Tag Archive | "Caesarstone"

Troubles Continue for Caesarstone

Tags: , , ,

Troubles Continue for Caesarstone

Posted on 07 November 2016 by CRadmin2

Caesarstone stock plummeted by as much as 20.8 percent on November 2, 2016, following the release of the company’s third-quarter earnings report. While overall revenue for the Israel-based quartz manufacturer rose to record levels, the company was held back by poor performance in the U.S. market and fell short of expectations by market analysts.

Overall Growth Falls Short of Expectations

The financial results for the third quarter of 2016, ending September 30, showed that overall revenue increased by 5.5 percent to $144.3 million, which is a new company record. Performance was strongest in the Australian and Canadian markets with growth of 21.8 percent and 13.0 percent, respectively.

Israel and the Rest of the World also showed increases at 6.4 percent and 14.8 percent, respectively, but the U.S. market declined by 5.4 percent while Europe sales fell by 1.2 percent.

While net income in the third quarter increased by 12.8 percent to $22.3 million, or $0.70 per share, these figures did not meet the expectation of analysts, which was set at $152.8 million in sales, or $0.77 per share.

In addition, Caesarstone executives are now predicting full-year revenue in the range of $524 million to $534 million, which falls short of the $553 million expected by market analysts.

Other highlights of the third-quarter report include the following:

  • Business in the U.S. has remained flat for the past nine months.
  • Gross margin rose by 1 percent, from 40 percent of sales last year to 41 percent.
  • Operating expenses increased.
  • Overall profitability grew from 18 percent to 20 percent.

New Investors Stuck With Losses

Even though Caesarstone acquired several new U.S. investors, the trades could not stop the losses experienced by the company on November 2. Migdal Insurance & Financial Holdings Ltd. reportedly purchased 550,000 shares valued at more than $19.1 million while Rice Hall James & Associates LLC purchased more than $9.1 million in shares and Tocqueville Asset Management L.P. X acquired more than $6.9 million in shares.

On November 1, the day before the third-quarter financials were released, Caesarstone stock closed at $34.85, and the next day it opened on the NASDAQ at only $27.60. After the release of the third-quarter earnings report, the stock fell by 20.8 percent but made a slight comeback to end the day at $29.60.

As of closing on Friday, November 4, Caesarstone stood at $27.80.

Caesarstone Warned About Non-Compliance

On October 27, just days before the recent plummet of Caesarstone stock, the company was issued a warning stating that it was not in compliance with NASDAQ’s independent director requirement, which was precipitated by the resignation of Moshe Ronen from the board.

Caesarstone was told that this requirement must be met by October 18, 2017, or its next annual shareholder meeting, whichever comes first. The next annual meeting is scheduled for April 17. A special meeting has been announced for December 6 to elect new nominees for the board of directors, and once these nominees are approved, it is believed that the NASDAQ requirement will be satisfied.

Move Along, Nothing to See Here

The company attempted to dissuade criticism by highlighting overall growth in the third quarter of 5.5 percent to $144.3 million, a new record for Caesarstone, and the acting chair deflected poor earnings by highlighting steps aimed at accelerating growth in the U.S. market.

“The company achieved record performance, and many of our regions continue to demonstrate substantial strength,” said Yonathan Melamed, acting chair of Caesarstone. “We are investing in expanding our marketing and sales capability in [the U.S.] and are making other strategic and operational changes that we believe will improve the business and generate growth.”

Yair Averbuch, CFO of Caesarstone expanded on Melamed’s statement concerning the investments that have been made to expand the company’s capabilities in the U.S. “Over the past several months, we have appointed new executive management, head people and improved processes to our sales team…and we are implementing a revised and more focused go-to-market strategy,” said Averbuch. “While there is some time required before these actions impact revenue, we believe we are taking the right steps to enhance growth.”

Looking Ahead for Investors

Market analysts now predict that Caesarstone’s full-year sales will halt at $529 million, down from the $557 million that was expected last quarter, and the adjusted profit margin will most likely be 24 percent rather than 25 percent.

Analysts have downgraded Caesarstone stock to “hold,” and investors have been warned to prepare for lower net profits as spending for marketing and sales support in the U.S. increases. The results of these investments are anyone’s guess as earlier investments were unable to spur growth in the third quarter. Growth in the U.S. is seen as crucial to the long-term profitability of Caesarstone.

