Caesarstone Reports Fourth Quarter and Full Year 2022 Financial Results

Rhea-AI Summary

Caesarstone Ltd. (CSTE) reported record revenue of $690.8 million for 2022, achieving a 7.3% year-over-year increase. However, fourth-quarter revenues declined 6.8% to $159.4 million. The company faced a net loss of $57.1 million, or $1.66 per share, predominantly due to a $71.3 million non-cash impairment charge. Adjusted net income for the year was $10.6 million, with an adjusted diluted EPS of $0.31. The outlook for 2023 anticipates stable revenues, but a focus on cost optimization and pricing strategies will be crucial to offset expected declines in volume and currency fluctuations.

Positive

• Record full year revenue of $690.8 million, an increase of 7.3% YoY.
• Adjusted net income of $10.6 million, demonstrating resilience amid challenges.
• Growth in U.S. and Canada contributed significantly to revenue increase.

Negative

• Fourth quarter revenues down 6.8% to $159.4 million.
• Net loss of $57.1 million for 2022, compared to net income of $19.0 million in 2021.
• Gross margin decreased from 26.6% to 23.6% year-over-year.

- Full Year Record Revenue Up 7.3% to $690.8 Million; Up 10.8% on Constant Currency Basis -

- Fourth Quarter Revenues Down 6.8% to $159.4 Million; Down 2.1% on Constant Currency Basis -

- Full Year Net Loss Attributable to Controlling Interest of $57.1 Million, or Loss per share of $1.66, Including a Non-cash Pretax Impairment Charge of $71.3 Million -

- Full Year Adjusted Net Income of $10.6 Million, or Adjusted Diluted EPS of $0.31 -

- Full Year Adjusted EBITDA of $51.9 Million -

MP MENASHE, Israel--(BUSINESS WIRE)-- Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its fourth quarter and full year ended December 31, 2022.

Yuval Dagim, Caesarstone’s Chief Executive Officer commented, “I am proud of the entire Caesarstone team’s efforts as we finished 2022 with record full year revenue of approximately $691 million despite softer macro-economic conditions in the second half of 2022. During the year, we focused diligently on executing our multi-pronged growth strategy as we navigated through a challenging demand environment that remains soft. While we expect market volumes to be lower in the near-term, we believe long-term renovation and remodel fundamentals in our key markets remain strong. With this in mind, we are focused on optimizing our global structure during 2023 to operate more efficiently and improve our scalability for new growth opportunities.”

“We are carefully monitoring our costs as we work to improve our margins while also investing for future growth. In order to do so effectively, we are focused on leveraging the projects within our Global Growth Acceleration Plan. This includes actions to rationalize our costs through headcount reductions and closely monitoring expenses. We have already reduced global headcount by 9% during the second half of 2022. We are more efficiently managing our working capital by balancing production at our facilities and reducing SKUs to align inventory levels to current demand. We have increased the portion of our products that are produced by 3^rd parties in lower cost countries, enabling us to better capture incremental demand for products at various price points. We are intensifying our marketing efforts to reinforce the Caesarstone brand, in part by reinvesting proceeds from cost saving actions. We are expanding our U.S footprint through investments into new distribution centers that will be opened in coming years. Furthermore, our investments in new territories including our bolt-on acquisition of a distributor in Sweden gives us a direct presence for expansion in Europe. And finally, the launch in the U.S. and Canada of our new Porcelain products in the first half of 2023 is an exciting milestone in our multi-material strategy to accelerate our growth in this exciting product category.”

“With our world-class brand, multi-material countertop offerings, innovative go-to-market initiatives and dedicated focus on driving results, we believe we are well situated to capture market share and unlock further value in our business.”

Fourth Quarter 2022 Results

Revenue in the fourth quarter of 2022 was $159.4 million, 6.8% lower compared to $171.1 million in the prior year quarter. On a constant currency basis, fourth quarter revenue was lower by 2.1% year-over-year. Sales improvement in the Company’s APAC region on a constant currency basis, was more than offset by softer performance in other regions given challenging macro-economic conditions that resulted in lower demand.

