Business Wire | Aug 4, 2021 07:00AM EDT

Caesarstone Reports Second Quarter 2021 Financial Results

Aug. 04, 2021

MP MENASHE, Israel--(BUSINESS WIRE)--Aug. 04, 2021--Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its second quarter ended June 30, 2021.

"I am very pleased with our ability to deliver record sales during the second quarter driven by strong performance across our business, as well as the positive contributions from our recent accretive acquisitions of Omicron and Lioli" commented Yuval Dagim, Caesarstone's Chief Executive Officer. "This achievement is attributable to the focused execution of our Global Growth Acceleration Plan as we continue to leverage our world-class brand and innovative go-to-market initiatives to enhance customer experience and engagement. To that point, our new CS Connect platform represents a technological leap for our business, transforming the way we communicate with our customers and consumers, and we are highly encouraged by the initial feedback we have received. Looking to the second half of 2021, we have a strong balance sheet in place with ample capital to build on our success as we further execute our growth strategy to transform Caesarstone into a leading premium, multi-material countertop company."

(*) Cash position is defined as cash and cash equivalents and short-term bank deposits and long and short-term investment in marketable securities less debt from financial institutions.

Second Quarter 2021 Results

Revenue in the second quarter of 2021 grew 65.1% to a record of $163.5 million compared to $99.0 million in the prior year quarter. On a constant currency basis, second quarter revenue was higher by 55.5% year-over-year. Sales growth was primarily driven by improved demand across the majority of our global footprint, as economies around the world continue to recover from the pandemic, in addition to the contribution of our recent acquisitions.

Gross margin in the second quarter improved to 28.0% compared to 20.4% in the prior year quarter. Adjusted gross margin in the second quarter was 28.1% compared to 20.5% in the prior year quarter. The year-over-year improvement in gross margin mainly reflects better regional and product mix, more favorable currency exchange rates, enhanced productivity in our factories, and growing demand since the beginning of the pandemic which were partly offset by lower sales prices and higher raw material and shipping inflation.

Operating expenses in the second quarter were $40.6 million, or 24.8% of revenue, compared to $23.1 million, or 23.3% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies, operating expenses were 22.3% of revenue, compared to 21.6% in the prior year quarter, mainly due to higher marketing and selling expenses related to initiatives under the Company's Global Growth Acceleration Plan.

Operating income grew to $5.2 million compared to operating loss of $2.9 million in the prior year quarter. The year-over-year growth mainly reflects higher gross profit.

Adjusted EBITDA, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies and for non-recurring items, more than doubled year-over-year to $18.8 million in the second quarter, representing a margin of 11.5%. This compares to adjusted EBITDA of $6.5 million, representing a margin of 6.6%, in the prior year quarter. The year-over-year margin improvement primarily reflects the higher gross margin.

Finance expense in the second quarter was $3.1 million compared to finance expense of $2.5 million in the prior year quarter. The difference was primarily a result of higher credit cards fees due to higher volume as well as interest related to bank loan.

Net Income attributable to controlling interest for the second quarter was $1.7 million compared to net loss of $5.9 million in the prior year quarter. Net income per share for the second quarter was $0.05 compared to net loss per share of $0.17 in the prior year quarter. Adjusted diluted net income per share for the second quarter was $0.21 on 34.6 million shares, compared to adjusted diluted net loss per share of $0.10 in the prior year quarter on 34.5 million shares.

Balance Sheet & Liquidity

As of June 30, 2021, the Company's balance sheet remained strong, including cash, cash equivalents and short-term bank deposits and short and long-term marketable securities of $121.1 million and total debt to financial institutions of $13.3 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 second quarter of 2021, based on its reported net income attributable to controlling interest for the period.

Outlook

The Company reiterates its expectation for 2021 revenue and Adjusted EBITDA to be higher year-over-year. The Company anticipates revenue to grow faster than EBITDA in 2021 mainly due to higher raw material and shipping costs, coupled with a return to more normalized levels of sales and marketing expenses and other investments to support growth initiatives. The Company's outlook includes the investment costs associated with its Global Growth Acceleration Plan. The Company's outlook also assumes that pandemic related business restrictions will continue to fade as the year progresses.

Webcast and Conference Call Details

The Company will host a live webcast and conference call today at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast of the call can be accessed at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible by dialing 1-877-407-4018 (domestic) or +1-201-689-8471 (international). The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone Second Quarter Earnings Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter pass code 13721368. The replay will be available beginning at 11:30 a.m. ET on Wednesday, August 4, 2021 and will last through 11:59 p.m. ET on Wednesday, August 11, 2021.

