CAESARSTONE SDOT-YAM LTD.
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Date: August 6, 2014 |
By:
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/s/ Yair Averbuch | |
Name: Yair Averbuch | |||
Title: Chief Financial Officer
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Exhibit | Description |
99.1 | Press release dated August 6, 2014, titled, “Caesarstone Reports Second Quarter 2014 Results.” |
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Second Quarter Revenue Up 30.4% to a Record of $116.1 million
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·
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Reports diluted EPS of $0.51 and Adjusted diluted EPS of $0.58
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Raises Full Year Guidance for Sales and Adjusted EBITDA
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Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Consolidated balance sheets
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As of
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U.S. dollars in thousands
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June 30,
2014
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December 31,
2013 |
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(Unaudited)
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 33,272 | $ | 22,248 | ||||
Short-term bank deposits
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47,000 | 70,000 | ||||||
Trade receivables, Net
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62,424 | 52,304 | ||||||
Other accounts receivable and prepaid expenses
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30,400 | 22,853 | ||||||
Inventories
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72,945 | 57,867 | ||||||
Total current assets
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246,041 | 225,272 | ||||||
LONG-TERM ASSETS:
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Severance pay fund
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4,230 | 3,973 | ||||||
Long-term deposits and prepayments
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807 | 1,603 | ||||||
Total long-term assets
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5,037 | 5,576 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET
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115,694 | 93,634 | ||||||
OTHER ASSETS
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11,748 | 13,372 | ||||||
GOODWILL
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40,712 | 39,702 | ||||||
Total assets
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$ | 419,232 | $ | 377,556 | ||||
LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Short-term bank credit
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$ | 4,774 | $ | 5,454 | ||||
Short-term loans from related parties
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3,031 | 1,194 | ||||||
Trade payables
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57,121 | 50,624 | ||||||
Account payables to related parties
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1,802 | 1,408 | ||||||
Accrued expenses and other liabilities
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22,005 | 20,890 | ||||||
Total current liabilities
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88,733 | 79,570 | ||||||
LONG-TERM LIABILITIES:
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Long-term loan and financing leaseback from a related party
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10,348 | 12,342 | ||||||
Accrued severance pay
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4,815 | 4,472 | ||||||
Other long-term liabilities
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1,023 | 1,704 | ||||||
Deferred tax liabilities, net
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5,745 | 6,245 | ||||||
Share based payment
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588 | - | ||||||
Total long-term liabilities
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22,519 | 24,763 | ||||||
REDEEMABLE NON-CONTROLLING INTEREST
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8,381 | 7,624 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES
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EQUITY:
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Ordinary shares
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366 | 364 | ||||||
Additional paid-in capital
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139,636 | 138,757 | ||||||
Accumulated other comprehensive income
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5,323 | 3,680 | ||||||
Retained earnings
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154,274 | 122,798 | ||||||
Total equity
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299,599 | 265,599 | ||||||
Total liabilities and equity
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$ | 419,232 | $ | 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 June 30,
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Six months ended June 30,
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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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2014
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2013
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Revenues
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$ | 116,064 | $ | 88,977 | $ | 210,478 | $ | 165,421 | ||||||||
Cost of revenues
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68,442 | 44,657 | 123,669 | 86,884 | ||||||||||||
Gross profit
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47,622 | 44,320 | 86,809 | 78,537 | ||||||||||||
Operating expenses:
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Research and development, net
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710 | 553 | 1,313 | 1,026 | ||||||||||||
Marketing and selling
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13,848 | 12,996 | 27,567 | 25,470 | ||||||||||||
General and administrative
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9,507 | 8,529 | 17,105 | 16,728 | ||||||||||||
Total operating expenses
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24,065 | 22,078 | 45,985 | 43,224 | ||||||||||||
Operating income
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23,557 | 22,242 | 40,824 | 35,313 | ||||||||||||
Finance expenses (income), net
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1,420 | (404 | ) | 2,985 | (215 | ) | ||||||||||
Income before taxes on income
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22,137 | 22,646 | 37,839 | 35,528 | ||||||||||||
Taxes on income
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3,361 | 2,481 | 5,590 | 4,653 | ||||||||||||
Net income
