CSTE Caesarstone Ltd

- Fourth Quarter Revenue of $128.5 Million and Full Year Revenue of $565.2 Million - - Full Year Cash Flow from Operations of $66.5 Million - - Initiated Restructuring Actions During 2023 to Reignite Long-term Growth and Profitability - - Expects to Realize Restructuring-Related Cost Savings of Approximately $20.0 Million in Full Year 2024 and $30.0 Million Thereafter Compared to Full Year 2023 -

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, 2023.

Yos Shiran, Caesarstone’s Chief Executive Officer commented, “In 2023, we implemented a new strategic plan and initiated significant restructuring actions which allowed us to achieve our primary financial objective for 2023, to generate positive cash flow from operations and end the year with a solid net cash position. We achieved that despite challenging macro-economic, regional geo-political and regulatory dynamics in key markets. We continue to position Caesarstone’s production footprint advantageously around the world and our teams have executed well to generate meaningful cost savings from our global restructuring actions. We are investing a portion of those savings into our brand, improving sales and marketing and R&D activities, as well as expanding our premium porcelain products to reignite profitable growth across our business to drive value to our customers and shareholders.”

Fourth Quarter 2023 Results

Revenue in the fourth quarter of 2023 was $128.5 million, compared to $159.4 million in the prior year quarter. On a constant currency basis, fourth quarter revenue was down 19.6% year-over-year mainly due to lower volumes. Volumes were primarily impacted by global economic headwinds, particularly in renovation and remodeling channels, across the Company’s main regions resulting in lower demand accompanied by greater competitive pressures.

Gross margin in the fourth quarter of 2023 was 18.1% compared to 19.4% in the prior year quarter. Adjusted gross margin in the fourth quarter was 18.9% compared to 19.7% in the prior year quarter. The decrease in gross margin resulted from lower revenues, unfavorable product mix, and higher production costs due to lower fixed cost absorption mainly related to lower capacity utilization. The reduction in gross margin was partially offset by the benefits of our improved production footprint.

Operating expenses in the fourth quarter of 2023 were $56.5 million, or 43.9% of revenue, compared to $106.1 million, or 66.6% of revenue in the prior year quarter. The lower percentage is primarily attributable to lower restructuring and impairment expenses. During the fourth quarter, the Company recorded a $27.7 million non-cash pre-tax restructuring and impairment expenses related to Richmond Hill facility closure. Excluding legal settlements and loss contingencies and restructuring and impairment expenses, operating expenses were 24.3% of revenue, compared to 22.2% in the prior year quarter with the higher percentage mainly reflecting lower revenues.

Operating loss in the fourth quarter of 2023 was $33.2 million compared to operating loss of $75.2 million in the prior year quarter. The difference mainly reflects lower restructuring and impairment expenses partially offset by lower gross margin.

Adjusted EBITDA in the fourth quarter of 2023, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies, restructuring and impairment expenses and for other non-recurring items, was $1.4 million, compared to adjusted EBITDA of $5.7 million in the prior year quarter. The year-over-year decrease primarily reflects the operating loss and lower gross margin.

Finance expenses in the fourth quarter of 2023 were $3.7 million compared to expenses of $0.4 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 2023 was $50.5 million compared to net loss of $74.0 million in the prior year quarter. Net loss per share for the fourth quarter was $1.47 compared to net loss per share of $2.15 in the prior year quarter. Adjusted diluted net loss per share for the fourth quarter was $0.28 on 34.5 million shares, compared to adjusted diluted net loss per share of $0.02 in the prior year quarter on a similar share count.

Full Year 2023 Results

Revenue in the full year 2023 was $565.2 million compared to $690.8 million in the prior year. On a constant currency basis, 2023 revenue was lower by 17.0% year-over-year, primarily attributable to lower volume.

Gross margin in 2023 was 16.3% compared to 23.6% in the prior year. Adjusted gross margin in 2023 was 17.0%, compared to 23.8% in the prior year. The difference in gross margin was primarily attributable to lower revenues and increased manufacturing unit costs due to lower fixed cost absorption mainly related to lower capacity utilization. This was partially offset by the benefits of an improved production footprint.

