-
Third Quarter Revenue Up 21.6% to a Record of $94.3 million
-
Net Income Attributable to Controlling Interest Up 27.8% to $0.46
Per Share
-
Declares One-Time Dividend of $20 million, Record Date of November
27, 2013
-
Raises Full Year Guidance for Sales and Adjusted EBITDA
MP MENASHE, Israel--(BUSINESS WIRE)--
Caesarstone Sdot-Yam Ltd. (CSTE), a manufacturer of high quality
engineered quartz surfaces, today reported financial results for its
third quarter ended September 30, 2013.
Revenues in the third quarter of 2013 increased by 21.6% to $94.3
million compared to $77.6 million in the same quarter of the prior year.
On a constant currency basis, third quarter revenue growth was 24.0%
compared to the same period last year. Growth in revenues was
broad-based, but primarily driven by continued increases in the United
States and Canada, up 47.8% and 22.2%, respectively, compared to the
same period in the prior year.
Yosef Shiran, Chief Executive Officer, commented, "We are pleased with
our results for the third quarter, particularly in the United States,
which is our largest and fastest growing market. Our strong brand,
leading products and improved market conditions all contributed to our
significant increase in revenues and our strong cash flow. We expect to
continue to drive value to our shareholders, partners and customers
through ongoing growth in our business."
Gross margin in the third quarter was 44.5% compared to 45.0% in the
same period in the prior year. This slight decline was driven by
increased manufacturing costs, including those associated with the
planned expansion in the Company's Bar Lev manufacturing facility, and
the overall negative currency impact in the quarter. These factors were
partially offset by favorable changes in the mix of revenues and
scale-related benefits.
Operating expenses in the third quarter were $21.1 million, or 22.4% of
revenues. This compares to the prior year's third quarter level of $18.2
million, or 23.5% of revenues.
Operating income in the third quarter was up 25.2% to $20.9 million, a
margin of 22.2%, compared to $16.7 million, a margin of 21.5%, in the
third quarter of 2012.
Adjusted EBITDA, which excludes share-based compensation, the excess
cost of acquired inventory and other non-recurring costs, increased by
18.4% to $25.2 million in the third quarter, a margin of 26.8%. This
compares to adjusted EBITDA of $21.3 million, a margin of 27.5% in the
third quarter of the prior year.
Finance expenses in the third quarter were $1.1 million compared to $2.0
million during the same period in the prior year.
The Company reported net income attributable to controlling interest for
the third quarter of 2013 of $16.1 million compared to $12.4 million in
the same quarter in the prior year. Diluted earnings per share for the
third quarter were $0.46 on 35.3 million shares compared to $0.36 per
diluted ordinary share on 34.4 million shares in the prior year's third
quarter. On an adjusted basis, earnings per share in the third quarter
were $0.47 compared to $0.39 in the prior year.
The Company's balance sheet as of September 30, 2013 remained solid with
cash and bank deposits of $104.9 million, growth of $32.2 million from
December 31, 2012.
The Company also today provided an update with respect to its planned
capacity expansion projects. In November it began utilizing expanded
capacity in its Bar Lev facility with an expected completion of a full
fifth line in the second quarter of 2014. The Company also today
announced that it has selected Richmond Hill, Georgia as the location
for its new manufacturing plant in the United States. Site-specific
considerations have prompted the Company to revise its expected start
date for the first of two lines to the second quarter of 2015. The
Company has decided to accelerate its initial investment to
approximately 70% of the total expected capital cost of $100 million in
order to support an expedited launch of the second line. Upon
completion, the Company's manufacturing operations will encompass seven
full production lines.
One-Time Dividend
The Company announced that it will pay a one-time dividend of $20
million, or approximately $0.58 per ordinary share, to shareholders of
record on November 27, 2013, payable on December 11, 2013. The Company
believes that, due to its strong recent and expected cash flow and
current cash position, the dividend will not affect its ability to fund
its growth strategy, anticipated capital expenditures and working
capital needs for the foreseeable future.
Guidance
Following a strong third quarter, the Company today increased its
revenue guidance for the full year of 2013 to a new range of $343 to
$348 million as compared to its prior range of $330 million to $340
million.