Gross margin in the fourth quarter of 2022 was 19.4% compared to 23.2% in the prior year quarter. Adjusted gross margin in the fourth quarter was 19.7% compared to 23.3% in the prior year quarter. The majority of the year-over-year reduction in gross margin resulted from increased manufacturing unit costs due to lower fixed cost absorption resulting from lower capacity utilization, higher raw material and shipping costs and unfavorable foreign currency exchange rate fluctuations as a result of appreciation of the U.S dollar against all other currencies, partially offset by pricing actions.

Operating expenses in the fourth quarter of 2022 were $106.1 million, compared to $36.3 million in the prior year quarter. The fourth quarter 2022 included a one-time, non-cash impairment charge of $71.3 million related to goodwill and long-lived assets. The Company’s current market capitalization together with challenging economic conditions, higher interest rates and lower production utilization prompted a review of its goodwill and long-lived asset balances, which resulted in the impairment charges. Excluding legal settlements, loss contingencies and impairment charges, adjusted operating expenses were 22.2% of revenue, compared to 21.9% in the prior year quarter.

Operating loss in the fourth quarter of 2022 was a loss of $75.2 million compared to operating income of $3.3 million in the prior year quarter. Excluding the one-time, non-cash impairment charges, the operating loss was $3.9 million. The year-over-year decrease mainly reflects lower gross margin.

Adjusted EBITDA in the fourth quarter of 2022, which excludes expenses for non-cash impairment charges, share-based compensation, legal settlements and loss contingencies and for non-recurring items, was $5.7 million, representing a margin of 3.6%. This compared to adjusted EBITDA of $11.5 million, representing a margin of 6.7% in the prior year quarter. The year-over-year decrease primarily reflects the lower operating income.

Finance expenses in the fourth quarter of 2022 were $0.4 million compared to finance expense of $7.4 million in the prior year quarter. The difference primarily reflects foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the fourth quarter of 2022 was $74.0 million compared to net loss of $2.9 million in the prior year quarter, and included the after-tax impact of the non-cash impairment charge for the fourth quarter of 2022. Net loss per share for the fourth quarter was $2.15 compared to net loss per share of $0.11 in the prior year quarter. Adjusted diluted net loss per share for the fourth quarter was $0.02 on 34.5 million shares, compared to adjusted diluted net income per share of $0.01 in the prior year quarter on a similar share count.

Full Year 2022 Results

Revenue in the full year 2022 grew 7.3% year over year and reached a company record of $690.8 million compared to $643.9 million in the prior year. On a constant currency basis, 2022 revenue was higher by 10.8% year-over-year, primarily attributable to growth in the United States and Canada.

Gross margin in 2022 was 23.6% compared to 26.6% in the prior year. Adjusted gross margin in 2022 was 23.8%, compared to 26.8% in the prior year. The difference in adjusted gross margin mainly reflects increased manufacturing unit costs due to lower fixed cost absorption resulting from lower capacity utilization, higher raw material prices, unfavorable foreign exchange rates, and shipping price increases which were partially offset by favorable product mix and selling price increases.

Operating expenses in 2022 were $221.9 million compared to $144.1 million in the prior year, and included the $71.3 million non-cash impairment charge in 2022. Excluding legal settlements, loss contingencies and impairment charges, adjusted operating expenses improved to 21.7% of revenue, compared to 21.9% in the prior year quarter.

Operating loss in 2022 was $58.7 million compared to operating income of $27.4 million in the prior year. The year-over-year decrease mainly reflects higher operating expenses. Excluding the non-cash impairment charges, operating income was $12.6 million.

Adjusted EBITDA, which excludes non-cash impairment charges, expenses for share-based compensation, legal settlements and loss contingencies and for non-recurring items, was $51.9 million in 2022, representing a margin of 7.5%. This compares to adjusted EBITDA of $68.2 million, representing a margin of 10.6% in the prior year. This year-over-year margin decrease primarily reflects lower gross margin.