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$ | 18,776 | $ | 20,165 | $ | 32,249 | $ | 30,875 | ||||||||
Net income attributable to non-controlling interest
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(570 | ) | (447 | ) | (773 | ) | (639 | ) | ||||||||
Net income attributable to controlling interest
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$ | 18,206 | $ | 19,718 | $ | 31,476 | $ | 30,236 | ||||||||
Basic net income per ordinary share
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$ | 0.52 | $ | 0.57 | $ | 0.90 | $ | 0.87 | ||||||||
Diluted net income per ordinary share
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$ | 0.51 | $ | 0.56 | $ | 0.89 | $ | 0.86 | ||||||||
Weighted average number of ordinary shares used in
computing basic income per ordinary share |
34,917,556 | 34,600,249 | 34,863,203 | 34,596,889 | ||||||||||||
Weighted average number of ordinary shares used in
computing diluted income per ordinary share |
35,408,872 | 35,139,901 | 35,401,917 | 35,061,710 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries
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Condensed Consolidated statements of cash flows on a Non GAAP Basis (Unaudited)
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Six months ended
June 30,
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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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$ | 32,249 | $ | 30,875 | ||||
Adjustments required to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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8,544 | 7,297 | ||||||
Share-based compensation expense
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1,419 | 1,500 | ||||||
Accrued severance pay, net
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86 | 75 | ||||||
Changes in deferred tax, net
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(2,223 | ) | 240 | |||||
Capital gains
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(2 | ) | (16 | ) | ||||
Foreign currency translation gains
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- | (132 | ) | |||||
Increase in trade receivables
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(10,120 | ) | (7,223 | ) | ||||
Increase in other accounts receivable and prepaid expenses
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(5,824 | ) | (7,563 | ) | ||||
Increase in inventories
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(15,078 | ) | (2,750 | ) | ||||
Increase (decrease) in trade payables
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1,364 | (2,705 | ) | |||||
Increase (decrease) in warranty provision
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(603 | ) | 76 | |||||
Increase in accrued expenses and other liabilities including related parties
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1,913 | 3,877 | ||||||
Net cash provided by operating activities
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11,725 | 23,551 | ||||||
Cash flows from investing activities:
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Purchase of property, plant and equipment
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(23,816 | ) | (10,275 | ) | ||||
Decrease (increase) in long term deposits and prepaid expenses
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796 | (319 | ) | |||||
Net cash used in investing activities
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(23,020 | ) | (10,594 | ) | ||||
Cash flows from financing activities:
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Repayment of long-term loans
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- | (5,297 | ) | |||||
Short-term bank credit and loans, net
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(680 | ) | 1,001 | |||||
Repayment of a financing leaseback related to Bar-Lev transaction
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(597 | ) | (566 | ) | ||||
Net cash used in financing activities
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(1,277 | ) | (4,862 | ) | ||||
Effect of exchange rate differences on cash and cash equivalents
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596 | (1,270 | ) | |||||
Increase (decrease) in cash and cash equivalents and Short term bank deposits
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(11,976 | ) | 6,825 | |||||
Cash and cash equivalents Short term bank deposits at beginning of the period
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92,248 | 72,733 | ||||||
Cash and cash equivalents and Short term bank deposits at end of the period
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$ | 80,272 | $ | 79,558 | ||||
Non - cash investing:
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Purchase of fixed assets with credit from suppliers
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5,133 | 8,246 |
Caesarstone Sdot-Yam Ltd. and its subsidiaries (Unaudited)
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Three months ended
June 30,
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Six months ended
June 30, |
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U.S. dollars in thousands
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2014
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2013
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2014
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2013
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Reconciliation of Net Income to Adjusted EBITDA:
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Net income
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$ | 18,776 | $ | 20,165 | $ | 32,249 | $ | 30,875 | |||||||||
Finance expenses (income), net
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1,420 | (404 | ) | 2,985 | (215 | ) | |||||||||||
Taxes on income
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3,361 | 2,481 | 5,590 | 4,653 | |||||||||||||
Depreciation and amortization
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4,299 | 3,684 | 8,544 | 7,297 | |||||||||||||
Excess cost of acquired inventory (a)
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108 | 72 | 108 | 142 | |||||||||||||
Share-based compensation expense (b)
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801 | 611 | 1,419 | 1,500 | |||||||||||||
Inventory - change of estimate (c)
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- | (3,458 | ) | - | (3,458 | ) | |||||||||||
Follow-on offering expenses (d)
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657 | 1,470 | 657 | 1,470 | |||||||||||||
Provision for employees fringe benefits (e)
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939 | - | 939 | - | |||||||||||||
Adjusted EBITDA
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$ | 30,361 | $ | 24,621 | $ | 52,491 | $ | 42,264 |
(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.