Operating expenses in 2023 were $180.0 million compared to $221.9 million in the prior year. During 2023, the Company recorded a $47.9 million non-cash pre-tax impairment charge related to the Sdot Yam and Richmond Hill manufacturing facility closures. Excluding legal settlements, loss contingencies, impairment and restructuring charges, adjusted operating expenses were 24.2% of revenue, compared to 21.7% in the prior year.

Operating loss in 2023 was $88.0 million compared to operating loss of $58.7 million in the prior year. The year-over-year difference mainly reflects lower gross margins partially offset by lower restructuring and impairment expenses.

Adjusted EBITDA, which excludes non-cash impairment charges, expenses for share-based compensation, legal settlements and loss contingencies, restructuring and impairment expenses and for other non-recurring items, was a loss of $9.4 million in 2023, compared to adjusted EBITDA of $51.9 million in the prior year. The year-over-year decrease primarily reflects the lower gross margin and operating loss.

Finance income in 2023 was $1.1 million compared to finance expense of $3.1 million in the prior year. The difference was primarily a result of foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest in 2023 was $107.7 million compared to net loss of $57.1 million in the prior year. Net loss per share for 2023 was $3.13 compared to diluted net loss per share of $1.66 in the prior year. Adjusted diluted net loss per share for 2023 was $1.34 on 34.6 million shares compared to adjusted diluted net income per share of $0.31 in the prior year on a similar share count.

Balance Sheet & Liquidity

During the fourth quarter, the Company generated positive cash flow from operations of $13.2 million mainly driven by inventory reductions, compared to operating cash flow of $1.0 million in the fourth quarter of 2022. As of December 31, 2023, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits of $91.1 million and total debt to financial institutions of $7.6 million. The Company’s net cash position as of December 31, 2023, was $83.5 million compared to $28.2 million as of December 31, 2022.

Restructuring and Cost Optimization Update

During 2023, the Company initiated several actions under its strategic restructuring plan across the Company’s operations. These included the closure of its manufacturing facility in Sdot-Yam, Israel in mid-2023, the closure of its Richmond Hill manufacturing facility in January 2024, and a reduction in related workforce. These actions were undertaken to better align the Company’s organizational structure, streamline global production and drive additional cost efficiencies through an optimized manufacturing footprint.

In connection with the facility closures, the Company incurred restructuring expenses and a one-time non-cash impairment charge totaling $27.7 million during the fourth quarter of 2023 and $47.9 million for the full year 2023, including a non-cash write-down of the long term non-cancellable lease agreement related to the Sdot-Yam property. Cash costs related to the facility closures were $1.4 million for the full year 2023. The Company estimates remaining cash costs associated with closing the facilities during 2024, will be in the range of $3.0 million to $5.0 million.

The facility closures are intended to help improve the Company’s profitability and expected to collectively contribute savings of approximately $20.0 million in 2024 and $30.0 million thereafter compared to full year 2023, by optimizing the Company’s manufacturing footprint, with the potential for additional cash savings as subleases are executed on the non-cancellable long-term facility lease agreement.

Following these restructuring actions, the Company continues to maintain its high level of service to customers through its remaining capacity and its third-party strategic manufacturing partners.

Australia Market Update

On December 13, 2023, Australian federal, state and territory governments announced a joint decision to ban the use, supply and manufacture of engineered stone slabs containing crystalline silica (including our quartz-based products) in Australia. Subject to the formal adoption of the legislation and regulations, the ban will go into effect on July 1, 2024 in most Australian states and territories.

Following the decision and although there are still uncertainties as it relates to the transition period, the Company is taking the necessary steps to ensure supply of alternative materials to its Australian customers in line with its high standards in the first half of 2024 to maintain its leading position.

Outlook

“As we enter 2024, we believe our business is seeing signs of stabilization. The U.S. macro environment appears more encouraging with potential Fed rate cuts on the horizon to catalyze construction activity. In Australia, we are determined to maintain our leading position as we introduce our high-quality alternative products in the first half of 2024. Based on these factors, we expect first quarter revenues to trend in line with the fourth quarter and improve sequentially in accordance with our historic seasonal cadence. While macro uncertainties and the competitive landscape persist, our strategic restructuring actions initiated over the past year have put us on more solid footing with leaner operations to deliver positive adjusted EBITDA in 2024. We also expect to produce another full year of positive operating cash flow. We believe that we are poised to take hold of the promising opportunities that lie ahead,” concluded Nahum Trost, Caesarstone’s Chief Financial Officer.