Finance income in 2022 was $3.1 million compared to finance expense of $7.6 million in the prior year. The difference was primarily a result of foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the full year 2022 was $57.1 million compared to net income of $19.0 million in the prior year, and included the after-tax impact of the impairment charge for 2022. Net loss per share for 2022 was $1.66 compared to diluted net income per share of $0.51 in the prior year. Adjusted diluted net income per share for 2022 was $0.31 compared to $0.83 in the prior year.

Balance Sheet & Liquidity

As of December 31, 2022, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits and short and long-term marketable securities of $59.2 million and total debt to financial institutions of $31.0 million.

Dividend

The Company’s dividend policy provides for a quarterly cash dividend of up to 50% of reported net income on a year-to-date basis, less any amount already paid as dividend for the respective period (the “calculated dividend”), subject in each case to approval by the Company’s board of directors. No dividend is paid if it would be less than $0.10 per share. Pursuant to the Company’s dividend policy, the Company does not intend to pay a dividend for the fourth quarter of 2022, based on its reported net loss attributable to controlling interest for the period.

Outlook

Given the challenging macroeconomic environment and limited ability to forecast the duration of government-induced actions that have slowed the pace of construction activity in many countries, at this time the Company anticipates revenues for 2023 will be within range of 2022 revenues. This will be largely achieved through enacted price actions roughly offsetting an expected decline in volume and the unfavorable impact of foreign currency exchange rate fluctuations. Additionally, the Company expects moderate and gradual improvement in Adjusted EBITDA as a percentage of sales for the full year 2023, primarily attributable to pricing initiatives, cost optimization efforts and other actions, which are expected to more than offset higher raw material and shipping costs in inventory entering into 2023.

Nahum Trost, Caesarstone’s Chief Financial Officer, concluded, “We believe the outlook that we are providing is both achievable and appropriate given the level of uncertainty in the industry. We are well positioned and prepared to execute on our multi-pronged growth strategy and the factors that are within our control. We believe we are taking a balanced and prudent approach to set expectations and we will fully leverage all resources available to us to mitigate risk and capitalize on the market opportunities available to Caesarstone.”

Webcast and Conference Call Details

The Company will host a webcast and conference call today, March 1, 2023, at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-877-451-6152 and 1-201-389-0879, respectively. The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone Fourth Quarter 2022 Earnings Conference Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or + 1-412-317-6671 (international) and enter pass code 13735420. The replay will be available beginning at 12:30 p.m. ET on Wednesday, March 1, 2023 and will last through 11:59 p.m. ET on Wednesday, March 8, 2023.

About Caesarstone

Caesarstone is a global leader of premium surfaces, specializing in countertops that create dynamic spaces of inspiration in the heart of the home. Established in 1987, its multi-material portfolio of over 100 colors combines the company’s innovative technology with its powerful design passion. Spearheading high-quality, sustainable surfaces, Caesarstone delivers functional resilience with timeless beauty, for a vast range of applications, including kitchen countertops, bathroom vanities, and more, for indoor and outdoor spaces.

Since it pioneered quartz countertops over thirty years ago, the brand has expanded into porcelain and natural stone and is on the ground in more than 50 countries worldwide while enhancing customer experience through the expansion of groundbreaking digital platforms & services. More information on Caesarstone: caesarstoneus.com, Facebook, Twitter, YouTube, Pinterest, and Instagram

Non-GAAP Financial Measures

The non-GAAP measures presented by the Company should be considered in addition to, and not as a substitute for, comparable GAAP measures. Reconciliations of GAAP gross profit to adjusted gross profit, GAAP net income (loss) to adjusted net income (loss) and net income (loss) to adjusted EBITDA are provided in the schedules to this release. To calculate revenues growth rates that exclude the impact of changes in foreign currency exchange rates, the Company converts actual reported results from local currency to U.S. dollars using constant foreign currency exchange rates in the current and comparable period. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company's operating performance.

