liabilities | 3,791 | 425 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Money market mutual funds [Member] | ||
Assets | ||
Cash equivalents | 1,011 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Assets | ||
Derivative assets | 62 | |
Liabilities | ||
Derivative liabilities | (3,791) | (425) |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate bonds [Member] | ||
Assets | ||
Short-term marketable securities | 7,607 | |
Long-term marketable securities | 10,434 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Governmental bonds [Member] | ||
Assets | ||
Short-term marketable securities | 505 | |
Long-term marketable securities | 492 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Liabilities | ||
Contingent Consideration | $ 1,492 |
SIGNIFICANT ACCOUNTING POLIC_12
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income loss, net | $ 487,350 | $ 477,724 | $ 466,501 | $ 469,895 | |
Accumulated gain on maketable secutritites [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income loss, net | 13 | ||||
Accumulated Foreign Currency Translation Differences [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income loss, net | 1,070 | (3,288) | (2,680) | ||
Accumulated other comprehensive income (loss), net [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income loss, net | [1] | $ 1,083 | $ (3,288) | $ (3,177) | $ 683 |
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation, hedging transactions and marketable securities. |
SIGNIFICANT ACCOUNTING POLIC_13
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Changes in Accumulated Balances of Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | $ 477,724 | $ 466,501 | $ 469,895 | |
Total other comprehensive income (loss), net of tax | 4,399 | (111) | (4,791) | |
Balance | 487,350 | 477,724 | 466,501 | |
Accumulated losses on maketable secutritites [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | ||||
Other comprehensive income (loss) before reclassifications | 13 | |||
Amounts reclassified from AOCI | ||||
Total other comprehensive income (loss), net of tax | 13 | |||
Balance | 13 | |||
Accumulated Foreign Currency Translation Differences [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | (3,288) | (2,680) | ||
Other comprehensive income (loss) before reclassifications | 4,358 | (608) | ||
Amounts reclassified from AOCI | ||||
Total other comprehensive income (loss), net of tax | 4,358 | (608) | ||
Balance | 1,070 | (3,288) | (2,680) | |
Accumulated other comprehensive income (loss), net [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | [1] | (3,288) | (3,177) | 683 |
Other comprehensive income (loss) before reclassifications | 6,777 | 1,605 | ||
Amounts reclassified from AOCI | (2,406) | (1,716) | ||
Total other comprehensive income (loss), net of tax | 4,371 | (111) | ||
Balance | [1] | 1,083 | (3,288) | (3,177) |
Accumulated losses on derivative instruments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance | (497) | |||
Other comprehensive income (loss) before reclassifications | 2,406 | 2,213 | ||
Amounts reclassified from AOCI | (2,406) | (1,716) | ||
Total other comprehensive income (loss), net of tax | 497 | |||
Balance | $ (497) | |||
[1] | Accumulated other comprehensive income (loss), net, comprised of foreign currency translation, hedging transactions and marketable securities. |
SIGNIFICANT ACCOUNTING POLIC_14
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Losses Reclassified Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of revenues | $ 352,470 | $ 397,335 | $ 412,457 |
Research and development | 3,974 | 4,146 | 3,635 |
Marketing and selling | 62,047 | 66,770 | 74,786 |
General and administrative | 39,081 | 40,681 | 43,323 |
Total gain | (7,622) | (12,862) | $ (24,568) |
Reclassification of AOCI [Member] | Accumulated losses on derivative instruments [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of revenues | 1,857 | 1,328 | |
Research and development | 61 | 40 | |
Marketing and selling | 217 | 161 | |
General and administrative | 271 | 187 | |
Total gain | $ 2,406 | $ 1,716 |
SIGNIFICANT ACCOUNTING POLIC_15
SIGNIFICANT ACCOUNTING POLICIES (Accounting for stock-based compensation) (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
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: | ||
Expected volatility | 46.00% | 47.40% |
Risk-free interest rate | 0.70% | 1.90% |
Expected life (years) | 5 years 1 month 6 days | 4 years 3 months 18 days |
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: | ||
Dividend yield | 0.00% | 0.00% |
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: | ||
Dividend yield | 3.00% | 3.00% |
Vesting period | 4 years | |
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 POLIC_16
SIGNIFICANT ACCOUNTING POLICIES (Redeemable Non-Controlling Interest) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning of the year | $ 16,481 | |||
Assuming the non controlling interest due to acquisition | 7,269 | |||
Net income attributable to non-controlling interest | 404 | 163 | ||
Dividend paid | [1] | (978) | ||
Adjustment to redemption value | (203) | |||
Foreign currency translation adjustments | 28 | (931) | ||
Adjustment to Call option value | [2] | 5,587 | ||
Call option exercise | [2] | 20,119 | ||
Redeemable non-controlling interest-end of the year | $ 7,701 | |||