Additionally, the Company increased its expected range of adjusted
EBITDA for the full year to $87 million to $89 million as compared to
its prior expected range of $82 million to $85 million.
Conference Call Details
Yosef Shiran, the Company's Chief Executive Officer, and Yair Averbuch,
the Company's Chief Financial Officer, will host a conference call
today, November 6, 2013, at 8:30 a.m. ET to discuss the results of the
third quarter ended September 30, 2013, followed by a question and
answer session for the investment community. A live webcast of the call
can be accessed at ir.caesarstone.com.
To access the call, dial toll-free 1-888-312-3048 or +1-719-325-2432
(international). Israeli participants can dial in at 1-80-924-5906. The
pass code is 9735686.
To listen to a telephonic replay of the conference call, dial toll-free
1-877-870-5176 or +1-858-384-5517 (international) and enter pass code
9735686. The replay will be available beginning at 11:30 a.m. ET on
November 6, 2013 and will last through 11:59 PM ESTNovember 20, 2013.
About Caesarstone
Caesarstone manufactures high quality engineered quartz surfaces, which
are used in both residential and commercial buildings as countertops,
vanities, wall cladding, floors and other interior surfaces. The wide
variety of colors, styles, designs and textures of Caesarstone®
products, along with Caesarstone's inherent characteristics such as
hardness, non-porous, scratch and stain resistance and durability,
provide consumers with excellent surfaces for their internal spaces
which are highly competitive to granite, manufactured solid surfaces and
laminate, as well as to other engineered quartz surfaces. Caesarstone's
four collections of products — Classico, Supremo, Motivo and Concetto —
are available in over 40 countries around the world. For more
information about the Company, please visit our website www.caesarstone.com.
(CSTE-E)
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. A
reconciliation of GAAP net income attributable to controlling interest
to adjusted net income attributable to controlling interest and net
income to Adjusted EBITDA. The Company provides these non-GAAP financial
measures because it believes that they present a better measure of the
Company's core business and management uses the non-GAAP measures
internally to evaluate the Company's ongoing performance. Accordingly,
the Company believes that they are useful to investors in enhancing an
understanding of the Company's operating performance.
Forward-Looking Statements
Information provided in this press release may contain statements
relating to current expectations, estimates, forecasts and projections
about future events that are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements generally relate to the Company's plans,
objectives and expectations for future operations, including its
projected results of operations and the expected timing and cost of
expanding its manufacturing facilities. 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. These factors
include, but are not limited to: the strength of the home renovation and
construction sectors; economic conditions within any of our key existing
markets; actions by our competitors; changes in raw material prices,
particularly polymer resins and pigments; unpredictability of seasonal
fluctuations in revenues; the outcome of silicosis claims and the claim
by our former quartz processor; fluctuations in currency exchange rates;
delays in manufacturing if our suppliers are unable to supply raw
materials; and other factors discussed under the heading "Risk Factors"
in the final prospectus for our initial public offering and other
documents filed with the Securities and Exchange Commission. These
forward-looking statements are made only as of the date hereof, and the
Company undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise.
