CAESARSTONE SDOT-YAM LTD.
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By:
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/s/ Yair Averbuch | |
Name: Yair Averbuch | |||
Title: Chief Financial Officer | |||
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First Quarter Revenue Up 23.5% to a First Quarter Record of $94.4 million
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Net Income attributable to Controlling Interest Up 26.2% to $13.3 million
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EPS of $0.37 and Adjusted EPS of $0.39
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Raises Full Year Guidance for Sales and Adjusted EBITDA
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Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Consolidated balance sheets
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As of
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U.S. dollars in thousands
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March 31,
2014
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December 31, 2013
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(Unaudited)
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 30,786 | $ | 22,248 | ||||
Short-term bank deposits
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60,000 | 70,000 | ||||||
Trade receivables
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53,695 | 52,304 | ||||||
Other accounts receivable and prepaid expenses
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23,719 | 22,853 | ||||||
Inventories
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69,066 | 57,867 | ||||||
Total current assets
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237,266 | 225,272 | ||||||
LONG-TERM ASSETS:
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Severance pay fund
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4,064 | 3,973 | ||||||
Long-term deposits and prepayments
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3,189 | 1,603 | ||||||
Total long-term assets
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7,253 | 5,576 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET
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101,033 | 93,634 | ||||||
OTHER ASSETS
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12,503 | 13,372 | ||||||
GOODWILL
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40,308 | 39,702 | ||||||
Total assets
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$ | 398,363 | $ | 377,556 | ||||
LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Short-term bank credit
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$ | 5,185 | $ | 5,454 | ||||
Trade payables
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56,628 | 50,624 | ||||||
Account payables and current maturities to related parties,
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including financing leaseback
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2,259 | 2,602 | ||||||
Accrued expenses and other liabilities
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21,841 | 20,890 | ||||||
Total current liabilities
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85,913 | 79,570 | ||||||
LONG-TERM LIABILITIES:
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Long-term loan and financing leaseback from a related party
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12,169 | 12,342 | ||||||
Accrued severance pay
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4,612 | 4,472 | ||||||
Other long-term liabilities
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1,897 | 1,704 | ||||||
Deferred tax liabilities, net
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5,894 | 6,245 | ||||||
Total long-term liabilities
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24,572 | 24,763 | ||||||
REDEEMABLE NON-CONTROLLING INTEREST
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7,548 | 7,624 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES
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EQUITY:
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Share capital -
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Ordinary shares
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365 | 364 | ||||||
Additional paid-in capital
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139,221 | 138,757 | ||||||
Accumulated other comprehensive income
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4,676 | 3,680 | ||||||
Retained earnings
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136,068 | 122,798 | ||||||
Total equity
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280,330 | 265,599 | ||||||
Total liabilities and equity
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$ | 398,363 | $ | 377,556 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Consolidated statements of income (Unaudited)
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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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2014
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2013
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Revenues
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$ | 94,414 | $ | 76,444 | ||||
Cost of revenues
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55,227 | 42,227 | ||||||
Gross profit
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39,187 | 34,217 | ||||||
Operating expenses:
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Research and development, net
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603 | 473 | ||||||
Marketing and selling
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13,719 | 12,474 | ||||||
General and administrative
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7,598 | 8,199 | ||||||
Total operating expenses
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21,920 | 21,146 | ||||||
Operating income
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17,267 | 13,071 | ||||||
Finance expenses, net
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1,565 | 189 | ||||||
Income before taxes on income
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15,702 | 12,882 | ||||||
Taxes on income
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2,229 | 2,172 | ||||||
Net income
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13,473 | 10,710 | ||||||
Net income attributable to non-controlling interest
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(203 | ) | (192 | ) | ||||
Net income attributable to controlling interest
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$ | 13,270 | $ | 10,518 | ||||
Basic net income per ordinary share
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$ | 0.38 | $ | 0.30 | ||||
Diluted net income per ordinary share
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$ | 0.37 | $ | 0.30 | ||||
Weighted average number of ordinary shares used in computing basic income per ordinary share
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34,808,850 | 34,593,529 | ||||||
Weighted average number of ordinary shares used in computing diluted income per ordinary share
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35,394,963 | 34,983,519 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Consolidated statements of cash flows (Unaudited)
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Three months ended
March 31,
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U.S. dollars in thousands
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2014
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2013
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Cash flows from operating activities:
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Net income
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$ | 13,473 | $ | 10,710 | ||||
Adjustments required to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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4,245 | 3,613 | ||||||
Share-based compensation expense
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618 | 889 | ||||||
Accrued severance pay, net
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49 | 67 | ||||||
Changes in deferred tax, net
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(1,305 | ) | (41 | ) | ||||
Capital gains
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- | (14 | ) | |||||
Foreign currency translation gains
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- | (27 | ) | |||||
