CSTE Caesarstone Ltd

- Full Year Record Revenue Up 7.3% to $690.8 Million; Up 10.8% on Constant Currency Basis -

- Fourth Quarter Revenues Down 6.8% to $159.4 Million; Down 2.1% on Constant Currency Basis -

- Full Year Net Loss Attributable to Controlling Interest of $57.1 Million, or Loss per share of $1.66, Including a Non-cash Pretax Impairment Charge of $71.3 Million -

- Full Year Adjusted Net Income of $10.6 Million, or Adjusted Diluted EPS of $0.31 -

- Full Year Adjusted EBITDA of $51.9 Million -

Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its fourth quarter and full year ended December 31, 2022.

Yuval Dagim, Caesarstone’s Chief Executive Officer commented, “I am proud of the entire Caesarstone team’s efforts as we finished 2022 with record full year revenue of approximately $691 million despite softer macro-economic conditions in the second half of 2022. During the year, we focused diligently on executing our multi-pronged growth strategy as we navigated through a challenging demand environment that remains soft. While we expect market volumes to be lower in the near-term, we believe long-term renovation and remodel fundamentals in our key markets remain strong. With this in mind, we are focused on optimizing our global structure during 2023 to operate more efficiently and improve our scalability for new growth opportunities.”

“We are carefully monitoring our costs as we work to improve our margins while also investing for future growth. In order to do so effectively, we are focused on leveraging the projects within our Global Growth Acceleration Plan. This includes actions to rationalize our costs through headcount reductions and closely monitoring expenses. We have already reduced global headcount by 9% during the second half of 2022. We are more efficiently managing our working capital by balancing production at our facilities and reducing SKUs to align inventory levels to current demand. We have increased the portion of our products that are produced by 3rd parties in lower cost countries, enabling us to better capture incremental demand for products at various price points. We are intensifying our marketing efforts to reinforce the Caesarstone brand, in part by reinvesting proceeds from cost saving actions. We are expanding our U.S footprint through investments into new distribution centers that will be opened in coming years. Furthermore, our investments in new territories including our bolt-on acquisition of a distributor in Sweden gives us a direct presence for expansion in Europe. And finally, the launch in the U.S. and Canada of our new Porcelain products in the first half of 2023 is an exciting milestone in our multi-material strategy to accelerate our growth in this exciting product category.”

“With our world-class brand, multi-material countertop offerings, innovative go-to-market initiatives and dedicated focus on driving results, we believe we are well situated to capture market share and unlock further value in our business.”

Fourth Quarter 2022 Results

Revenue in the fourth quarter of 2022 was $159.4 million, 6.8% lower compared to $171.1 million in the prior year quarter. On a constant currency basis, fourth quarter revenue was lower by 2.1% year-over-year. Sales improvement in the Company’s APAC region on a constant currency basis, was more than offset by softer performance in other regions given challenging macro-economic conditions that resulted in lower demand.

Gross margin in the fourth quarter of 2022 was 19.4% compared to 23.2% in the prior year quarter. Adjusted gross margin in the fourth quarter was 19.7% compared to 23.3% in the prior year quarter. The majority of the year-over-year reduction in gross margin resulted from increased manufacturing unit costs due to lower fixed cost absorption resulting from lower capacity utilization, higher raw material and shipping costs and unfavorable foreign currency exchange rate fluctuations as a result of appreciation of the U.S dollar against all other currencies, partially offset by pricing actions.

Operating expenses in the fourth quarter of 2022 were $106.1 million, compared to $36.3 million in the prior year quarter. The fourth quarter 2022 included a one-time, non-cash impairment charge of $71.3 million related to goodwill and long-lived assets. The Company’s current market capitalization together with challenging economic conditions, higher interest rates and lower production utilization prompted a review of its goodwill and long-lived asset balances, which resulted in the impairment charges. Excluding legal settlements, loss contingencies and impairment charges, adjusted operating expenses were 22.2% of revenue, compared to 21.9% in the prior year quarter.

