CAESARSTONE SDOT-YAM LTD.
|
|||
Date: February 7, 2013
|
By:
|
/s/ Yair Averbuch | |
Name: Yair Averbuch
|
|||
Title: Chief Financial Officer |
99.1
|
Press Release dated February 6, 2013, entitled “Caesarstone Reports Fourth Quarter and Full Year 2012 Results.”
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
||||
Consolidated balance sheets
|
As of
|
||||||||
U.S. dollars in thousands
|
December 31,
2011
|
December 31,
2012
|
||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 11,950 | $ | 29,033 | ||||
Short-term bank deposits
|
- | 43,700 | ||||||
Trade receivables
|
36,798 | 44,066 | ||||||
Other accounts receivable and prepaid expenses
|
13,474 | 16,238 | ||||||
Inventories
|
48,085 | 50,550 | ||||||
Total current assets
|
110,307 | 183,587 | ||||||
LONG-TERM INVESTMENTS:
|
||||||||
Severance pay fund
|
2,942 | 3,424 | ||||||
Long-term deposits and prepayments
|
343 | 1,198 | ||||||
Total long-term investments
|
3,285 | 4,622 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
69,657 | 72,987 | ||||||
OTHER ASSETS
|
20,626 | 16,898 | ||||||
GOODWILL
|
42,442 | 42,955 | ||||||
Total assets
|
$ | 246,317 | $ | 321,049 | ||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Short-term bank credit
|
$ | 3,866 | $ | 5,248 | ||||
Current maturities of long-term loans
|
12,541 | 5,500 | ||||||
Trade payables
|
30,838 | 36,925 | ||||||
Account payables to related parties
|
5,437 | 2,888 | ||||||
Accrued expenses and other liabilities
|
29,033 | 15,314 | ||||||
Total current liabilities
|
81,715 | 65,875 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans
|
5,405 | - | ||||||
Long-term loan from related party
|
1,820 | 12,188 | ||||||
Capital leases
|
71 | 2 | ||||||
Accrued severance pay
|
3,584 | 3,987 | ||||||
Long-term warranty provision
|
1,439 | 1,599 | ||||||
Deferred tax liabilities, net
|
8,248 | 6,375 | ||||||
Share-based payment in subsidiary
|
1,379 | - | ||||||
Total long-term liabilities
|
21,946 | 24,151 | ||||||
REDEEMABLE NON-CONTROLLING INTEREST
|
6,205 | 7,106 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES
|
||||||||
EQUITY:
|
||||||||
Share capital -
|
||||||||
Ordinary shares
|
192 | 360 | ||||||
Cumulative preferred shares
|
86 | - | ||||||
Additional paid-in capital
|
55,338 | 135,437 | ||||||
Accumulated other comprehensive income
|
13,682 | 8,517 | ||||||
Retained earnings
|
67,153 | 79,603 | ||||||
Total equity
|
136,451 | 223,917 | ||||||
Total liabilities and equity
|
$ | 246,317 | $ | 321,049 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
Consolidated statements of income
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2011
|
2012
|
2011
|
2012
|
||||||||||||
Revenues
|
$ | 67,081 | $ | 76,222 | $ | 259,671 | $ | 296,564 | ||||||||
Cost of revenues
|
40,899 | 44,365 | 155,377 | 169,169 | ||||||||||||
Gross profit
|
26,182 | 31,857 | 104,294 | 127,395 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
781 | 403 | 2,487 | 2,100 | ||||||||||||
Marketing and selling
|
10,403 | 12,532 | 34,043 | 46,911 | ||||||||||||
General and administrative
|
8,836 | 6,732 | 30,018 | 28,423 | ||||||||||||
Total operating expenses
|
20,020 | 19,667 | 66,548 | 77,434 | ||||||||||||
Operating income
|
6,162 | 12,190 | 37,746 | 49,961 | ||||||||||||
Finance expenses (income), net
|
3,019 | (225 | ) | 4,775 | 2,773 | |||||||||||
Income before taxes on income
|
3,143 | 12,415 | 32,971 | 47,188 | ||||||||||||
Taxes on income
|