Canadian Quartz Holdings Inc. [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Equity interest held by CIOT | 45.00% | |||
[1] | In 2018 dividend payment was made by Company’s subsidiary Caesarstone Canada Inc. and reflects the amount paid to the non-controlling interest holders. | |||
[2] | See also Note 1e. |
MARKETABLE SECURITIES (Summary
MARKETABLE SECURITIES (Summary of Available-for-sale Marketable Securities) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |
Amortized cost, within one year | $ 8,074 |
Gross unrealized gains, within one year | 2 |
Gross unrealized losses, within one year | 2 |
Accrued Interest, within one year | 38 |
Fair value, within one year | 8,112 |
Amortized cost, after one year | 10,836 |
Gross unrealized gains, after one year | 15 |
Gross unrealized losses, after one year | 2 |
Accrued Interest, after one year | 77 |
Fair value, after one year | 10,926 |
Available-for-sale marketable securities: | |
Amortized cost | 18,910 |
Gross unrealized gains | 17 |
Gross unrealized losses | 4 |
Accrued Interest | 115 |
Fair value | 19,038 |
Corporate bonds [Member] | |
Debt Securities, Available-for-sale [Line Items] | |
Amortized cost, within one year | 7,570 |
Gross unrealized gains, within one year | 2 |
Gross unrealized losses, within one year | 2 |
Accrued Interest, within one year | 37 |
Fair value, within one year | 7,607 |
Amortized cost, after one year | 10,353 |
Gross unrealized gains, after one year | 13 |
Gross unrealized losses, after one year | 2 |
Accrued Interest, after one year | 70 |
Fair value, after one year | 10,434 |
Governmental bonds [Member] | |
Debt Securities, Available-for-sale [Line Items] | |
Amortized cost, within one year | 504 |
Gross unrealized gains, within one year | |
Gross unrealized losses, within one year | |
Accrued Interest, within one year | 1 |
Fair value, within one year | 505 |
Amortized cost, after one year | 483 |
Gross unrealized gains, after one year | 2 |
Gross unrealized losses, after one year | |
Accrued Interest, after one year | 7 |
Fair value, after one year | $ 492 |
OTHER ACCOUNTS RECEIVABLE AND_3
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Schedule of Other Accounts Receivable and Prepaid Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid expenses | $ 5,567 | $ 3,876 | |
Government authorities | 8,176 | 15,850 | |
Advances to suppliers | 4,843 | 4,315 | |
Derivatives | 62 | ||
Other receivables | [1] | 7,895 | 9,963 |
Other accounts receivables and prepaid expenses | $ 26,481 | $ 34,066 | |
[1] | Including mainly insurance receivables, see also note 11. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 23,023 | $ 21,410 |
Work-in-progress | 1,534 | 1,726 |
Finished goods | 127,516 | 99,550 |
Inventories | $ 152,073 | $ 122,686 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Property, Plant and Equipment [Line Items] | ||||
Cost | $ 476,319 | $ 420,909 | ||
Accumulated depreciation | 253,436 | 216,133 | ||
Depreciated cost | 222,883 | 204,776 | ||
Amortization cost | 1,200 | |||
Depreciation expense | 28,829 | 28,587 | $ 26,350 | |
Machinery and Manufacturing Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | [1] | 304,679 | 276,222 | |
Accumulated depreciation | 185,133 | 159,351 | ||
Investment grants received | 8,420 | |||
Office Equipment and Furniture [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 26,807 | 21,933 | ||
Accumulated depreciation | 18,571 | 16,087 | ||
Motor Vehicles [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 4,533 | 2,263 | ||
Accumulated depreciation | 3,362 | 1,356 | ||
Buildings and Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 139,361 | 119,552 | ||
Accumulated depreciation | 46,226 | 39,205 | ||
Prepaid Expenses Related to Operating Lease [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | [2] | 939 | 939 | |
Accumulated depreciation | $ 144 | $ 134 | ||
Operating lease term | 49 years | |||
Operating lease renewal term | 49 years | |||
[1] | Presented net of investment grants received in the total amount of $8,420. | |||
[2] | Until 2012, the Company leased land from the Israel Lands Administration ("ILA") for its Bar-Lev manufacturing facility. The lease term started on February 6, 2005. The lease is for an initial non-cancellable term of 49 years, with a renewal option of an additional 49 years. All payments on account of the initial term were paid in advance (based on discounted values) at the beginning of the lease, and included in the minimum lease payments to be amortized. The prepaid expenses are amortized through the term of the lease, based on the straight-line method (including the bargain renewal option term). See also Note 14d. |
GOODWILL AND INTANGIBLES (Detai
GOODWILL AND INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
GOODWILL [Abstract] | |||
Beginning balance | $ 35,218 | $ 35,283 | |
Acquired through business combination | [1] | 10,619 | |
Foreign currency translation adjustments | 1,635 | (65) | |
Ending balance | $ 47,472 | $ 35,218 | |
[1] | Deriving from Lioli and Omicron acquisitions (see also Note 1(b) and 1(c)) |
GOODWILL AND INTANGIBLES (Sched
GOODWILL AND INTANGIBLES (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Foreign currency translation adjustment | $ 7 | |
Total intangibles assets | 12,098 | |