Operating loss in the fourth quarter of 2022 was a loss of $75.2 million compared to operating income of $3.3 million in the prior year quarter. Excluding the one-time, non-cash impairment charges, the operating loss was $3.9 million. The year-over-year decrease mainly reflects lower gross margin.

Adjusted EBITDA in the fourth quarter of 2022, which excludes expenses for non-cash impairment charges, share-based compensation, legal settlements and loss contingencies and for non-recurring items, was $5.7 million, representing a margin of 3.6%. This compared to adjusted EBITDA of $11.5 million, representing a margin of 6.7% in the prior year quarter. The year-over-year decrease primarily reflects the lower operating income.

Finance expenses in the fourth quarter of 2022 were $0.4 million compared to finance expense of $7.4 million in the prior year quarter. The difference primarily reflects foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the fourth quarter of 2022 was $74.0 million compared to net loss of $2.9 million in the prior year quarter, and included the after-tax impact of the non-cash impairment charge for the fourth quarter of 2022. Net loss per share for the fourth quarter was $2.15 compared to net loss per share of $0.11 in the prior year quarter. Adjusted diluted net loss per share for the fourth quarter was $0.02 on 34.5 million shares, compared to adjusted diluted net income per share of $0.01 in the prior year quarter on a similar share count.

Full Year 2022 Results

Revenue in the full year 2022 grew 7.3% year over year and reached a company record of $690.8 million compared to $643.9 million in the prior year. On a constant currency basis, 2022 revenue was higher by 10.8% year-over-year, primarily attributable to growth in the United States and Canada.

Gross margin in 2022 was 23.6% compared to 26.6% in the prior year. Adjusted gross margin in 2022 was 23.8%, compared to 26.8% in the prior year. The difference in adjusted gross margin mainly reflects increased manufacturing unit costs due to lower fixed cost absorption resulting from lower capacity utilization, higher raw material prices, unfavorable foreign exchange rates, and shipping price increases which were partially offset by favorable product mix and selling price increases.

Operating expenses in 2022 were $221.9 million compared to $144.1 million in the prior year, and included the $71.3 million non-cash impairment charge in 2022. Excluding legal settlements, loss contingencies and impairment charges, adjusted operating expenses improved to 21.7% of revenue, compared to 21.9% in the prior year quarter.

Operating loss in 2022 was $58.7 million compared to operating income of $27.4 million in the prior year. The year-over-year decrease mainly reflects higher operating expenses. Excluding the non-cash impairment charges, operating income was $12.6 million.

Adjusted EBITDA, which excludes non-cash impairment charges, expenses for share-based compensation, legal settlements and loss contingencies and for non-recurring items, was $51.9 million in 2022, representing a margin of 7.5%. This compares to adjusted EBITDA of $68.2 million, representing a margin of 10.6% in the prior year. This year-over-year margin decrease primarily reflects lower gross margin.

Finance income in 2022 was $3.1 million compared to finance expense of $7.6 million in the prior year. The difference was primarily a result of foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the full year 2022 was $57.1 million compared to net income of $19.0 million in the prior year, and included the after-tax impact of the impairment charge for 2022. Net loss per share for 2022 was $1.66 compared to diluted net income per share of $0.51 in the prior year. Adjusted diluted net income per share for 2022 was $0.31 compared to $0.83 in the prior year.

Balance Sheet & Liquidity

As of December 31, 2022, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits and short and long-term marketable securities of $59.2 million and total debt to financial institutions of $31.0 million.

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 does not intend to pay a dividend for the fourth quarter of 2022, based on its reported net loss attributable to controlling interest for the period.

Outlook

Given the challenging macroeconomic environment and limited ability to forecast the duration of government-induced actions that have slowed the pace of construction activity in many countries, at this time the Company anticipates revenues for 2023 will be within range of 2022 revenues. This will be largely achieved through enacted price actions roughly offsetting an expected decline in volume and the unfavorable impact of foreign currency exchange rate fluctuations. Additionally, the Company expects moderate and gradual improvement in Adjusted EBITDA as a percentage of sales for the full year 2023, primarily attributable to pricing initiatives, cost optimization efforts and other actions, which are expected to more than offset higher raw material and shipping costs in inventory entering into 2023.