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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.
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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 during the period.
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(c)
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Relates to a change in estimate for the value of inventory following the implementation of the Company's new ERP system in April 2013.
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(d)
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In 2013, consists of direct expenses related to a follow-on offering that closed in April 2013, including a bonus paid by the Company' former shareholder, Tene, to certain of its employees that under US GAAP the Company is required to expense against paid-in capital.
In 2014, consists of direct expenses related to a follow-on offering that closed in June 2014.
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(e)
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Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israel Tax Authority and with the National Insurance Intitute of Israel.
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Caesarstone Sdot-Yam Ltd. and its subsidiaries (Unaudited)
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Three months ended June 30,
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Six months ended June 30,
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U.S. dollars in thousands
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2014
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2013
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2014
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2013
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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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$ | 18,206 | $ | 19,718 | $ | 31,476 | $ | 30,236 | |||||||||
Excess cost of acquired inventory (a)
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108 | 72 | 108 | 142 | |||||||||||||
Share-based compensation expense (b)
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801 | 611 | 1,419 | 1,500 | |||||||||||||
Inventory - change of estimate (c)
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- | (3,458 | ) | - | (3,458 | ) | |||||||||||
Follow-on offering expenses (d)
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657 | 1,470 | 657 | 1,470 | |||||||||||||
Provision for employees fringe benefits (e)
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939 | - | 939 | - | |||||||||||||
Tax adjustment (f)
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342 | - | 342 | - | |||||||||||||
Total adjustments
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2,847 | (1,305 | ) | 3,465 | (346 | ) | |||||||||||
Less tax on non-tax adjustments (g)
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345 | (207 | ) | 433 | (45 | ) | |||||||||||
Total adjustments after tax
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2,502 | (1,098 | ) | 3,032 | (301 | ) | |||||||||||
Adjusted net income attributable to controlling interest
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$ | 20,708 | $ | 18,620 | $ | 34,508 | $ | 29,935 | |||||||||
Adjusted diluted EPS
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$ | 0.58 | $ | 0.53 | $ | 0.97 | $ | 0.85 |
(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.
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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 during the period.
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(c)
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Relates to a change in estimate for the value of inventory following the implementation of the Company's new ERP system in April 2013.
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(d)
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In 2013, consists of direct expenses related to a follow on-offering that closed in April 2013, including a bonus paid by the Company' former shareholder, Tene, to certain of its employees that under US GAAP the Company is required to expense against paid-in capital.
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In 2014, consists of direct expenses related to a follow on offering that closed in June 2014.
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(e)
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Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israel Tax Authority and with the National Insurance Intitute of Israel.
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(f)
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Tax adjustment as a result of tax settlement with the Israeli tax authorities.
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(g)
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The tax adjustments for the three and six months ended June 30, 2014 and 2013 were based on the effective tax rate (excluding adjustments to the tax line item) 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 June 30,
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Six months ended June 30,
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U.S. dollars in thousands
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2014
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2013
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2014
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2013
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USA
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47,894 | 30,890 | 85,520 | 54,596 | ||||||||||||
Australia
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27,443 | 23,612 | 48,762 | 42,995 | ||||||||||||
Canada
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15,381 | 13,129 | 27,118 | 23,844 | ||||||||||||
Israel
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9,923 | 9,978 | 21,184 | 20,531 | ||||||||||||
Europe
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7,280 | 4,497 | 11,978 | 10,389 | ||||||||||||
Rest of World
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8,143 | 6,871 | 15,916 | 13,066 | ||||||||||||
$ | 116,064 | $ | 88,977 | $ | 210,478 | $ | 165,421 |