Comments (0)

Caesarstone Announces Appointment of New CEO

Tags: , ,

Caesarstone Announces Appointment of New CEO

Posted on 20 September 2016 by CRadmin3

caesarstoneCaesarstone Ltd., a manufacturer of high quality engineered quartz surfaces, announced the appointment of Mr. Raanan Zilberman as the Company’s new Chief Executive Officer.

Mr. Yonathan Melamed, Chairman of the Board, commented, “I am happy to welcome Raanan Zilberman, who will join Caesarstone as the Company’s CEO in February 2017. After a rigorous search, the Board of Directors elected Mr. Zilberman due to his leadership and considerable experience, along with his strong track record of success as a CEO.”

Over the last 17 years, Zilberman has served as CEO & President of several multinational corporations, including: CEO of Eden Springs, a Swiss-based provider of water & coffee services to European workplaces; CEO of Danone Springs, a joint venture between “Group Danone” and “Mey Eden; President of Vishay Transducers, a subsidiary of Vishay Intertechnology Inc.; and CEO & President of Tedea-Huntleigh, a multinational company that engages in production and marketing of electromechanical sensors. Prior to that, Zilberman served as COO of Tadiran Appliances, a former subsidiary of Carrier and United Technologies.

Zilberman commented, “I am proud and excited to join Caesarstone. I look forward to working with the management team, who has done an amazing job in developing the company over the past few years. Together we will continue to seek new growth opportunities to foster our brand and to further enhance value for Caesarstone’s shareholders, employees, partners and customers.”

You may also be interested in this article about additions to Caesarstone collections.

Comments (0)

Caesarstone Adds to Classico and Supernatural Quartz Collections

Tags: , ,

Caesarstone Adds to Classico and Supernatural Quartz Collections

Posted on 10 June 2016 by cradmin

caesarstone _Symphony_GreyCaesarstone launched eight new colors as part of its Classico and Supernatural collections. They are: Symphony Grey (pictured here), with streaming light and dark tones and diagonal lines and veining; Urban Safari, with a khaki tone and spanning diagonal veins; Cosmopolitan White, a whirlpool of streaming shades with diagonal lines and veining; Taj Royal, with creamy hues and delicate veins; Vivid White, the company’s purest shade of white; Nobel Grey, a light grey with swirls of dark grey and creamy hues; Statuario Maximus, a marble-inspired design with broad shades of grey veins across a white base; and Tuscan Dawn, a bold brown with vanilla strokes.

Comments (0)

Caesarstone Announces Departure of CEO

Tags: , ,

Caesarstone Announces Departure of CEO

Posted on 25 May 2016 by CRadmin3

CaesarstoneCaesarstone Sdot-Yam Ltd. (CSTE), a manufacturer of engineered quartz surfaces, announced that Yos Shiran, the company’s CEO, has informed the company that he is resigning to pursue other interests. Shiran will continue to serve as CEO of the company for the next three months. Caesarstone’s Board of Directors has begun the search for the company’s next CEO and is committed to a seamless transition.

Yonathan Melamed, Chairman of the Board of Caesarstone commented, “On behalf of the board, I would like to express our sincere appreciation and gratitude to Yos Shiran for his many outstanding contributions to Caesarstone. We were fortunate to have him lead the company to many notable achievements since his appointment as CEO in January 2009. Yos’ extraordinary vision, business acumen and leadership guided Caesarstone to its position as the global countertop market leader with a strong brand recognized around the world, innovative products, a culture of excellence and in a position for continued growth in the future”.

Yos Shiran, Chief Executive Officer of Caesarstone said, “It has been an honor to lead Caesarstone these past 7 and a half years. I am proud of what we have accomplished as a team and I am convinced that Caesarstone has the strength and capabilities to continue its growth as a strong force in our industry globally. It has also been my great privilege to work with dedicated and skilled employees at Caesarstone and with committed suppliers and customers around the world. I am grateful for the hard work Caesarstone’s team has invested to turn our company into a global leader with best in class performance in the industry”.

You may also be interested in this video about Caesarstone’s U.S. manufacturing plant.