Nahum Trost, Caesarstone’s Chief Financial Officer, concluded, “We believe the outlook that we are providing is both achievable and appropriate given the level of uncertainty in the industry. We are well positioned and prepared to execute on our multi-pronged growth strategy and the factors that are within our control. We believe we are taking a balanced and prudent approach to set expectations and we will fully leverage all resources available to us to mitigate risk and capitalize on the market opportunities available to Caesarstone.”

Webcast and Conference Call Details

The Company will host a webcast and conference call today, March 1, 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 1-877-451-6152 and 1-201-389-0879, respectively. The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone Fourth Quarter 2022 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 13735420. The replay will be available beginning at 12:30 p.m. ET on Wednesday, March 1, 2023 and will last through 11:59 p.m. ET on Wednesday, March 8, 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 estimations relating to 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 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, 2022, 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.

Caesarstone Ltd. and its subsidiariesCondensed consolidated balance sheets As of U.S. dollars in thousands December 31, 2022 December 31, 2021 (Unaudited) (Audited) ASSETS   CURRENT ASSETS:   Cash and cash equivalents and short-term bank deposits

$

52,081

 

$

74,315

 

Short-term available for sale marketable securities

 

7,077

 

 

11,228

 

Trade receivables, net

 

77,898

 

 

82,815

 

Other accounts receivable and prepaid expenses

 

32,570

 

 

35,443

 

Inventories

 

238,232

 

 

204,725

 

  Total current assets

 

407,858

 

 

408,526

 

  LONG-TERM ASSETS:   Severance pay fund

 

3,410

 

 

4,090

 

Other long-term receivables

 

-

 

 

449

 

Deferred tax assets, net

 

16,251

 

 

10,880

 

Long-term deposits and prepaid expenses

 

3,255

 

 

3,832

 

Operating lease right-of-use assets

 

144,098

 

 

154,652

 

Long-term available for sale marketable securities

 

-

 

 

8,647

 

Property, plant and equipment, net

 

169,292

 

 

221,150

 

Intangible assets, net

 

8,817

 

 

9,627

 

Goodwill

 

-

 

 

45,800

 

  Total long-term assets

 

345,123

 

 

459,127

 

  Total assets

$

752,981

 

$

867,653

 

  LIABILITIES AND EQUITY   CURRENT LIABILITIES:   Short-term bank credit

$

26,135

 

$

12,523

 

Trade payables

 

62,194

 

 

81,369

 

Related parties and other loans

 

283

 

 

2,276

 

Short term legal settlements and loss contingencies

 

17,595

 

 

22,592

 

Accrued expenses and other liabilities

 

58,777

 

 

64,534

 

  Total current liabilities

 

164,984

 

 

183,294

 

  LONG-TERM LIABILITIES:   Long-term bank and other loans and financing liability of land from a related party

 

4,823

 

 

6,240

 

Legal settlements and loss contingencies long-term

 

19,572

 

 

20,859

 

Deferred tax liabilities, net

 

4,288

 

 

4,992

 

Long-term lease liabilities

 

124,353

 

 

143,324

 

Accrued severance pay

 

4,750

 

 

5,500

 

Long-term warranty provision

 

1,262

 

 

1,280

 

  Total long-term liabilities

 

159,048

 

 

182,195

 

  REDEEMABLE NON-CONTROLLING INTEREST

 

7,903

 

 

7,869

 

  EQUITY:   Ordinary shares

 

371

 

 

371

 

Treasury shares - at cost

 

(39,430

)

 

(39,430

)

Additional paid-in capital

 

163,431

 

 

161,929

 

Capital fund related to non-controlling interest

 

(5,587

)

 

(5,587

)

Accumulated other comprehensive income (loss), net

 

(9,578

)

 

(704

)

Retained earnings

 

311,839

 

 

377,716

 

  Total equity

 

421,046

 

 

494,295

 

  Total liabilities and equity

$

752,981

 

$

867,653

 