Customer Relationships [Member] | ||
Original amounts | 12,193 | |
Accumulated amortization | $ (102) |
GOODWILL AND INTANGIBLES (Sch_2
GOODWILL AND INTANGIBLES (Schedule of Estimated Amortization Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
GOODWILL [Abstract] | ||
2021 | $ 2,439 | |
2022 | 2,439 | |
2023 | 2,439 | |
2024 | 2,439 | |
2025 | 2,342 | |
Total | $ 12,098 |
SHORT-TERM BANK CREDIT AND CU_3
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOAN (Details) ₨ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020INR (₨) | Dec. 31, 2019USD ($) | Dec. 31, 2019INR (₨) | |
Short-term Debt [Line Items] | ||||
Short-term bank credit | $ 8,326 | |||
Current maturities of Long- term bank loan and other | $ 1,639 | |||
Weighted average interest | ||||
Short-term bank credit | 3.30% | 3.30% | ||
Short-term and revolving credit lines | $ 18,187 | $ 207 | ||
Total short-term bank credit and loans | $ 11,142 | 0 | ||
Rupees [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term bank credit | ₨ | ₨ 2,816 | |||
Current maturities of Long- term bank loan and other | ₨ 1,980 | |||
Weighted average interest | ||||
Short-term bank credit | 12.60% | 12.60% | ||
Current maturities of long-term loans | 12.60% | 12.60% | ||
Israel [Member] | ||||
Weighted average interest | ||||
Short-term and revolving credit lines, expiration date | Dec. 31, 2020 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Employees and payroll accruals | $ 13,414 | $ 15,690 |
Accrued expenses | 7,855 | 5,871 |
Advances from customers | 959 | 377 |
Taxes payable | 6,291 | 6,753 |
Warranty provision | 1,305 | 1,531 |
Derivatives | 3,791 | 425 |
Sales return provision | 567 | 797 |
Contingent consideration liability and other | 2,534 | 8 |
Accrued expenses and other liabilities | 55,570 | 42,782 |
Accrued expenses and other liabilities [Member] | ||
Operating lease liability short-term | $ 18,854 | $ 11,330 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease payments | $ 3,700 |
Lease commenced date | Dec. 31, 2021 |
Sublease rental payments | $ 1,850 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating lease term remaining | 5 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating lease term remaining | 15 years |
LEASES (Schedule of Lease-Relat
LEASES (Schedule of Lease-Related Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 123,928 | $ 72,047 | $ 73,366 |
Long-term lease liabilities | 112,719 | 64,638 | |
Total lease liabilities | $ 131,573 | $ 75,968 | |
Weighted average remaining lease term (years) | 8 years 11 months 26 days | 9 years 2 months 15 days | |
Weighted average discount rate | 4.03% | 3.51% | |
Accrued expenses and other liabilities [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Current lease liabilities Accrued expenses and other liabilities | $ 18,854 | $ 11,330 |
LEASES (Schedule of Components
LEASES (Schedule of Components of Operating Lease Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease cost: | ||
Operating lease expense | $ 16,388 | $ 14,540 |
Variable lease expense | 4,126 | 2,774 |
Short-term lease expense | 158 | 2,787 |
Sublease income | (776) | (673) |
Total operating lease cost | $ 19,896 | $ 19,428 |
LEASES (Schedule of Operating L
LEASES (Schedule of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |||
2021 | $ 22,791 | ||
2022 | 20,864 | ||
2023 | 17,103 | ||
2024 | 14,781 | ||
2025 | 13,399 | ||
2026 and thereafter | 64,496 | ||
Total future lease payments | [1],[2] | 153,434 | |
Less imputed interest | (21,861) | ||
Total | $ 131,573 | $ 75,968 | |
[1] | As of December 31, 2020, the Company has additional operating lease payments, not included in the table above, that have not yet commenced of approximately $3,700. These operating leases will commence during 2021 | ||
[2] | Total lease payments have not been reduced by sublease rental payments of approximately $1,850 due in the future under non-cancelable subleases. |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 16,100 | $ 14,432 |
Right-of-use assets obtained in exchange for new operating lease liabilities: | ||
Operating leases | $ 64,901 | $ 82,185 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Legal proceedings and contingencies) (Details) $ in Thousands, € in Millions, ₪ in Millions, ₨ in Millions, R in Millions | Jan. 15, 2021USD ($) | Jan. 15, 2021EUR (€) | Jan. 04, 2018USD ($) | Jan. 04, 2018ILS (₪) | Nov. 30, 2019 | Jan. 17, 2018USD ($) | Jan. 17, 2018ILS (₪) | Dec. 31, 2020USD ($)claims | Dec. 31, 2019USD ($)claims | Dec. 31, 2018USD ($)claims | Dec. 31, 2018EUR (€)claims | Dec. 31, 2020INR (₨) | Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Jun. 30, 2016ZAR (R) | Oct. 31, 2015USD ($) | Oct. 31, 2015EUR (€) | Oct. 31, 2015ZAR (R) | 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 | $ 6,319 | $ 12,359 | $ 8,903 | |||||||||||||||||||||||||
Loss contingency liability, current | 31,039 | 28,300 | ||||||||||||||||||||||||||
Loss contingency liability, non-current | 21,910 | 21,505 | ||||||||||||||||||||||||||
Non-current insurance receivable | 3,837 | $ 3,176 | ||||||||||||||||||||||||||
Settlement amount for claims | $ 2,799 | $ 13,900 | ||||||||||||||||||||||||||
Lawsuit claim amount | $ 6,640 | |||||||||||||||||||||||||||
