
Financial Highlights Caesarstone reported record Q2 revenue of $180.3 million, a 10.3% YoY increase, with $11.1 million net income and $0.20 adjusted EPS Q2 2022 Key Financial Metrics | Metric | Value | | :--- | :--- | | Revenue | $180.3 Million | | Revenue Growth (YoY) | 10.3% | | Revenue Growth (Constant Currency) | 13.7% | | Net Income (Controlling Interest) | $11.1 Million | | EPS | $0.32 | | Adjusted EPS | $0.20 | | Adjusted EBITDA | $17.1 Million | | Dividend per Share | $0.25 | - In July 2022, the company acquired a leading distributor in Sweden with annual revenues of approximately $4 million, establishing its first direct go-to-market presence in the E.U23 Management Commentary CEO highlighted sixth consecutive quarter of double-digit revenue growth, driven by US market strength and effective pricing strategies - Achieved the 6th consecutive quarter of double-digit year-over-year revenue growth3 - Implemented successful pricing actions to mitigate increasing costs of raw materials and shipping, leading to improved sequential margins3 - The company's business in key markets is estimated to be 60% to 70% tied to the historically resilient repair and remodel end market3 Detailed Financial Performance Record Q2 revenue of $180.3 million was achieved, though gross margin declined to 26.4% due to costs, while net income rose to $11.1 million Revenue Analysis Q2 revenue grew 10.3% to $180.3 million, with strong 19.0% growth in Americas, particularly the USA Q2 2022 Revenue Performance | Metric | Q2 2022 | Q2 2021 | YoY Growth | Constant Currency Growth | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $180.3M | $163.5M | 10.3% | 13.7% | Q2 2022 Revenue by Region (USD in thousands) | Region | Q2 2022 | Q2 2021 | YoY % Change | YoY % Change (CCB) | | :--- | :--- | :--- | :--- | :--- | | USA | $93,039 | $77,844 | 19.5% | 19.5% | | Canada | $25,363 | $21,946 | 15.6% | 20.0% | | Australia | $30,195 | $31,597 | -4.4% | 3.1% | | EMEA | $15,827 | $15,852 | -0.2% | 11.7% | | Israel | $6,419 | $8,112 | -20.9% | -19.6% | Profitability Analysis Gross margin declined to 26.4% due to costs, while operating income increased to $6.4 million, and net income surged to $11.1 million - Gross margin declined to 26.4% from 28.0% year-over-year, mainly due to higher shipping and raw material costs, partially offset by price increases and favorable product mix5 Q2 Profitability Metrics (USD in millions) | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Operating Income | $6.4 | $5.2 | | Adjusted EBITDA | $17.1 | $18.8 | | Adjusted EBITDA Margin | 9.5% | 11.5% | | Net Income (Controlling Interest) | $11.1 | $1.7 | | Adjusted Diluted EPS | $0.20 | $0.21 | - Finance income was $6.4 million in Q2 2022, compared to a finance expense of $3.1 million in Q2 2021, primarily due to favorable foreign currency exchange rate fluctuations9 Balance Sheet & Liquidity The company maintained a strong balance sheet with $62.2 million in cash and $18.0 million in total debt Liquidity Position as of June 30, 2022 | Item | Amount (USD in millions) | | :--- | :--- | | Cash, cash equivalents, and marketable securities | $62.2 | | Total debt to financial institutions | $18.0 | Dividend A cash dividend of $0.25 per share was declared for Q2 2022, payable on September 7, 2022 - A cash dividend of $0.25 per share was declared for Q2 202212 - The dividend will be paid on September 7, 2022, to shareholders of record as of August 17, 202212 Full Year 2022 Outlook Full-year 2022 guidance projects revenue between $710 million and $725 million, with Adjusted EBITDA margin similar to 2021 Full Year 2022 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $710 million - $725 million | | Adjusted EBITDA as % of Sales | Similar to 2021 | - Revenue growth is expected to be driven by volume and price improvements13 - The company anticipates higher sales and selling prices will offset increased costs for raw materials (like polyester) and shipping13 Consolidated Financial Statements Detailed financial statements present the company's position and performance, including balance sheet, income, and cash flow statements Condensed Consolidated Balance Sheets Total assets increased to $872.8 million driven by inventories, while total liabilities decreased and equity rose to $507.2 million Balance Sheet Summary (USD in thousands) | Account | June 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $53,483 | $74,315 | | Inventories | $252,112 | $204,725 | | Total Assets | $872,803 | $867,653 | | Total Current Liabilities | $190,646 | $183,294 | | Total Liabilities | $357,602 | $365,489 | | Total Equity | $507,218 | $494,295 | Condensed Consolidated Statements of Income Q2 revenues rose to $180.3 million, with operating income at $6.4 million, and net income surging to $11.1 million or $0.32 diluted EPS Income Statement Summary - Three Months Ended June 30 (USD in thousands) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Revenues | $180,272 | $163,462 | | Gross Profit | $47,525 | $45,784 | | Operating Income | $6,356 | $5,173 | | Net Income (Controlling Interest) | $11,147 | $1,705 | | Diluted EPS | $0.32 | $0.05 | Selected Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $27.8 million, a shift from prior year, with cash and equivalents decreasing by $20.8 million Cash Flow Summary - Six Months Ended June 30 (USD in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | ($27,751) | $23,088 | | Net cash from investing activities | $2,331 | ($17,215) | | Net cash from financing activities | $5,104 | ($18,867) | | Decrease in cash and cash equivalents | ($20,832) | ($12,960) | Non-GAAP Reconciliations Non-GAAP reconciliations show Adjusted EBITDA of $17.1 million and Adjusted Net Income of $6.8 million or $0.20 diluted EPS Reconciliation of Net Income to Adjusted EBITDA (Q2 2022, USD in thousands) | Description | Amount | | :--- | :--- | | Net income | $11,230 | | Finance income, net | ($6,445) | | Taxes on income | $1,571 | | Depreciation and amortization | $8,823 | | Legal settlements and loss contingencies, net | $1,334 | | Other adjustments | $560 | | Adjusted EBITDA (Non-GAAP) | $17,073 | Reconciliation of Net Income to Adjusted Net Income (Q2 2022, USD in thousands) | Description | Amount | | :--- | :--- | | Net income attributable to controlling interest | $11,147 | | Adjustments (Legal, Share-based comp, etc.) | $1,894 | | Exchange rate differences on lease revaluation | ($7,478) | | Tax effect of adjustments | ($4,396) | | Adjusted net income (Non-GAAP) | $6,751 | | Adjusted diluted EPS (Non-GAAP) | $0.20 |