(506 | ) | 1,444 | 3,600 | 6,821 | |||||||||||
Income after taxes on income
|
3,649 | 10,971 | 29,371 | 40,367 | ||||||||||||
Equity in losses of affiliate, net
|
- | - | (67 | ) | - | |||||||||||
Net income
|
3,649 | 10,971 | 29,304 | 40,367 | ||||||||||||
Net loss (income) attributable to non-controlling interest
|
56 | (214 | ) | (252 | ) | (735 | ) | |||||||||
Net income attributable to controlling interest
|
3,705 | 10,757 | 29,052 | 39,632 | ||||||||||||
Dividends attributable to preferred shareholders
|
1,047 | - | 8,376 | - | ||||||||||||
Net income attributable to the Company's ordinary shareholders
|
$ | 2,658 | $ | 10,757 | $ | 20,676 | $ | 39,632 | ||||||||
Diluted net income per share of ordinary shares
|
$ | 0.14 | $ | 0.31 | $ | 1.06 | $ | 1.21 | ||||||||
Weighted average number of ordinary shares used in computing basic income per share
|
19,565,000 | 34,365,250 | 19,565,000 | 32,641,701 | ||||||||||||
Weighted average number of ordinary shares used in computing diluted income per share
|
19,565,000 | 34,561,697 | 19,565,000 | 32,699,748 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
||||||||
Consolidated statements of cash flows
|
||||||||
Twelve months ended December 31,
|
||||||||
U.S. dollars in thousands
|
2011
|
2012
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 29,304 | $ | 40,367 | ||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
14,615 | 14,368 | ||||||
Share-based compensation expense
|
- | 3,660 | ||||||
Decrease in share-based payment in subsidiary
|
- | (1,383 | ) | |||||
Accrued severance pay, net
|
(33 | ) | (61 | ) | ||||
Changes in deferred tax, net
|
(3,858 | ) | (1,927 | ) | ||||
Equity in loss of affiliate, net
|
67 | - | ||||||
Capital gains
|
(84 | ) | (79 | ) | ||||
Foreign currency translation gains
|
1,433 | 417 | ||||||
Impairment of long-term loan to others
|
1,127 | - | ||||||
Increase in trade receivables
|
(10,460 | ) | (8,561 | ) | ||||
Increase in other accounts receivable and prepaid expenses
|
(2,376 | ) | (3,291 | ) | ||||
Decrease (increase) in inventories
|
4,090 | (3,816 | ) | |||||
Increase (decrease) in trade payables
|
(942 | ) | 5,201 | |||||
Incearse (decrease) in warranty provision
|
(126 | ) | 297 | |||||
Decrease in accrued expenses and other liabilities including related parties
|
(4,533 | ) | (9,922 | ) | ||||
Net cash provided by operating activities
|
28,224 | 35,270 | ||||||
Cash flows from investing activities:
|
||||||||
Acquisition of U.S. Quartz Products, Inc.
|
(16,213 | ) | - | |||||
Acquisition of the business of White-Wood Distributors Ltd.
|
(1,954 | ) | - | |||||
Acquisition of the business of Prema Asia Marketing PTE Ltd.
|
(576 | ) | (150 | ) | ||||
Purchase of property, plant and equipment
|
(8,785 | ) | (13,481 | ) | ||||
Investment in short-term deposits
|
- | (43,700 | ) | |||||
Increase in long-term deposits and prepayments
|
(16 | ) | (849 | ) | ||||
Repayment of loan by related party and other
|
177 | - | ||||||
Net cash used in investing activities
|
(27,367 | ) | (58,180 | ) | ||||
Cash flows from financing activities:
|
||||||||
Dividend paid
|
(6,948 | ) | (27,182 | ) | ||||
Receipt from issuance of ordinary shares, net
|
- | 76,768 | ||||||
Repayment of long-term loans
|
(19,819 | ) | (12,670 | ) | ||||
Short-term bank credit and loans, net
|
(7,402 | ) | 1,275 | |||||
Repayment of contingent consideration related to U.S. Quartz Products, Inc acquisition.