Forward-Looking Statements

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “goals," “intend,” “seek,” “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “may,” “plan,” “outlook,” “future” and “project” and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward looking statements include statements regarding the Company’s sustainability goals and plans, intentions, expectations, assumptions, goals and beliefs regarding the Company’s business and sustainability vision. These forward-looking statements also may relate to the Company's plans, objectives and expectations for future operations, including estimations relating to the impact of the COVID-19 pandemic and mitigation measures in connection thereto, and expectations of the results of the Company’s business optimization initiatives. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties, both known or unknown. These factors include, but are not limited to: the impact of the COVID-19 pandemic on end-consumers, the effects of global economy and geo-politics on the Company’s business and operations; managing constraints in the global supply chain, raw material shortages, increased prices and effects of challenges in global shipping and transportation; Company’s ability to pass all or some of these increases to its customers; the strength of the home renovation and construction sectors; intense competitive pressures; disruptions to our information technology systems globally, including by deliberate cyber-attacks; the degree of the Company’s ability to develop, produce and deliver high quality and safe products; fluctuations in currency exchange rates against the U.S. Dollar; Company’s ability to raise funds to finance our current and future capital needs; Company’s ability to build-out and expand into certain markets and successfully integrate our acquisitions; the Company’s ability to effective manage its relationship with key suppliers; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with our operations and products; efficiently manufacturing our products and managing changes in production and supply chain; economic conditions within any of our key existing markets; the success of our expansion efforts in the United States; the extent of the Company’s ability to meet its ESG goals and targets, management of GHG and other emissions; the impacts of conditions in Israel, such as negative economic, labor or geopolitical events; the unpredictability of seasonal fluctuations in revenues; disturbances to the Company’s operations or the operations of its suppliers, distributors, customers or other third parties and other factors, risks and uncertainties discussed under the sections "Risk Factors" and “Special Note Regarding Forward-Looking Statements and Risk Factor Summary” in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2022, and in other documents filed by Caesarstone with the SEC, which are available free of charge at www.sec.gov. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Caesarstone Ltd. and its subsidiaries Condensed consolidated balance sheets
		As of
U.S. dollars in thousands		December 31, 2022				December 31, 2021
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents and short-term bank deposits		$	52,081			$	74,315
Short-term available for sale marketable securities			7,077				11,228
Trade receivables, net			77,898				82,815
Other accounts receivable and prepaid expenses			32,570				35,443
Inventories			238,232				204,725
Total current assets			407,858				408,526
LONG-TERM ASSETS:
Severance pay fund			3,410				4,090
Other long-term receivables			-				449
Deferred tax assets, net			16,251				10,880
Long-term deposits and prepaid expenses			3,255				3,832
Operating lease right-of-use assets			144,098				154,652
Long-term available for sale marketable securities			-				8,647
Property, plant and equipment, net			169,292				221,150
Intangible assets, net			8,817				9,627
Goodwill			-				45,800
Total long-term assets			345,123				459,127
Total assets		$	752,981			$	867,653
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit		$	26,135			$	12,523
Trade payables			62,194				81,369
Related parties and other loans			283				2,276
Short term legal settlements and loss contingencies			17,595				22,592
Accrued expenses and other liabilities			58,777				64,534
Total current liabilities			164,984				183,294
LONG-TERM LIABILITIES:
Long-term bank and other loans and financing liability of land from a related party			4,823				6,240
Legal settlements and loss contingencies long-term			19,572				20,859
Deferred tax liabilities, net			4,288				4,992
Long-term lease liabilities			124,353				143,324
Accrued severance pay			4,750				5,500
Long-term warranty provision			1,262				1,280
Total long-term liabilities			159,048				182,195
REDEEMABLE NON-CONTROLLING INTEREST			7,903				7,869
EQUITY:
Ordinary shares			371				371
Treasury shares - at cost			(39,430	)			(39,430	)
Additional paid-in capital			163,431				161,929
Capital fund related to non-controlling interest			(5,587	)			(5,587	)
Accumulated other comprehensive income (loss), net			(9,578	)			(704	)
Retained earnings			311,839				377,716
Total equity			421,046				494,295
Total liabilities and equity		$	752,981			$	867,653

