Exhibit 99.1
Caesarstone Reports Third Quarter 2023 Financial Results
- Revenues of $142.4 Million -
- Generated Strong Cash Flow from Operations of $28.2 Million During the Quarter and $53.3 Million Year-to-Date -
- Produces Strong Sequential Gross Margin Improvement to 19.1% -
- Remains Focused on Global Strategic Restructuring Actions to Reignite Long-term Growth and Profitability -
- Reiterates Full Year Outlook and Expects Positive Cash Flow from Operations in the Fourth Quarter -
MP MENASHE, Israel – November 8, 2023 - Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its third quarter ended September 30, 2023.
Yos Shiran, Caesarstone’s Chief Executive Officer commented, “We are pleased with the strong cash flow generated from operations. We are making significant progress with the implementation of our global restructuring actions and are executing against our plan to improve our cost structure and optimize our production footprint. I am confident we are taking the right steps to improve our business performance and drive value to our shareholders, partners and customers. Moving into 2024 and beyond, we remain focused on optimizing our business to operate more efficiently, investing in our brand, and introducing innovative products as we create a new foundation to support long-term profitable growth.”
Mr. Shiran continued, “We are deeply disturbed by the horrible acts of vicious violence and terror that were inflicted by Hamas’ terrorists on October 7th. We are confident that Israel will not only prevail but will also exercise justice towards all who were involved in committing these heinous crimes. We at Caesarstone remain committed to supporting the people of Israel and the rehabilitation of our effected townships. We are operating our business as usual during these challenging times. While this situation has disrupted the market place in Israel, which accounts for approximately 5% of our revenues, we have taken the steps necessary to ensure business continuity and have not experienced any material impact to our strategy, global operations or Israeli production operations. We are monitoring the situation closely and see no major impediments to continue serving our customers globally.”
Nahum Trost, Caesarstone’s Chief Financial Officer added, “We have now generated more than $53 million in cash flow from operations year-to-date to support our business transformation even as we navigate complex market dynamics across our global footprint. As promised, we produced a higher sequential gross margin. In addition, we generated positive adjusted EBITDA during the quarter and currently expect to generate similar Adjusted EBITDA in the fourth quarter despite the near-term reduction in Israel revenues due to the war on terror.”
Third Quarter 2023 Results
Revenue in the third quarter of 2023 was $142.4 million, compared to $180.7 million in the prior year quarter. On a constant currency basis, third quarter revenue was down 20.3% year-over-year mainly due to lower volume. Volumes were primarily impacted by global economic headwinds, particularly in renovation and remodeling channels, across the Company’s main regions and the competitive landscape, resulting in lower demand.
Gross margin in the third quarter of 2023 was 19.1% compared to 23.0% in the prior year quarter. Adjusted gross margin in the third quarter was 19.8% compared to 23.1% in the prior year quarter. The decrease in gross margin resulted from lower revenues, increased manufacturing unit costs due to lower fixed cost absorption mainly related to lower capacity utilization. This was partially offset by lower shipping costs and the benefits of an improved production footprint.
Operating expenses in the third quarter of 2023 were $29.2 million, or 20.5% of revenue, compared to $38.5 million, or 21.3% of revenue in the prior year quarter. The higher percentage is primarily attributable to lower revenues. Excluding legal settlements and loss contingencies and restructuring expenses, operating expenses were 23.7% of revenue, compared to 20.9% in the prior year quarter.
Operating loss in the third quarter of 2023 was $2.0 million compared to operating income of $3.2 million in the prior year quarter. The decrease mainly reflects lower gross margin.
Adjusted EBITDA in the third quarter of 2023, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies and for other items, was $1.9 million, compared to adjusted EBITDA of $13.4 million in the prior year quarter. The year-over-year decrease primarily reflects the operating loss.
Finance income in the third quarter of 2023 was $1.3 million compared to finance expenses of $4.3 million in the prior year quarter. The difference primarily reflects foreign currency exchange rate fluctuations on assets and liabilities denominated mainly in new Israeli Shekel that devaluated against the US Dollar, along with higher interest earned on our cash balances.