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Consolidated balance sheets
|
|
|
|
|
|
|
|
|
|
|
As of
|
U.S. dollars in thousands
|
|
|
September 30,
2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
19,946
|
|
|
$
|
29,033
|
Short-term bank deposits
|
|
|
|
85,000
|
|
|
|
43,700
|
Trade receivables
|
|
|
|
54,427
|
|
|
|
44,066
|
Other accounts receivable and prepaid expenses
|
|
|
|
22,882
|
|
|
|
16,238
|
Inventories
|
|
|
|
53,707
|
|
|
|
50,550
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
235,962
|
|
|
|
183,587
|
|
|
|
|
|
|
|
LONG-TERM ASSETS:
|
|
|
|
|
|
|
Severance pay fund
|
|
|
|
3,725
|
|
|
|
3,424
|
Long-term deposits and prepayments
|
|
|
|
1,594
|
|
|
|
1,198
|
|
|
|
|
|
|
|
Total long-term assets
|
|
|
|
5,319
|
|
|
|
4,622
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
88,327
|
|
|
|
72,987
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
14,247
|
|
|
|
16,898
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
|
40,596
|
|
|
|
42,955
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
384,451
|
|
|
$
|
321,049
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term bank credit
|
|
|
$
|
7,180
|
|
|
$
|
5,248
|
Current maturities of long-term loans
|
|
|
|
-
|
|
|
|
5,500
|
Trade payables
|
|
|
|
51,870
|
|
|
|
36,925
|
Account payables to related parties
|
|
|
|
2,808
|
|
|
|
2,888
|
Accrued expenses and other liabilities
|
|
|
|
20,344
|
|
|
|
15,314
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
82,202
|
|
|
|
65,875
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term loan and a financing leaseback from related party
|
|
|
12,407
|
|
|
|
12,188
|
Accrued severance pay
|
|
|
|
4,383
|
|
|
|
3,989
|
Long-term warranty provision
|
|
|
|
1,699
|
|
|
|
1,599
|
Deferred tax liabilities, net
|
|
|
|
6,212
|
|
|
|
6,375
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
|
24,701
|
|
|
|
24,151
|
|
|
|
|
|
|
|
REDEEMABLE NON-CONTROLLING INTEREST
|
|
7,855
|
|
|
|
7,106
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
Share capital -
|
|
|
|
|
|
|
Ordinary shares
|
|
|
|
364
|
|
|
|
360
|
Additional paid-in capital
|
|
|
|
138,222
|
|
|
|
135,437
|
Accumulated other comprehensive income
|
|
|
|
5,165
|
|
|
|
8,517
|
Retained earnings
|
|
|
|
125,942
|
|
|
|
79,603
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
269,693
|
|
|
|
223,917
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
384,451
|
|
|
$
|
321,049
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Consolidated statements of income
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
U.S. dollars in thousands (except per share data)
|
|
|
2013
|
|
|
|
2012
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
94,320
|
|
|
$
|
77,556
|
|
|
$
|
259,741
|
|
|
$
|
220,342
|
|
Cost of revenues
|
|
|
52,322
|
|
|
|
42,633
|
|
|
|
139,206
|
|
|
|
124,804
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
41,998
|
|
|
|
34,923
|
|
|
|
120,535
|
|
|
|
95,538
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
422
|
|
|
|
388
|
|
|
|
1,448
|
|
|
|
1,697
|
|
Marketing and selling
|
|
|
12,863
|
|
|
|
10,797
|
|
|
|
38,333
|
|
|
|
34,379
|
|
General and administrative
|
|
|
7,796
|
|
|
|
7,034
|
|
|
|
24,524
|
|
|
|
21,691
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
21,081
|
|
|
|
18,219
|
|
|
|
64,305
|
|
|
|
57,767
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
20,917
|
|
|
|
16,704
|
|
|
|
56,230
|
|
|
|
37,771
|
|
Finance expenses, net
|
|
|
1,113
|
|
|
|
1,986
|
|
|
|
898
|
|
|
|
2,998
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
19,804
|
|
|
|
14,718
|
|
|
|
55,332
|
|
|
|
34,773
|
|
Taxes on income
|
|
|
3,343
|
|
|
|
2,045
|
|
|
|
7,996
|
|
|
|
5,377
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
16,461
|
|
|
|
12,673
|
|
|
|
47,336
|
|
|
|
29,396
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest
|
|
|
(358
|
)
|
|
|
(310
|
)
|
|
|
(997
|
)
|
|
|
(521
|
)
|
Net income attributable to controlling interest
|
|
$
|
16,103
|
|
|
$
|
12,363
|
|
|
$
|
46,339
|
|
|
$
|
28,875
|
|
Diluted net income per share of ordinary shares
|
|
$
|
0.46
|
|
|
$
|
0.36
|
|
|
$
|
1.32
|
|
|
$
|
0.90
|
|
Weighted average number of ordinary shares used in computing
basic income per share
|
|
|
34,732,961
|
|
|
|
34,365,250
|
|
|
|
34,642,246
|
|
|
|
32,067,184
|
|
Weighted average number of ordinary shares used in computing
diluted income per share
|
|
|
35,322,419
|
|
|
|
34,380,274