Increase in trade receivables
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(1,391 | ) | (1,964 | ) | ||||
Decrease (increase) in other accounts receivable and prepaid expenses
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88 | (4,392 | ) | |||||
Increase in inventories
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(11,199 | ) | (3,682 | ) | ||||
Increase in trade payables
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1,716 | 647 | ||||||
Increase in warranty provision
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26 | 55 | ||||||
Increase in accrued expenses and other liabilities including related parties
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569 | 249 | ||||||
Net cash provided by operating activities
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6,889 | 6,110 | ||||||
Cash flows from investing activities:
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Investment in short-term deposits
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10,000 | (15,000 | ) | |||||
Purchase of property, plant and equipment
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(6,380 | ) | (2,793 | ) | ||||
Increase in long term deposits and prepayments
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(1,586 | ) | - | |||||
Net cash provided by (used in) investing activities
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2,034 | (17,793 | ) | |||||
Cash flows from financing activities:
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Repayment of long-term loans
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- | (2,684 | ) | |||||
Short-term bank credit and loans, net
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(269 | ) | 41 | |||||
Repayment of a financing leaseback related to Bar-Lev transaction
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(295 | ) | (280 | ) | ||||
Net cash used in financing activities
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(564 | ) | (2,923 | ) | ||||
Effect of exchange rate differences on cash and cash equivalents
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179 | 114 | ||||||
Increase (decrease) in cash and cash equivalents
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8,538 | (14,492 | ) | |||||
Cash and cash equivalents at beginning of year
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22,248 | 29,033 | ||||||
Cash and cash equivalents at end of year
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$ | 30,786 | $ | 14,541 | ||||
Non - cash investing:
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Purchase of fixed assets with credit from suppliers
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4,444 | 1,740 |
Caesarstone Sdot-Yam 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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2014
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2013
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(Unaudited)
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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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$ | 13,473 | $ | 10,710 | ||||
Finance expenses, net
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1,565 | 189 | ||||||
Taxes on income
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2,229 | 2,172 | ||||||
Depreciation and amortization
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4,245 | 3,613 | ||||||
Excess cost of acquired inventory (a)
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- | 70 | ||||||
Share-based compensation expense (b)
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618 | 889 | ||||||
Adjusted EBITDA
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$ | 22,130 | $ | 17,643 |
(a)
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Consists of charges to cost of goods sold for the difference between the higher carrying cost of the inventory of two of the Company's subsidiaries- Caesarstone USA's inventory at the time of its acquisition and inventory that was purchased from its distributor and Caesarstone Australia Pty Limited's inventory that was purchased from its distributor, and the standard cost of the Company's inventory- which adversely impacts the Company's gross margins until such inventory is sold. The majority of the inventory acquired from Caesarstone USA was sold in 2011, and the majority of the inventory acquired from the Australian distributor was sold in 2012. | |||||
(b)
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In 2013, share-based compensation consists of expenses related to the stock options granted to employees of the Company. In 2014, share-based compensation consists primarily of expenses related to the stock options granted to employees of the Company, as well as expenses related to share based rights granted in Februrary 2014. | |||||
Caesarstone Sdot-Yam 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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2014
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2013
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(Unaudited)
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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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$ | 13,270 | $ | 10,518 | ||||
Excess cost of acquired inventory (a)
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- | 70 | ||||||
Share-based compensation expense (b)
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618 | 889 | ||||||
Total adjustments before tax
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618 | 959 | ||||||
Less tax on above adjustments (c)
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88 | 162 | ||||||
Total adjustments after tax
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530 | 797 | ||||||
Adjusted net income attributable to controlling interest
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$ | 13,800 | $ | 11,315 | ||||
Adjusted diluted EPS
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$ | 0.39 | $ | 0.32 |
(a)
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Consists of charges to cost of goods sold for the difference between the higher carrying cost of the inventory of two of the Company's subsidiaries- Caesarstone USA's inventory at the time of its acquisition and inventory that was purchased from its distributor an Caesarstone Australia Pty Limited's inventory that was purchased from its distributor, and the standard cost of the Company's inventory- which adversely impacts the Company's gross margins until such inventory is sold. The majority of the inventory acquired from Caesarstone USA was sold in 2011, and the majority of the inventory acquired from the Australian distributor was sold in 2012.
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(b)
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In 2013, share-based compensation consists of expenses related to the stock options granted to employees of the Company. In 2014, share-based compensation consists primarily of expenses related to the stock options granted to employees of the Company, as well as expenses related to share based rights granted in Februrary 2014.
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(c)
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The tax adjustments for the three months ended March 31, 2014 and 2013 were based on the effective tax rate for these periods, respectively.
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Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Geographic breakdown of revenues by region (Unaudited)
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Three months ended
March 31,
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U.S. dollars in thousands
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2014
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2013
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USA
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37,626 | 23,706 | ||||||
Australia
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21,319 | 19,383 | ||||||
Canada
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11,737 | 10,715 | ||||||
Israel
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11,261 | 10,553 | ||||||
Europe
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4,698 | 5,892 | ||||||
Rest of World
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7,773 | 6,195 | ||||||
$ | 94,414 | $ | 76,444 |