Net loss attributable to controlling interest for the third quarter of 2023 was $0.9 million compared to net loss of $0.5 million in the prior year quarter. Net loss per share for the third quarter was $0.03 compared to diluted net loss per share of $0.02 in the prior year quarter. Adjusted diluted net loss per share for the third quarter was $0.20 on 34.6 million shares, compared to adjusted diluted net income per share of $0.01 in the prior year quarter on a similar share count.
Balance Sheet & Liquidity
During the third quarter, the Company generated positive cash flow from operations of $28.2 million mainly driven by inventory reductions, compared to operating cash flow of $3.5 million in the third quarter of 2022. As of September 30, 2023, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits and short-term marketable securities of $79.1 million and total debt to financial institutions of $6.9 million. The Company’s net cash position as of September 30, 2023, was $72.2 million compared to $28.2 million as of December 31, 2022.
Dividend
The Company’s dividend policy provides for a quarterly cash dividend of up to 50% of reported net income on a year-to-date basis, less any amount already paid as dividend for the respective period (the “calculated dividend”), subject in each case to approval by the Company’s board of directors. No dividend is paid if it would be less than $0.10 per share. Pursuant to the Company’s dividend policy, the Company will not pay a dividend for the third quarter of 2023, based on its reported net loss attributable to controlling interest for the period.
Outlook
Based on the actions and initiatives underway, the strong cash flow from operations produced year-to-date, and the expectation to generate additional cash flow from operations in the fourth quarter of 2023, the Company reiterates its full year outlook to generate positive cash flow from operations and to end the year with an improved net cash position. The outlook for the remaining quarter is based on working capital improvements and cost optimization efforts, along with an expectation for similar adjusted EBITDA in the fourth quarter compared to the third quarter of 2023 despite the near-term reduction in Israel revenues due to the war on terror.
Webcast and Conference Call Details
The Company will host a webcast and conference call today, November 8, 2023, at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-844-825-9789 and 1-412-317-5180, respectively. The toll-free Israeli number is 1 80 921 3284. Upon dialing in, please request to join the Caesarstone Third Quarter 2023 Earnings Conference Call.
To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671 (international) and enter pass code 10183220. The replay will be available beginning at 12:30 p.m. ET on Wednesday, November 8, 2023 and will last through 11:59 p.m. ET on Wednesday, November 15, 2023.
About Caesarstone
Caesarstone is a global leader of premium surfaces, specializing in countertops that create dynamic spaces of inspiration in the heart of the home. Established in 1987, its multi-material portfolio of over 100 colors combines the company’s innovative technology with its powerful design passion. Spearheading high-quality, sustainable surfaces, Caesarstone delivers functional resilience with timeless beauty, for a vast range of applications, including kitchen countertops, bathroom vanities, and more, for indoor and outdoor spaces.
Since it pioneered quartz countertops over thirty years ago, the brand has expanded into porcelain and natural stone and is on the ground in more than 50 countries worldwide while enhancing customer experience through the expansion of groundbreaking digital platforms & services. More information on Caesarstone: caesarstoneus.com, Facebook, Twitter, YouTube, Pinterest, and Instagram
Non-GAAP Financial Measures
The non-GAAP measures presented by the Company should be considered in addition to, and not as a substitute for, comparable GAAP measures. Reconciliations of GAAP gross profit to adjusted gross profit, GAAP net income (loss) to adjusted net income (loss) and net income (loss) to adjusted EBITDA are provided in the schedules to this release. To calculate revenues growth rates that exclude the impact of changes in foreign currency exchange rates, the Company converts actual reported results from local currency to U.S. dollars using constant foreign currency exchange rates in the current and comparable period. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company's operating performance.
