Caesarstone Sdot Yam Ltd. (Nasdaq: CSTE) today reported double-digit profit growth, despite flat revenue, and announced plans to expand production of its granite surfaces in the US and Israel at an investment of $88 million. However, it said that its revenue in 2012 would be at the lower end of its prior guidance of $292-302 million, and it reiterated its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance of $67-70 million.
Revenue rose 4.6% to $77.6 million for the third quarter from $74.2 million for the corresponding quarter. US sales rose 18% and Canadian sales rose 29% over the corresponding quarter, but total revenue growth was affected by a stronger US dollar and a challenging housing market in Australia.
GAAP-based net profit rose 22.8% to $12.4 million ($0.36 per share) for the third quarter from $10.1 million for the corresponding quarter, and non-GAAP net profit rose 28% to $13.4 million ($0.39 per share) from $10.4 million.
Caesarstone CEO Yosef Shiran said, "We are very pleased with our third quarter, which set a record for any quarter in our history for both sales and profitability. We are positioned as the highest quality quartz brand and are successfully executing our global growth strategy."
Caesarstone also announced today that it plans to expand its production capabilities in Israel for a fifth production line and that it will build a new factory in the US. The $13 million expansion in Israel will boost production capacity by 15%, and will be completed by October 2013. The $75 million US plant will have two production lines, and will boost production capacity by 50%. The first line is due to be operational in late 2014, and the second line will depend on the company's growth.
Shiran said, “We believe that expanding our manufacturing footprint into the US will provide us with a number of competitive and strategic benefits that will serve our long-term growth plans, most significantly the related improvement in delivery times. At the same time, our expansion in Israel will enable us to rapidly and efficiently expand our production capacity to meet the increasing demand for our products."
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2012
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