-
Q4 Revenue Up 27.0% to a Record of $96.8 million
-
Q4 Net Income Attributable to Controlling Interest Up 58.1%; EPS of
$0.48
-
FY13 Revenue Up 20.2% to $356.6 million
-
FY13 Net Income Attributable to Controlling Interest Up 59.8%; EPS
of $1.80
-
Company Issues FY14 Guidance, Expects Continued Growth
MP MENASHE, Israel--(BUSINESS WIRE)--
Caesarstone Sdot-Yam Ltd. (CSTE), a manufacturer of high quality
engineered quartz surfaces sold under its premium brand, today reported
financial results for its fourth quarter and fiscal year ended December
31, 2013.
Revenues in the fourth quarter of 2013 increased by 27.0% to $96.8
million compared to $76.2 million in the prior year. On a constant
currency basis, fourth quarter revenue growth was 29.7% year-over-year.
Growth in revenues was broad-based, but primarily driven by continued
increases in the United States, the Company's largest region, which rose
59.2% compared to the same period in the prior year.
Yosef Shiran, Chief Executive Officer, commented, "We are pleased to set
another record year for both sales and earnings. Revenue growth
continued its acceleration into year-end, principally driven by our
growth in the United States. We believe these results demonstrate the
realization of our quartz penetration vision and our solid position in
the US market. This was accompanied by strong demand in all of our other
regions, and the success of our Super-Natural collection. We expect 2014
to be another strong year, and we look forward to expanding our capacity
to meet the increasing demand, maintain our leadership position, enhance
our strong brand and generate value for our customers and shareholders."
In addition, the Company noted that during the fourth quarter, as
contemplated by its previously announced agreement with IKEA,
Caesarstone is now providing all 38 of IKEA's US stores with quartz
countertops. Both IKEA and Caesarstone have been pleased to see a good
reaction from consumers who prefer Caesarstone quartz surfaces as their
material of choice and find IKEA's kitchen equipped with Caesarstone
surfaces as an appealing proposition.
Gross margin in the fourth quarter was 43.0% compared to 41.8% in the
prior year. This year-over-year improvement was driven primarily by the
benefits of higher volume and the success of the Super-Natural
collection, partially offset by a significantly negative exchange rate
impact.
Operating expenses in the fourth quarter were $21.8 million, or 22.5% of
revenues. This compares to the prior year's fourth quarter level of
$19.7 million, or 25.8% of revenues.
Operating income in the fourth quarter was $19.8 million, an increase of
62.2% compared to $12.2 million in the fourth quarter of 2012.
Adjusted EBITDA, which excludes share-based compensation expense, the
excess cost of acquired inventory and other non-recurring costs,
increased by 47.1% to $24.2 million in the fourth quarter, a margin of
25.0%. This compares to adjusted EBITDA of $16.5 million, a margin of
21.6% in the fourth quarter of the prior year.
Finance expenses in the fourth quarter were $0.4 million compared to
finance income of $0.2 million during the same period in the prior year.
The Company reported net income attributable to controlling interest for
the fourth quarter of $17.0 million, compared to $10.8 million in the
same quarter in the prior year. Diluted earnings per share for the
fourth quarter were $0.48 on 35.4 million shares, compared to $0.31 on
34.6 million shares in the prior year. On an adjusted basis, earnings
per share in the fourth quarter were $0.49 compared to $0.32 in the
prior year.
The Company's balance sheet as of December 31, 2013 remained solid with
cash and bank deposits of $92.2 million, compared to $72.7 million in
the prior year, after a $20.1 million dividend paid during the
fourth-quarter.
Full-Year Results
Revenues for the full year of 2013 grew by 20.2% to a record level of
$356.6 million as compared to $296.6 million in 2012. On a constant
currency basis, growth was 21.6% year-over-year. Revenue grew in all
regions, with the strongest growth coming from the United States, which
grew by 42.2% to become the Company's largest region.
Full-year gross margin, excluding a one-time positive inventory
adjustment of $3.5 million, was 44.5%, an improvement of 150 basis
points over the prior-year.
Operating expenses in 2013 were 24.2% of revenue compared to 26.1% in
the prior year, reflecting the benefit of higher volume.
Operating profitability in 2013, excluding the inventory adjustment
referred to above, improved by 350 basis points to 20.3%, driven by a
combination of scale-related benefits and the success of the
Super-Natural collection.
Adjusted EBITDA in 2013 increased by 32.1% to $91.7 million, compared to
$69.4 million in fiscal 2012.
Adjusted net income attributable to controlling interest for the full
year of 2013 increased by 45.3% to $64.0 million, compared to the fiscal
2012 level of $44.0 million. Adjusted diluted earnings per share was
$1.82 in 2013, compared to $1.35 in the prior year.