About Caesarstone

Caesarstone is a concept and lifestyle-driven company with a customer-centered approach to designing, developing, and producing high-end engineered stone countertops, used in residential and commercial buildings. Our products offer superior aesthetic appeal and perfected functionality through a distinct variety of colors, styles, textures, and finishes used in diverse countertop applications, marked by inherent longevity. Strong commitment to service has fostered growing customer loyalty in over 50 countries where the Caesarstone product collections are available: Classico, Supernatural, Metropolitan and Outdoor. For more information please visit our website: www.caesarstone.com.

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" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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, expectations of the results of the Company's business optimization initiative , integration of the company's acquisitions and its projected outlook and results of operations. 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, economic conditions in our key markets, raw material shortages and prices, , fluctuations in home renovation and construction sectors; the company's ability to compete with lower-priced products and other intense competitive pressures; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with exposure to silica dust; ability to efficiently manufacture products and managing required changes in production and supply chain in light of our recent acquisitions; fluctuations in currency exchange rates; the success of our expansion efforts in the United States; unpredictability of seasonal fluctuations in revenues and other factors discussed under the heading "Risk Factors" in our most recent annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. 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 subsidiariesCondensed consolidated balance sheets

As of

June 30, DecemberU.S. dollars in thousands 2021 31, 2020

(Unaudited) (Audited)

ASSETS CURRENT ASSETS: Cash and cash equivalents and short-term bank $ 101,288 $ 114,248depositsShort-term available for sale marketable securities 13,246 8,112

Trade receivables, net 86,970 84,822

Other accounts receivable and prepaid expenses 39,609 26,481

Inventories 167,495 152,073

Total current assets 408,608 385,736

LONG-TERM ASSETS: Severance pay fund 3,932 4,007

Long-term deposits 3,763 3,837

Deferred tax assets, net 9,034 8,359

Other long-term receivables 404 1,675

Operating lease right-of-use assets 119,829 123,928

Long-term available for sale marketable securities 6,596 10,926

Property, plant and equipment, net 218,562 222,883

Goodwill and intangible assets, net 57,743 59,570

Total long-term assets 419,863 435,185

Total assets $ 828,471 $ 820,921

LIABILITIES AND EQUITY CURRENT LIABILITIES: Short-term bank credit $ 13,314 $ 13,122

Trade payables 73,844 55,063

Related parties and other loans 2,229 2,221

Short term legal settlements and loss contingencies 23,361 31,039

Accrued expenses and other liabilities 58,670 55,570

Total current liabilities 171,418 157,015

LONG-TERM LIABILITIES: Long-term bank and other loans and financing 6,597 20,706liability of land from a related partyLegal settlements and loss contingencies long-term 25,770 21,910

Deferred tax liabilities, net 6,025 6,943

Long-term lease liabilities 107,978 112,719

Accrued severance pay 5,296 5,303

Long-term warranty provision 1,283 1,274

Total long-term liabilities 152,949 168,855

REDEEMABLE NON-CONTROLLING INTEREST 7,111 7,701

EQUITY: Ordinary shares 371 371

Treasury shares - at cost (39,430) (39,430)

Additional paid-in capital 161,079 160,083

Capital fund related to non-controlling interest (5,587) (5,587)

Accumulated other comprehensive loss 1,306 1,083

Retained earnings 379,254 370,830

Total equity 496,993 487,350

Total liabilities and equity $ 828,471 $ 820,921

Caesarstone Ltd. and its subsidiaries Condensed consolidated statements of income

Three months ended June 30,

Six months ended June 30,

U.S. dollars in thousands (except per share data)2021

2020

2021

2020

(Unaudited)

(Unaudited)

Revenues$

163,462

$

99,037

$

309,494

$

225,594

Cost of revenues117,678

78,865

220,408

169,021

Gross profit45,784

20,172

89,086

56,573

Operating expenses:Research and development1,114

763

2,219

1,543

Marketing and selling23,594

11,435

41,870

30,064

General and administrative11,794

9,241

24,937

21,108

Legal settlements and loss contingencies, net4,109

1,637

4,849

4,475

Total operating expenses40,611

23,076

73,875

57,190

Operating income (loss)5,173

(2,904)