Webcast and Conference Call Details

The Company will host a webcast and conference call today, February 21, 2024, at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-844-825-9789 and 1-412-317-5180, respectively. The toll-free Israeli number is 1 80 921 3284. Upon dialing in, please request to join the Caesarstone Fourth Quarter 2023 Earnings Conference Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671 (international) and enter pass code 10185872. The replay will be available beginning at 12:30 p.m. ET on Wednesday, February 21, 2024 and will last through 11:59 p.m. ET on Wednesday, February 28, 2024.

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 restructuring plan, the closure of the Sdot Yam and Richmond Hill Facilities, the estimated closure costs and the estimated potential savings relating to said closures, the ability to sell or sublease all or part of the facilities 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 effects of global and regional economy and geo-politics on the Company’s business and operations; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with fabricating our products; ; our R&D and product introduction efforts, managing constraints in the global supply chain and effectively procuring raw materials and goods, inflation and effects of challenges in global shipping and transportation; Company’s ability to pass such increases to its customers; the strength of the home renovation and construction sectors; competitive pressures; disruptions to our information technology systems globally, including by deliberate cyber-attacks;; fluctuations in currency exchange rates against the U.S. Dollar; 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 extent of the Company’s ability to meet its ESG goals and targets the unpredictability of seasonal fluctuations in revenues; disturbances to the Company’s operations or the operations of its suppliers, distributors, customers or other third parties and other factors, risks and uncertainties discussed under the sections "Risk Factors" and “Special Note Regarding Forward-Looking Statements and Risk Factor Summary” in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2023, and in other documents filed by Caesarstone with the SEC, which are available free of charge at www.sec.gov. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Further, the estimates of the charges and expenditures that the Company expects to incur in connection with the restructuring plan and facility closure and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the restructuring plan and facility closure.

Caesarstone Ltd. and its subsidiaries Condensed consolidated balance sheets

As of

U.S. dollars in thousands

December 31, 2023

 

December 31, 2022

(Unaudited)

 

(Audited)

ASSETS   CURRENT ASSETS:   Cash and cash equivalents and short-term bank deposits

$

91,123

 

$

52,081

 

Short-term available for sale marketable securities

 

-

 

 

7,077

 

Trade receivables, net

 

66,888

 

 

77,898

 

Other accounts receivable and prepaid expenses

 

25,489

 

 

32,570

 

Inventories

 

136,446

 

 

238,232

 

  Total current assets

 

319,946

 

 

407,858

 

  LONG-TERM ASSETS:   Severance pay fund

 

1,994

 

 

3,410

 

Deferred tax assets, net

 

3,061

 

 

16,251

 

Long-term deposits and prepaid expenses

 

4,961

 

 

3,255

 

Operating lease right-of-use assets

 

120,156

 

 

144,098

 

Property, plant and equipment, net

 

123,480

 

 

169,292

 

Intangible assets, net

 

6,257

 

 

8,817

 

  Total long-term assets

 

259,909

 

 

345,123

 

  Total assets

$

579,855

 

$

752,981

 

  LIABILITIES AND EQUITY   CURRENT LIABILITIES:   Short-term bank credit

$

5,118

 

$

26,135

 

Trade payables

 

42,848

 

 

62,194

 

Related parties

 

257

 

 

283

 

Short term legal settlements and loss contingencies

 

16,106

 

 

17,595

 

Accrued expenses and other liabilities

 

56,894

 

 

58,777

 

  Total current liabilities

 

121,223

 

 

164,984

 

  LONG-TERM LIABILITIES:   Long-term bank and other loans

 

2,549

 

 

4,823

 

Legal settlements and loss contingencies long-term and other liabilities

 

11,814

 

 

19,572

 

Deferred tax liabilities, net

 

3,006

 

 

4,288

 

Long-term lease liabilities

 

114,146

 

 

124,353

 

Accrued severance pay

 

3,065

 

 

4,750

 

Long-term warranty provision

 

1,204

 

 

1,262

 

  Total long-term liabilities

 

135,784

 

 

159,048

 

  REDEEMABLE NON-CONTROLLING INTEREST

 

7,789

 

 

7,903

 

  EQUITY:   Ordinary shares

 