|
- | (6,242 | ) | |||||
Contribution to equity by non-controlling interest
|
458 | - | ||||||
Receipt of finance loan related to Bar-Lev transaction
|
- | 10,893 | ||||||
Receipt of long-term loan from related party
|
1,878 | - | ||||||
Repayment of finance loan related to Bar-Lev transaction
|
- | (362 | ) | |||||
Net cash (used in) provided by financing activities
|
(31,833 | ) | 42,480 | |||||
Effect of exchange rate differences on cash and cash equivalents
|
(811 | ) | (2,487 | ) | ||||
Increase (decrease) in cash and cash equivalents
|
(31,787 | ) | 17,083 | |||||
Cash and cash equivalents at beginning of year
|
43,737 | 11,950 | ||||||
Cash and cash equivalents at end of year
|
11,950 | 29,033 | ||||||
non - cash investing and financing activities:
|
||||||||
Purchase of fixed assets with credit from suppliers
|
3,633 | 2,141 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
||||||||||||||||
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2011
|
2012
|
2011
|
2012
|
||||||||||||
Reconciliation of Net Income to Adjusted EBITDA:
|
||||||||||||||||
Net income
|
$ | 3,649 | $ | 10,971 | $ | 29,304 | $ | 40,367 | ||||||||
Finance expenses, net
|
3,019 | (225 | ) | 4,775 | 2,773 | |||||||||||
Taxes on income
|
(506 | ) | 1,444 | 3,600 | 6,821 | |||||||||||
Depreciation and amortization
|
4,048 | 3,553 | 14,615 | 14,368 | ||||||||||||
Equity in losses of affiliate, net (a)
|
- | - | 67 | - | ||||||||||||
Excess cost of acquired inventory (b)
|
220 | 103 | 4,021 | 885 | ||||||||||||
Share-based compensation expense (c)
|
100 | 615 | 1,259 | 3,007 | ||||||||||||
IPO bonus (d)
|
- | - | - | 1,970 | ||||||||||||
USQ purchase price adjustment (e)
|
- | - | - | 255 | ||||||||||||
Litigation credit (f)
|
- | - | (1,783 | ) | (1,001 | ) | ||||||||||
Microgil loan and inventory write down (g)
|
2,916 | - | 2,916 | - | ||||||||||||
Adjusted EBITDA
|
$ | 13,446 | $ | 16,461 | $ | 58,774 | $ | 69,445 |
(a)
|
Consists of the Company's portion of the results of operations of Caesarstone USA prior to its acquisition by the Company in May 2011.
|
|||||||||
(b)
|
Consists of the difference between the standard cost of the Company's inventory and the higher carrying cost in two of the Company's subsidiaries:
|
|||||||||
Caesarstone USA’s inventory at the time of its acquisition and Caesarstone Australia's ("CSA") inventory that was purchased from its distributer.
|
||||||||||
These differences adversely impact our gross margins until such inventory is sold. The majority of the acquired inventory in Caesarstone USA was sold in 2011, while the majority of the acquired inventory in Caesarstone Australia was sold in 2012.
|
||||||||||
|
||||||||||
(c)
|
In 2011, share-based compensation consists of changes in the value of share-based rights granted in January 2009 to the Company's Chief Executive Officer.
|
|||||||||
In 2012, share-based compensation consists primarily of expenses related to the stock options granted to employees of the Company, as well as changes in the value of share-based rights granted to the Company's Chief Executive Officer in January 2009.
|
||||||||||
|
||||||||||
(d)
|
Consists of the payment of $1.7 million to certain employees of the Company and $0.25 million to the Company's Chairman for their contribution to the completion of the Company's IPO.
|
|||||||||
|
||||||||||
(e)
|
In May 2011, the Company acquired the remaining 75% equity interest in its U.S distributer, Caesarstone USA, in which it acquired a 25% interest in January 2007. The acquisition price was $26.5 million and the majority of the amount was paid in 2011, while the balance of the purchase price was payable following the closing of the Company's IPO.
|
|||||||||
|
||||||||||
(f)
|
In 2011, litigation credit consists of a mediation award in our favor pursuant to two trademark infringement cases brought by Caesarstone Australia Pty Limited.
|
|||||||||
In 2012, the litigation credit relates to the settlement agreement with the former CEO of CSA. The Company has been engaged in litigation with the former CEO of CSA since mid-2010, which included, among other things, his claim seeking an order requiring the Company to purchase his shares in CSA in accordance with his agreement with the Company and CSA or at a fair and reasonable price. In May 2012, the Company entered into a settlement agreement with the former CEO of CSA pursuant to which he transferred the ownership in any shares in CSA he received in connection with his employment with CSA.
The Company made no payment in consideration for such transferor any other payment in favor of the former CEO. As a result of this settlement, the Company has reversed the liability connected to this litigation and theadjustment is presented net of the related litigation expenses incurred for the settlement process.
|
||||||||||
(g)
|
Relates to our writing down to zero the cost of inventory provided to Microgil, our former third-party quartz processor in Israel, in 2011 in the amount of $1.8 million and our writing down to zero our $1.1 million loan to Microgil, in each case, in connection with a dispute.
