|
CAESARSTONE LTD.
|
|
|
|
|
|
|
Date: February 12, 2020
|
By:
|
/s/ Ron Mosberg
|
|
|
|
Name: Ron Mosberg
|
|
|
|
Title: General Counsel & Corporate Secretary
|
|
Exhibit
|
Description
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands (except per share data)
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Revenues
|
$
|
133,867
|
$
|
142,881
|
$
|
545,974
|
$
|
575,871
|
||||||||
Cost of revenues
|
98,884
|
105,811
|
397,335
|
412,457
|
||||||||||||
Gross profit
|
34,983
|
37,070
|
148,639
|
163,414
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
962
|
1,131
|
4,146
|
3,635
|
||||||||||||
Marketing and selling
|
16,698
|
17,593
|
66,770
|
74,786
|
||||||||||||
General and administrative
|
9,625
|
10,409
|
40,681
|
43,323
|
||||||||||||
Legal settlements and loss contingencies, net
|
7,201
|
3,902
|
12,359
|
8,903
|
||||||||||||
Total operating expenses
|
34,486
|
33,035
|
123,956
|
130,647
|
||||||||||||
Operating income
|
497
|
4,035
|
24,683
|
32,767
|
||||||||||||
Finance expenses (income), net
|
(622
|
)
|
2,097
|
5,578
|
3,639
|
|||||||||||
Income before taxes on income
|
1,119
|
1,938
|
19,105
|
29,128
|
||||||||||||
Taxes on income
|
1,394
|
454
|
6,243
|
4,560
|
||||||||||||
Net income (loss)
|
$
|
(275
|
)
|
$
|
1,484
|
$
|
12,862
|
$
|
24,568
|
|||||||
Net income attributable to non-controlling interest
|
-
|
(118
|
)
|
-
|
(163
|
)
|
||||||||||
Net income (loss) attributable to controlling interest
|
$
|
(275
|
)
|
$
|
1,366
|
$
|
12,862
|
$
|
24,405
|
|||||||
Basic net income (loss) per ordinary share (*)
|
$
|
(0.01
|
)
|
$
|
0.04
|
$
|
0.37
|
$
|
0.72
|
|||||||
Diluted net income (loss) per ordinary share (*)
|
$
|
(0.01
|
)
|
$
|
0.04
|
$
|
0.37
|
$
|
0.72
|
|||||||
Weighted average number of ordinary shares used in computing basic income (loss) per ordinary share
|
34,397,410
|
34,363,211
|
34,383,895
|
34,357,691
|
||||||||||||
Weighted average number of ordinary shares used in computing diluted income (loss) per ordinary share
|
34,397,410
|
34,394,808
|
34,459,599
|
34,409,182
|
(*) The numerator for the calculation of net income (loss) per share for the three and twelve months ended December 31, 2018 has been increased by approximately $0.1
million and $0.2 million, respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.
|
Twelve months ended December 31,
|
||||||||
U.S. dollars in thousands
|
2019
|
2018
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
12,862
|
$
|
24,568
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
28,587
|
28,591
|
||||||
Share-based compensation expense
|
3,631
|
1,684
|
||||||
Accrued severance pay, net
|
(247
|
)
|
(543
|
)
|
||||
Changes in deferred tax, net
|
(1,479
|
)
|
(3,064
|
)
|
||||
Capital loss
|
326
|
225
|
||||||
Legal settlemnets and loss contingencies, net
|
12,359
|
8,903
|
||||||
Increase in trade receivables
|
(5,032
|
)
|
(2,637
|
)
|
||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
(6,346
|
)
|
7,673
|
|||||
Decrerase (increase) in inventories
|
35,303
|
(30,607
|
)
|
|||||
Decrease in trade payables
|
(6,663
|
)
|
(16,223
|
)
|
||||
Increase in warranty provision
|
69
|
367
|
||||||
Changes in right of use assets
|
(73,664
|
)
|
-
|
|||||
Changes in lease liabilities
|
77,278
|
-
|
||||||
Increase (decrease) in accrued expenses and other liabilities including related party
|
6,063
|
(4,245
|
)
|
|||||
Net cash provided by operating activities
|
83,047
|
14,692
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property, plant and equipment
|
(23,590
|
)
|
(20,962
|
)
|
||||
Proceeds from sale of property, plant and equipment
|
66
|
28
|
||||||
Increase in long term deposits
|
(63
|
)
|
(219
|
)
|
||||
Net cash used in investing activities
|
(23,587
|
)
|
(21,153
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Dividend paid
|
(5,160
|
)
|
(20,268
|
)
|
||||
Dividend paid by subsidiary to non-controlling interest
|
-
|
(978
|
)
|
|||||
Call option exercised related to non-controlling interest
|
-
|
(20,119
|
)
|
|||||
Changes in short-term bank credit and loans, net
|
(7,771
|
)
|
4,171
|
|||||
Repayment of a financing leaseback related to Bar-Lev transaction
|
(1,196
|
)
|
(1,169
|
)
|
||||
Net cash used in financing activities
|
(14,127
|
)
|
(38,363
|
)
|
||||
Effect of exchange rate differences on cash and cash equivalents
|
477
|
(321
|
)
|
|||||
Incresase (decrease) in cash and cash equivalents and short-term bank deposits
|
45,810
|
(45,145
|
)
|
|||||
Cash and cash equivalents and short-term bank deposits at beginning of the period
|
93,562
|
138,707
|
||||||
Cash and cash equivalents and short-term bank deposits at end of the period
|
$
|
139,372
|
$
|
93,562
|
||||
Non - cash investing:
|
||||||||
Changes in trade payables balances related to purchase of fixed assets
|
(3,235
|
)
|
2,688
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Reconciliation of Gross profit to Adjusted Gross profit:
|
||||||||||||||||
Gross profit
|
$
|
34,983
|
$
|
37,070
|
$
|
148,639
|
$
|
163,414
|
||||||||
Share-based compensation expense (a)
|
10
|
85
|
$
|
285
|
163
|
|||||||||||
Non-recurring import related income
|
-
|
2,104
|
$
|
(1,501
|
)
|
2,104
|
||||||||||
Other non-recurring items (b)
|
294
|
-
|
$
|
1,661
|
-
|
|||||||||||
Adjusted Gross profit (Non-GAAP)
|
$
|
35,287
|
$
|
39,259
|
$
|
149,084
|
$
|
165,681
|
(a)
|
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
|
|||||||||
(b)
|
Three months ended December 31, 2019 reflects one time inventory write down due to discontinuation of certain product group manufacturing, and Twelve months ended December 31, 2019 figures includes mainly one
time amortization of machinery equipment with no future alternative use.
