Caesarstone: $1 Billion Company by 2025
MP MENASHE, Israel – Caesarstone Ltd. reported double-digit growth in fourth-quarter (4Q) and full-year 2021 revenues, fueled mainly by U.S. sales.
However, other financial considerations led to a net 4Q 2021 loss for the company and a suspension of the common-stock dividend.
“Our record fourth quarter and full year revenue reflects effective execution of our multi-faceted growth strategy and the benefits from increasing demand for our premium countertops globally,” said Caesarstone CEO Yuval Dagim.
“We have a clear path forward into the next stage of our growth journey and are excited to introduce today a long-term financial goal for 2025, which includes revenue growing to $1 billion.”
The Israeli-based producer of quartz-surfaces and porcelain slabs found the United States as its largest market, with the $77.6 million in 4Q from the U.S. accounting for 45.3% of the company’s global revenues. The final three months of last year represented the second-biggest quarterly revenue for U.S. operations, topped only by 3Q 2021’s $79 million.
Caesarstone CFO Nahum Trost, in a conference call Feb. 9 with Wall Street analysts, noted solid U.S. sales, including growth in Home Depots nationwide and a 50% quarter-on-quarter gain in IKEA in-store sales.
The U.S. revenue gains aren’t attributable solely to Caesarstone’s manufactured surfaces, however, as the company’s early 2021 acquisition of Omicron Granite and Tile added sales at the company’s 17 locations in the Southeast and Midwest.
We were pleased to see strong contribution to our results from the successful integration of our Omicron acquisition,” Dagim said in the call. “This acquisition has proven to be a bright spot within our business, bringing strong synergies and providing us with a solid platform to better serve customers as we continue to deepen our direct presence in attractive U.S. markets.”
Dagim added that the company’s other big acquisition of 2021 – large-porcelain-panel maker Lioli Ceramica – “proceeding as planned, and we remain on track to launch an innovative new global porcelain collection under our Caesarstone brand in 2022.”
Caesarstone’s 4Q 2021 operating income of $3.3 million, however, was offset by financial expenses of $7.4 million. After other adjustments, the company’s resulting net loss of $3.3 million (11¢ per share) meant that it won’t be paying a quarterly dividend.
The 4Q loss didn’t make a major dent in Caesarstone’s overall 2021 performance, however, with $643.8 million in revenue worldwide leading to an annual net income of $18.9 million, bettering 2020’s $7.2 million in income by 262.5%.
Dagim expressed confidence in the company’s future, citing the two 2021 acquisitions and the rollout of the CS Connect platform to communicate directly with kitchen and bath retail partners. “With now already over 700 retail partners and counting, we expect to generate significant revenue from CS Connect over the coming years,” he said on the conference call.
Dagim also noted “quite nice improvement efficiencies” at its Richmond Hill, Ga., plant.
“We are edging capacity from quarter-to-quarter,” he said. “We’re not to utilizing full capacity yet in 2022. But we’re approaching that full capacity over the, I would say, 24 months or so.”
The company is experiencing increased costs, particular in polyester binding material, but Caesarstone also raised prices effective Jan. 1.
Trost said that Caesarstone estimates 2022 revenue worldwide to be between $710 million to $725 million.