Forward-Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “goals," “intend,” “seek,” “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “may,” “plan,” “outlook,” “future” and “project” and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward looking statements include statements regarding the Company’s sustainability goals and plans, intentions, expectations, assumptions, goals and beliefs regarding the Company’s business and sustainability vision. These forward-looking statements also may relate to the Company's plans, objectives and expectations for future operations, including the potential duration and impact of the current war in Israel on our business and operations located in Israel as well as the effects on our global operations, estimations relating to the restructuring plan, the closure of the Sdot Yam Facility, the estimated closure costs and the estimated potential savings relating to the facility closure, the ability to sublease all or part of the facility covered by the long-term non-cancellable lease agreement, the impact of the COVID-19 pandemic and mitigation measures in connection thereto, and expectations of the results of the Company’s business optimization initiatives. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties, both known or unknown. These factors include, but are not limited to: the implementation of the proposed restructuring plan, the closure of the Sdot Yam Facility, the estimated closure costs and ability to realize potential savings relating to the closure, the ability to sublease all or part of the facility covered by the long-term non-cancellable lease agreement, the impact of the COVID-19 pandemic on end-consumers, the effects of global economy and geo-politics on the Company’s business and operations; managing constraints in the global supply chain, raw material shortages, increased prices and effects of challenges in global shipping and transportation; Company’s ability to pass all or some of these increases to its customers; the strength of the home renovation and construction sectors; intense competitive pressures; disruptions to our information technology systems globally, including by deliberate cyber-attacks; the degree of the Company’s ability to develop, produce and deliver high quality and safe products; fluctuations in currency exchange rates against the U.S. Dollar; Company’s ability to raise funds to finance our current and future capital needs; Company’s ability to build-out and expand into certain markets and successfully integrate our acquisitions; the Company’s ability to effective manage its relationship with key suppliers; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with our operations and products; efficiently manufacturing our products and managing changes in production and supply chain; economic conditions within any of our key existing markets; the success of our expansion efforts in the United States; the extent of the Company’s ability to meet its ESG goals and targets, management of GHG and other emissions; the impacts of conditions in Israel, such as negative economic, labor or geopolitical events; the unpredictability of seasonal fluctuations in revenues; disturbances to the Company’s operations or the operations of its suppliers, distributors, customers or other third parties and other factors, risks and uncertainties discussed under the sections "Risk Factors" and “Special Note Regarding Forward-Looking Statements and Risk Factor Summary” in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2023, and in other documents filed by Caesarstone with the SEC, which are available free of charge at www.sec.gov. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Further, the estimates of the charges and expenditures that the Company expects to incur in connection with the restructuring plan and facility closure and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the restructuring plan and facility closure.
Investor Relations:
ICR, Inc. - Rodny Nacier
CSTE@icrinc.com
+1 (646) 200-8870
Caesarstone Ltd. and its subsidiaries
Condensed consolidated balance sheets
| As of | ||||||||
| U.S. dollars in thousands | September 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents and short-term bank deposits | $ | 78,086 | $ | 52,081 | ||||
| Short-term available for sale marketable securities | 1,009 | 7,077 | ||||||
| Trade receivables, net | 74,683 | 77,898 | ||||||
| Other accounts receivable and prepaid expenses | 25,238 | 32,570 | ||||||
| Inventories | 146,224 | 238,232 | ||||||