15,211

(617)

Finance expenses (income), net3,095

2,507

(2,238)

1,638

Income (loss) before taxes2,078

(5,411)

17,449

(2,255)

Taxes on income598

471

2,127

949

Net income (loss)$

1,480

$

(5,882)

$

15,322

$

(3,204)

Net loss attributable to non-controlling interest225

-

573

-

Net income (loss) attributable to controlling interest$

1,705

$

(5,882)

$

15,895

$

(3,204)

Basic net income (loss) per ordinary share (*)$

0.05

$

(0.17)

$

0.45

$

(0.09)

Diluted net income (loss) per ordinary share (*)$

0.05

$

(0.17)

$

0.45

$

(0.09)

Weighted average number of ordinary shares used in computing basic income (loss) per ordinary share34,451,071

34,412,369

34,449,483

34,406,107

Weighted average number of ordinary shares used in computing diluted income (loss) per ordinary share34,539,958

34,412,369

34,525,127

34,406,107

Caesarstone Ltd. and its subsidiariesCondensed consolidated statements of income

Three months ended June Six months ended June 30, 30,

U.S. dollars in 2021 2020 2021 2020thousands (except pershare data) (Unaudited) (Unaudited)

Revenues $ 163,462 $ 99,037 $ 309,494 $ 225,594

Cost of revenues 117,678 78,865 220,408 169,021

Gross profit 45,784 20,172 89,086 56,573

Operating expenses:Research and 1,114 763 2,219 1,543developmentMarketing and selling 23,594 11,435 41,870 30,064

General and 11,794 9,241 24,937 21,108administrativeLegal settlements and 4,109 1,637 4,849 4,475loss contingencies, net Total operating 40,611 23,076 73,875 57,190expenses Operating income (loss) 5,173 (2,904) 15,211 (617)

Finance expenses 3,095 2,507 (2,238) 1,638(income), net Income (loss) before 2,078 (5,411) 17,449 (2,255)taxesTaxes on income 598 471 2,127 949

Net income (loss) $ 1,480 $ (5,882) $ 15,322 $ (3,204)

Net loss attributable 225 - 573 -to non-controllinginterest Net income (loss) $ 1,705 $ (5,882) $ 15,895 $ (3,204)attributable tocontrolling interestBasic net income (loss) $ 0.05 $ (0.17) $ 0.45 $ (0.09)per ordinary share (*)Diluted net income $ 0.05 $ (0.17) $ 0.45 $ (0.09)(loss) per ordinaryshare (*)Weighted average numberof ordinary shares used 34,451,071 34,412,369 34,449,483 34,406,107in computing basicincome (loss) perordinary shareWeighted average numberof ordinary shares used 34,539,958 34,412,369 34,525,127 34,406,107in computing dilutedincome (loss) perordinary share (*) The numerator for the calculation of net income per share for the three and six months ended June 30, 2021 has been decreased by approximately $0.1 and $0.2 million, respectively, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.(*) The numerator for the calculation of net income per share for the three andsix months ended June 30, 2021 has been decreased by approximately $0.1 and$0.2 million, respectively, to reflect the adjustment to redemption valueassociated with the redeemable non-controlling interest.Caesarstone Ltd. and its subsidiaries Selected Condensed consolidated statements of cash flows

Six months ended June 30,

U.S. dollars in thousands2021

2020

(Unaudited)

Cash flows from operating activities:Net income (loss)$

15,322

$

(3,204)

Adjustments required to reconcile net income(loss) to net cash provided by operating activities:Depreciation and amortization17,689

14,102

Share-based compensation expense996

1,707

Accrued severance pay, net72

7

Changes in deferred tax, net(1,856)

(640)

Capital (gain) loss(4)

22

Legal settlemnets and loss contingencies, net4,849

4,475

Decrease (increase) in trade receivables(2,307)

9,942

Decrease (increase) in other accounts receivable and prepaid expenses(8,985)

3,172

Increase in inventories(15,383)

(12,621)

Increase (decrease) in trade payables19,049

(16,117)

Increase (decrease) in warranty provision16

(98)

Changes in right of use assets3,987

(1,347)

Changes in lease liabilities(4,277)

1,554

Amortization of premium and accretion of discount on marketable securities, net204

6

Changes in Accrued interest related to Marketable Securities27

(8)

Increase (decrease) in accrued expenses and other liabilities including related parties(6,311)