Percentage of cost of arbitration | 80.00% | |||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Settlement amount for claims | $ 890,000 | |||||||||||||||||||||||||||
USA [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Insurance receivable | 20,000 | |||||||||||||||||||||||||||
Canada [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Insurance receivable | 20,000 | |||||||||||||||||||||||||||
Australia [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Insurance receivable | 50,000 | |||||||||||||||||||||||||||
India [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Insurance receivable | $ 600 | |||||||||||||||||||||||||||
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 | 173 | |||||||||||||||||||||||||||
Individual Claims [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Number of claims filed | claims | 172 | |||||||||||||||||||||||||||
Motion to be recognized as a class action Claims [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Number of claims filed | claims | 13 | |||||||||||||||||||||||||||
New Silicosis Claim [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Number of claims filed | claims | 38 | 45 | 54 | 54 | ||||||||||||||||||||||||
Estimate of possible loss | $ 56,180 | |||||||||||||||||||||||||||
Legal settelments and loss contingencies | $ 5,299 | $ 7,258 | ||||||||||||||||||||||||||
Loss contingency liability | 42,345 | 39,172 | ||||||||||||||||||||||||||
Loss contingency liability, current | 20,435 | 17,667 | ||||||||||||||||||||||||||
Loss contingency liability, non-current | 21,910 | 21,505 | ||||||||||||||||||||||||||
Insurance receivable | 7,958 | 9,517 | ||||||||||||||||||||||||||
Current insurance receivable | 6,283 | 6,340 | ||||||||||||||||||||||||||
Non-current insurance receivable | 1,675 | $ 3,176 | ||||||||||||||||||||||||||
Amount Israel insurance policy covers, minimum | 20,000 | |||||||||||||||||||||||||||
Amount Israel insurance policy covers, maximum | $ 35,000 | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Settlement amount for claims | ₪ | ₪ 9 | ₪ 48.2 | ||||||||||||||||||||||||||
ILS [Member] | New Silicosis Claim [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 216 | |||||||||||||||||||||||||||
ILS [Member] | Breach of Contract Lawsuit Filed by Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 232.8 | |||||||||||||||||||||||||||
ILS [Member] | Breach of Contract Lawsuit Filed Against Microgil and Kfar Giladi Quarries [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | ₪ | ₪ 76.6 | |||||||||||||||||||||||||||
Euro [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | € | € 15.7 | |||||||||||||||||||||||||||
Lawsuit claim amount | € | € 5.8 | |||||||||||||||||||||||||||
Euro [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Settlement amount for claims | € | € 7.2 | |||||||||||||||||||||||||||
Euro [Member] | Breach of Contract with Agent [Member] | Europe [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | € | € 6.2 | € 7.1 | ||||||||||||||||||||||||||
South African Rand [Member] | Breach of Contract with Agent [Member] | South Africa [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Estimate of possible loss | R | R 51.2 | R 43.7 | ||||||||||||||||||||||||||
Rupees [Member] | India [Member] | ||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||
Insurance receivable | ₨ | ₨ 40 |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES (Summary Of Cumulative product Claims Activity) (Details) - New Silicosis Claim [Member] - claims | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Loss Contingency Pending Claims Numer Roll Forward | ||||
Outstanding claims, January 1 | [1],[2] | 156 | 131 | 105 |
New claims | 38 | 45 | 54 | |
Settled and dismissed claims | (21) | (20) | (28) | |
Outstanding claims, December 31 | [1],[2] | 173 | 156 | 131 |
[1] | In 2020, representing 138 injured persons. | |||
[2] | Not including the legal proceedings in Australia. |
COMMITMENTS AND CONTINGENT LI_5
COMMITMENTS AND CONTINGENT LIABILITIES (Purchase obligation) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligation for 2021 | $ 27,732 |
COMMITMENTS AND CONTINGENT LI_6
COMMITMENTS AND CONTINGENT LIABILITIES (Guarantees and Obligations) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees outstanding | $ 3,550 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2014 | ||
Income Tax Contingency [Line Items] | ||||||
Liability for unrecognized tax benefits | $ 3,663 | $ 4,913 | ||||
Corporate tax rate | 23.00% | 23.00% | 23.00% | |||
Population of enterprise sales in a specific market | 14 million | |||||
Attributable to Approved Enterprise Programs [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Tax-exempt earnings | $ 24,065 | |||||
Tax liability, if distributed | 5,535 | |||||
Attributable to Beneficiary Enterprise Program [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Tax-exempt earnings | 18,805 | |||||
Tax liability, if distributed | $ 4,325 | |||||
Machinery and Manufacturing Equipment [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Accelerated depreciation rate | 200.00% | |||||
Building [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% | |||||
Maximum [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Percentage of industrial enterprise sales revenues | 75.00% | |||||
Development Area A [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 20.00% | |||||