371

 

 

371

 

Treasury shares - at cost

 

(39,430

)

 

(39,430

)

Additional paid-in capital

 

164,456

 

 

163,431

 

Capital fund related to non-controlling interest

 

(5,587

)

 

(5,587

)

Accumulated other comprehensive income (loss), net

 

(8,402

)

 

(9,578

)

Retained earnings

 

203,651

 

 

311,839

 

  Total equity

 

315,059

 

 

421,046

 

  Total liabilities and equity

$

579,855

 

$

752,981

 

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)

2023

 

2022

 

2023

 

2022

(Unaudited) (Unaudited)   Revenues

$

128,525

 

$

159,369

 

$

565,231

 

$

690,806

 

Cost of revenues

 

105,245

 

 

128,438

 

 

473,292

 

 

527,561

 

  Gross profit

 

23,280

 

 

30,931

 

 

91,939

 

 

163,245

 

  Operating expenses: Research and development

 

1,249

 

 

1,151

 

 

5,086

 

 

4,098

 

Sales and Marketing

 

19,764

 

 

22,332

 

 

82,222

 

 

94,412

 

General and administrative

 

10,168

 

 

11,861

 

 

49,490

 

 

51,596

 

Restructuring and Impairment expenses (income) related to long lived assets (**)

 

27,715

 

 

71,258

 

 

47,939

 

 

71,258

 

Legal settlements and loss contingencies, net

 

(2,424

)

 

(491

)

 

(4,770

)

 

568

 

  Total operating expenses

 

56,472

 

 

106,111

 

 

179,967

 

 

221,932

 

  Operating loss

 

(33,192

)

 

(75,180

)

 

(88,028

)

 

(58,687

)

Finance expenses (income), net

 

3,747

 

 

407

 

 

(1,069

)

 

(3,079

)

  Loss before taxes

 

(36,939

)

 

(75,587

)

 

(86,959

)

 

(55,608

)

Tax expenses (income), net

 

13,949

 

 

(1,699

)

 

21,281

 

 

758

 

  Net loss

$

(50,888

)

$

(73,888

)

$

(108,240

)

$

(56,366

)

  Net loss (income) attributable to non-controlling interest

 

367

 

 

(78

)

 

584

 

 

(688

)

  Net loss attributable to controlling interest

$

(50,521

)

$

(73,966

)

$

(107,656

)

$

(57,054

)

Basic net loss per ordinary share (*)

$

(1.47

)

$

(2.15

)

$

(3.13

)

$

(1.66

)

Diluted net loss per ordinary share (*)

$

(1.47

)

$

(2.15

)

$

(3.13

)

$

(1.66

)

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

 

34,527,235

 

 

34,504,904

 

 

34,519,126

 

 

34,488,275

 

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

 

34,527,235

 

 

34,504,904

 

 

34,519,126

 

 

34,488,275

 

  (*) The numerator for the calculation of net loss per share for the three and twelve months ended December 31, 2023 and 2022, has been decreased by approximately $0.1 and $0.5 million, and $0.1 and $0.2 million, respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.

(**) Q4'23 results including long-lived assets impairment and restructuring expenses in the amount of $27.5 million, related to closure of Richmond plant.

YTD results including also impairment and restructuring expenses related to Sdot Yam plant closure.

Caesarstone Ltd. and its subsidiaries Selected Condensed consolidated statements of cash flows  

Twelve months ended December 31,

U.S. dollars in thousands  

2023

 

2022

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

$

(108,240

)

 

$

(56,366

)

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

 

30,007

 

 

 

36,344

 

Share-based compensation expense  

 

1,025

 

 

 

1,502

 

Accrued severance pay, net  

 

(268

)

 

 

(58

)

Changes in deferred tax, net  

 

11,965

 

 

 

(5,693

)

Capital loss  

 

18

 

 

 

67

 

Legal settlements and loss contingencies, net  

 

(4,770

)

 

 

568

 

Decrease in trade receivables  

 

11,760

 

 

 

2,612

 

Decrease in other accounts receivable and prepaid expenses  

 

8,145

 

 

 

3,645

 

Decrease (increase) in inventories  

 

102,586

 

 

 

(40,884

)

Decrease in trade payables  

 

(30,483

)

 

 

(21,032

)