4,173

Net cash provided by operating activities23,088

5,125

Cash flows from investing activities:Repayment of assumed shareholders loan related to acquisition(1,966)

-

Repayment of contingent consideration related to acquisition(1,780)

Purchase of property, plant and equipment(12,472)

(12,459)

Proceeds from sale of property, plant and equipment5

6

Investment in marketable securities, net(1,042)

(13,002)

Decrease (increase) in long term deposits40

(711)

Net cash used in investing activities(17,215)

(26,166)

Cash flows from financing activities:Dividend paid(7,234)

-

Changes in short-term bank credits and long-term loans(10,983)

(459)

Repayment of a financing leaseback related to Bar-Lev transaction(650)

(610)

Net cash used in financing activities(18,867)

(1,069)

Effect of exchange rate differences on cash and cash equivalents34

(198)

Decrease in cash and cash equivalents and short-term bank deposits(12,960)

(22,308)

Cash and cash equivalents and short-term bank deposits at beginning of the period114,248

139,372

Cash and cash equivalents and short-term bank deposits at end of the period$

101,288

$

117,064

Non - cash investing:Changes in trade payables balances related to purchase of fixed assets(316)

(954)

Caesarstone Ltd. and its subsidiariesSelected Condensed consolidated statements of cash flows

Six months ended June 30,

U.S. dollars in thousands 2021 2020

(Unaudited)

Cash flows from operating activities: Net income (loss) $ 15,322 $ (3,204)

Adjustments required to reconcile net income(loss) tonet cash provided by operating activities:Depreciation and amortization 17,689 14,102

Share-based compensation expense 996 1,707

Accrued severance pay, net 72 7

Changes in deferred tax, net (1,856) (640)

Capital (gain) loss (4) 22

Legal settlemnets and loss contingencies, net 4,849 4,475

Decrease (increase) in trade receivables (2,307) 9,942

Decrease (increase) in other accounts receivable and (8,985) 3,172prepaid expensesIncrease in inventories (15,383) (12,621)

Increase (decrease) in trade payables 19,049 (16,117)

Increase (decrease) in warranty provision 16 (98)

Changes in right of use assets 3,987 (1,347)

Changes in lease liabilities (4,277) 1,554

Amortization of premium and accretion of discount on 204 6marketable securities, netChanges in Accrued interest related to Marketable 27 (8)SecuritiesIncrease (decrease) in accrued expenses and other (6,311) 4,173liabilities including related parties Net cash provided by operating activities 23,088 5,125

Cash flows from investing activities: Repayment of assumed shareholders loan related to (1,966) -acquisitionRepayment of contingent consideration related to (1,780)acquisitionPurchase of property, plant and equipment (12,472) (12,459)

Proceeds from sale of property, plant and equipment 5 6

Investment in marketable securities, net (1,042) (13,002)

Decrease (increase) in long term deposits 40 (711)

Net cash used in investing activities (17,215) (26,166)

Cash flows from financing activities: Dividend paid (7,234) -

Changes in short-term bank credits and long-term loans (10,983) (459)

Repayment of a financing leaseback related to Bar-Lev (650) (610)transaction Net cash used in financing activities (18,867) (1,069)

Effect of exchange rate differences on cash and cash 34 (198)equivalents Decrease in cash and cash equivalents and short-term (12,960) (22,308)bank depositsCash and cash equivalents and short-term bank deposits 114,248 139,372at beginning of the period Cash and cash equivalents and short-term bank deposits $ 101,288 $ 117,064at end of the period Non - cash investing:Changes in trade payables balances related to purchase (316) (954)of fixed assetsCaesarstone Ltd. and its subsidiaries

Three months ended June 30,

Six months ended June 30,

U.S. dollars in thousands2021

2020

2021

2020

(Unaudited)

(Unaudited)

Reconciliation of Gross profit to Adjusted Gross profit:Gross profit$

45,784

$

20,172

$

89,086

$

56,573

Share-based compensation expense (a)37

122

142

253

Amortization of assets related to acquisitions160

-

694

-

Adjusted Gross profit (Non-GAAP)$

45,981

$

20,294

$

89,922

$

56,826

Caesarstone Ltd. and its subsidiaries

Three months ended Six months ended June 30, June 30,

U.S. dollars in thousands 2021 2020 2021 2020

(Unaudited) (Unaudited)

Reconciliation of Gross profit toAdjusted Gross profit:Gross profit $ 45,784 $ 20,172 $ 89,086 $ 56,573

Share-based compensation expense (a) 37 122 142 253

Amortization of assets related to 160 - 694 -acquisitionsAdjusted Gross profit (Non-GAAP) $ 45,981 $ 20,294 $ 89,922 $ 56,826

(a)

Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.