| Total current assets | 325,240 | 407,858 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Severance pay fund | 2,791 | 3,410 | ||||||
| Deferred tax assets, net | 12,093 | 16,251 | ||||||
| Long-term deposits and prepaid expenses | 4,823 | 3,255 | ||||||
| Operating lease right-of-use assets | 124,005 | 144,098 | ||||||
| Property, plant and equipment, net | 155,254 | 169,292 | ||||||
| Intangible assets, net | 6,790 | 8,817 | ||||||
| Total long-term assets | 305,756 | 345,123 | ||||||
| Total assets | $ | 630,996 | $ | 752,981 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term bank credit | $ | 3,755 | $ | 26,135 | ||||
| Trade payables | 42,984 | 62,194 | ||||||
| Related parties and other loans | 211 | 283 | ||||||
| Short term legal settlements and loss contingencies | 16,034 | 17,595 | ||||||
| Accrued expenses and other liabilities | 58,500 | 58,777 | ||||||
| Total current liabilities | 121,484 | 164,984 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term bank and other loans and financing liability of land from a related party | 3,144 | 4,823 | ||||||
| Legal settlements and loss contingencies long-term and other liabilities | 13,512 | 19,572 | ||||||
| Deferred tax liabilities, net | 3,050 | 4,288 | ||||||
| Long-term lease liabilities | 115,008 | 124,353 | ||||||
| Accrued severance pay | 3,837 | 4,750 | ||||||
| Long-term warranty provision | 1,220 | 1,262 | ||||||
| Total long-term liabilities | 139,771 | 159,048 | ||||||
| REDEEMABLE NON-CONTROLLING INTEREST | 8,066 | 7,903 | ||||||
| EQUITY: | ||||||||
| Ordinary shares | 371 | 371 | ||||||
| Treasury shares - at cost | (39,430 | ) | (39,430 | ) | ||||
| Additional paid-in capital | 163,987 | 163,431 | ||||||
| Capital fund related to non-controlling interest | (5,587 | ) | (5,587 | ) | ||||
| Accumulated other comprehensive income (loss), net | (11,958 | ) | (9,578 | ) | ||||
| Retained earnings | 254,292 | 311,839 | ||||||
| Total equity | 361,675 | 421,046 | ||||||
| Total liabilities and equity | $ | 630,996 | $ | 752,981 | ||||
Caesarstone Ltd. and its subsidiaries
Condensed consolidated statements of income (loss)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| U.S. dollars in thousands (except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues | $ | 142,394 | $ | 180,727 | $ | 436,706 | $ | 531,437 | ||||||||
| Cost of revenues | 115,205 | 139,110 | 368,047 | 399,123 | ||||||||||||
| Gross profit | 27,189 | 41,617 | 68,659 | 132,314 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,242 | 853 | 3,837 | 2,947 | ||||||||||||
| Sales and Marketing | 20,398 | 23,821 | 62,458 | 72,080 | ||||||||||||
| General and administrative | 12,144 | 13,187 | 39,322 | 39,735 | ||||||||||||
| Restructuring and Impairment expenses (income) related to long lived assets (**) | (3,349 | ) | - | 20,224 | - | |||||||||||
| Legal settlements and loss contingencies, net | (1,259 | ) | 601 | (2,346 | ) | 1,059 | ||||||||||
| Total operating expenses | 29,176 | 38,462 | 123,495 | 115,821 | ||||||||||||
| Operating income (loss) | (1,987 | ) | 3,155 | (54,836 | ) | 16,493 | ||||||||||
| Finance expenses (income), net | (1,292 | ) | 4,307 | (4,816 | ) | (3,486 | ) | |||||||||
| Income (loss) before taxes | (695 | ) | (1,152 | ) | (50,020 | ) | 19,979 | |||||||||
| Tax expenses (income), net | 83 | (788 | ) | 7,332 | 2,457 | |||||||||||
| Net income (loss) | $ | (778 | ) | $ | (364 | ) | $ | (57,352 | ) | $ | 17,522 | |||||
| Net loss (income) attributable to non-controlling interest | (109 | ) | (99 | ) | 217 | (610 | ) | |||||||||
| Net income (loss) attributable to controlling interest | $ | (887 | ) | $ | (463 | ) | $ | (57,135 | ) | $ | 16,912 | |||||
| Basic net income (loss) per ordinary share (*) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (1.67 | ) | $ | 0.49 | |||||
| Diluted net income (loss) per ordinary share (*) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (1.67 | ) | $ | 0.48 | |||||
| Weighted average number of ordinary shares used in computing basic income (loss) per ordinary share | 34,522,015 | 34,493,599 | 34,515,291 | 34,485,587 | ||||||||||||
| Weighted average number of ordinary shares used in computing diluted income (loss) per ordinary share | 34,522,015 | 34,493,599 | 34,515,291 | 34,543,319 | ||||||||||||
(*) The numerator for the calculation of net income (loss) per share for the three and nine months ended September 30, 2023 and 2022, has been decreased by approximately $0.1 and $0.4 million, and $0.1 and $0.2 million, respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.