Foreign residents from the preferred enterprise earnings [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 20.00% | |||||
Internal Revenue Service (IRS) [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 26.10% | |||||
Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | 2017 | |||||
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 | 2015 | |||||
Canada Revenue Agency [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 26.60% | |||||
Canada Revenue Agency [Member] | Earliest Tax Year [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | 2016 | |||||
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 | 2016 | |||||
England [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 19.00% | |||||
England [Member] | Earliest Tax Year [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | 2016 | |||||
India [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Corporate tax rate | 28.00% | |||||
India [Member] | Earliest Tax Year [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | 2018 | |||||
Israel Tax Authority [Member] | Earliest Tax Year [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | [1] | 2019 | ||||
[1] | During 2020 the Company’s Israeli tax return for the years 2015-2018 were examined and the examination’s results are reflected in its tax expenses. |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets | |||
Goodwill and Intangible assets | $ 327 | $ 358 | |
Other temporary differences | [1] | 14,300 | 8,664 |
Temporary differences related to inventory | [2] | 6,083 | 6,962 |
Carryforward losses, deductions and credits | 1,102 | 868 | |
Less-valuation allowance | (1,102) | (822) | |
Total deferred tax assets | 20,710 | 16,030 | |
Deferred tax liabilities | |||
Property and equipment | (9,143) | (8,149) | |
Intangible liabilities | (6,504) | ||
Other temporary differences | (3,648) | ||
Total deferred tax liabilities | (19,295) | (8,149) | |
Deferred tax assets, net | $ 1,415 | $ 7,881 | |
[1] | Deriving mainly from provision for labor related and warranty provision. The increase mainly related to provision for loss contingencies and lease accounting in accordance with ASC842 | ||
[2] | Deriving mainly from the provision for slow moving inventory and IRS section 263(a). |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income before taxes on income | $ 12,322 | $ 19,105 | $ 29,128 |
Statutory tax rate in Israel | 23.00% | 23.00% | 23.00% |
Income taxes at statutory rate | $ 2,834 | $ 4,394 | $ 6,699 |
Increase (decrease) in tax expenses resulting from: | |||
Tax benefit arising from reduced rate as an "Preferred Enterprise" | (120) | (2,646) | (2,527) |
Non-deductible expenses, net | 1,764 | 2,025 | 701 |
Increase (decrease) in taxes from prior years, also related to settlement with tax authorities | (868) | 707 | (670) |
Tax adjustment in respect of foreign subsidiaries' different tax rates | (251) | 772 | (453) |
Uncertain tax position | 1,659 | 1,037 | 482 |
Changes in valuation allowance | (280) | 112 | 184 |
Others | (38) | (158) | 144 |
Income tax expense | $ 4,700 | $ 6,243 | $ 4,560 |
Effective tax rate | 38.00% | 33.00% | 16.00% |
Per share amounts (basic and diluted) of the tax benefit resulting from an "Preferred Enterprise" | $ 0 | $ (0.08) | $ (0.07) |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 12,859 | $ 5,329 | $ 18,424 |
Foreign | (537) | 13,776 | 10,704 |
Income before taxes on income | $ 12,322 | $ 19,105 | $ 29,128 |
TAXES ON INCOME (Schedule of Ta
TAXES ON INCOME (Schedule of Tax Expenses on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | $ 5,597 | $ 7,752 | $ 7,624 |
Deferred taxes | (897) | (1,509) | (3,064) |
Income tax expense | 4,700 | 6,243 | 4,560 |
Domestic | 3,886 | 2,874 | 2,726 |
Foreign | 814 | 3,369 | 1,834 |
Taxes in respect of prior years | $ 4,700 | $ 6,243 | $ 4,560 |
TAXES ON INCOME (Reconciliati_2
TAXES ON INCOME (Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Gross tax liabilities, beginning balance | $ 4,913 | $ 3,876 | $ 2,737 |
Increase in tax positions for current year | 1,659 | 1,037 | 482 |
Increase in tax position of prior years | 657 | ||
Addition of tax position of prior years | 118 | ||
Decrease in tax position resulting from settlement | (3,027) | ||
Gross tax liabilities, ending balance | $ 3,663 | $ 4,913 | $ 3,876 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Share Capital) (Details) - ₪ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
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 | 34,437,296 | 34,397,776 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2021 | Sep. 17, 2020 | Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Dividends paid | $ 4,821 | $ 5,160 | $ 20,268 | |||
Percentage amount of reported net income attributable to controlling interest | 50.00% | |||||
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 | |||||
Pecentage of with withholding tax | 20.00% | |||||
Amount of request of payment | $ 11,000 | |||||
ILS [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Amount of request of payment | $ 38,000 | |||||
Subsequent Event [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Quarterly cash dividend paid per share | $ 0.10 | |||||
Percentage amount of reported net income attributable to controlling interest | 50.00% | |||||