Comments (0)

Caesarstone Saga Continues, May Be Resolved

Tags: , , ,

Caesarstone Saga Continues, May Be Resolved

Posted on 17 December 2015 by cradmin

Last August, we reported one of the biggest financial-news stories  of the year related to the countertop industry, concerning the sudden plummet of Caesarstone stock from a high of $72.01 at the end of July to $49.59 on August 6. Unfortunately, the Caesarstone saga has continued over these past few months, and it still seems to be far from an ultimate resolution.

During the intervening time, Caesarstone stock prices fell even further to a 52-week low of $28.92 on September 29. Since then, a partial recovery has been made, but the stock continues to struggle to break the $40 mark, and no one is quite sure if it will ever regain its previous value in the $60 to $70 range.

Caesarstone Q3 Financials Released

Caesarstone officially released its financial statement for the third quarter of 2015 on November 4. According to the statement, revenue experienced a year-to-year increase of 11 percent to a record-setting $136.8 million. This growth was mostly driven by sales in the U.S. and Canada, which grew by 22.2 percent to $61.7 million and 16.9 percent to $19.8 million, respectively.

“We are pleased with our results in the third quarter, which demonstrate the continuing strength of our brand and business around the world,” said Yosef Shiran, CEO of Caesarstone. “We are executing well, driving growth despite significant foreign-currency headwinds. We are also continuing to innovate, launch new products, expand our infrastructure and enhance our competitive edge.”

Other items of interest in the third-quarter financial statement are as follows:

  • Gross margin fell year-to-year from 43.7 percent to 39.5 percent.
  • Operating expenses increased from $22.7 million last year to $29.4 million, partially because of a $4.7 million expense for silicosis claims not covered by the company’s insurance.
  • Last year’s $1 million finance income dropped to become a $100,000 expense.
  • Net income per share fell to $0.56 from $0.75 in the previous year.
  • Expected revenue for 2015 is $497 million to $502 million.

Kibbutz Issues Proxy Contest

Shortly after the third-quarter financials were released, Kibbutz Sdot-Yam, the founder and largest shareholder of Caesarstone stock, initiated a proxy contest to replace two of the board of directors’ nominees for upcoming board elections with their own handpicked candidates: Yitzhak Sharir and Ammon Dick.

Caesarstone responded, saying the company was “surprised and disappointed” by the news. Caesarstone also stated that it believes Kibbutz is seeking to control the board even though the group sold nearly $300 million in shares, reducing its controlling stake in the company to 32.4 percent. The company said that it is exploring all options to enhance shareholder value and strengthen its leadership position in the quartz-surfaces market and advised shareholders against returning or signing any proxy cards or voting instructions they may have received from Kibbutz.

Caesarstone Management Vs. Kibbutz

On November 18, Caesarstone management hosted an investor presentation to discuss the proxy contest, and Kibbutz issued a letter in response to the presentation five days later, refuting the claims of Caesarstone management and urging all shareholders to elect its nominees to the board of directors.

According to the letter, Caesarstone management claims Kibbutz is trying to claim control over the board of directors and that Kibbutz’s motives are in conflict with the interests of public shareholders. Kibbutz states that the group voluntarily abdicated the chair, which it had held since the initial IPO to ensure the board remained independent, and even if the two members it sponsors are elected, the group would still only hold three of the nine seats on the board. In addition, Kibbutz points out that the majority of the group’s assets are invested in Caesarstone, and its interests are simply to grow the company and maximize shareholder value. Currently, Caesarstone stock accounts for 90 percent of the group’s equity.

Another point of contention is that Caesarstone management claims to have suggested and introduced Ronald Kaplan, a well-respected U.S. business executive, to the nominating committee. Kibbutz, however, states that it independently found Kaplan through JP Morgan. Kibbutz believes that Kaplan, Sharir and Dick will bring “meaningful and much-needed improvement” to the board of directors. In a new response letter, Caesarstone capitulated, saying Kibbutz is correct in that the group found Kaplan, and management is appreciative of Kibbutz’s support on this matter.

Caesarstone also claims that the company holds strong practices for corporate governance, but Kibbutz refutes this, stating that the board is forbidden to meet without the CEO present and several members are unduly influenced by the CEO, compromising their independence. In addition, Kibbutz claims that management’s nominees to the board are less than independent.