Caesarstone Ltd. and its subsidiaries Condensed consolidated statements of income (loss)
			Three months ended December 31,								Twelve months ended December 31,
U.S. dollars in thousands (except per share data)			2022				2021				2022				2021
			(Unaudited)								(Unaudited)				(Audited)
Revenues			$	159,369			$	171,057			$	690,806			$	643,892
Cost of revenues				128,438				131,379				527,561				472,394
Gross profit				30,931				39,678				163,245				171,498
Operating expenses:
Research and development				1,151				1,177				4,098				4,216
Sales and Marketing				22,332				22,594				94,412				85,725
General and administrative				11,861				13,746				51,596				50,845
Impairment expenses related to goodwill and long lived assets (**)				71,258				-				71,258				-
Legal settlements and loss contingencies, net				(491	)			(1,181	)			568				3,283
Total operating expenses				106,111				36,336				221,932				144,069
Operating income (loss)				(75,180	)			3,342				(58,687	)			27,429
Finance expenses (income), net				407				7,425				(3,079	)			7,590
Income (loss) before taxes				(75,587	)			(4,083	)			(55,608	)			19,839
Taxes on income (loss)				(1,699	)			(780	)			758				1,950
Net income (loss)			$	(73,888	)		$	(3,303	)		$	(56,366	)		$	17,889
Net loss (income) attributable to non-controlling interest				(78	)			426				(688	)			1,077
Net income (loss) attributable to controlling interest			$	(73,966	)		$	(2,877	)		$	(57,054	)		$	18,966
Basic net income (loss) per ordinary share (*)			$	(2.15	)		$	(0.11	)		$	(1.66	)		$	0.51
Diluted net income (loss) per ordinary share (*)			$	(2.15	)		$	(0.11	)		$	(1.66	)		$	0.51
Weighted average number of ordinary shares used in computing basic income per ordinary share				34,504,904				34,471,363				34,488,275				34,462,328
Weighted average number of ordinary shares used in computing diluted income per ordinary share				34,504,904				34,471,363				34,488,275				34,570,111

(*) The numerator for the calculation of net income (loss) per share for the three and twelve months ended December 31, 2022 and 2021, has been decreased by approximately $0.1 and $0.1 million, and $1.1 and $1.4 million respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.

(**) Goodwill impairment in the amount of $44.8 million and Long-lived assets impairment in the amount of $26.5 million

