EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1

Caesarstone Ltd. and its subsidiaries
Condensed consolidated balance sheets
 
   
As of
  
 
U.S. dollars in thousands
  
December 31,
2016
    
December 31,
2015
  
   
(Unaudited)
    
(Audited)
  
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents and short-term bank deposits
  
$
106,270
    
$
62,807
  
Trade receivables, net
    
63,072
      
59,185
  
Other accounts receivable and prepaid expenses
    
39,484
      
32,230
  
Inventories
    
101,474
      
95,479
  
                 
Total current assets
    
310,300
      
249,701
  
                 
LONG-TERM ASSETS:
                
Severance pay fund
    
3,403
      
3,296
  
Other receivables long-term
    
7,977
      
8,603
  
                 
Total long-term assets
    
11,380
      
11,899
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
222,818
      
225,438
  
                 
OTHER ASSETS
    
4,546
      
6,883
  
                 
GOODWILL
    
35,656
      
35,821
  
                 
Total assets
  
$
584,700
    
$
529,742
  
                 
LIABILITIES AND EQUITY
                
                 
CURRENT LIABILITIES:
                
                 
Short-term bank credit
  
$
8,540
    
$
3,241
  
Trade payables
    
48,633
      
46,382
  
Related party and other loan
    
3,099
      
3,251
  
Accrued expenses and other liabilities
    
33,065
      
27,986
  
                 
Total current liabilities
    
93,337
      
80,860
  
                 
LONG-TERM LIABILITIES:
                
                 
Long-term loan and financing leaseback from a related party
    
8,070
      
8,472
  
Legal settlements and loss contingencies long-term
    
12,527
      
11,190
  
Accrued severance pay
    
4,265
      
4,309
  
Long-term warranty provision
    
988
      
934
  
Deferred tax liabilities, net
    
14,921
      
14,767
  
Share-based payment
    
-
      
148
  
                 
Total long-term liabilities
    
40,771
      
39,820
  
                 
REDEEMABLE NON-CONTROLLING INTEREST
    
12,939
      
8,841
  
                 
EQUITY:
                
Ordinary shares
    
371
      
370
  
Treasury shares - at cost
    
(39,430
)
    
-
  
Additional paid-in capital
    
146,536
      
142,765
  
Accumulated other comprehensive loss
    
(1,150
)
    
(1,892
)
Retained earnings
    
331,326
      
258,978
  
                 
Total equity
    
437,653
      
400,221
  
                 
Total liabilities and equity
  
$
584,700
    
$
529,742
  
 
Caesarstone Ltd. and its subsidiaries
Condensed consolidated statements of income
 
   
Three months ended
December 31,
    
Twelve months ended
December 31,
  
U.S. dollars in thousands (except per share data)
  
2016
    
2015
    
2016
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Audited)
  
                         
Revenues
  
$
134,975
    
$
127,361
    
$
538,543
    
$
499,515
  
Cost of revenues
    
83,543
      
79,143
      
326,057
      
299,290
  
                                 
Gross profit
    
51,432
      
48,218
      
212,486
      
200,225
  
                                 
Operating expenses:
                                
Research and development
    
713
      
993
      
3,290
      
3,052
  
Marketing and selling
    
18,568
      
15,047
      
70,343
      
59,521
  
General and administrative
    
9,930
      
9,599
      
40,181
      
36,612
  
Legal settlements and loss contingencies, net
    
3,115
      
(64
)
    
5,868
      
4,654
  
                                 
Total operating expenses
    
32,326
      
25,575
      
119,682
      
103,839
  
                                 
Operating income
    
19,106
      
22,643
      
92,804
      
96,386
  
Finance expenses, net
    
1,000
      
688
      
3,318
      
3,085
  
                                 
Income before taxes on income
    
18,106
      
21,955
      
89,486
      
93,301
  
Taxes on income
    
2,790
      
2,563
      
13,003
      
13,843
  
                                 
Net income
  
$
15,316
    
$
19,392
    
$
76,483
    
$
79,458
  
                                 
Net income attributable to non-controlling interest
    
(248
)
    