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

Caesarstone Ltd. and its subsidiaries

Three months ended June 30,

Six months ended June 30,

U.S. dollars in thousands2021

2020

2021

2020

(Unaudited)

(Unaudited)

Reconciliation of Net Income (loss) to Adjusted EBITDA:Net income (loss)$

1,480

$

(5,882)

$

15,322

$

(3,204)

Finance expenses (income), net3,095

2,507

(2,238)

1,638

Taxes on income598

471

2,127

949

Depreciation and amortization related to acquisitions8,781

6,987

17,689

14,102

Legal settlements and loss contingencies, net (a)4,109

1,637

4,849

4,475

Contingent consideration adjustment related to acquisition284

-

284

-

Share-based compensation expense (b)429

801

996

1,707

Adjusted EBITDA (Non-GAAP)$

18,776

$

6,521

$

39,029

$

19,667

Caesarstone Ltd. and its subsidiaries

Three months ended Six months ended June 30, June 30,

U.S. dollars in thousands 2021 2020 2021 2020

(Unaudited) (Unaudited)

Reconciliation of Net Income (loss)to Adjusted EBITDA:Net income (loss) $ 1,480 $ (5,882) $ 15,322 $ (3,204)

Finance expenses (income), net 3,095 2,507 (2,238) 1,638

Taxes on income 598 471 2,127 949

Depreciation and amortization 8,781 6,987 17,689 14,102related to acquisitionsLegal settlements and loss 4,109 1,637 4,849 4,475contingencies, net (a)Contingent consideration adjustment 284 - 284 -related to acquisitionShare-based compensation expense (b) 429 801 996 1,707

Adjusted EBITDA (Non-GAAP) $ 18,776 $ 6,521 $ 39,029 $ 19,667

(a)

Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.

(b)

Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.

Consists of legal settlements expenses and loss contingencies, net, related(a) to product liability claims and other adjustments to on-going legal claims, including related legal fees.

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

Caesarstone Ltd. and its subsidiaries

Three months ended June 30,

Six months ended June 30,

U.S. dollars in thousands (except per share data)2021

2020

2021

2020

(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$

1,705

$

(5,882)

$

15,895

$

(3,204)

Legal settlements and loss contingencies, net (a)4,109

1,637

4,849

4,475

Contingent consideration adjustment related to acquisition284

-

284

-

Amortization of assets related to acquisitions, net of tax561

-

1,387

-

Share-based compensation expense (b)429

801

996

1,707

Non cash revaluation of lease liabilities (c)889

1,256

(973)

(215)

Total adjustments6,272

3,694

6,543

5,967

Less tax on non-tax adjustments (d)770

1,310

797

2,116

Total adjustments after tax5,502

2,384

5,746

3,851

Adjusted net income (loss) attributable to controlling interest (Non-GAAP)$

7,207

$

(3,498)

$

21,641

$

647

Adjusted diluted EPS (e)$

0.21

$

(0.10)

$

0.63

$

0.02

Caesarstone Ltd. and its subsidiaries

Three months ended Six months ended June 30, June 30,

U.S. dollars in thousands (except per 2021 2020 2021 2020share data) (Unaudited) (Unaudited)

Reconciliation of net income (loss)attributable to controlling interestto adjusted net income (loss)attributable to controlling interest:Net income (loss) attributable to $ 1,705 $ (5,882) $ 15,895 $ (3,204)controlling interestLegal settlements and loss 4,109 1,637 4,849 4,475contingencies, net (a)Contingent consideration adjustment 284 - 284 -related to acquisitionAmortization of assets related to 561 - 1,387 -acquisitions, net of taxShare-based compensation expense (b) 429 801 996 1,707

Non cash revaluation of lease 889 1,256 (973) (215)liabilities (c)Total adjustments 6,272 3,694 6,543 5,967

Less tax on non-tax adjustments (d) 770 1,310 797 2,116

Total adjustments after tax 5,502 2,384 5,746 3,851

Adjusted net income (loss) $ 7,207 $ (3,498) $ 21,641 $ 647attributable to controlling interest(Non-GAAP)Adjusted diluted EPS (e) $ 0.21 $ (0.10) $ 0.63 $ 0.02

(a)

Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.

