Caesarstone 1Q 2014 Revenue Up

MP MENASHE, Israel – Caesarstone scored another record quarter in revenues early this year, due mainly to U.S. sales.

The quartz-surfaces producer, however, failed to meet Wall Street analysts’ estimates for earnings per share (EPS) for this year’s first quarter… although it beat overall revenue predictions.

The company’s worldwide revenues for 1Q 2014 increased by 23.5% to $94.4 million compared to $76.4 million in the same quarter last year. Growth came mainly in the United States, up 58.7% to $37.6 million, compared to $23.7 million in the same period in the prior year.

“We are excited to see continued strong momentum and support for the Caesarstone brand, particularly in the United States where our growth remains robust,” said Yosef Shiran, Caesarstone CEO. “We are pleased to have successfully increased our manufacturing throughput and built our inventories to support continued growth.

“The U.S. continues to be our largest and fastest growing market. The adoption rate of quartz in the United States continues to build, and Caesarstone is positioned as a clear leader in the market.”

No other world market showed the same first-quarter growth pace as the United States, however. Caesarstone’s second biggest market – Australia – grew only 10% year-to-year to $21.3 million, and Canada registered 9.5% growth to $11.7 million.

Israel’s $11.2 million in 1Q 2014 marked growth of 6.7%, while European 1Q revenues fell 20.3% to $4.6 million. (Shiran attributed the dip in European sales “largely to the timing of shipments to certain distributors.”) The remainder of Caesarstone’s international business grew 25.5% to $7.7 million.

Analysts of Caesarstone’s stock (NASDAQ:CSTE) predicted 1Q revenues of less than $90 million. However, the company’s EPS of 39¢ missed market estimates by 2¢.

For the rest of 2014, Caesarstone ratcheted up its estimates on revenues, offering a year-end assessment of $420 million-$430 million, up $10 million from previous figures.

The company also noted that its Richmond Hill, Ga., plant should be running with one production line by summer 2014, and will move ahead to install a second production line at the plant by the end of next year. In a conference call with stock analysts this morning, Shiran noted that, “it will take a few months or a few quarters until we get to full capacity there.”

Information from this report came from transcripts by Seeking Alpha of Caesarstone’s May 8 conference call with analysts.