Caesarstone Ltd. and its subsidiaries Selected Condensed consolidated statements of cash flows
		Twelve months ended December 31,
U.S. dollars in thousands		2022				2021
		(Unaudited)				(Audited)
Cash flows from operating activities:
Net income (loss)		$	(56,366	)		$	17,889
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			36,344				35,407
Share-based compensation expense			1,502				1,845
Accrued severance pay, net			(58	)			121
Changes in deferred tax, net			(5,693	)			(4,473	)
Capital (gain) loss			67				(3	)
Legal settlements and loss contingencies, net			568				3,283
Decrease in trade receivables			2,612				815
Decrease (increase) in other accounts receivable and prepaid expenses			3,645				(9,036	)
Increase in inventories			(40,884	)			(54,189	)
Increase (decrease) in trade payables			(21,032	)			28,277
Increase (decrease) in warranty provision			(119	)			112
Changes in right of use assets			9,487				25,906
Changes in lease liabilities			(17,909	)			(22,085	)
Contingent consideration related to acquisition			120				(288	)
Amortization of premium and accretion of discount on marketable securities, net			238				412
Changes in Accrued interest related to Marketable Securities			74				42
Decrease in accrued expenses and other liabilities including related parties			(7,165	)			(3,352	)
Impairment of goodwill and long-lived assets			71,258				-
Net cash provided by (used in) operating activities			(23,311	)			20,684
Cash flows from investing activities:
Net cash paid for acquisitions			(2,245	)			-
Repayment of assumed shareholders loan related to acquisition			-				(1,966	)
Repayment of contingent consideration related to acquisition			-				-
Purchase of property, plant and equipment			(17,801	)			(31,477	)
Proceeds from sale of property, plant and equipment			12				9
Maturity of (investment in) marketable securities			12,401				(1,343	)
Decrease (increase) in long term deposits			348				(108	)
Net cash used in investing activities			(7,285	)			(34,885	)
Cash flows from financing activities:
Dividend paid			(8,625	)			(10,681	)
Changes in short-term bank credits and long-term loans, including related parties			18,640				(11,761	)
Contingent consideration related to acquisition			-				(1,492	)
Repayment of a financing leaseback related to Bar-Lev transaction			(859	)			(1,320	)
Net cash provided by (used in) financing activities			9,156				(25,254	)
Effect of exchange rate differences on cash and cash equivalents			(794	)			(478	)
Decrease in cash and cash equivalents and short-term bank deposits			(22,234	)			(39,933	)
Cash and cash equivalents and short-term bank deposits at beginning of the period			74,315				114,248
Cash and cash equivalents and short-term bank deposits at end of the period		$	52,081			$	74,315
Non - cash investing:
Changes in trade payables balances related to purchase of fixed assets			(925	)			(56	)

	Caesarstone Ltd. and its subsidiaries
			Three months ended December 31,						Twelve months ended December 31,
	U.S. dollars in thousands		2022			2021			2022			2021
			(Unaudited)						(Unaudited)
	Reconciliation of Gross profit to Adjusted Gross profit:
	Gross profit		$	30,931		$	39,678		$	163,245		$	171,498
	Share-based compensation expense (a)			86			107			315			321
	Amortization of assets related to acquisitions			72			79			306			852
	Restructuring expenses (b)			237			-			237			-
	Adjusted Gross profit (Non-GAAP)		$	31,326		$	39,864		$	164,103		$	172,671

(a)		Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
(b)		Restructuring expenses related to workforce reduction

Caesarstone Ltd. and its subsidiaries
		Three months ended December 31,								Twelve months ended December 31,
U.S. dollars in thousands		2022				2021				2022				2021
		(Unaudited)								(Unaudited)
Reconciliation of Net Income (loss) to Adjusted EBITDA:
Net income (loss)		$	(73,888	)		$	(3,303	)		$	(56,366	)		$	17,889
Finance expenses (income), net			407				7,425				(3,079	)			7,590
Taxes on income			(1,699	)			(780	)			758				1,950
Depreciation and amortization			9,121				8,916				36,344				35,407
Legal settlements and loss contingencies, net (a)			(492	)			(1,181	)			568				3,283
Contingent consideration adjustment related to acquisition			63				-				120				284
Acquisition and integration related expenses			-				-				80				-
Share-based compensation expense (b)			259				458				1,502				1,845
Impairment expenses related to goodwill and long lived assets			71,258				-				71,258				-
Restructuring expenses (c)			684				-				684				-
Adjusted EBITDA (Non-GAAP)		$	5,713			$	11,535			$	51,869			$	68,248

(a)		Consists primarily of legal settlements expenses and loss contingencies, net, related to product liability claims.
(b)		Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
(c)		Restructuring expenses related to workforce reduction.