Incentive Compensation Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of additional shares authorized | 1,000,000 | |||||
Number of ordinary shares registered under Plan | 2,500,000 | 3,275,000 | ||||
Options and restricted stock units outstanding | 1,499,224 | |||||
Ordinary shares reserved for issuance | 601,593 | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average grant-date fair value of options granted | $ 4.9 | $ 6.2 | $ 7.2 | |||
Weighted-average grant-date fair value of options vested | $ 8.32 | $ 14.18 | $ 12.95 | |||
Intrinsic value of options exercised | $ 0 | $ 35 | $ 0 | |||
Unrecognized compensation cost | $ 2,744 | |||||
Unrecognized compensation cost, weighted-average recognition period | 1 year 6 months | |||||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Quarterly cash dividend paid per share | $ 0.10 | |||||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Quarterly cash dividend paid per share | $ 0.15 |
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, 2020USD ($)$ / sharesshares | |
Number of options | |
Outstanding - beginning of the year | shares | 1,410,750 |
Granted | shares | 141,500 |
Exercised | shares | |
Forfeited | shares | 137,750 |
Outstanding - end of the year | shares | 1,414,500 |
Options exercisable at the end of the year | shares | 645,750 |
Vested and expected to vest | shares | 1,414,500 |
Weighted average exercise price | |
Outstanding - beginning of the year | $ / shares | $ 19.16 |
Granted | $ / shares | 11.42 |
Exercised | $ / shares | |
Forfeited | $ / shares | 19.21 |
Outstanding - end of the year | $ / shares | 18.11 |
Options exercisable at the end of the year | $ / shares | 22.32 |
Vested and expected to vest | $ / shares | $ 18.11 |
Aggregate intrinsic value | |
Outstanding - beginning of the year | $ | $ 776 |
Outstanding - end of the year | $ | 257 |
Options exercisable at the end of the year | $ | 24 |
Vested and expected to vest | $ | $ 257 |
SHAREHOLDERS' EQUITY (Summary_2
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, 2020USD ($)$ / sharesshares | |
Number of RSUs | |
Outstanding - beginning of the year | shares | 120,786 |
Granted | shares | 11,100 |
Exercised | shares | (39,520) |
Forfeited | shares | (7,642) |
Outstanding - end of the year | shares | 84,724 |
RSUs exercisable at the end of the year | shares | |
Vested and expected to vest | shares | 84,724 |
Weighted average fair value | |
Outstanding - beginning of the year | $ / shares | $ 16.90 |
Granted | $ / shares | 11.21 |
Exercised | $ / shares | 19.23 |
Forfeited | $ / shares | 14.55 |
Outstanding - end of the year | $ / shares | 15.30 |
RSUs exercisable at the end of the year | $ / shares | |
Vested and expected to vest | $ / shares | $ 15.30 |
Aggregate intrinsic value | |
Outstanding - beginning of the year | $ | $ 1,556 |
Outstanding - end of the year | $ | 1,091 |
RSUs exercisable at the end of the year | $ | |
Vested and expected to vest | $ | $ 1,091 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Awards Outstanding) (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of options outstanding | shares | 1,499,224 |
Number of options exercisable | shares | 645,750 |
0.01 [Member] | RSUs [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price | $ 0.01 |
Number of options outstanding | shares | 84,724 |
Awards outstanding, weighted average remaining contractual life (years) | 5 years 3 months 10 days |
Awards outstanding, weighted average exercise price per share | $ 0.01 |
Number of options exercisable | shares | |
Awards exercisable, weighted average exercise price | |
$ 10.4-14.5 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, minimum | 10.4 |
Exercise price, maximum | $ 14.5 |
Number of options outstanding | shares | 566,500 |
Awards outstanding, weighted average remaining contractual life (years) | 5 years 5 months 23 days |
Awards outstanding, weighted average exercise price per share | $ 13.02 |
Number of options exercisable | shares | 140,625 |
Awards exercisable, weighted average remaining contractual life (years) | 4 years 10 months 28 days |
Awards exercisable, weighted average exercise price | $ 13.33 |
$ 15.3-17.7 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, minimum | 15.3 |
Exercise price, maximum | $ 17.7 |
Number of options outstanding | shares | 520,500 |
Awards outstanding, weighted average remaining contractual life (years) | 5 years 1 month 28 days |
Awards outstanding, weighted average exercise price per share | $ 15.60 |
Number of options exercisable | shares | 213,625 |
Awards exercisable, weighted average remaining contractual life (years) | 5 years 18 days |
Awards exercisable, weighted average exercise price | $ 15.59 |
$ 20.2-30.0 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, minimum | 20.2 |
Exercise price, maximum | $ 30 |
Number of options outstanding | shares | 165,500 |
Awards outstanding, weighted average remaining contractual life (years) | 3 years 7 months 2 days |
Awards outstanding, weighted average exercise price per share | $ 27.24 |
Number of options exercisable | shares | 129,500 |
Awards exercisable, weighted average remaining contractual life (years) | 3 years 6 months 18 days |
Awards exercisable, weighted average exercise price | $ 27.73 |