Guidance
The Company today issued initial guidance for the full-year of 2014. At
present, it expects its revenues to be in the range of $410 million to
$420 million, and adjusted EBITDA in the range of $104 million to $109
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, February 12, 2013, at 8:30 a.m. ET to discuss the results of the
fourth quarter and fiscal year ended December 31, 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 1-888-329-8877 or +1-719-457-1512
(international). Israeli participants can dial in at 1-80-924-5906. The
pass code is 1329081.
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
1329081. The replay will be available beginning at 11:30 a.m. ET on
February 12, 2013 and will last through 11:59 PM ESTFebruary 26, 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 48 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 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
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
22,248
|
|
|
$
|
29,033
|
Short-term bank deposits
|
|
|
|
70,000
|
|
|
|
43,700
|
Trade receivables
|
|
|
|
52,304
|
|
|
|
44,066
|
Other accounts receivable and prepaid expenses
|
|
|
|
22,853
|
|
|
|
16,238
|
Inventories
|
|
|
|
57,867
|
|
|
|
50,550
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
225,272
|
|
|
|
183,587
|
|
|
|
|
|
|
|
LONG-TERM ASSETS:
|
|
|
|
|
|
|
Severance pay fund
|
|
|
|
3,973
|
|
|
|
3,424
|
Long-term deposits and prepayments
|
|
|
|
1,603
|
|
|
|
1,198
|
|
|
|
|
|
|
|
Total long-term assets
|
|
|
|
5,576
|
|
|
|
4,622
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
|
93,634
|
|
|
|
72,987
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
13,372
|
|
|
|
16,898
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
|
39,702
|
|
|
|
42,955
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
377,556
|
|
|
$
|
321,049
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term bank credit
|
|
|
$
|
5,454
|
|
|
$
|
5,248
|
Current maturities of long-term loans
|
|
|
|
-
|
|
|
|
5,500
|
Trade payables
|
|
|
|
50,624
|
|
|
|
36,925
|
Account payables to related parties
|
|
|
|
2,602
|
|
|
|
2,888
|
Accrued expenses and other liabilities
|
|
|
|
20,890
|
|
|
|
15,314
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
79,570
|
|
|
|
65,875
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term loan and financing leaseback from a related party
|
|
|
|
12,342
|
|
|
|
12,188
|
Accrued severance pay
|
|
|
|
4,472
|
|
|
|
3,989
|
Long-term warranty provision
|
|
|
|
1,704
|
|
|
|
1,599
|
Deferred tax liabilities, net
|
|
|
|
6,245
|
|
|
|
6,375
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
|
24,763
|
|
|
|
24,151
|
|
|
|
|
|
|
|
REDEEMABLE NON-CONTROLLING INTEREST
|
|
|
|
7,624
|
|
|
|
7,106
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
Share capital -
|
|
|
|
|
|
|
Ordinary shares
|
|
|
|
364
|
|
|
|
360
|
Additional paid-in capital
|
|
|
|
138,755
|
|
|
|
135,437
|
Accumulated other comprehensive income
|
|
|
|
3,682
|
|
|
|
8,517
|
Retained earnings
|
|
|
|
122,798
|
|
|
|
79,603
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
265,599
|
|
|
|
223,917
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
377,556
|
|
|
$
|
321,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Consolidated statements of income
|
|
|
|
Three months ended
|
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
|
December 31,
|
U.S. dollars in thousands (except per share data)
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
96,813
|
|
|
|
$
|
76,222
|
|
|
|
$
|
356,554
|
|
|
|
$
|
296,564
|
|
Cost of revenues
|
|
|
|
55,230
|
|
|
|
|
44,365
|
|
|
|
|
194,436
|
|
|
|
|
169,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
41,583
|
|
|
|
|
31,857
|
|
|
|
|
162,118
|
|
|
|
|
127,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
|
554
|
|
|
|
|
403
|
|
|
|
|
2,002
|
|
|
|
|
2,100
|
|
Marketing and selling
|
|
|
|
12,876
|
|
|
|
|
12,532
|
|
|
|
|
51,209
|
|
|
|
|
46,911
|
|
General and administrative
|
|
|
|
8,380
|
|
|
|
|
6,732
|
|
|
|
|
32,904
|
|
|
|
|