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
||||||||||||||||
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2011
|
2012
|
2011
|
2012
|
||||||||||||
Reconciliation of Net Income Attributable to Controlling Interest to Adjusted Net Income:
|
||||||||||||||||
Net income attributable to controlling interest
|
$ | 3,705 | $ | 10,757 | $ | 29,052 | $ | 39,632 | ||||||||
Excess cost of acquired inventory (a)
|
220 | 103 | 4,021 | 885 | ||||||||||||
Share-based compensation expense (b)
|
100 | 615 | 1,259 | 3,007 | ||||||||||||
IPO bonus (c)
|
- | - | - | 1,970 | ||||||||||||
USQ Purchase Price adjustment (d)
|
- | - | - | 255 | ||||||||||||
Litigation credit (e)
|
- | - | (1,783 | ) | (1,001 | ) | ||||||||||
Microgil loan and inventory write down (g)
|
2,916 | - | 2,916 | - | ||||||||||||
Total adjustments before tax
|
3,236 | 718 | 6,413 | 5,116 | ||||||||||||
Less tax on above adjustments (f)
|
354 | 260 | 700 | 740 | ||||||||||||
Total adjustments after tax
|
2,882 | 458 | 5,713 | 4,376 | ||||||||||||
Adjusted net income attributable to controlling interest
|
6,587 | 11,215 | 34,765 | 44,008 | ||||||||||||
Dividends attributable to preferred shareholders
|
1,861 | - | 9,990 | - | ||||||||||||
Net income attributable to the Company's ordinary shareholders
|
$ | 4,726 | $ | 11,215 | $ | 24,775 | $ | 44,008 | ||||||||
Adjusted diluted EPS
|
0.24 | 0.32 | 1.27 | 1.35 |
(a)
|
Consists of the difference between the standard cost of the Company's inventory and the higher carrying cost in two of the Company's subsidiaries:
|
Caesarstone USA’s inventory at the time of its acquisition and Caesarstone Australia's ("CSA") inventory that was purchased from its distributer.
|
|
These differences adversely impact our gross margins until such inventory is sold. The majority of the acquired inventory in Caesarstone USA was sold in 2011, while the majority of the acquired inventory in Caesarstone Australia was sold in 2012.
|
|
(b)
|
In 2011, share-based compensation consists of changes in the value of share-based rights granted in January 2009 to the Company's Chief Executive Officer.
|
In 2012, share-based compensation consists primarily of expenses related to the stock options granted to employees of the Company, as well as changes in the value of share-based rights granted in January 2009 to the Company's Chief Executive Officer.
|
|
(c)
|
Consists of the payment of $1.7 million to certain employees of the Company and $0.25 million to the Company's Chairman for their contribution to the completion of the Company's IPO.
|
|
|
(d)
|
In May 2011, the Company acquired the remaining 75% equity interest in its U.S distributer, Caesarstone USA, in which it acquired a25% interest in January 2007. The acquisition price was $26.5 million and the majority of the amount was paid in 2011, while the balance of the purchase price was payable following the closing of the Company's IPO.
|
|
|
(e)
|
In 2011, litigation credit consists of a mediation award in our favor pursuant to two trademark infringement cases brought by Caesarstone Australia Pty Limited.
|
In 2012, the litigation credit relates to the settlement agreement with the former CEO of CSA. The Company has been engaged in litigation with the former CEO of CSA since mid-2010, which included, among other things, his claim seeking an order requiring the Company to purchase his shares in CSA in accordance with his agreement with the Company and CSA or at a fair and reasonable price. In May 2012, the Company entered into a settlement agreement with the former CEO of CSA pursuant to which he transferred the ownership in any shares in CSA he received in connection with his employment with CSA.
|
|
|
|
The Company made no payment in consideration for such transferor any other payment in favor of the former CEO. As a result of this settlement, the Company has reversed the liability connected to this litigation and theadjustment is presented net of the related litigation expenses incurred for the settlement process.
|
|
(f)
|
The tax adjustments for 2011 and for the first three quarters of 2012 were based on effective tax rate for 2011. For the twelve months ended December 2012, the 2012 annual effective tax rate was used. The Company recognized the cumulative effect of the change in effective tax rate in the fourth quarter.
|
(g)
|
Relates to our writing down to zero the cost of inventory provided to Microgil, our former third-party quartz processor in Israel, in 2011 in the amount of $1.8 million and our writing down to zero our $1.1 million loan to Microgil, in each case, in connection with a dispute.
|
Caesarstone Sdot-Yam Ltd. and its subsidiaries
|
||||||||||||||||
Geographic breakdown of revenues by region
|
||||||||||||||||
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
U.S. dollars in thousands
|
2011
|
2012
|
2011
|
2012
|
||||||||||||
Australia
|
21,710 | 25,315 | 88,230 | 88,935 | ||||||||||||
USA
|
18,188 | 21,772 | 59,735 | 86,759 | ||||||||||||
Canada
|
8,448 | 10,926 | 29,695 | 40,322 | ||||||||||||
Israel
|
8,751 | 8,699 | 38,592 | 36,373 | ||||||||||||
Europe
|
5,120 | 4,397 | 22,880 | 20,749 | ||||||||||||
Rest of World
|
4,864 | 5,113 | 20,539 | 23,426 | ||||||||||||
$ | 67,081 | $ | 76,222 | $ | 259,671 | $ | 296,564 |