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Reconciliation of Net Income (loss) to Adjusted EBITDA:
|
||||||||||||||||
Net income (loss)
|
$
|
(275
|
)
|
$
|
1,484
|
$
|
12,862
|
$
|
24,568
|
|||||||
Finance expenses (income), net
|
(622
|
)
|
2,097
|
5,578
|
3,639
|
|||||||||||
Taxes on income
|
1,394
|
454
|
6,243
|
4,560
|
||||||||||||
Depreciation and amortization (*)
|
6,970
|
7,052
|
28,587
|
28,591
|
||||||||||||
Legal settlements and loss contingencies, net (a)
|
7,201
|
3,902
|
12,359
|
8,903
|
||||||||||||
Share-based compensation expense (b)
|
779
|
751
|
3,631
|
1,684
|
||||||||||||
Non-recurring import related expense (income)
|
-
|
2,104
|
(1,501
|
)
|
2,104
|
|||||||||||
Other non-recurring items (c)
|
294
|
-
|
1,287
|
1,157
|
||||||||||||
Adjusted EBITDA (Non-GAAP)
|
$
|
15,741
|
$
|
17,844
|
$
|
69,046
|
$
|
75,206
|
(a)
|
Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
|
(b)
|
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
|
(c)
|
Relates to non-recurring expenses related to North American region establishment, one time charge related to reduction in headcount and certain activities including discontinuation of certain product group
manufacturing, and in 2018 also relocation expenses of Caesarstone USA headquarters (Company's subsidiary).
|
(*)
|
Twelve months ended December 31, 2019 figures include one time amortization of machinnery equipment with no future alternative use.
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands (except per share data)
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Reconciliation of net income (loss) attributable to controlling interest to adjusted net income attributable to controlling interest:
|
||||||||||||||||
Net income (loss) attributable to controlling interest
|
$
|
(275
|
)
|
$
|
1,366
|
$
|
12,862
|
$
|
24,405
|
|||||||
Legal settlements and loss contingencies, net (a)
|
7,201
|
3,902
|
12,359
|
8,903
|
||||||||||||
Share-based compensation expense (b)
|
779
|
751
|
3,631
|
1,684
|
||||||||||||
Non cash revaluation of lease liabilities (c)
|
266
|
-
|
3,615
|
-
|
||||||||||||
Non-recurring import related expense (income)
|
2,104
|
(1,501
|
)
|
2,104
|
||||||||||||
Other non-recurring items (d)
|
294
|
-
|
2,487
|
1,157
|
||||||||||||
Total adjustments
|
8,540
|
6,757
|
20,591
|
13,848
|
||||||||||||
Less tax on non-tax adjustments (e)
|
2,791
|
1,097
|
6,729
|
2,168
|
||||||||||||
Total adjustments after tax
|
5,749
|
5,660
|
13,862
|
11,680
|
||||||||||||
Adjusted net income attributable to controlling interest (Non-GAAP)
|
$
|
5,474
|
$
|
7,026
|
$
|
26,724
|
$
|
36,085
|
||||||||
Adjusted diluted EPS (f)
|
$
|
0.16
|
$
|
0.20
|
$
|
0.77
|
$
|
1.05
|
(a)
|
Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
|
(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)
|
Relates to non-recurring expenses related to North American region establishment, one time charge related to reduction in headcount and certain activities including discontinuation of certain product group
manufacturing, one time amortization of machinnery equipment with no future alternative use, and in 2018 also relocation expenses of Caesarstone USA headquarters (Company's subsidiary).
|
(e)
|
Tax adjustments for the three and twelve months ended December 31, 2019 and 2018, based on the effective tax rates for these periods.
|
(f)
|
In calculating adjusted diluted (Non-GAAP) EPS, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718.
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
USA (*)
|
$
|
64,659
|
$
|
60,200
|
$
|
250,471
|
$
|
239,241
|
||||||||
Australia (incl. New Zealand)
|
26,000
|
33,484
|
108,150
|
131,086
|
||||||||||||
Canada (*)
|
20,575
|
23,834
|
85,975
|
99,678
|
||||||||||||
Israel
|
8,503
|
9,268
|
38,693
|
39,894
|
||||||||||||
Europe
|
8,820
|
8,722
|
37,756
|
34,457
|
||||||||||||
Rest of World
|
5,310
|
7,373
|
24,929
|
31,515
|
||||||||||||
$
|
133,867
|
$
|
142,881
|
$
|
545,974
|
$
|
575,871
|
(*)
|
Total revenues for the three and twelve months ended December 31, 2019 and 2018 in the North American region were $85,234 and $336,446, and $84,034 and $338,919,
respectively.
|