28,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
21,810
|
|
|
|
|
19,667
|
|
|
|
|
86,115
|
|
|
|
|
77,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
19,773
|
|
|
|
|
12,190
|
|
|
|
|
76,003
|
|
|
|
|
49,961
|
|
Finance expenses (income), net
|
|
|
|
416
|
|
|
|
|
(225
|
)
|
|
|
|
1,314
|
|
|
|
|
2,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
19,357
|
|
|
|
|
12,415
|
|
|
|
|
74,689
|
|
|
|
|
47,188
|
|
Taxes on income
|
|
|
|
2,340
|
|
|
|
|
1,444
|
|
|
|
|
10,336
|
|
|
|
|
6,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
17,017
|
|
|
|
|
10,971
|
|
|
|
|
64,353
|
|
|
|
|
40,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest
|
|
|
|
(12
|
)
|
|
|
|
(214
|
)
|
|
|
|
(1,009
|
)
|
|
|
|
(735
|
)
|
Net income attributable to controlling interest
|
|
|
$
|
17,005
|
|
|
|
$
|
10,757
|
|
|
|
$
|
63,344
|
|
|
|
$
|
39,632
|
|
Basic net income per ordinary share
|
|
|
$
|
0.49
|
|
|
|
$
|
0.31
|
|
|
|
$
|
1.83
|
|
|
|
$
|
1.21
|
|
Diluted net income per ordinary share
|
|
|
$
|
0.48
|
|
|
|
$
|
0.31
|
|
|
|
$
|
1.80
|
|
|
|
$
|
1.21
|
|
Weighted average number of ordinary shares used in computing basic
income per ordinary share
|
|
|
|
34,739,315
|
|
|
|
|
34,365,250
|
|
|
|
|
34,666,514
|
|
|
|
|
32,641,701
|
|
Weighted average number of ordinary shares used in computing diluted
income per ordinary share
|
|
|
|
35,393,947
|
|
|
|
|
34,561,697
|
|
|
|
|
35,209,946
|
|
|
|
|
32,699,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Consolidated statements of cash flows
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31,
|
U.S. dollars in thousands
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
64,353
|
|
|
|
$
|
40,367
|
|
Adjustments required to reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation and amortization
|
|
|
|
14,994
|
|
|
|
|
14,368
|
|
Share-based compensation expense
|
|
|
|
2,514
|
|
|
|
|
3,660
|
|
Decrease in share-based payment in subsidiary
|
|
|
|
-
|
|
|
|
|
(1,383
|
)
|
Accrued severance pay, net
|
|
|
|
(64
|
)
|
|
|
|
(61
|
)
|
Changes in deferred tax, net
|
|
|
|
674
|
|
|
|
|
(1,927
|
)
|
Capital gains
|
|
|
|
(22
|
)
|
|
|
|
(79
|
)
|
Compensation paid by a former shareholder
|
|
|
|
810
|
|
|
|
|
-
|
|
Foreign currency translation losses (gains)
|
|
|
|
(132
|
)
|
|
|
|
417
|
|
Increase in trade receivables
|
|
|
|
(8,238
|
)
|
|
|
|
(8,561
|
)
|
Increase in other accounts receivable and prepaid expenses
|
|
|
|
(7,419
|
)
|
|
|
|
(3,291
|
)
|
Increase in inventories
|
|
|
|
(7,317
|
)
|
|
|
|
(3,816
|
)
|
Increase in trade payables
|
|
|
|
9,351
|
|
|
|
|
5,201
|
|
Increase in warranty provision
|
|
|
|
401
|
|
|
|
|
297
|
|
Increase (decrease) in accrued expenses and other liabilities
including related parties
|
|
|
|
5,765
|
|
|
|
|
(9,922
|
)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
75,670
|
|
|
|
|
35,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in short-term deposits
|
|
|
|
(26,300
|
)
|
|
|
|
(43,700
|
)
|
Purchase of property, plant and equipment
|
|
|
|
(27,372
|
)
|
|
|
|
(13,481
|
)
|
Acquisition of the business of Prema Asia Marketing PTE Ltd. |
|
|
|
-
|
|
|
|
|
(150
|
)
|
Increase in long term deposits and prepayments
|
|
|
|
(405
|
)
|
|
|
|
(849
|
)
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
(54,077
|
)
|
|
|
|
(58,180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend paid
|
|
|
|
(20,149
|
)
|
|
|
|
(27,182
|
)
|
Receipt from issuance of ordinary shares, net
|
|
|
|
-
|
|
|
|
|
76,768
|
|
Repayment of long-term loans
|
|
|
|
(5,372
|
)
|
|
|
|
(12,670
|
)
|
Short-term bank credit and loans, net
|
|
|
|
206
|
|
|
|
|
1,275
|
|
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
|
|
|
|
(1,149
|
)
|
|
|
|
(362
|
)
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(26,464
|
)
|
|
|
|
42,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate differences on cash and cash equivalents
|
|
|
|
(1,914
|
)
|
|
|
|
(2,487
|
)
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
(6,785
|
)
|
|
|
|
17,083
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
29,033
|
|
|
|
|
11,950
