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CAESARSTONE LTD.
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Date: May 5, 2021
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By:
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/s/ Ron Mosberg
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Name: Ron Mosberg
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Title: General Counsel & Corporate Secretary
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Exhibit
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Description
|
Caesarstone Ltd. and its subsidiaries
Condensed consolidated balance sheets
|
As of
|
||||||||
U.S. dollars in thousands
|
March 31,
2021
|
December 31,
2020
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents and short-term bank deposits
|
$
|
99,820
|
$
|
114,248
|
||||
Short-term available for sale marketable securities
|
11,697
|
8,112
|
||||||
Trade receivables, net
|
84,533
|
84,822
|
||||||
Other accounts receivable and prepaid expenses
|
35,425
|
26,481
|
||||||
Inventories
|
155,402
|
152,073
|
||||||
Total current assets
|
386,877
|
385,736
|
||||||
LONG-TERM ASSETS:
|
||||||||
Severance pay fund
|
3,766
|
4,007
|
||||||
Other long-term receivables
|
3,773
|
3,837
|
||||||
Deferred tax assets, net
|
7,763
|
8,359
|
||||||
Long-term deposits and prepaid expenses
|
768
|
1,675
|
||||||
Operating lease right-of-use assets
|
121,531
|
123,928
|
||||||
Long-term available for sale marketable securities
|
7,170
|
10,926
|
||||||
Property, plant and equipment, net
|
219,631
|
222,883
|
||||||
Goodwill and intangible assets, net
|
58,717
|
59,570
|
||||||
Total long-term assets
|
423,119
|
435,185
|
||||||
Total assets
|
$
|
809,996
|
$
|
820,921
|
||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Short-term bank credit
|
$
|
4,403
|
$
|
13,122
|
||||
Trade payables
|
59,846
|
55,063
|
||||||
Related parties and other loans
|
2,227
|
2,221
|
||||||
Short term legal settlements and loss contingencies
|
19,277
|
31,039
|
||||||
Accrued expenses and other liabilities
|
54,391
|
55,570
|
||||||
Total current liabilities
|
140,144
|
157,015
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term bank and other loans and financing liability of land from a related party
|
17,213
|
20,706
|
||||||
Legal settlements and loss contingencies long-term
|
21,660
|
21,910
|
||||||
Deferred tax liabilities, net
|
6,456
|
6,943
|
||||||
Long-term lease liabilities
|
108,743
|
112,719
|
||||||
Accrued severance pay
|
5,129
|
5,303
|
||||||
Long-term warranty provision
|
1,274
|
1,274
|
||||||
Total long-term liabilities
|
160,475
|
168,855
|
||||||
REDEEMABLE NON-CONTROLLING INTEREST
|
7,500
|
7,701
|
||||||
EQUITY:
|
||||||||
Ordinary shares
|
371
|
371
|
||||||
Treasury shares - at cost
|
(39,430
|
)
|
(39,430
|
)
|
||||
Additional paid-in capital
|
160,651
|
160,083
|
||||||
Capital fund related to non-controlling interest
|
(5,587
|
)
|
(5,587
|
)
|
||||
Accumulated other comprehensive loss
|
1,008
|
1,083
|
||||||
Retained earnings
|
384,864
|
370,830
|
||||||
Total equity
|
501,877
|
487,350
|
||||||
Total liabilities and equity
|
$
|
809,996
|
$
|
820,921
|
Caesarstone Ltd. and its subsidiaries
Condensed consolidated statements of income
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands (except per share data)
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
Revenues
|
$
|
146,032
|
$
|
126,557
|
||||
Cost of revenues
|
102,730
|
90,156
|
||||||
Gross profit
|
43,302
|
36,401
|
||||||
Operating expenses:
|
||||||||
Research and development
|
1,105
|
780
|
||||||
Marketing and selling
|
18,276
|
18,629
|
||||||
General and administrative
|
13,143
|
11,867
|
||||||
Legal settlements and loss contingencies, net
|
740
|
2,838
|
||||||
Total operating expenses
|
33,264