Caesarstone Ltd. and its subsidiariesCondensed consolidated statements of income (loss)

Three months ended December 31,

Twelve months ended December 31,

U.S. dollars in thousands (except per share data)

2022

2021

2022

2021

(Unaudited) (Unaudited) (Audited)   Revenues

$

159,369

 

$

171,057

 

$

690,806

 

$

643,892

Cost of revenues

 

128,438

 

 

131,379

 

 

527,561

 

 

472,394

  Gross profit

 

30,931

 

 

39,678

 

 

163,245

 

 

171,498

  Operating expenses: Research and development

 

1,151

 

 

1,177

 

 

4,098

 

 

4,216

Sales and Marketing

 

22,332

 

 

22,594

 

 

94,412

 

 

85,725

General and administrative

 

11,861

 

 

13,746

 

 

51,596

 

 

50,845

Impairment expenses related to goodwill and long lived assets (**)

 

71,258

 

 

-

 

 

71,258

 

 

-

Legal settlements and loss contingencies, net

 

(491

)

 

(1,181

)

 

568

 

 

3,283

  Total operating expenses

 

106,111

 

 

36,336

 

 

221,932

 

 

144,069

  Operating income (loss)

 

(75,180

)

 

3,342

 

 

(58,687

)

 

27,429

Finance expenses (income), net

 

407

 

 

7,425

 

 

(3,079

)

 

7,590

  Income (loss) before taxes

 

(75,587

)

 

(4,083

)

 

(55,608

)

 

19,839

Taxes on income (loss)

 

(1,699

)

 

(780

)

 

758

 

 

1,950

  Net income (loss)

$

(73,888

)

$

(3,303

)

$

(56,366

)

$

17,889

  Net loss (income) attributable to non-controlling interest

 

(78

)

 

426

 

 

(688

)

 

1,077

  Net income (loss) attributable to controlling interest

$

(73,966

)

$

(2,877

)

$

(57,054

)

$

18,966

Basic net income (loss) per ordinary share (*)

$

(2.15

)

$

(0.11

)

$

(1.66

)

$

0.51

Diluted net income (loss) per ordinary share (*)

$

(2.15

)

$

(0.11

)

$

(1.66

)

$

0.51

Weighted average number of ordinary shares used in computing basic income per ordinary share

 

34,504,904

 

 

34,471,363

 

 

34,488,275

 

 

34,462,328

Weighted average number of ordinary shares used in computing diluted income per ordinary share

 

34,504,904

 

 

34,471,363

 

 

34,488,275

 

 

34,570,111

(*) The numerator for the calculation of net income (loss) per share for the three and twelve months ended December 31, 2022 and 2021, has been decreased by approximately $0.1 and $0.1 million, and $1.1 and $1.4 million respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.

(**) Goodwill impairment in the amount of $44.8 million and Long-lived assets impairment in the amount of $26.5 million

Caesarstone Ltd. and its subsidiariesSelected Condensed consolidated statements of cash flows Twelve months endedDecember 31, U.S. dollars in thousands

2022

2021

(Unaudited) (Audited) Cash flows from operating activities:   Net income (loss)

$

(56,366

)

$

17,889

 

Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization

 

36,344

 

 

35,407

 

Share-based compensation expense

 

1,502

 

 

1,845

 

Accrued severance pay, net

 

(58

)

 

121

 

Changes in deferred tax, net

 

(5,693

)

 

(4,473

)

Capital (gain) loss

 

67

 

 

(3

)

Legal settlements and loss contingencies, net

 

568

 

 

3,283

 

Decrease in trade receivables

 

2,612

 

 

815

 

Decrease (increase) in other accounts receivable and prepaid expenses

 

3,645

 

 

(9,036

)

Increase in inventories

 

(40,884

)

 

(54,189

)

Increase (decrease) in trade payables

 

(21,032

)

 

28,277

 

Increase (decrease) in warranty provision

 

(119

)

 

112

 

Changes in right of use assets

 

9,487

 

 

25,906

 

Changes in lease liabilities

 

(17,909

)

 

(22,085

)

Contingent consideration related to acquisition

 