(**) Restructuring expenses in accordance with ASC420, and Right Of Use (ROU) asset impairment related to Sdot Yam plant closure.
Q3'23 net credit includes ROU and Fixed assets alignments to proper imapirment calculations.
Caesarstone Ltd. and its subsidiaries Selected Condensed consolidated statements of cash flows |
| Nine months ended September 30, | ||||||||
| U.S. dollars in thousands | 2023 | 2022 | ||||||
| (Unaudited) | (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (57,352 | ) | $ | 17,522 | |||
| Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 22,711 | 27,223 | ||||||
| Share-based compensation expense | 556 | 1,243 | ||||||
| Accrued severance pay, net | (290 | ) | (84 | ) | ||||
| Changes in deferred tax, net | 2,878 | (4,001 | ) | |||||
| Capital (gain) loss | 83 | 65 | ||||||
| Legal settlemnets and loss contingencies, net | (2,346 | ) | 1,060 | |||||
| Decrease (increase) in trade receivables | 2,725 | (10,810 | ) | |||||
| Decrease in other accounts receivable and prepaid expenses | 8,359 | 1,377 | ||||||
| Decrease (increase) in inventories | 91,329 | (50,098 | ) | |||||
| Increase (decrease) in trade payables | (25,775 | ) | 3,305 | |||||
| Decrease in warranty provision | (72 | ) | (128 | ) | ||||
| Changes in right of use assets | (1,206 | ) | 10,533 | |||||
| Changes in lease liabilities | (8,134 | ) | (19,663 | ) | ||||
| Contingent consideration related to acquisitions | 240 | 57 | ||||||
| Amortization of premium and accretion of discount on marketable securities, net | 63 | 193 | ||||||
| Changes in Accrued interest related to Marketable Securities | 25 | 44 | ||||||
| Decrease in accrued expenses and other liabilities including related parties | (682 | ) | (2,130 | ) | ||||
| Restructuring expenses and Impairment related to long lived assets | 20,224 | - | ||||||
| Net cash provided by (used in) operating activities | 53,336 | (24,292 | ) | |||||
Cash flows from investing activities: | ||||||||
| Net cash paid for acquisitions | (511 | ) | (2,245 | ) | ||||
| Purchase of property, plant and equipment | (8,718 | ) | (12,771 | ) | ||||
| Proceeds from sale of property, plant and equipment | 16 | 9 | ||||||
| Maturity of marketable securities | 6,103 | 11,901 | ||||||
| Decreae (increase) in long term deposits | (108 | ) | 341 | |||||
| Net used in investing activities | (3,218 | ) | (2,765 | ) | ||||
Cash flows from financing activities: | ||||||||
| Dividend paid | - | (8,625 | ) | |||||
| Changes in short-term bank credits and long-term loans, including related parties | (24,063 | ) | 21,947 | |||||
| Repayment of a financing leaseback related to Bar-Lev transaction | - | (859 | ) | |||||
| Net cash provided by (used in) financing activities | (24,063 | ) | 12,463 | |||||
| Effect of exchange rate differences on cash and cash equivalents | (50 | ) | (1,161 | ) | ||||
| Increase (decrease) in cash and cash equivalents and short-term bank deposits | 26,005 | (15,755 | ) | |||||
| Cash and cash equivalents and short-term bank deposits at beginning of the period | 52,081 | 74,315 | ||||||
| Cash and cash equivalents and short-term bank deposits at end of the period | $ | 78,086 | $ | 58,560 | ||||
Non - cash investing: | ||||||||
| Changes in trade payables balances related to purchase of fixed assets | (104 | ) | (441 | ) | ||||