Decrease in warranty provision  

 

(165

)

 

 

(119

)

Changes in right of use assets  

 

7,865

 

 

 

28,056

 

Changes in lease liabilities  

 

(9,516

)

 

 

(36,478

)

Contingent consideration related to acquisitions  

 

264

 

 

 

120

 

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

 

63

 

 

 

238

 

Changes in Accrued interest related to Marketable Securities  

 

39

 

 

 

74

 

Decrease in accrued expenses and other liabilities including related parties  

 

(1,705

)

 

 

(7,165

)

Restructuring expenses and Impairment related to long lived assets  

 

47,939

 

 

 

71,258

 

Net cash provided by (used in) operating activities  

 

66,529

 

 

 

(23,311

)

            Cash flows from investing activities:           Net cash paid for acquisitions  

 

(511

)

 

 

(2,245

)

Purchase of property, plant and equipment  

 

(11,168

)

 

 

(17,801

)

Proceeds from sale of property, plant and equipment  

 

177

 

 

 

12

 

Maturity of marketable securities  

 

7,100

 

 

 

12,401

 

Decrease (increase) in long term deposits  

 

(135

)

 

 

348

 

      Net used in investing activities  

 

(4,537

)

 

 

(7,285

)

            Cash flows from financing activities:           Dividend paid  

 

-

 

 

 

(8,625

)

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

 

(23,268

)

 

 

18,640

 

Repayment of a financing leaseback related to Bar-Lev transaction  

 

-

 

 

 

(859

)

      Net cash provided by (used in) financing activities  

 

(23,268

)

 

 

9,156

 

            Effect of exchange rate differences on cash and cash equivalents  

 

318

 

 

 

(794

)

      Increase (decrease) in cash and cash equivalents and short-term bank deposits  

 

39,042

 

 

 

(22,234

)

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

 

52,081

 

 

 

74,315

 

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

$

91,123

 

 

$

52,081

 

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

 

188

 

 

 

(925

)

Caesarstone Ltd. and its subsidiaries

 

 

 

 

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

U.S. dollars in thousands

2023

 

2022

 

2023

 

2022

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

$

23,280

 

$

30,931

$

91,939

 

$

163,245

Share-based compensation expense (a)

 

(59

)

 

86

 

94

 

 

315

Amortization of assets related to acquisitions

 

71

 

 

72

 

286

 

 

306

Residual operating expenses related to Sdot-Yam after closing

 

1,129

 

 

237

 

3,924

 

 

237

Other non recuring items

 

(152

)

 

-

 

(304

)

 

-

Adjusted Gross profit (Non-GAAP)

$

24,269

 

$

31,326

$

95,939

 

$

164,103

  (a) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company. Caesarstone Ltd. and its subsidiaries  

Three months ended December 31,

 

Twelve months ended December 31,

U.S. dollars in thousands

2023

 

2022

 

2023

 

2022

(Unaudited) (Unaudited) Reconciliation of Net Loss to Adjusted EBITDA: Net loss

$

(50,888

)

$

(73,888

)

$

(108,240

)

$

(56,366

)

Finance expenses (income), net

 

3,747

 

 

407

 

 

(1,069

)

 

(3,079

)

Taxes on income

 

13,949

 

 

(1,699

)

 

21,281

 

 

758

 

Depreciation and amortization

 

7,296

 

 

9,121

 

 

30,007

 

 

36,344

 

Legal settlements and loss contingencies, net (a)

 

(2,424

)

 

(492

)

 

(4,770

)

 

568

 

Contingent consideration adjustment related to acquisition

 

24

 

 

63

 

 

264

 

 

120.00

 

Acquisition and integration related expenses

 

-

 

 

-

 

 

-

 

 

80

 

Share-based compensation expense (b)

 

469

 

 

259

 

 

1,025

 

 

1,502

 

Restructuring expenses and Impairment related to long lived assets (c)

 

27,715

 

 

71,258

 

 

47,939

 

 

71,258

 

Residual operating expenses related to closed plants after closing

 

1,643

 

 

684

 

 

4,438

 

 

684

 

Other non recuring items

 

(152

)

 

-

 

 

(304

)

 

-

 

Adjusted EBITDA (Non-GAAP)

$

1,379

 

$

5,713

 

$

(9,429

)

$

51,869

 