|
34,114
|
||||||
Operating income
|
10,038
|
2,287
|
||||||
Finance income, net
|
(5,333
|
)
|
(869
|
)
|
||||
Income before taxes
|
15,371
|
3,156
|
||||||
Taxes on income
|
1,529
|
478
|
||||||
Net income
|
$
|
13,842
|
$
|
2,678
|
||||
Net loss attributable to non-controlling interest
|
348
|
-
|
||||||
Net income attributable to controlling interest
|
$
|
14,190
|
$
|
2,678
|
||||
Basic net income per ordinary share (*)
|
$
|
0.41
|
$
|
0.08
|
||||
Diluted net income per ordinary share (*)
|
$
|
0.41
|
$
|
0.08
|
||||
Weighted average number of ordinary shares used in computing basic income per ordinary share
|
34,439,783
|
34,399,916
|
||||||
Weighted average number of ordinary shares used in computing diluted income per ordinary share
|
34,489,432
|
34,448,505
|
Caesarstone Ltd. and its subsidiaries
Selected Condensed consolidated statements of cash flows
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
13,842
|
$
|
2,678
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
8,908
|
7,115
|
||||||
Share-based compensation expense
|
567
|
906
|
||||||
Accrued severance pay, net
|
69
|
(86
|
)
|
|||||
Changes in deferred tax, net
|
101
|
(1,060
|
)
|
|||||
Capital (gain) loss
|
(2
|
)
|
17
|
|||||
Legal settlemnets and loss contingencies, net
|
740
|
2,838
|
||||||
Decrease (increase) in trade receivables
|
179
|
(3,075
|
)
|
|||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
(9,299
|
)
|
2,268
|
|||||
Increase in inventories
|
(3,344
|
)
|
(11,737
|
)
|
||||
Increase in trade payables
|
2,987
|
2,009
|
||||||
Increase (decrease) in warranty provision
|
(9
|
)
|
52
|
|||||
Changes in right of use assets
|
2,328
|
2,576
|
||||||
Changes in lease liabilities
|
(3,968
|
)
|
(515
|
)
|
||||
Amortization of premium and accretion of discount on marketable securities, net
|
70
|
-
|
||||||
Changes in Accrued interest related to Marketable Securities
|
13
|
-
|
||||||
Decrease in accrued expenses and other liabilities including related parties
|
(11,020
|
)
|
(580
|
)
|
||||
Net cash provided by operating activities
|
2,162
|
3,406
|
||||||
Cash flows from investing activities:
|
||||||||
Repayment of assumed shareholders loan related to acquisition
|
(1,966
|
)
|
-
|
|||||
Purchase of property, plant and equipment
|
(4,727
|
)
|
(8,500
|
)
|
||||
Proceeds from sale of property, plant and equipment
|
4
|
8
|
||||||
Investment in marketable securities
|
78
|
-
|
||||||
Increase in long term deposits
|
48
|
(731
|
)
|
|||||
Net cash used in investing activities
|
(6,563
|
)
|
(9,223
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Changes in short-term bank credits and long-term loans
|
(9,704
|
)
|
(459
|
)
|
||||
Repayment of a financing leaseback related to Bar-Lev transaction
|
(323
|
)
|
(305
|
)
|
||||
Net cash used in financing activities
|
(10,027
|
)
|
(764
|
)
|
||||
Effect of exchange rate differences on cash and cash equivalents
|
-
|
(927
|
)
|
|||||
Decrease in cash and cash equivalents and short-term bank deposits
|
(14,428
|
)
|
(7,508
|
)
|
||||
Cash and cash equivalents and short-term bank deposits at beginning of the period
|
114,248
|
139,372
|
||||||
Cash and cash equivalents and short-term bank deposits at end of the period
|
$
|
99,820
|
$
|
131,864
|
||||
Non - cash investing:
|
||||||||
Changes in trade payables balances related to purchase of fixed assets
|
(158
|
)
|
(564
|
)
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
Reconciliation of Gross profit to Adjusted Gross profit:
|
||||||||
Gross profit
|
$
|
43,302
|
$
|
36,401
|
||||
Share-based compensation expense (a)
|
105
|
131
|
||||||
Amortization of assets related to acquisitions
|
534
|
-
|
||||||
Adjusted Gross profit (Non-GAAP)
|
$
|
43,941
|
$
|
36,532
|
(a)
|
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the
Company.