|
|
|
|
35,148,613
|
|
|
|
32,079,099
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Consolidated statements of cash flows
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
U.S. dollars in thousands
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
47,336
|
|
|
$
|
29,396
|
|
Adjustments required to reconcile net income to net cash provided by
operating activities:
|
|
Depreciation and amortization
|
|
|
11,100
|
|
|
|
10,815
|
|
Share-based compensation expense
|
|
|
1,980
|
|
|
|
3,045
|
|
Decrease in share-based payment
|
|
|
-
|
|
|
|
(1,383
|
)
|
Accrued severance pay, net
|
|
|
95
|
|
|
|
33
|
|
Changes in deferred tax, net
|
|
|
1,396
|
|
|
|
(1,482
|
)
|
Capital gains
|
|
|
(22
|
)
|
|
|
(79
|
)
|
Foreign currency translation losses (gains)
|
|
|
(132
|
)
|
|
|
460
|
|
Increase in trade receivables
|
|
|
(10,361
|
)
|
|
|
(10,962
|
)
|
Increase in other accounts receivable and prepaid expenses
|
|
|
(8,203
|
)
|
|
|
(3,186
|
)
|
Increase in inventories
|
|
|
(3,157
|
)
|
|
|
(3,872
|
)
|
Increase in trade payables
|
|
|
8,572
|
|
|
|
1,577
|
|
Increase in warranty provision
|
|
|
359
|
|
|
|
95
|
|
Increase (decrease) in accrued expenses and other liabilities including
related parties
|
|
|
6,509
|
|
|
|
(7,806
|
)
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
55,472
|
|
|
|
16,651
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Investment in short-term deposits
|
|
|
(41,300
|
)
|
|
|
(33,700
|
)
|
Purchase of property, plant and equipment
|
|
|
(17,424
|
)
|
|
|
(8,308
|
)
|
Acquisition of the business of Prema Asia Marketing PTE Ltd. |
|
|
-
|
|
|
|
(150
|
)
|
Decrease (increase) in long term deposits
|
|
|
(396
|
)
|
|
|
35
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(59,120
|
)
|
|
|
(42,123
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Dividend paid
|
|
|
-
|
|
|
|
(27,182
|
)
|
Receipt from issuance of ordinary shares, net
|
|
|
-
|
|
|
|
76,815
|
|
Repayment of long-term loans
|
|
|
(5,372
|
)
|
|
|
(9,954
|
)
|
Short-term bank credit and loans, net
|
|
|
1,932
|
|
|
|
125
|
|
Repayment of contingent consideration related to U.S. Quartz Products,
Inc acquisition.
|
|
|
-
|
|
|
|
(6,242
|
)
|
Receipt of a financing leaseback related to Bar-Lev transaction
|
|
|
-
|
|
|
|
10,893
|
|
Repayment of a financing leaseback related to Bar-Lev transaction
|
|
|
(854
|
)
|
|
|
(88
|
)
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(4,294
|
)
|
|
|
44,367
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate differences on cash and cash equivalents
|
|
|
(1,145
|
)
|
|
|
(2,465
|
)
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
|
(9,087
|
)
|
|
|
16,430
|
|
Cash and cash equivalents at beginning of year
|
|
|
29,033
|
|
|
|
11,950
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
|
19,946
|
|
|
|
28,380
|
|
|
|
|
|
|
non - cash investing:
|
|
|
|
|
Purchase of fixed assets with credit from suppliers
|
|
|
6,438
|
|
|
|
2,650
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
U.S. dollars in thousands
|
|
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
16,461
|
|
$
|
12,673
|
|
|
$
|
|
47,336
|
|
|
$
|
|
29,396
|
|
|
Finance expenses, net
|
|
|
|
1,113
|
|
|
1,986
|
|
|
|
|
898
|
|
|
|
|
2,998
|
|
|
Taxes on income
|
|
|
|
3,343
|
|
|
2,045
|
|
|
|
|
7,996
|
|
|
|
|
5,377
|
|
|
Depreciation and amortization
|
|
|
|
3,803
|
|
|
3,488
|
|
|
|
|
11,100
|
|
|
|
|
10,815
|
|
|
Excess cost of acquired inventory (a)
|
|
|
|
31
|
|
|
113
|
|
|
|
|
173
|
|
|
|
|
782
|
|
|
Share-based compensation expense (b)
|
|
|
|
480
|
|
|
1,005
|
|
|
|
|
1,980
|
|
|
|
|
2,392
|
|
|
Inventory - change of estimate (c)
|
|
|
|
-
|
|
|
-
|
|
|
|
|
(3,458
|
)
|
|
|
|
-
|
|
|
Follow-on expenses (d)
|
|
|
|
-
|
|
|
-
|
|
|
|
|
1,470
|
|
|
|
|
-
|
|
|
IPO bonus (e)
|
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,970
|
|
|
Caesarstone USA contingent consideration adjustment (f)
|
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
255
|
|
|
Litigation credit (g)
|
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,001
|
)
|
|
Adjusted EBITDA
|
|
|
$
|
25,231
|
|
$
|
21,310
|
|
|
$
|
|
67,495
|
|
|
$
|
|
52,984
|
|
|
|
|
(a)
|
|
Consists of charges to cost of goods sold for the difference
between the higher carrying cost of the inventory of two of the
company's subsidiaries, Caesarstone USA's inventory at the time of
its acquisition and Caesarstone Australia Pty Limited's inventory