$ 30.1-42.2 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, minimum | 30.1 |
Exercise price, maximum | $ 42.2 |
Number of options outstanding | shares | 162,000 |
Awards outstanding, weighted average remaining contractual life (years) | 1 year 11 months 4 days |
Awards outstanding, weighted average exercise price per share | $ 34.69 |
Number of options exercisable | shares | 162,000 |
Awards exercisable, weighted average remaining contractual life (years) | 1 year 11 months 4 days |
Awards exercisable, weighted average exercise price | $ 34.69 |
SHAREHOLDERS' EQUITY (Schedul_3
SHAREHOLDERS' EQUITY (Schedule Compensation Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 2,858 | $ 3,632 |
Cost of Revenues [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 416 | 284 |
Research and Development Expenses [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 176 | 173 |
Marketing and selling expenses [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 465 | 315 |
General and Administrative Expenses [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,801 | $ 2,860 |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Kibbutz Sdot-Yam) (Details) ₪ in Thousands, $ in Thousands, $ in Millions | Sep. 05, 2016shares | Aug. 06, 2013USD ($) | Jan. 17, 2021USD ($) | Jul. 31, 2015 | Dec. 31, 2020USD ($)m²shares | Dec. 31, 2020ILS (₪)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011m² | Jan. 17, 2021CAD ($) |
Related Party Transaction [Line Items] | |||||||||||
Area of property | m² | 30,744 | ||||||||||
Consideration for annual fee payment for the year 2013 | $ 27,732 | ||||||||||
Amount of loan | $ 9,543 | ||||||||||
Land Use Agreement with Kibbutz [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Agreement amount | $ 250 | ||||||||||
Agreement amounts expected in subsequent year | $ 342 | ||||||||||
Land Use Agreement with Kibbutz [Member] | ILS [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Agreement amount | 950 | ||||||||||
Agreement amounts expected in subsequent year | 1,100 | ||||||||||
Kibbutz Sdot-Yam [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Percentage of ownership | 30.30% | 30.30% | |||||||||
Notice period to cancel automatic renewal of agreement | 6 months | ||||||||||
Sale Lease back Transaction Additional Renewal Termo of Lease | 1 year | ||||||||||
Interest rate | 6.28% | ||||||||||
Proceeds from sale-leaseback transaction | $ 10,900 | ||||||||||
Lease term | 10 years | ||||||||||
Annual rent | $ 1,200 | ||||||||||
Deferred tax asset | $ 247 | 367 | |||||||||
Deferred tax liability | 725 | 760 | |||||||||
Kibbutz Sdot-Yam [Member] | Land Purchase Agreement and Leaseback [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Agreement amount | $ 1,244 | 1,189 | 1,174 | ||||||||
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] | |||||||||||
Additional contract term | 3 years | 3 years | |||||||||
Expenses with related party | $ 2,106 | 2,408 | 2,548 | ||||||||
Agreement amount | 77 | ||||||||||
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] | |||||||||||
Expenses with related party | $ 1,315 | 1,451 | 1,285 | ||||||||
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 | ||||||||
Number of facilities | 1 | ||||||||||
Area of property | m² | 100,000 | ||||||||||
Fee for land use agreement | $ 22 | ||||||||||
Payments for land use right | $ 4,690 | $ 4,459 | $ 4,286 | ||||||||
Consideration for annual fee payment for the year 2013 | 4,000 | ||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Scenario One [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Building expenses not included in land use fees | 22 | ||||||||||
Kibbutz Sdot-Yam [Member] | Land Use Agreement [Member] | Additional Leased Area [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Agreement amount | $ 19 | ||||||||||
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] | ILS [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fee for land use agreement | $ 70 | ||||||||||
Consideration for annual fee payment for the year 2013 | $ 12,900 | ||||||||||
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] | Additional Leased Area [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Agreement amount | 62 | ||||||||||
Kibbutz Sdot-Yam [Member] | Construction of Access Road [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Amount of agreement | 1,000 | ||||||||||
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 | 62 | ||||||||||
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 | 14,029,494 | 14,029,494 | |||||||||
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] | Subsequent Event [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Amount of loan | $ 4 | ||||||||||
Interest rate | 0.25% | 0.25% | |||||||||
Shareholders loan [Member] | Subsequent Event [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Amount of loan | $ 3,969,000 | ||||||||||
Loan payment terrm | 5 | ||||||||||
Interest on loan | Libor plus 4.5% |
TRANSACTIONS WITH RELATED PAR_4
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Financing Leaseback) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Related Party Transaction [Line Items] | |
2021 | $ 1,639 |
2022 | 1,788 |
Total long-term loans | 11,182 |
Kibbutz Sdot-Yam [Member] | |
Related Party Transaction [Line Items] | |
2021 | 853 |
2022 | 7,272 |