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
Reconciliation of Net Income to Adjusted EBITDA:
|
||||||||
Net income
|
$
|
13,842
|
$
|
2,678
|
||||
Finance income, net
|
(5,333
|
)
|
(869
|
)
|
||||
Taxes on income
|
1,529
|
478
|
||||||
Depreciation and amortization related to acquisitions
|
8,908
|
7,115
|
||||||
Legal settlements and loss contingencies, net (a)
|
740
|
2,838
|
||||||
Share-based compensation expense (b)
|
567
|
906
|
||||||
Adjusted EBITDA (Non-GAAP)
|
$
|
20,253
|
$
|
13,146
|
(a)
|
Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
|
(b)
|
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands (except per share data)
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
Reconciliation of net income attributable to controlling interest to adjusted net income attributable to controlling interest:
|
||||||||
Net income attributable to controlling interest
|
$
|
14,190
|
$
|
2,678
|
||||
Legal settlements and loss contingencies, net (a)
|
740
|
2,838
|
||||||
Amortization of assets related to acquisitions, net of tax
|
826
|
-
|
||||||
Share-based compensation expense (b)
|
567
|
906
|
||||||
Non cash revaluation of lease liabilities (c)
|
(1,862
|
)
|
(1,471
|
)
|
||||
Total adjustments
|
271
|
2,273
|
||||||
Less tax on non-tax adjustments (d)
|
27
|
344
|
||||||
Total adjustments after tax
|
244
|
1,929
|
||||||
Adjusted net income attributable to controlling interest (Non-GAAP)
|
$
|
14,434
|
$
|
4,607
|
||||
Adjusted diluted EPS (e)
|
$
|
0.42
|
$
|
0.13
|
(a)
|
Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
|
(b)
|
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
|
(c)
|
Exchange rate diffrences deriving from revaluation of lease contracts in accoradance with FASB ASC 842.
|
(d)
|
Tax adjustments for the three months ended March 31, 2021 and 2020, based on the effective tax rates.
|
(e)
|
In calculating adjusted diluted (Non-GAAP) EPS for the three months ended March 31, 2021 and 2020, the diluted weighted average number of shares outstanding excludes the effects of
share-based compensation expense in accordance with FASB ASC 718.
|
Three months ended March 31,
|
||||||||
U.S. dollars in thousands
|
2021
|
2020
|
||||||
(Unaudited)
|
||||||||
USA
|
$
|
70,831
|
$
|
60,055
|
||||
Canada
|
17,779
|
18,558
|
||||||
Latin America
|
858
|
506
|
||||||
America's
|
89,468
|
79,119
|
||||||
Australia
|
27,172
|
22,354
|
||||||
Asia
|
7,777
|
2,831
|
||||||
APAC
|
34,949
|
25,185
|
||||||
EMEA
|
12,718
|
11,340
|
||||||
Israel
|
8,897
|
10,913
|
||||||
Total Revenues
|
$
|
146,032
|
$
|
126,557
|
Three months ended
|
||||||||||||||||||||||||||||||||||||
U.S. dollars in thousands
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
6/30/2019
|
3/30/2019
|
|||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||
USA
|
$
|
70,831
|
$
|
53,618
|
$
|
52,097
|
$
|
41,726
|
$
|
60,055
|
$
|
64,659
|
$
|
64,805
|
$
|
64,590
|
$
|
56,417
|
||||||||||||||||||
Canada
|
17,779
|
20,325
|
19,174
|
14,435
|
18,558
|
20,575
|
21,881
|
23,341
|
20,178
|
|||||||||||||||||||||||||||
Latin America
|
858
|
1,387
|
124
|
132
|
506
|
735
|
1,434
|
1,351
|
596
|
|||||||||||||||||||||||||||
America's
|
89,468
|
75,330
|
71,395
|
56,293