Caesarstone Refutes Kibbutz

In yet another response from Caesarstone management, Kibbutz’s claims are refuted as utterly false. Highlights of this letter are as follows:

  • If Kibbutz’s new nominees are elected, the board will include five directors with ties to the group.
  • The new nominees are not completely independent of the group.
  • Caesarstone management has been completely honest about the independence of its nominees.
  • The CEO of Caesarstone does not wield undue influence over board meetings and agendas.

Board Elections Held on December 3

When board elections were held on December 3, Kibbutz found that neither of its two candidates received seats. In a statement to the press, the group thanked shareholders for their “time, attention and interest. Kibbutz also said the group is ready to work with Caesarstone management and fully cooperate with the new board.

Eleven days after elections, Caesarstone stock was reevaluated by seven of the eight ratings firms currently covering the company. Of the eight, one has rated the stock as sell, two have issued hold ratings and four have rated the stock as buy, including JP Morgan.

It appears that this brings the Caesarstone saga to a close, although the company’s focus on celebrity endorsements and leveraging its agreement with Ikea, instead of including the fabricator as one of its top priority outlets still seems to be an issue, at least with some of the fabricators we have spoken with, but we here at CountertopResource.com will stay abreast of the situation should tensions rise again.

Comments (0)

Caesarstone Adds to its Supernatural Series of Quartz Surfacing

Tags: , , , , , ,

Caesarstone Adds to its Supernatural Series of Quartz Surfacing

Posted on 01 December 2015 by CRadmin3

CS-StatuarioNuvo1-250wCaesarstone, a manufacturer of quartz surfaces, added a new design, Statuario Nuvo, to its Supernatural Series. This newest design was released throughout the United States in October 2015. Caesarstone’s Statuario Nuvo is inspired by Statuario marble. The design features dark veins on a white background, enriched with a delicately diffused subsurface vein structure. The company reports that its quartz surfaces are easy to clean and the non-porous nature of quartz surfaces require minimal maintenance – there’s no need to seal or wax the surface.

You may also be interested in this article on this new adhesive by Chemical Concepts designed specifically for marble and marble-like quartz colors.

Comments (0)

Has Caesarstone Shot Itself in the Foot by Ignoring Fabricators?

Tags: , , ,

Has Caesarstone Shot Itself in the Foot by Ignoring Fabricators?

Posted on 21 August 2015 by cradmin

combine_imagesCaesarstone has been making big news in the world of finance after its stock plummeted by more than 25 percent this month, most of which occurred on two key days: August 5 and August 19. This has left many professionals in the countertop industry, myself included, wondering whether the company’s aloof business model, which practically ignores fabricators roles in the sales equation, is ultimately to blame.

Caesarstone was founded in 1987, is based in Israel and has a large U.S. division headquartered in Van Nuys, Calif. It is known as one of the pioneers of quartz surfacing, putting quartz aggregate through the patented Bretonstone process. It is the only publicly-traded stock for a company exclusively dealing in quartz surfacing. Stock in the corporation is  traded on the NASDAQ as Caesarstone Sdot-Yam Ltd. (CSTE).

Overall, the last year seems to have been one of the company’s best to date. In May, the company opened its first quartz surfacing manufacturing plant in the U.S. just outside of Savannah, Ga., and it includes some of the most advanced technology available for producing engineered stone, as well as a showroom/”community center” for displays, events and meetings. Much of the company’s recent success, however, is attributed to a 2013 deal in which Caesarstone partnered with Ikea US as the exclusive supplier of non-laminate countertops in its retail stores.

Second Quarter Financials Released

On July 31, 2015, Caesarstone stock hit an all-time high when it closed at about $72 per share after remaining in the $60s range for most of the year. However, the company released its Q2 2015 financial statements on Aug. 5. By the time the market opened in the United States, the stock had already dropped by more than 6 points, and at the end of the day, it was down by more than 25 percent at 52.57 with 3.6 million shares changing hands. After another heavy day of trading on August 6, the stock closed even lower at 49.59.