120

 

 

(288

)

Amortization of premium and accretion of discount on marketable securities, net

 

238

 

 

412

 

Changes in Accrued interest related to Marketable Securities

 

74

 

 

42

 

Decrease in accrued expenses and other liabilities including related parties

 

(7,165

)

 

(3,352

)

Impairment of goodwill and long-lived assets

 

71,258

 

 

-

 

Net cash provided by (used in) operating activities

 

(23,311

)

 

20,684

 

    Cash flows from investing activities:   Net cash paid for acquisitions

 

(2,245

)

 

-

 

Repayment of assumed shareholders loan related to acquisition

 

-

 

 

(1,966

)

Repayment of contingent consideration related to acquisition

 

-

 

 

-

 

Purchase of property, plant and equipment

 

(17,801

)

 

(31,477

)

Proceeds from sale of property, plant and equipment

 

12

 

 

9

 

Maturity of (investment in) marketable securities

 

12,401

 

 

(1,343

)

Decrease (increase) in long term deposits

 

348

 

 

(108

)

  Net cash used in investing activities

 

(7,285

)

 

(34,885

)

    Cash flows from financing activities:   Dividend paid

 

(8,625

)

 

(10,681

)

Changes in short-term bank credits and long-term loans, including related parties

 

18,640

 

 

(11,761

)

Contingent consideration related to acquisition

 

-

 

 

(1,492

)

Repayment of a financing leaseback related to Bar-Lev transaction

 

(859

)

 

(1,320

)

  Net cash provided by (used in) financing activities

 

9,156

 

 

(25,254

)

    Effect of exchange rate differences on cash and cash equivalents

 

(794

)

 

(478

)

  Decrease in cash and cash equivalents and short-term bank deposits

 

(22,234

)

 

(39,933

)

Cash and cash equivalents and short-term bank deposits at beginning of the period

 

74,315

 

 

114,248

 

  Cash and cash equivalents and short-term bank deposits at end of the period

$

52,081

 

$

74,315

 

  Non - cash investing: Changes in trade payables balances related to purchase of fixed assets

 

(925

)

 

(56

)

Caesarstone Ltd. and its subsidiaries   Three months endedDecember 31, Twelve months endedDecember 31, U.S. dollars in thousands

2022

2021

2022

2021

(Unaudited) (Unaudited) Reconciliation of Gross profit to Adjusted Gross profit: Gross profit

$

30,931

$

39,678

$

163,245

$

171,498

Share-based compensation expense (a)

 

86

 

107

 

315

 

321

Amortization of assets related to acquisitions

 

72

 

79

 

306

 

852

Restructuring expenses (b)

 

237

 

-

 

237

 

-

Adjusted Gross profit (Non-GAAP)

$

31,326

$

39,864

$

164,103

$

172,671

(a)

Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.

(b)

Restructuring expenses related to workforce reduction

Caesarstone Ltd. and its subsidiaries   Three months endedDecember 31, Twelve months endedDecember 31, U.S. dollars in thousands

2022

2021

2022

2021

(Unaudited) (Unaudited) Reconciliation of Net Income (loss) to Adjusted EBITDA: Net income (loss)

$

(73,888

)

$

(3,303

)

$

(56,366

)

$

17,889

Finance expenses (income), net

 

407

 

 

7,425

 

 

(3,079

)

 

7,590

Taxes on income

 

(1,699

)

 

(780

)

 

758

 

 

1,950

Depreciation and amortization

 

9,121

 

 

8,916

 

 

36,344

 

 

35,407

Legal settlements and loss contingencies, net (a)

 

(492

)

 

(1,181

)

 

568

 

 

3,283

Contingent consideration adjustment related to acquisition

 

63

 

 

-

 

 

120

 

 

284

Acquisition and integration related expenses

 

-

 

 

-

 

 

80

 

 

-

Share-based compensation expense (b)

 

259

 

 

458

 

 

1,502

 

 

1,845

Impairment expenses related to goodwill and long lived assets

 

71,258

 

 

-

 

 

71,258

 

 