(682
)
    
(1,887
)
    
(1,692
)
Net income attributable to controlling interest
  
$
15,068
    
$
18,710
    
$
74,596
    
$
77,766
  
Basic net income per ordinary share
  
$
0.37
    
$
0.53
    
$
2.08
    
$
2.21
  
Diluted net income per ordinary share
  
$
0.37
    
$
0.53
    
$
2.08
    
$
2.19
  
Weighted average number of ordinary shares used in computing basic income per ordinary share
    
34,321,573
      
35,294,755
      
34,706,303
      
35,252,596
  
Weighted average number of ordinary shares used in computing diluted income per ordinary share
    
34,356,672
      
35,451,861
      
34,763,920
      
35,463,698
  
 
- 2 -
Caesarstone Ltd. and its subsidiaries
Selected Condensed consolidated statements of cash flows (Unaudited)
 
   
Twelve months ended
December 31,
  
U.S. dollars in thousands
  
2016
    
2015
  
             
Cash flows from operating activities:
            
             
Net income
  
$
76,483
    
$
79,458
  
Adjustments required to reconcile net income to net cash provided by operating activities:
          
Depreciation and amortization
    
28,254
      
22,334
  
Share-based compensation expense
    
3,068
      
2,293
  
Accrued severance pay, net
    
(150
)
    
540
  
Changes in deferred tax, net
    
(963
)
    
7,051
  
Capital loss
    
32
      
-
  
Legal settlemnets and loss contingencies, net
    
5,868
      
4,654
  
Compensation paid by a shareholder
    
266
      
-
  
Increase in trade receivables
    
(4,184
)
    
(2,968
)
Decrease (increase) in other accounts receivable and prepaid expenses
    
(5,617
)
    
(3,069
)
Increase in inventories
    
(5,376
)
    
(15,267
)
Increase (decrease) in trade payables
    
1,424
      
(8,659
)
Increase (decrease) in warranty provision
    
100
      
(447
)
Increase (decrease) in accrued expenses and other liabilities including related party
    
2,314
      
(259
)
                 
Net cash provided by operating activities
    
101,519
      
85,661
  
                 
Cash flows from investing activities:
                
                 
Purchase of property, plant and equipment
    
(22,943
)
    
(76,495
)
Proceeds from sale of property, plant and equipment
    
22
      
-
  
Increase in long term deposits
    
(452
)
    
(1,228
)
                 
Net cash used in investing activities (*)
    
(23,373
)
    
(77,723
)
                 
Cash flows from financing activities:
                
                 
Dividend paid by subsidiary to non-controlling interest
    
(243
)
    
-
  
Changes in short-term bank credit and loans, net
    
5,157
      
3,241
  
Repayment of a financing leaseback related to Bar-Lev transaction
    
(1,100
)
    
(1,092
)
Purchase of treasury shares at cost
    
(39,430
)
    
-
  
                 
Net cash provided by (used in) financing activities
    
(35,616
)
    
2,149
  
                 
Effect of exchange rate differences on cash and cash equivalents
    
933
      
(1,607
)
                 
Increase in cash and cash equivalents and short-term bank deposits
    
43,463
      
8,480
  
Cash and cash equivalents and short-term bank deposits at beginning of the period
    
62,807
      
54,327
  
                 
Cash and cash equivalents and short-term bank deposits at end of the period
  
$
106,270
    
$
62,807
  
                 
Non - cash investing:
                
Changes in trade payables balances related to purchase of fixed assets
    
(403
)
    
(4,389
)
 
(*) Cash used in investing activities does not include changes in bank deposits as such balance is included in the "cash and cash equivalents and short term bank deposits" line at the beginning and end of the period.
 