On the surface, the results of the Q2 2015 financial report do not seem too bad:

  • Revenue increased by 9.9 percent to a new high of $127.5 million.
  • S. revenue increased by 19.2 percent to $57.1 million.
  • Diluted earnings per share (EPS) rose by 27.5 percent to $0.65.

“We are pleased to report another quarter of solid financial results,” said Caesarstone CEO Yosef Shiran upon release of the Q2 financials. “Each of our major markets is healthy, even with the headwinds from currency exchange rates, and continues to present significant opportunities. We look forward to capturing those opportunities to continue driving long-term growth and value for our shareholders.”

A snapshot of Caesarstone stock performance over the last 30 days

A snapshot of Caesarstone stock performance over the last 30 days. Click this image to see a larger, more readable version.

After the stock price plummeted, financial analysts pointed out that top-line results were much lower than expected. Even though revenue increased to $127.5 million, investors were expecting it to be closer to $134.2 million, and management had cut revenue guidance by $20 million to a maximum of $505 million while analysts had projected the figure to be $521.5 million. Travis Hoium of the well-known Motley Fool stock-centric media outlet explained the drop in stock price to be a result of expectations getting ahead of performance, claiming there is “nothing to panic about for long-term investors.”

Caesarstone Under Attack

In the two weeks that followed, Caestarstone stock remained stuck in the low 50s, but on August 19, a prominent market-research firm, Spruce Point Capital Management, LLC., issued a scathing 54-page report accusing the company of manufacturing substandard products, lying about the quality of its quartz countertops and propping itself up on an unstable business model.

The report also states that it is Spruce Point’s belief that Caesarstone will continue to fall short of its goals to grow sales by 15 percent and maintain its share of the market among the rising competition in the quartz surfacing industry. The firm also notes that Caesarstone’s controlling shareholder has reduced its ownership from 79 percent to 32.6 percent.

Spruce Point went even further in its analysis by stating that it estimates the true value of Caesarstone stock to be in the range of $15 per share, which is 79 percent lower than its July 31 high. According to Spruce Point, the firm had Caesarstone quartz surfacing independently analyzed, and it claims the product contains less quartz than advertised, so rather than demanding a premium price, the company should be selling at a discount.

Shortly after this report was released, Caesarstone stock plummeted again, this time to $39.77, the lowest it has been since October 2013. By the end of the day, however, it had regained a couple of points to close at $44.61.

Caesarstone Issues Weak Response

Caesarstone responded to the attack the following day, stating that the Spruce Point report is misleading, includes inaccuracies and draws false conclusions.

“We stand by all of our previous public statements, regulatory filings and presentations,” said Shiran. “We are proud of the honesty and integrity with which we have operated our business and categorically reject any suggestion to the contrary.”

“We are a strong company with a powerful brand that produces high-quality and innovative products through an efficient operation and state-of-the-art infrastructure,” Shiran continued. “This has enabled us to consistently produce excellent business and financial results and we believe in the Company’s capability to continue to do so.”

Fabricators Influence Countertop Selection

We here at CountertopResource.com believe that Caesarstone may have pushed itself off a cliff by limiting fabricators’ roles in its business model. The company has, so far, relied heavily on celebrity endorsements and its exclusive contract with Ikea. While the company does work with spec reps, architects and designers, some claim it has seemed to largely ignore the fabricator.

Caesarstone’s largest competitors, Cosentino, DuPont and (dare I say Cambria, who seems to be losing favor of some fabricators as well for opening its own shops that compete with former customers), all work closely with fabricators. And according to the results of our 2015 CountertopResource.com Countertop Survey, the furthest reaching of its kind that we are aware of, our audience agrees that fabricators are influential in the decision-making process.

Even though we have yet to fully analyze and release results from our recent industry survey that received more than 500 responses, we thought one question was pertinent enough to share here. We asked, “How much influence do you feel fabricators have over what materials their customers choose for their countertop purchases.” Respondents had this to say:

  • 3.4 percent said fabricators just sell customers what they ask for.
  • 14.1 percent said fabricators have a little influence over what countertop materials their customers buy but mostly just sell them what they ask for.
  • 28.9 percent said the influence of a fabricator can sometimes sway what countertop material is used.
  • 26.2 percent said the influence of a fabricator can often sway what countertop material is selected by a customer.
  • 26.5 percent said fabricators have great influence over what countertop materials a customer chooses.
  • 1 percent said customers will almost always choose the material that the fabricator suggests.