Caesarstone Ltd. and its subsidiaries
		Three months ended December 31,								Twelve months ended December 31,
U.S. dollars in thousands (except per share data)		2022				2021				2022				2021
		(Unaudited)								(Unaudited)
Reconciliation of net income (loss) attributable to controlling interest to adjusted net income (loss) attributable to controlling interest:
Net income (loss) attributable to controlling interest		$	(73,966	)		$	(2,877	)		$	(57,054	)		$	18,966
Legal settlements and loss contingencies, net (a)			(492	)			(1,181	)			568				3,283
Contingent consideration adjustment related to acquisition			63				-				120				284
Amortization of assets related to acquisitions, net of tax			536				502				2,084				2,391
Share-based compensation expense (b)			259				458				1,502				1,845
Acquisition and integration related expenses			-				-				80				-
Non cash revaluation of lease liabilities (c)			676				3,461				(9,527	)			2,918
Impairment expenses related to goodwill and long lived assets			71,258				-				71,258				-
Restructuring expenses (d)			684				-				684				-
Total adjustments			72,984				3,240				66,769				10,721
Less tax on non-tax adjustments (e)			(146	)			200				(910	)			1,054
Total adjustments after tax			73,130				3,040				67,679				9,668
Adjusted net income (loss) attributable to controlling interest (Non-GAAP)		$	(836	)		$	163			$	10,625			$	28,634
Adjusted earning (loss) per share (f)		$	(0.02	)		$	0.01			$	0.31			$	0.83

(a)		Consists primarily of legal settlements expenses and loss contingencies, net, related to product liability claims.
(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 differences deriving from revaluation of lease contracts in accordance with FASB ASC 842.
(d)		Restructuring expenses related to workforce reduction.
(e)		Tax adjustments for the three and twelve months ended December 31, 2022 and 2021, based on the effective tax rates.
(f)		In calculating adjusted (Non-GAAP) earning per share, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718.
		In calculating adjusted (Non-GAAP) loss per share, the basic weighted average number of shares outstanding includes the effects of share-based compensation expense in accordance with FASB ASC 718.

Caesarstone Ltd. and its subsidiaries
Geographic breakdown of revenues by region
		Three months ended December 31,						Twelve months ended December 31,						Three months ended December 31,						Twelve months ended December 31,
U.S. dollars in thousands		2022			2021			2022			2021
		(Unaudited)						(Unaudited)			(Audited)			YoY % change			YoY % change CCB			YoY % change			YoY % change CCB
USA		$	76,394		$	77,613		$	342,293		$	305,353		-1.6	%		-1.6	%		12.1	%		12.1	%
Canada			20,673			22,263			93,377			84,467		-7.1	%		0.1	%		10.5	%		14.6	%
Latin America			964			1,618			4,481			4,702		-40.4	%		-40.4	%		-4.7	%		-4.7	%
America's			98,031			101,494			440,151			394,522		-3.4	%		-1.8	%		11.6	%		12.4	%
Australia			29,346			30,730			116,284			118,714		-4.5	%		6.6	%		-2.0	%		6.2	%
Asia			7,891			8,011			34,607			30,390		-1.5	%		-0.3	%		13.9	%		15.3	%
APAC			37,237			38,741			150,891			149,104		-3.9	%		5.1	%		1.2	%		8.1	%
EMEA			15,266			18,160			63,320			60,836		-15.9	%		-4.0	%		4.1	%		16.7	%
Israel			8,835			12,662			36,444			39,430		-30.2	%		-23.7	%		-7.6	%		-4.5	%
Total Revenues		$	159,369		$	171,057		$	690,806		$	643,892		-6.8	%		-2.1	%		7.3	%		10.8	%

 

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Source: Caesarstone Ltd.

FAQ

What is Caesarstone's revenue for the fourth quarter of 2022?

Caesarstone reported fourth quarter revenues of $159.4 million, a decline of 6.8% compared to the prior year.

How did Caesarstone perform financially in 2022?

Caesarstone achieved record revenue of $690.8 million for 2022, up 7.3% year-over-year, but reported a net loss of $57.1 million.

What is the adjusted EBITDA for Caesarstone in 2022?

Caesarstone's adjusted EBITDA for 2022 was $51.9 million, representing a margin of 7.5%.

What is Caesarstone's outlook for 2023?

Caesarstone anticipates revenues for 2023 to align with 2022 levels, focusing on cost optimization and pricing strategies.