Caesarstone Ltd. and its subsidiaries
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| U.S. dollars in thousands | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Reconciliation of Gross profit to Adjusted Gross profit: | ||||||||||||||||
| Gross profit | $ | 27,189 | $ | 41,617 | $ | 68,659 | $ | 132,314 | ||||||||
| Share-based compensation expense (a) | 16 | 79 | 153 | 228 | ||||||||||||
| Amortization of assets related to acquisitions | 71 | 80 | 215 | 234 | ||||||||||||
| Residual operating expenses related to Sdot-Yam after closing | 1,011 | - | 2,795 | - | ||||||||||||
| Other non recuring items | (152 | ) | - | (152 | ) | - | ||||||||||
| Adjusted Gross profit (Non-GAAP) | $ | 28,135 | $ | 41,775 | $ | 71,670 | $ | 132,776 | ||||||||
| (a) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. |
Caesarstone Ltd. and its subsidiaries
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| U.S. dollars in thousands | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Reconciliation of Net Income (loss) to Adjusted EBITDA: | ||||||||||||||||
| Net income (loss) | $ | (778 | ) | $ | (364 | ) | $ | (57,352 | ) | $ | 17,522 | |||||
| Finance expenses (income), net | (1,292 | ) | 4,307 | (4,816 | ) | (3,486 | ) | |||||||||
| Taxes on income | 83 | (788 | ) | 7,332 | 2,457 | |||||||||||
| Depreciation and amortization | 7,472 | 9,200 | 22,711 | 27,223 | ||||||||||||
| Legal settlements and loss contingencies, net (a) | (1,259 | ) | 602 | (2,346 | ) | 1,060 | ||||||||||
| Contingent consideration adjustment related to acquisition | 75 | 57 | 240 | 57.00 | ||||||||||||
| Acquisition and integration related expenses | - | - | - | 80 | ||||||||||||
| Share-based compensation expense (b) | 61 | 375 | 556 | 1,243 | ||||||||||||
| Restructuring expenses and Impairment related to long lived assets (c) | (3,349 | ) | - | 20,224 | - | |||||||||||
| Residual operating expenses related to Sdot-Yam after closing (c) | 1,011 | - | 2,795 | - | ||||||||||||
| Other non recuring items | (152 | ) | (152 | ) | - | |||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 1,872 | $ | 13,389 | $ | (10,808 | ) | $ | 46,156 | |||||||
| (a) | Consists primarily of legal settlements expenses and loss contingencies, net, related to product liability claims. |
| (b) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. |
| (c) | Expenses related to restructuring. Q3'23 net credit includes ROU and Fixed assets alignments to proper imapirment calculations. |
Caesarstone Ltd. and its subsidiaries
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| U.S. dollars in thousands (except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Reconciliation of net income (loss) attributable to controlling interest to adjusted net income (loss) attributable to controlling interest: | ||||||||||||||||
| Net income (loss) attributable to controlling interest | $ | (887 | ) | $ | (463 | ) | $ | (57,135 | ) | $ | 16,912 | |||||
| Legal settlements and loss contingencies, net (a) | (1,259 | ) | 602 | (2,346 | ) | 1,060 | ||||||||||
| Contingent consideration adjustment related to acquisition | 75 | 57 | 240 | 57 | ||||||||||||
| Amortization of assets related to acquisitions, net of tax | 582 | 548 | 1,608 | 1,548 | ||||||||||||
| Share-based compensation expense (b) | 61 | 375 | 556 | 1,243 | ||||||||||||