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
|
|
22,248
|
|
|
|
|
29,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non - cash investing:
|
|
|
|
|
|
|
Purchase of fixed assets with credit from suppliers
|
|
|
|
4,880
|
|
|
|
|
2,141
|
|
|
|
|
|
|
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
|
December 31,
|
U.S. dollars in thousands
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
17,017
|
|
|
$
|
10,971
|
|
|
|
$
|
64,353
|
|
|
|
$
|
40,367
|
|
Finance expenses, net
|
|
|
|
416
|
|
|
|
(225
|
)
|
|
|
|
1,314
|
|
|
|
|
2,773
|
|
Taxes on income
|
|
|
|
2,340
|
|
|
|
1,444
|
|
|
|
|
10,336
|
|
|
|
|
6,821
|
|
Depreciation and amortization
|
|
|
|
3,894
|
|
|
|
3,553
|
|
|
|
|
14,994
|
|
|
|
|
14,368
|
|
Excess cost of acquired inventory (a)
|
|
|
|
15
|
|
|
|
103
|
|
|
|
|
188
|
|
|
|
|
885
|
|
Share-based compensation expense (b)
|
|
|
|
534
|
|
|
|
615
|
|
|
|
|
2,514
|
|
|
|
|
3,007
|
|
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 gain (g)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,001
|
)
|
Adjusted EBITDA
|
|
|
$
|
24,216
|
|
|
$
|
16,461
|
|
|
|
$
|
91,711
|
|
|
|
$
|
69,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 paid by the Company's former
shareholder, 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
|
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
|
December 31,
|
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
|
|
|
$
|
17,005
|
|
|
$
|
10,757
|
|
|
$
|
63,344
|
|
|
|
$
|
39,632
|
|
Excess cost of acquired inventory (a)
|
|
|
|
15
|
|
|
|
103
|
|
|
|
188
|
|
|
|
|
885
|
|
Share-based compensation expense (b)
|
|
|
|
534
|
|
|
|
615
|
|
|
|
2,514
|
|
|
|
|
3,007
|
|
IPO bonus (c)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,970
|
|
Caesarstone USA contingent consideration adjustment (d)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
255
|
|
Inventory - change of estimate (e)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,458
|
)
|
|
|
|
-
|
|
Follow-on expenses (f)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,470
|
|
|
|
|
-
|
|
Litigation gain (g)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(1,001
|
)
|
Total adjustments before tax
|
|
|
|
549
|
|
|
|
718
|
|
|
|
714
|
|
|
|
|
5,116
|
|
Less tax on above adjustments (h)
|
|
|
|
75
|
|
|
|
260
|
|
|
|
99
|
|
|
|
|
740
|
|
Total adjustments after tax
|
|
|
|
474
|
|
|
|
458
|
|
|
|
615
|
|
|
|
|
4,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to controlling interest
|
|
|
$
|
17,479
|
|
|
$
|
11,215
|
|
|
$
|
63,959
|
|
|
|
$
|
44,008
|
|
Adjusted diluted EPS
|
|
|
|
0.49
|
|
|
|
0.32
|
|
|
|
1.82
|
|
|
|
|
1.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 paid by the Company's
former shareholder, 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 first three quarters of 2012 were based
on effective tax rate for 2011. For the twelve months ended December
31, 2012, the 2012 annual effective tax rate was used. The Company
recognized the cumulative effect of the change in effective tax rate
in the fourth quarter. The tax adjustments for the three and twelve
months ended December 31, 2013, were based on the effective tax rate
for the twelve months ended December 31, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
Geographic breakdown of revenues by region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
|
December 31,
|
U.S. dollars in thousands
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA |
|
|
|
34,659
|
|
|
|
21,772
|
|
|
|
123,399
|
|
|
|
86,759
|
Australia |
|
|
|
24,315
|
|
|
|
25,315
|
|
|
|
89,894
|
|
|
|
88,935
|
Canada |
|
|
|
12,058
|
|
|
|
10,926
|
|
|
|
49,214
|
|
|
|
40,322
|
Israel |
|
|
|
10,546
|
|
|
|
8,699
|
|
|
|
42,024
|
|
|
|
36,373
|
Europe |
|
|
|
6,622
|
|
|
|
4,397
|
|
|
|
22,973
|
|
|
|
20,749
|
Rest of World
|
|
|
|
8,613
|
|
|
|
5,113
|
|
|
|
29,050
|
|
|
|
23,426
|
|
|
|
$
|
96,813
|
|
|
$
|
76,222
|
|
|
$
|
356,554
|
|
|
$
|
296,564
|
Investor Relations:
ICR, Inc.
James Palczynski, +1
203-682-8229
Partner
Source: Caesarstone Sdot-Yam Ltd.
News Provided by Acquire Media