that was purchased from its distributor, and the standard cost of
the Company's inventory, which adversely impacts the company's
gross margins until such inventory is sold. The majority of the
acquired inventory from Caesarstone USA was sold in 2011, and the
majority of the inventory purchased from the Australian
distributor was sold in 2012.
|
(b)
|
|
In 2012, share-based compensation consists primarily of expenses
related to the stock options granted to employees of the Company,
as well as changes in the value of share-based rights granted to
the Company's Chief Executive Officer in January 2009. In 2013,
share-based compensation consists of expenses related to the stock
options granted to employees of the Company.
|
(c)
|
|
Relates to a change in estimate for the value of inventory following
the implementation of the Company's new ERP system in April 2013.
|
(d)
|
|
Consists of direct expenses related to a follow on-offering that
closed in April 2013, including a bonus declared by Tene to
certain employees of the Company that under US GAAP the Company is
required to expense against paid-in capital.
|
(e)
|
|
Consists of the payment of $1.72 million to certain employees of
the Company and $0.25 million to the Company's Chairman for their
contribution to the completion of the Company's initial public
offering, or IPO.
|
(f)
|
|
Relates to the change in fair value of the contingent
consideration that was part of the consideration transferred in
connection with the acquisition of Caesarstone USA.
|
(g)
|
|
In 2011, litigation gain consists of a mediation award in the
Company's favor pursuant to two trademark infringement cases
brought by Caesarstone Australia Pty Limited. In 2012, litigation
gain resulted from a settlement agreement with the former chief
executive officer of Caesarstone Australia Pty Limited related to
litigation that had been commenced in 2010. Pursuant to the
settlement, he transferred to the company the ownership of all his
shares in Caesarstone Australia Pty Limited received in connection
with his employment. The company did not make any payments in
connection with such transfer or other payments to the former
chief executive officer. As a result of the settlement, the
company reversed the liability provision in connection with the
litigation and the adjustment is presented net of the related
litigation expenses incurred in connection with the settlement.
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
U.S. dollars in thousands
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income attributable to controlling interest
to adjusted net income attributable to controlling interest:
|
|
Net income attributable to controlling interest
|
|
$
|
16,103
|
|
$
|
12,363
|
|
$
|
46,339
|
|
|
$
|
28,875
|
|
Excess cost of acquired inventory (a)
|
|
|
31
|
|
|
113
|
|
|
173
|
|
|
|
782
|
|
Share-based compensation expense (b)
|
|
|
480
|
|
|
1,005
|
|
|
1,980
|
|
|
|
2,392
|
|
IPO bonus (c)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
1,970
|
|
Caesarstone USA contingent consideration adjustment (d)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
255
|
|
Inventory - change of estimate (c)
|
|
-
|
|
|
-
|
|
|
(3,458
|
)
|
|
|
-
|
|
Follow-on expenses (f)
|
|
|
-
|
|
|
-
|
|
|
1,470
|
|
|
|
-
|
|
Litigation credit (g)
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
(1,001
|
)
|
Total adjustments before tax
|
|
|
511
|
|
|
1,118
|
|
|
165
|
|
|
|
4,398
|
|
Less tax on above adjustments (h)
|
|
|
69
|
|
|
123
|
|
|
24
|
|
|
|
480
|
|
Total adjustments after tax
|
|
|
442
|
|
|
995
|
|
|
141
|
|
|
|
3,918
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to controlling interest
|
|
$
|
16,545
|
|
$
|
13,358
|
|
$
|
46,480
|
|
|
$
|
32,793
|
|
Adjusted diluted EPS
|
|
|
0.47
|
|
|
0.39
|
|
|
1.32
|
|
|
|
1.02
|
|
(a)
|
|
Consists of charges to cost of goods sold for the difference
between the higher carrying cost of the inventory of two of the
company's subsidiaries, Caesarstone USA's inventory at the time of
its acquisition and Caesarstone Australia Pty Limited's inventory
that was purchased from its distributor, and the standard cost of
the Company's inventory, which adversely impacts the company's
gross margins until such inventory is sold. The majority of the
acquired inventory from Caesarstone USA was sold in 2011, and the
majority of the inventory purchased from the Australian
distributor was sold in 2012.