-

Restructuring expenses (c)

 

684

 

 

-

 

 

684

 

 

-

Adjusted EBITDA (Non-GAAP)

$

5,713

 

$

11,535

 

$

51,869

 

$

68,248

(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) Restructuring expenses related to workforce reduction. Caesarstone Ltd. and its subsidiaries   Three months endedDecember 31, Twelve months endedDecember 31, U.S. dollars in thousands (except per share data)

2022

2021

2022

2021

(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

$

(73,966

)

$

(2,877

)

$

(57,054

)

$

18,966

Legal settlements and loss contingencies, net (a)

 

(492

)

 

(1,181

)

 

568

 

 

3,283

Contingent consideration adjustment related to acquisition

 

63

 

 

-

 

 

120

 

 

284

Amortization of assets related to acquisitions, net of tax

 

536

 

 

502

 

 

2,084

 

 

2,391

Share-based compensation expense (b)

 

259

 

 

458

 

 

1,502

 

 

1,845

Acquisition and integration related expenses

 

-

 

 

-

 

 

80

 

 

-

Non cash revaluation of lease liabilities (c)

 

676

 

 

3,461

 

 

(9,527

)

 

2,918

Impairment expenses related to goodwill and long lived assets

 

71,258

 

 

-

 

 

71,258

 

 

-

Restructuring expenses (d)

 

684

 

 

-

 

 

684

 

 

-

Total adjustments

 

72,984

 

 

3,240

 

 

66,769

 

 

10,721

Less tax on non-tax adjustments (e)

 

(146

)

 

200

 

 

(910

)

 

1,054

Total adjustments after tax

 

73,130

 

 

3,040

 

 

67,679

 

 

9,668

  Adjusted net income (loss) attributable to controlling interest (Non-GAAP)

$

(836

)

$

163

 

$

10,625

 

$

28,634

Adjusted earning (loss) per share (f)

$

(0.02

)

$

0.01

 

$

0.31

 

$

0.83

(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 differences deriving from revaluation of lease contracts in accordance with FASB ASC 842.

(d)

Restructuring expenses related to workforce reduction.

(e)

Tax adjustments for the three and twelve months ended December 31, 2022 and 2021, based on the effective tax rates.

(f)

In calculating adjusted (Non-GAAP) earning per share, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718. In calculating adjusted (Non-GAAP) loss per share, the basic weighted average number of shares outstanding includes 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 endedDecember 31, Twelve months endedDecember 31, Three months endedDecember 31, Twelve months endedDecember 31, U.S. dollars in thousands

2022

2021

2022

2021

(Unaudited) (Unaudited) (Audited) YoY % change YoY % change CCB YoY % change YoY % change CCB   USA

$

76,394

$

77,613

$

342,293

$

305,353

-1.6

%

-1.6

%

12.1

%

12.1

%

Canada

 

20,673

 

22,263

 

93,377

 

84,467

-7.1

%

0.1

%

10.5

%

14.6

%

Latin America

 

964

 

1,618

 

4,481

 

4,702

-40.4

%

-40.4

%

-4.7

%

-4.7

%

America's

 

98,031

 

101,494

 

440,151

 

394,522

-3.4

%

-1.8

%

11.6

%

12.4

%

  Australia

 

29,346

 

30,730

 

116,284

 

118,714

-4.5

%

6.6

%

-2.0

%

6.2

%

Asia

 

7,891

 

8,011

 

34,607

 

30,390

-1.5

%

-0.3

%

13.9

%

15.3

%

APAC

 

37,237

 

38,741

 

150,891

 

149,104

-3.9

%

5.1

%

1.2

%

8.1

%

  EMEA

 

15,266

 

18,160

 

63,320

 

60,836

-15.9

%

-4.0

%

4.1

%

16.7

%

  Israel

 

8,835

 

12,662

 

36,444

 

39,430

-30.2

%

-23.7

%

-7.6

%

-4.5

%

  Total Revenues

$

159,369

$

171,057

$

690,806

$

643,892

-6.8

%

-2.1

%

7.3

%

10.8

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005118/en/

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