Total long-term loans | $ 8,125 |
TRANSACTIONS WITH RELATED PAR_5
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Transactions with Related Parties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Cost of revenues | $ 7,200 | $ 6,890 | $ 6,607 |
Research and development | 406 | 301 | 185 |
Selling and marketing | 638 | 708 | 779 |
General and administrative | 913 | 1,283 | 1,341 |
Finance expenses, net | $ 491 | $ 511 | $ 531 |
TRANSACTIONS WITH RELATED PAR_6
TRANSACTIONS WITH RELATED PARTIES AND OTHER LOAN (Schedule of Balances with Related Parties) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2012 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Related Party Transaction [Line Items] | ||||
Financing liability of land from related party- current maturities | [1] | $ 1,746 | $ 1,736 | |
Long-term financing liability of land from a related party | [1] | 6,723 | 6,994 | |
Other loans | [2] | $ 4,440 | $ 921 | |
Kibbutz Sdot-Yam [Member] | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from financing leaseback | $ 10,900 | |||
Related party transaction, interest rate | 6.28% | |||
[1] | 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 6.28% 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 at that time CIOT and the Company, on a pro rata basis. Although the Company acquired CIOT ownership interest in Caesarstone Canada Inc. during December, 2018, the loan continues to bear interest until repayment at a per annum rate equal to Bank of Canada's prime business rate plus 0.25% (See also note 1e). The interest accrued on the loan is payable on a quarterly basis. Such loan is repaid in three equal annual installments commencing 2020. |
LONG-TERM BANK LOAN (Narrative
LONG-TERM BANK LOAN (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-term debt, face amount | $ 9,543 |
Current maturity of loan | $ 1,639 |
Long-term debt, interest rate terms | The loan is denominated in Indian rupee and it bears interest rate of India labor plus 4.5%. |
LONG-TERM BANK LOAN (Schedule
LONG-TERM BANK LOAN (Schedule of Long-Term Bank Loan) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Long-term Debt, by Current and Noncurrent [Abstract] | |
2021 | $ 1,639 |
2022 | 1,788 |
2023 | 1,994 |
2024 | 2,175 |
2025 and thereafter | 3,586 |
Total long-term loans | $ 11,182 |
MAJOR CUSTOMER AND GEOGRAPHIC_3
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Schedule of Revenues) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 486,412 | $ 545,974 | $ 575,871 |
USA [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 207,496 | 250,471 | 239,241 |
Canada [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 72,492 | 85,979 | 99,679 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 2,149 | 4,115 | 5,397 |
Australia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 103,587 | 108,149 | 131,085 |
Asia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 14,566 | 15,514 | 17,715 |
EMEA [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 45,201 | 43,054 | 42,861 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 40,921 | $ 38,692 | $ 39,893 |
MAJOR CUSTOMER AND GEOGRAPHIC_4
MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION (Schedule of Long-Lived Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 358,909 | $ 276,823 |
USA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 167,370 | 118,458 |
Canada [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 5,384 | 5,676 |
Australia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 14,947 | 7,669 |
Asia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 29,955 | 400 |
EMEA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 8,398 | 8,583 |
Israel [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 132,855 | $ 136,037 |
SELECTED SUPPLEMENTARY STATEM_3
SELECTED SUPPLEMENTARY STATEMENTS OF INCOME DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finance expenses: | |||
Interest in respect of short-term loans, credit cards and bank fees | $ 3,254 | $ 3,342 | $ 3,591 |
Interest in respect of loans to related parties | 1,053 | 568 | 585 |
Amortization/accretion of premium/discount on marketable securities | 161 | ||
Realized gain/loss from marketable securities | 11 | ||
Changes in derivatives fair value | 3,427 | 193 | |
Foreign exchange transactions losses | 7,128 | 6,578 | 6,259 |
Finance expenses | 15,034 | 10,488 | 10,628 |
Finance income: | |||
Interest in respect of cash and cash equivalent and short-term bank deposits | 657 | 1,018 | 1,472 |
Changes in derivatives fair value | 33 | ||
Interest income from marketable securities | 213 | ||
Foreign exchange transactions gains | 3,965 | 3,859 | 5,517 |
Finance income | 4,835 | 4,910 | 6,989 |
Finance expenses, net | 10,199 | 5,578 | 3,639 |
Numerator: | |||
Net income attributable to controlling interest, as reported | 7,218 | 12,862 | 24,405 |
Adjustment to redemption value of non-controlling interest | 203 | ||
Numerator for basic and diluted net income per share | $ 7,218 | $ 12,862 | $ 24,608 |
Denominator: | |||
Denominator for basic income per share | 34,419 | 34,384 | 34,358 |
Effect of dilutive stock based awards | 55 | 76 | 51 |
Denominator for diluted income per share | 34,474 | 34,460 | 34,409 |
Earnings Per Share: | |||
Basic and diluted earnings per share | $ 0.21 | $ 0.37 | $ 0.72 |