|
|
|
|
|
|
|
|
|
(b)
|
|
In 2012, share-based compensation consists primarily of expenses
related to the stock options granted to employees of the Company, as
well as changes in the value of share-based rights granted to the
Company's Chief Executive Officer in January 2009. In 2013,
share-based compensation consists of expenses related to the stock
options granted to employees of the Company.
|
|
|
|
|
(c)
|
|
Consists of the payment of $1.72 million to certain employees of the
Company and $0.25 million to the Company's Chairman for their
contribution to the completion of the Company's IPO.
|
|
|
(d)
|
|
Relates to the change in fair value of the contingent consideration
that was part of the consideration transferred in connection with
the acquisition of Caesarstone USA.
|
|
|
(e)
|
|
Relates to a change in estimate for the value of inventory following
the implementation of the Company's new ERP system in April 2013.
|
(f)
|
|
Consists of direct expenses related to a follow on-offering that
closed in April 2013, including a bonus declared by Tene to
certain employees of the Company that under US GAAP the Company is
required to expense against paid-in capital.
|
|
(g)
|
|
In 2011, litigation gain consists of a mediation award in the
Company's favor pursuant to two trademark infringement cases
brought by Caesarstone Australia Pty Limited. In 2012, litigation
gain resulted from a settlement agreement with the former chief
executive officer of Caesarstone Australia Pty Limited related to
litigation that had been commenced in 2010. Pursuant to the
settlement, he transferred to the company the ownership of all his
shares in Caesarstone Australia Pty Limited received in connection
with his employment. The company did not make any payments in
connection with such transfer or other payments to the former
chief executive officer. As a result of the settlement, the
company reversed the liability provision in connection with the
litigation and the adjustment is presented net of the related
litigation expenses incurred in connection with the settlement.
|
|
|
|
|
|
|
|
|
|
|
|
|
(h)
|
|
The tax adjustments for the three and nine months ended September
30, 2012 were based on the effective tax rate for 2011. The tax
adjustments for the three and nine months ended September 30, 2013,
were based on the effective tax rate for the nine months ended
September 30, 2013.
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries Geographic
breakdown of revenues by region
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
U.S. dollars in thousands
|
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA |
|
|
34,144
|
|
|
23,094
|
|
|
|
88,740
|
|
|
64,987
|
Australia |
|
|
22,584
|
|
|
22,919
|
|
|
|
65,579
|
|
|
63,620
|
Canada |
|
|
13,312
|
|
|
10,892
|
|
|
|
37,156
|
|
|
29,396
|
Israel |
|
|
10,947
|
|
|
9,674
|
|
|
|
31,478
|
|
|
27,674
|
Europe |
|
|
5,962
|
|
|
5,182
|
|
|
|
16,351
|
|
|
16,352
|
Rest of World
|
|
|
7,371
|
|
|
5,795
|
|
|
|
20,437
|
|
|
18,313
|
|
|
$
|
94,320
|
|
$
|
77,556
|
|
|
$
|
259,741
|
|
$
|
220,342
|

Investor Relations:
ICR, Inc.
James Palczynski, Senior
Managing Director, +1 (203) 682-8229
Source: Caesarstone Sdot-Yam Ltd.
News Provided by Acquire Media