(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)

Tax adjustments for the three and six months ended June 30, 2021 and 2020, based on the effective tax rates.

(e)

In calculating adjusted diluted (Non-GAAP) EPS for the three and six months ended June 30, 2021 and 2020, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718.

Consists of legal settlements expenses and loss contingencies, net, related(a) to product liability claims and other adjustments to on-going legal claims, including related legal fees.

(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) Tax adjustments for the three and six months ended June 30, 2021 and 2020, based on the effective tax rates.

In calculating adjusted diluted (Non-GAAP) EPS for the three and six months(e) ended June 30, 2021 and 2020, the diluted weighted average number of shares outstanding excludes 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 June 30,

Six months ended June 30,

U.S. dollars in thousands2021

2020

2021

2020

(Unaudited)

(Unaudited)

USA$

77,844

$

41,726

$

148,675

$

101,781

Canada21,946

14,435

39,725

32,993

Latin America741

132

1,599

638

America's100,531

56,293

189,999

135,412

Australia31,597

23,534

58,769

45,888

Asia7,370

1,732

15,147

4,563

APAC38,967

25,266

73,916

50,451

EMEA15,852

8,031

28,570

19,371

Israel8,112

9,447

17,009

20,360

Total Revenues$

163,462

$

99,037

$

309,494

$

225,594

Caesarstone Ltd. and its subsidiaries

Geographic breakdown of revenues by region

Three months ended June 30, Six months ended June 30,

U.S. dollars in 2021 2020 2021 2020thousands (Unaudited) (Unaudited)

USA $ 77,844 $ 41,726 $ 148,675 $ 101,781

Canada 21,946 14,435 39,725 32,993

Latin America 741 132 1,599 638

America's 100,531 56,293 189,999 135,412

Australia 31,597 23,534 58,769 45,888

Asia 7,370 1,732 15,147 4,563

APAC 38,967 25,266 73,916 50,451

EMEA 15,852 8,031 28,570 19,371

Israel 8,112 9,447 17,009 20,360

Total Revenues $ 163,462 $ 99,037 $ 309,494 $ 225,594

Caesarstone Ltd. and its subsidiaries

Geographic breakdown of revenues by region - Supplemental data

Three months ended

U.S. dollars in thousands6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019

(Unaudited)

USA$

77,844

$

70,831

$

53,618

$

52,097

$

41,726

$

60,055

$

64,659

$

64,805

$

64,590

Canada21,946

17,779

20,325

19,174

14,435

18,558

20,575

21,881

23,341

Latin America741

858

1,387

124

132

506

735

1,434

1,351

America's100,531

89,468

75,330

71,395

56,293

79,119

85,969

88,120

89,282

Australia31,597

27,172

29,953

27,746

23,534

22,354

26,000

28,642

28,294

Asia7,370

7,777

7,122

2,881

1,732

2,831

3,932

3,675

3,311

APAC38,967

34,949

37,075

30,627

25,266

25,185

29,932

32,317

31,605

EMEA15,852

12,718

14,408

11,422

8,031

11,340

9,464

11,719

11,418

Israel8,112

8,897

10,083

10,478

9,447

10,913

8,502

10,683

8,766

Total Revenues$

163,462

$

146,032

$

136,896

$

123,922

$

99,037

$

126,557

$

133,867

$

142,839

$

141,071

Year-over-year % change

6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

(Unaudited)

USA86.6%

17.9%

-17.1%

-19.6%

-35.4%

Canada52.0%

-4.2%

-1.2%

-12.4%

-38.2%

Latin America461.4%

69.6%

88.8%

-91.4%

-90.2%

America's78.6%

13.1%

-12.4%

-19.0%

-36.9%

Australia34.3%

21.6%

15.2%

-3.1%

-16.8%

Asia325.5%

174.7%

81.1%

-21.6%

-47.7%

APAC54.2%

38.8%

23.9%

-5.2%

-20.1%

EMEA97.4%

12.2%

52.2%

-2.5%

-29.7%

Israel-14.1%

-18.5%

18.6%

-1.9%

7.8%

Total Revenues65.1%

15.4%

2.3%

-13.2%

-29.8%

Year-over-year % change in constant currency (*)

6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

(Unaudited)