According to these results, nearly 83 percent of respondents believe that fabricators are important to the decision-making process when it comes to material selection. Again, our opinion as an organization joins others that believe ignoring this may be adversely affecting Caesarstone, and any other company who fails to take the role of the fabricator into account. However, we can’t help to believe that it is also a little something more, as we have discovered the company has an abysmal F rating with the Better Business Bureau, an organization most companies do all they can to appease.

What do you think? Let us know in the comments below, or drop me a line at info@countertopresource.com.

Comments (3)

A Look at the New U.S. Caesarstone Manufacturing Plant

Tags: , , , , , , , , ,

A Look at the New U.S. Caesarstone Manufacturing Plant

Posted on 17 June 2015 by cradmin

In a new video released by Caesarstone various leaders of the company talk about the opening of its first U.S.-based quartz surfacing manufacturing facility just outside of Savannah, Ga. It also gives a basic inside look at the workings of the plant. The facility has been in the works for quite awhile and its opening represents the ability for the company to produce “made in the USA” material, and be closer to, and therefore more nimble towards, the U.S. market.

The facility also has a showroom where industry professionals can view the color selections and even gather for various meetings and events in a “community center” portion of the building.

You may also be interested in this video on the Breton quartz manufacturing process.


Comments (0)

Caesarstone To Open First U.S. Quartz Surfacing Plant in May

Tags: , , ,

Caesarstone To Open First U.S. Quartz Surfacing Plant in May

Posted on 20 May 2015 by cradmin

Caesarstone is opening its new manufacturing plant in Richmond Hill, Ga., at a ceremony on May 27, 2015. This new state-of-the-art factory is the third production facility for the company, and the first site located in the United States.The location in Richmond Hill was selected for numerous reasons, including the proximity to the Savannah, Ga., port and the support that Caesarstone received from the state, the county and the city. This plant is expected to create approximately 200 new jobs. “We are thrilled to open our first factory in the United States,” said CEO Yos Shiran. “This is an important milestone for us and we look forward to working with the local community to better serve our customers in the United States and offer products also made in the United States.”

In Fall 2015, Caesarstone will unveil the new Experience Center that will be open to the public, next to its plant at Richmond Hill, designed by renowned interior designer Stephanie Goto from New York.

You may also be interested in this article on the opening of a Cosentino Center in Toronto.

Comments (0)

Caesarstone launches 10 New Quartz Colors Inspired by Concrete, Granite

Tags: , , ,

Caesarstone launches 10 New Quartz Colors Inspired by Concrete, Granite

Posted on 13 April 2015 by cradmin

Caesarstone calcatta nuvo

Calcatta Nuvo is just one of 10 new colors recently introduced by Caesarstone

Caesarstone added 10 new colors to its Classico Collection, including colors with veins and colors resembling concrete, granite and other natural stones.  The 10 new colors include: Alpine Mist, a white glossy color with additional white detail; Blanco Drift, with a white base and swirls of light brown and grey hues; Calacatta Nuvo (pictured here), inspired by calacatta marble with cascading veins; Clamshell, a blend of soft greys with intricate grey and white detail; Coastal Grey, a traditional granite look with dark tones and strokes of black and white; Fresh Concrete, Raw Concrete and Sleek Concrete, three colors inspired by the industrial trend;  Vanilla Noir, a merge of solid black with bold beige and vanilla strokes; and Woodlands, a granite look with dark brown hues and delicate beige and vanilla strokes. As is standard with quartz surfacing, slabs are nonporous, heat-, stain- and scratch-resistant.

You may also be interested in this article on the launch of the new Wilsonart Quartz Surfacing line.

Comments (0)

Advertise Here

Photos from our Flickr stream

See all photos

Advertise Here

The Countertop Industry Insider


Subscribe to Get New Posts via Email

Enter your email address to join 182 of the best informed people in the industry who receive notifications of new posts by email. You can choose to receive notifications weekly or 1 per day, excluding weekends holidays.

Join 182 other subscribers

CountertopResource on Social Media