- 3 -
Caesarstone Ltd. and its subsidiaries
 
   
Three months ended
December 31,
    
Twelve months ended
December 31,
  
U.S. dollars in thousands
  
2016
    
2015
    
2016
    
2015
  
    (Unaudited)  
Reconciliation of Net Income to Adjusted EBITDA:
                        
Net income
  
$
15,316
    
$
19,392
    
$
76,483
    
$
79,458
  
Finance expenses, net
    
1,000
      
688
      
3,318
      
3,085
  
Taxes on income
    
2,790
      
2,563
      
13,003
      
13,843
  
Depreciation and amortization
    
7,211
      
6,706
      
28,254
      
22,334
  
Legal settlements and loss contingencies, net (a)
    
3,115
      
(64
)
    
5,868
      
4,654
  
Compensation paid by a shareholder (b)
    
-
      
-
      
266
      
-
  
Share-based compensation expense (c)
    
535
      
1,147
      
3,068
      
2,293
  
Adjusted EBITDA (Non-GAAP)
  
$
29,967
    
$
30,432
    
$
130,260
    
$
125,667
  
 
(a)
Consists of legal settlements expenses and loss contingencies, net, related to silicosis claims.
          
(b)
One time bonus paid by a shareholder to Company's employees.
                
(c)
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees of the Company.
 
In addition, includes expenses for phantom awards granted and related payroll expenses as a result of exercises.
    
 
- 4 -
Caesarstone Ltd. and its subsidiaries
 
   
Three months ended
December 31,
    
Twelve months ended
December 31,
  
U.S. dollars in thousands (except per share data)
  
2016
    
2015
    
2016
    
2015
  
    (Unaudited)  
Reconciliation of net income attributable to controlling interest to
adjusted net income attributable to controlling interest:
              
               
Net income attributable to controlling interest
  
$
15,068
    
$
18,710
    
$
74,596
    
$
77,766
  
Legal settlements and loss contingencies, net (a)
    
3,115
      
(64
)
    
5,868
      
4,654
  
Compensation paid by a shareholder (b)
    
-
      
-
      
266
      
-
  
Share-based compensation expense (c)
    
535
      
1,147
      
3,068
      
2,293
  
Tax adjustment (d)
    
-
      
-
      
(1,158
)
    
-
  
Total adjustments
    
3,650
      
1,083
      
8,044
      
6,947
  
Less tax on non-tax adjustments (e)
    
572
      
104
      
1,456
      
1,031
  
Total adjustments after tax
    
3,078
      
979
      
6,588
      
5,916
  
                                 
Adjusted net income attributable to controlling interest (Non-GAAP)
  
$
18,146
    
$
19,689
    
$
81,184
    
$
83,682
  
Adjusted diluted EPS (f)
  
$
0.53
    
$
0.55
    
$
2.33
    
$
2.36
  
 
(a)
Consists of legal settlements expenses and loss contingencies, net, related to silicosis claims.
        
(b)
One time bonus paid by a shareholder to Company's employees.
            
(c)
Share-based compensation includes expenses related to stock options and restricted stock units granted to employees of the Company. In addition, includes expenses for phantom awards granted and the related payroll expenses as a result of exercises.
(d)
Tax adjustment as a result of tax settlement with the Israeli tax authorities.
            
(e)
Tax adjustments for the three and twelve months ended December 31, 2016 and 2015 were based on the effective tax rates for these periods, respectively.
(f)
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.
 
- 5 -
Caesarstone Ltd. and its subsidiaries
Geographic breakdown of revenues by region (Unaudited)
 
   
Three months ended
December 31,
    
Twelve months ended
December 31,
  
U.S. dollars in thousands
  
2016
    
2015
    
2016
    
2015
  
                         
USA
  
$
54,963
    
$
56,549
    
$
222,597
    
$
223,341
  
Australia (incl. New Zealand)
    
36,062
      
30,687
      
130,910
      
110,290
  
Canada
    
21,460
      
17,879
      
85,740
      
70,739
  
Israel
    
9,816
      
9,592
      
42,545
      
39,645
  
Europe
    
5,199
      
5,479
      
25,606
      
23,948
  
Rest of World
    
7,475
      
7,176
      
31,145
      
31,552
  
   
$
134,975
    
$
127,361
    
$
538,543
    
$
499,515
  
 
- 6 -