USA86.6%

17.9%

-17.1%

-19.6%

-35.4%

Canada35.1%

-9.6%

-2.4%

-11.7%

-36.0%

Latin America460.5%

69.8%

88.7%

-91.3%

-90.2%

America's74.2%

11.8%

-12.7%

-18.8%

-36.4%

Australia14.6%

2.8%

7.9%

-7.1%

-11.5%

Asia312.8%

169.5%

80.7%

-21.2%

-45.9%

APAC35.1%

21.5%

17.5%

-8.7%

-15.1%

EMEA77.6%

3.3%

45.8%

-5.9%

-26.9%

Israel-20.5%

-24.6%

9.4%

-4.5%

4.5%

Total Revenues55.5%

9.8%

-0.4%

-14.4%

-28.3%

Caesarstone Ltd. and its subsidiaries

Geographic breakdown of revenues by region - Supplemental data

Three months ended

U.S. 12/31/ 6/30/ 12/31/dollars 6/30/2021 3/31/2021 2020 9/30/2020 2020 3/31/2020 2019 9/30/2019 6/30/2019inthousands (Unaudited)

USA $ 77,844 $ 70,831 $ 53,618 $ 52,097 $ 41,726 $ 60,055 $ 64,659 $ 64,805 $ 64,590

Canada 21,946 17,779 20,325 19,174 14,435 18,558 20,575 21,881 23,341

Latin 741 858 1,387 124 132 506 735 1,434 1,351AmericaAmerica's 100,531 89,468 75,330 71,395 56,293 79,119 85,969 88,120 89,282

Australia 31,597 27,172 29,953 27,746 23,534 22,354 26,000 28,642 28,294

Asia 7,370 7,777 7,122 2,881 1,732 2,831 3,932 3,675 3,311

APAC 38,967 34,949 37,075 30,627 25,266 25,185 29,932 32,317 31,605

EMEA 15,852 12,718 14,408 11,422 8,031 11,340 9,464 11,719 11,418

Israel 8,112 8,897 10,083 10,478 9,447 10,913 8,502 10,683 8,766

Total $ 163,462 $ 146,032 $ 136,896 $ 123,922 $ 99,037 $ 126,557 $ 133,867 $ 142,839 $ 141,071Revenues Year-over-year % change

6/30/2021 3/31/2021 12/31/ 9/30/2020 6/30/ 2020 2020

(Unaudited)

USA 86.6% 17.9% -17.1% -19.6% -35.4%

Canada 52.0% -4.2% -1.2% -12.4% -38.2%

Latin 461.4% 69.6% 88.8% -91.4% -90.2%AmericaAmerica's 78.6% 13.1% -12.4% -19.0% -36.9%

Australia 34.3% 21.6% 15.2% -3.1% -16.8%

Asia 325.5% 174.7% 81.1% -21.6% -47.7%

APAC 54.2% 38.8% 23.9% -5.2% -20.1%

EMEA 97.4% 12.2% 52.2% -2.5% -29.7%

Israel -14.1% -18.5% 18.6% -1.9% 7.8%

Total 65.1% 15.4% 2.3% -13.2% -29.8%Revenues Year-over-year % change in constant currency (*)

6/30/2021 3/31/2021 12/31/ 9/30/2020 6/30/ 2020 2020

(Unaudited)

USA 86.6% 17.9% -17.1% -19.6% -35.4%

Canada 35.1% -9.6% -2.4% -11.7% -36.0%

Latin 460.5% 69.8% 88.7% -91.3% -90.2%AmericaAmerica's 74.2% 11.8% -12.7% -18.8% -36.4%

Australia 14.6% 2.8% 7.9% -7.1% -11.5%

Asia 312.8% 169.5% 80.7% -21.2% -45.9%

APAC 35.1% 21.5% 17.5% -8.7% -15.1%

EMEA 77.6% 3.3% 45.8% -5.9% -26.9%

Israel -20.5% -24.6% 9.4% -4.5% 4.5%

Total 55.5% 9.8% -0.4% -14.4% -28.3%Revenues (*) Change in revenues at constant currency is calculated so that revenues can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of business performance. Change in revenues adjusted for currency are calculated by translating current period activity in local currency using the comparable prior-year period's currency conversion rate. Exchange rates used, are the representative exchange rate published by the Bank of Israel for the relevant periods. View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005422/en/

CONTACT: Investor Relations: ICR, Inc. - Rodny Nacier CSTE@icrinc.com +1 646 277-1237