| Acquisition and integration related expenses | - | - | - | 80 | ||||||||||||
| Non cash revaluation of lease liabilities (c) | (2,092 | ) | (796 | ) | (5,094 | ) | (10,203 | ) | ||||||||
| Restructuring expenses and Impairment related to long lived assets (d) | (3,349 | ) | - | 20,224 | - | |||||||||||
| Residual operating expenses related to Sdot-Yam after closing (d) | 1,011 | - | 2,795 | - | ||||||||||||
| Other non recuring items | (152 | ) | - | (152 | ) | - | ||||||||||
| Total adjustments | (5,123 | ) | 786 | 17,831 | (6,215 | ) | ||||||||||
| Less tax on non-tax adjustments (e) | 760 | 311 | (2,614 | ) | (764 | ) | ||||||||||
| Total adjustments after tax | (5,883 | ) | 476 | 20,445 | (5,451 | ) | ||||||||||
| Adjusted net income (loss) attributable to controlling interest (Non-GAAP) | $ | (6,770 | ) | $ | 13 | $ | (36,690 | ) | $ | 11,461 | ||||||
| Adjusted earning (loss) per share (f) | $ | (0.20 | ) | $ | 0.01 | $ | (1.06 | ) | $ | 0.33 | ||||||
| (a) | Consists primarily of legal settlements expenses and loss contingencies, net, related to product liability claims. | |||||||||
| (b) | Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. | |||||||||
| (c) | Exchange rate diffrences deriving from revaluation of lease contracts in accoradance with FASB ASC 842. | |||||||||
| (d) | Expenses related to restructuring. Q3'23 net credit includes ROU and Fixed assets alignments to proper imapirment calculations. | |||||||||
| (e) | Tax adjustments for the three and nine months ended September 30, 2023 and 2022, based on the effective tax rates. | |||||||||
| (f) | In calculating adjusted (Non-GAAP) earning (loss) per share, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718. | |||||||||
Caesarstone Ltd. and its subsidiaries
Geographic breakdown of revenues by region
Three months ended September 30, | Nine months ended September 30, | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||
| U.S. dollars in thousands | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Audited) | YoY % change | YoY % change CCB | YoY % change | YoY % change CCB | ||||||||||||||||||||||||||
| USA | $ | 65,883 | $ | 87,623 | $ | 211,364 | $ | 265,899 | (24.8 | )% | (24.8 | )% | (20.5 | )% | (20.5 | )% | ||||||||||||||||
| Canada | 18,956 | 23,607 | 57,712 | 72,704 | (19.7 | )% | (17.5 | )% | (20.6 | )% | (16.8 | )% | ||||||||||||||||||||
| Latin America | 1,650 | 1,470 | 2,468 | 3,517 | 12.2 | % | 12.2 | % | (29.8 | )% | (29.8 | % | ||||||||||||||||||||
| America's | 86,489 | 112,700 | 271,544 | 342,120 | (23.3 | )% | (22.8 | )% | (20.6 | )% | (19.8 | )% | ||||||||||||||||||||
| Australia | 27,326 | 31,204 | 79,539 | 86,938 | (12.4 | )% | (8.4 | )% | (8.5 | )% | (3.4 | )% | ||||||||||||||||||||
| Asia | 6,747 | 8,834 | 20,069 | 26,716 | (23.6 | )% | (23.5 | )% | (24.9 | )% | (25.8 | )% | ||||||||||||||||||||
| APAC | 34,073 | 40,038 | 99,608 | 113,654 | (14.9 | )% | (11.7 | )% | (12.4 | )% | (8.6 | )% | ||||||||||||||||||||
| EMEA | 15,185 | 17,004 | 45,395 | 48,054 | (10.7 | )% | (16.5 | )% | (5.5 | )% | (6.4 | )% | ||||||||||||||||||||
| Israel | 6,650 | 10,985 | 20,162 | 27,609 | (39.5 | )% | (32.3 | )% | (27.0 | )% | (19.2 | )% | ||||||||||||||||||||
| Total Revenues | $ | 142,397 | $ | 180,727 | $ | 436,709 | $ | 531,437 | (21.2 | )% | (20.3 | )% | (17.8 | )% | (16.2 | )% | ||||||||||||||||