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CAESARSTONE LTD.
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Date: May 9, 2018
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By:
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/s/ Michal Baumwald Oron
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Name: Michal Baumwald Oron
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Title: Vice President Business
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Development & General Counsel
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Exhibit
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Description
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·
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Quarterly Revenue of $136.1 million, similar to prior year
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·
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First Quarter Diluted EPS of $0.05; Adjusted Diluted EPS of $0.10
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·
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Reduces Full Year 2018 Revenue and Adjusted EBITDA guidance
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·
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Revitalized leadership team focused on improved execution and strategy
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Caesarstone Ltd. and its subsidiaries
Condensed consolidated balance sheets |
As of
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||||||||
U.S. dollars in thousands
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March 31,
2018
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December 31,
2017
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||||||
(Unaudited)
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(Audited)
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|||||||
ASSETS
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||||||||
CURRENT ASSETS:
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||||||||
Cash and cash equivalents and short-term bank deposits
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$
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112,111
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$
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138,707
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||||
Trade receivables, net
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74,631
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73,267
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Other accounts receivable and prepaid expenses
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39,671
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33,053
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Inventories
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142,357
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132,940
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Total current assets
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368,770
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377,967
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LONG-TERM ASSETS:
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||||||||
Severance pay fund
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3,866
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3,887
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Other long-term receivables
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6,722
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8,502
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Deferred tax assets, net
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6,102
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3,965
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Long-term deposits and prepaid expenses
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2,802
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2,743
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Property, plant and equipment, net
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214,428
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216,653
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Other intangibles assets
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1,666
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2,241
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Goodwill
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36,721
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37,029
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Total long-term assets
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272,307
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275,020
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Total assets
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$
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641,077
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$
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652,987
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Short-term bank credit
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$
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13,158
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$
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4,191
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Trade payables
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63,755
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64,021
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Related party and other loan
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3,268
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3,463
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Short term legal settlements and loss contingencies
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13,455
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25,782
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Accrued expenses and other liabilities
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30,897
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30,000
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Total current liabilities
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124,533
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127,457
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LONG-TERM LIABILITIES:
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Long-term loan and financing leaseback from a related party
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8,063
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8,336
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Legal settlements and loss contingencies long-term
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25,572
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23,454
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Accrued severance pay
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5,020
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5,556
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Long-term warranty provision
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1,173
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1,151
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Deferred tax liabilities, net
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-
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657
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Total long-term liabilities
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39,828
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39,154
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REDEEMABLE NON-CONTROLLING INTEREST
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15,326
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16,481
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EQUITY:
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Ordinary shares
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371
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371
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Treasury shares - at cost
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(39,430
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)
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(39,430
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)
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Additional paid-in capital
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151,910
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151,880
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Accumulated other comprehensive income
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522
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683
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Retained earnings
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348,017
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356,391
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Total equity
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461,390
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469,895
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Total liabilities and equity
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$
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641,077
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$
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652,987
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Caesarstone Ltd. and its subsidiaries
Condensed consolidated statements of income |
Three months ended March 31,
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U.S. dollars in thousands (except per share data)
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2018
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2017
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(Unaudited)
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(Unaudited)
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Revenues
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$
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136,058
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$
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136,411
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Cost of revenues
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101,814
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87,170
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Gross profit
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34,244
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49,241
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Operating expenses:
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Research and development
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756
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948
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Marketing and selling
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18,360
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21,159
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General and administrative
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11,204
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11,326
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Legal settlements and loss contingencies, net
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2,497
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671
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Total operating expenses
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32,817
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34,104
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Operating income
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1,427
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15,137
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Finance expenses (income), net
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(540
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)
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1,524
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Income before taxes on income
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1,967
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13,613
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Taxes on income
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511
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2,348
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Net income
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$
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1,456
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$
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11,265
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Net loss (income) attributable to non-controlling interest
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37
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(169
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)
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Net income attributable to controlling interest
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$
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1,493
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$
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11,096
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Basic net income per ordinary share (*)
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$
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0.05
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$
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0.31
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Diluted net income per ordinary share (*)
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$
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0.05
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$
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0.31
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Weighted average number of ordinary shares used in computing basic income per ordinary share
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34,343,749
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34,321,573
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Weighted average number of ordinary shares used in computing diluted income per ordinary share
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34,383,006
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34,364,084
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Caesarstone Ltd. and its subsidiaries
Selected Condensed consolidated statements of cash flows |
Three months ended March 31,
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U.S. dollars in thousands
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2018
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2017
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||||||
(Unaudited)
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(Unaudited)
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Cash flows from operating activities:
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Net income
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$
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1,456
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$
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11,265
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Adjustments required to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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7,250
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7,429
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Share-based compensation expense
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30