|
79,119
|
85,969
|
88,120
|
89,282
|
77,191
|
|||||||||||||||||||||||||||
Australia
|
27,172
|
29,953
|
27,746
|
23,534
|
22,354
|
26,000
|
28,642
|
28,294
|
25,214
|
|||||||||||||||||||||||||||
Asia
|
7,777
|
7,122
|
2,881
|
1,732
|
2,831
|
3,932
|
3,675
|
3,311
|
4,596
|
|||||||||||||||||||||||||||
APAC
|
34,949
|
37,075
|
30,627
|
25,266
|
25,185
|
29,932
|
32,317
|
31,605
|
29,810
|
|||||||||||||||||||||||||||
EMEA
|
12,718
|
14,408
|
11,422
|
8,031
|
11,340
|
9,464
|
11,719
|
11,418
|
10,455
|
|||||||||||||||||||||||||||
Israel
|
8,897
|
10,083
|
10,478
|
9,447
|
10,913
|
8,502
|
10,683
|
8,766
|
10,741
|
|||||||||||||||||||||||||||
Total Revenues
|
$
|
146,032
|
$
|
136,896
|
$
|
123,922
|
$
|
99,037
|
$
|
126,557
|
$
|
133,867
|
$
|
142,839
|
$
|
141,071
|
$
|
128,197
|
Year-over-year % change
|
||||||||||||||||||||
3/31/2021
|
12/31/2020
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
USA
|
17.9
|
%
|
(17.1
|
)%
|
(19.6
|
)%
|
(35.4
|
)%
|
6.4
|
%
|
||||||||||
Canada
|
(4.2
|
)%
|
(1.2
|
)%
|
(12.4
|
)%
|
(38.2
|
)%
|
(8.0
|
)%
|
||||||||||
Latin America
|
69.6
|
%
|
88.8
|
%
|
(91.4
|
)%
|
(90.2
|
)%
|
(15.1
|
)%
|
||||||||||
America's
|
13.1
|
%
|
(12.4
|
)%
|
(19.0
|
)%
|
(36.9
|
)%
|
2.5
|
%
|
||||||||||
Australia
|
21.6
|
%
|
15.2
|
%
|
(3.1
|
)%
|
(16.8
|
)%
|
(11.3
|
)%
|
||||||||||
Asia
|
174.7
|
%
|
81.1
|
%
|
(21.6
|
)%
|
(47.7
|
)%
|
(38.4
|
)%
|
||||||||||
APAC
|
38.8
|
%
|
23.9
|
%
|
(5.2
|
)%
|
(20.1
|
)%
|
(15.5
|
)%
|
||||||||||
EMEA
|
12.2
|
%
|
52.2
|
%
|
(2.5
|
)%
|
(29.7
|
)%
|
8.5
|
%
|
||||||||||
Israel
|
(18.5
|
)%
|
18.6
|
%
|
(1.9
|
)%
|
7.8
|
%
|
1.6
|
%
|
||||||||||
Total Revenues
|
15.4
|
%
|
2.3
|
%
|
(13.2
|
)%
|
(29.8
|
)%
|
(1.3
|
)%
|
Year-over-year % change in constant currency (*)
|
||||||||||||||||||||
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
|||||||||||||||
(Unaudited)
|
||||||||||||||||||||
USA
|
17.9
|
%
|
(17.1
|
)%
|
(19.6
|
)%
|
(35.4
|
)%
|
6.4
|
%
|
||||||||||
Canada
|
(9.6
|
)%
|
(2.4
|
)%
|
(11.7
|
)%
|
(36.0
|
)%
|
(7.1
|
)%
|
||||||||||
Latin America
|
69.8
|
%
|
88.7
|
%
|
(91.3
|
)%
|
(90.2
|
)%
|
(15.2
|
)%
|
||||||||||
America's
|
11.8
|
%
|
(12.7
|
)%
|
(18.8
|
)%
|
(36.4
|
)%
|
2.7
|
%
|
||||||||||
Australia
|
2.8
|
%
|
7.9
|
%
|
(7.1
|
)%
|
(11.5
|
)%
|
(3.3
|
)%
|
||||||||||
Asia
|
169.5
|
%
|
80.7
|
%
|
(21.2
|
)%
|
(45.9
|
)%
|
(37.1
|
)%
|
||||||||||
APAC
|
21.5
|
%
|
17.5
|
%
|
(8.7
|
)%
|
(15.1
|
)%
|
(8.5
|
)%
|
||||||||||
EMEA
|
3.3
|
%
|
45.8
|
%
|
(5.9
|
)%
|
(26.9
|
)%
|
11.4
|
%
|
||||||||||
Israel
|
(24.6
|
)%
|
9.4
|
%
|
(4.5
|
)%
|
4.5
|
%
|
(1.5
|
)%
|
||||||||||
Total Revenues
|
9.8
|
%
|
(0.4
|
)%
|
(14.4
|
)%
|
(28.3
|
)%
|
0.5
|
%
|
(*) Change in revenues at constant currency is calculated so that revenues can be viewed without the impact of fluctuations s in foreign currency exchange rates, thereby facilitating period-to-period
comparisons of business performance. Change in revenues adjusted for currency are calculated by translating current period activity in local currency using the comparable prior-year period’s currency conversion rate. Exchange rates
used, are the representative exchange rate published by the Bank of Israel for the relevant periods.
|