    (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) Q4'23 results including long-lived assets impairment and restructuring expenses related to closure of Richmond plant. YTD results including also impairment and restructuring expenses related to Sdot Yam plant closure. Caesarstone Ltd. and its subsidiaries  

Three months ended December 31,

 

Twelve months ended December 31,

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

2023

 

2022

 

2023

 

2022

(Unaudited) (Unaudited) Reconciliation of net income attributable to controlling interest to adjusted net income (loss) attributable to controlling interest: Net loss attributable to controlling interest

$

(50,521

)

$

(73,966

)

$

(107,656

)

$

(57,054

)

Legal settlements and loss contingencies, net (a)

 

(2,424

)

 

(492

)

 

(4,770

)

 

568

 

Contingent consideration adjustment related to acquisition

 

24

 

 

63

 

 

264

 

 

120

 

Amortization of assets related to acquisitions, net of tax

 

534

 

 

536

 

 

2,142

 

 

2,084

 

Share-based compensation expense (b)

 

469

 

 

259

 

 

1,025

 

 

1,502

 

Acquisition and integration related expenses

 

-

 

 

-

 

 

-

 

 

80

 

Non cash revaluation of lease liabilities (c)

 

3,538

 

 

676

 

 

(1,556

)

 

(9,527

)

Restructuring expenses and Impairment related to long lived assets (d)

 

27,715

 

 

71,258

 

 

47,939

 

 

71,258.00

 

Residual operating expenses related to closed plants after closing

 

1,643

 

 

684

 

 

4,438

 

 

684.00

 

Other non recuring items

 

(152

)

 

-

 

 

(304

)

 

-

 

Total adjustments

 

31,347

 

 

72,984

 

 

49,178

 

 

66,769

 

Less tax on non-tax adjustments (e)

 

(9,421

)

 

(144

)

 

(12,035

)

 

(910

)

Total adjustments after tax

 

40,768

 

 

73,130

 

 

61,213

 

 

67,679

 

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

$

(9,753

)

$

(836

)

$

(46,443

)

$

10,625

 

Adjusted earning (loss) per share (f)

$

(0.28

)

$

(0.02

)

$

(1.34

)

$

0.31

 

    (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. (e) Tax adjustments for the three and twelve months ended December 31, 2023 and 2022, based on the effective tax rates. (f) In calculating adjusted (Non-GAAP) earning (loss) per share, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718. Caesarstone Ltd. and its subsidiaries Geographic breakdown of revenues by region  

Three months ended December 31,

 

Twelve months ended December 31,

 

Three months ended December 31,

 

Twelve months ended December 31,

U.S. dollars in thousands

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

YoY % change

 

YoY % change CCB

 

YoY % change

 

YoY % change CCB

  USA

$

60,283

$

76,394

$

271,647

$

342,293

-21.1

%

-21.1

%

-20.6

%

-20.6

%

Canada

 

17,750

 

20,673

 

75,462

 

93,377

-14.1

%

-13.8

%

-19.2

%

-16.1

%

Latin America

 

817

 

964

 

3,285

 

4,481

-15.2

%

-15.2

%

-26.7

%

-26.7

%

America's

 

78,850

 

98,031

 

350,394

 

440,151

-19.6

%

-19.5

%

-20.4

%

-19.7

%

  Australia

 

26,684

 

29,346

 

106,223

 

116,284

-9.1

%

-8.1

%

-8.7

%

-4.7

%

Asia

 

5,890

 

7,891

 

25,959

 

34,607

-25.4

%

-26.1

%

-25.0

%

-26.0

%

APAC

 

32,574

 

37,237

 

132,182

 

150,891

-12.5

%

-11.9

%

-12.4

%

-9.6

%

  EMEA

 

14,513

 

15,266

 

59,908

 

63,320

-4.9

%

-10.7

%

-5.4

%

-7.6

%

  Israel

 

2,588

 

8,835

 

22,747

 

36,444

-70.7

%

-68.0

%

-37.6

%

-31.4

%

  Total Revenues

$

128,525

$

159,369

$

565,231

$

690,806

-19.4

%

-19.6

%

-18.2

%

-17.0

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221191174/en/

Investor Relations: ICR, Inc. - Rodny Nacier CSTE@icrinc.com +1 (646) 200-8870