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1,154
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Accrued severance pay, net
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(513
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)
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469
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Changes in deferred tax, net
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(2,829
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)
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131
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Legal settlemnets and loss contingencies, net
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2,497
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671
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Increase in trade receivables
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(173
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)
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(5,782
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)
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Increase in other accounts receivable and prepaid expenses
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(3,924
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)
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(1,627
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)
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Increase in inventories
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(9,863
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)
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(4,374
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)
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Increase (decrease) in trade payables
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(1,334
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)
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3,426
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Increase (decrease) in warranty provision
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53
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(20
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)
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Decrease (increase) in accrued expenses and other liabilities including related party
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(13,616
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)
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4,969
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Net cash provided by (used in) operating activities
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(20,966
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)
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17,711
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Cash flows from investing activities:
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Purchase of property, plant and equipment
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(4,112
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)
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(4,708
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)
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Increase in long term deposits
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(42
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)
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(4
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)
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Net cash used in investing activities (*)
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(4,154
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)
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(4,712
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)
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Cash flows from financing activities:
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Dividend paid
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(9,960
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)
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-
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Dividend paid by subsidiary to non-controlling interest
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(559
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)
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-
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Changes in short-term bank credit and loans, net
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9,294
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1,830
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Repayment of a financing leaseback related to Bar-Lev transaction
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(294
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)
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(284
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)
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Net cash provided by (used in) financing activities
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(1,519
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)
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1,546
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Effect of exchange rate differences on cash and cash equivalents
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43
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194
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Increase (decrease) in cash and cash equivalents and short-term bank deposits
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(26,596
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)
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14,739
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Cash and cash equivalents and short-term bank deposits at beginning of the period
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138,707
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106,270
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Cash and cash equivalents and short-term bank deposits at end of the period
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$
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112,111
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$
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121,009
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Non - cash investing:
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Changes in trade payables balances related to purchase of fixed assets
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366
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131
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Caesarstone Ltd. and its subsidiaries
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Three months ended March 31,
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U.S. dollars in thousands
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2018
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2017
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||||||
(Unaudited)
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||||||||
Reconciliation of Net Income to Adjusted EBITDA:
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Net income
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$
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1,456
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$
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11,265
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Finance expenses (income), net
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(540
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)
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1,524
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Taxes on income
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511
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2,348
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Depreciation and amortization
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7,250
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7,429
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Legal settlements and loss contingencies, net (a)
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2,497
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671
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Share-based compensation expense (b)
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30
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1,154
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Provision for employees fringe benefits (c)
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-
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(114
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)
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Adjusted EBITDA (Non-GAAP)
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$
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11,204
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$
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24,277
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(a)
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Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims.
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(b)
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Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
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In addition, includes expenses for phantom awards granted and related payroll expenses as a result of exercises.
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(c)
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Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israeli Tax Authority and with the National Insurance Intitute of Israel.
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Caesarstone Ltd. and its subsidiaries
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Three months ended March 31,
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||||||||
U.S. dollars in thousands (except per share data)
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2018
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2017
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||||||
(Unaudited)
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||||||||
Reconciliation of net income attributable to controlling interest to adjusted net income attributable to controlling interest:
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||||||||
Net income attributable to controlling interest
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$
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1,493
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$
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11,096
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Legal settlements and loss contingencies, net (a)
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2,497
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671
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||||||
Share-based compensation expense (b)
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30
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1,154
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||||||
Provision for employees fringe benefits (c)
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-
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(114
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)
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Total adjustments
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2,527
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1,711
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Less tax on non-tax adjustments (d)
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656
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295
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||||||
Total adjustments after tax
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1,871
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1,416
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Adjusted net income attributable to controlling interest (Non-GAAP)
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$
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3,364
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$
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12,512
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Adjusted diluted EPS (e)
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$
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0.10
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$
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0.36
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(a)
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Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims.
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(b)
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Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
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In addition, includes expenses for phantom awards granted and the related payroll expenses as a result of exercises.
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(c)
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Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israeli Tax Authority and with the National Insurance Intitute of Israel.
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(d)
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Tax adjustments for the three months ended March 31, 2018 and 2017 were based on the effective tax rates for these periods, respectively.
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(e)
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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.
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Caesarstone Ltd. and its subsidiaries
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Geographic breakdown of revenues by region
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Three months ended March 31,
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U.S. dollars in thousands
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2018
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2017
|
||||||
(Unaudited)
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(Unaudited)
|
|||||||
USA
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$
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56,750
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$
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58,024
|
||||
Australia (incl. New Zealand)
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28,903
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29,521
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||||||
Canada
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23,355
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22,304
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Israel
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11,790
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11,699
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||||||
Europe
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7,433
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6,377
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||||||
Rest of World
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7,827
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8,486
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||||||
$
|
136,058
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$
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136,411
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