- Revenue of $99.6 Million -

- Gross Margin of 21.3% -

- Strong Balance Sheet with Net Cash Position of $85.3 Million -

- Continued Progress on Strategic Transformation and Cost Optimization Initiatives -

MP MENASHE, Israel--(BUSINESS WIRE)--May 7, 2025-- Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its first quarter ended March 31, 2025.

Yos Shiran, Caesarstone’s Chief Executive Officer commented, “We delivered modest sequential improvement this quarter as our business continues to stabilize in a challenging market environment. These results reflect our ability to effectively navigate a complex global landscape while advancing key initiatives that are designed to transform our business for long-term success. Our manufacturing optimization efforts are already yielding measurable benefits, our porcelain expansion is gaining momentum, and we anticipate that our R&D investments will drive growth. While we are carefully monitoring the impact of recently imposed U.S. tariffs, our strong balance sheet and operational flexibility leave us well positioned to manage near-term headwinds as we continue to build a more agile, innovation and marketing driven organization well equipped to capture long-term growth opportunities.”

First Quarter 2025 Results

Revenue in the first quarter of 2025 was $99.6 million compared to $118.3 million in the prior year quarter. On a constant currency basis, first quarter revenue was down 14.5% year-over-year mainly due to lower volumes. Volumes were impacted by global economic headwinds across the Company's main regions resulting in lower demand accompanied by greater competitive pressures.

Gross margin in the first quarter of 2025 was 21.3% compared to 24.5% in the prior year quarter. Adjusted gross margin in the first quarter was 21.2%, compared to 24.4% in the prior year quarter. The difference in gross margin was mainly due to unfavorable product mix and lower volumes and production, which resulted in lower fixed costs absorption, partially offset by the benefits of an improved production footprint.

Operating expenses in the first quarter of 2025 were $35.9 million, or 36.1% of revenue, compared to $34.6 million, or 29.2% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies, and restructuring and impairment expenses, operating expenses were 32.6% of revenue compared to 28.6% in the prior year quarter, primarily due to lower revenues.

Operating loss in the first quarter of 2025 was $14.8 million compared to an operating loss of $5.6 million in the prior year quarter, primarily reflecting lower gross profit and higher legal settlements and loss contingencies.

Adjusted EBITDA in the first quarter of 2025, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies, impairment and restructuring charges and other non-recurring items, was a loss of $7.1 million in the first quarter of 2025 compared to a gain of $0.6 million in the prior year quarter.

Finance income in the first quarter of 2025 was $2.5 million compared to $0.7 million in the prior year quarter. The difference primarily reflects foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the first quarter of 2025 was $12.9 million compared to a net loss of $5.1 million in the prior year quarter. Net loss per share for the first quarter 2025 was $0.37 compared to a net loss per share of $0.15 in the prior year quarter. Adjusted diluted net loss per share for the first quarter was $0.29 on 34.6 million shares, compared to Adjusted diluted net loss per share of $0.13 in the prior year quarter on 34.6 million shares.

Balance Sheet & Liquidity

As of March 31, 2025, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits of $88.8 million and total debt to financial institutions of $3.5 million. The Company's net cash position was $85.3 million as of March 31, 2025.

US Tariffs Update

The U.S. government recently announced new tariffs affecting various countries and product categories, including a 10% tariff at this time for the majority of imported products. Approximately 49% of the Company's revenues are generated in the U.S. market, served by the Company’s global production network. While the full impact of these tariffs remains uncertain at this time, the Company is in regular dialogue with its manufacturing partners to optimize its supply chain and is also evaluating potential pricing actions in the U.S. market.

Legal Proceedings Update

As of March 31, 2025, the Company was subject to lawsuits with respect to 357 injured persons alleging injuries associated with exposure of fabricators and their employees to respirable crystalline silica dust. Of these, 51 were in Israel, 130 in Australia and 176 in the United States. As of March 31, 2025, the Company has recorded a provision of $50.0 million representing its assessment of exposure that is probable and estimable with respect to pending claims. The Company's insurance receivables for silicosis-related claims totaled $31.6 million. The Company has assessed the remaining 174 claims in the U.S. and determined that a loss is only reasonably possible or that the claims are still in an early stage.

If there is a change in the assessment for the outcome of the claims or the insurance coverage through the course of the trial processes, such changes could lead to a material and adverse impact on our business, financial position, results of operations or cash flows.

Outlook

“We are on track to realize the full benefits of our cost optimization initiatives and strategic investments for 2025. However, given the persistent macroeconomic pressures across our global footprint and the recently imposed U.S. tariffs, we are withdrawing our full year outlook provided on March 5, 2025 as we assess the potential direct and indirect impacts on our 2025 results. Even so, we remain focused on the disciplined execution of our transformation while continuing to invest strategically in innovation and marketing to drive long-term profitable growth,” concluded Nahum Trost, Caesarstone’s Chief Financial Officer.

Webcast and Conference Call Details

The Company will host a webcast and conference call today, May 7, 2025, at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-833-816-1463 and 1-412-542-4167, respectively. The toll-free Israeli number is 1 80 921 3284. Upon dialing in, please request to join the Caesarstone First Quarter 2025 Earnings Conference Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671 (international) and enter pass code 10198535. The replay will be available beginning at 12:30 p.m. ET on Wednesday, May 7, 2025 and will last through 11:59 p.m. ET on Wednesday, May 14, 2025.

About Caesarstone

Caesarstone is a global leader of premium surfaces, specializing in countertops that create dynamic spaces of inspiration in the heart of the home. Established in 1987, its multi-material portfolio of over 100 colors combines the company’s innovative technology with its powerful design passion. Spearheading high-quality, sustainable surfaces, Caesarstone delivers functional resilience with timeless beauty, for a vast range of applications, including kitchen countertops, bathroom vanities, and more, for indoor and outdoor spaces.

Since it pioneered quartz countertops over thirty years ago, the brand has expanded into porcelain and natural stone and is on the ground in more than 50 countries worldwide while enhancing customer experience through the expansion of groundbreaking digital platforms & services. More information on Caesarstone: caesarstoneus.com,Facebook, LinkedIn and Instagram

The Company has filed its annual report on Form 20-F for the year ended December 31, 2024 with the U.S. securities and exchange commission (“SEC”) and can be accessed on its website.

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" within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “goals," “intend,” “seek,” “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “may,” “plan,” “outlook,” “future” and “project” and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements regarding the Company’s goals and plans, intentions, expectations, assumptions, goals and beliefs regarding the Company’s business. Actual results may differ materially from those projections and estimates due to various risks and uncertainties, both known or unknown. These factors include, but are not limited to: the effects of global and regional economy and geo-politics on the Company’s business and operations including the length, duration and impact of the war in Israel, the Houthi’s disruption to the movement of goods in the Red Sea and trade disruptions such as Turkey’s decision not to trade with Israel; the outcome of silicosis and other bodily injury claims, and the availability relevant insurance; regulatory changes and requirements relating to the manufacturing and fabrication of our products; the outcome of our restructuring efforts, of the closure of the Sdot Yam and Richmond Hill Facilities, the estimated closure costs and the estimated potential savings relating to said closures, the ability to sell or sublease all or part of these facilities; our ability to effectively collaborate with production business partners; our R&D and product introduction efforts, managing constraints in the global supply chain and effectively procuring raw materials and goods as well as fluctuations in their price; our ability to mitigate the recently imposed U.S. custom tariffs; our ability to protect our brand, technology and intellectual property, as well as our freedom to operate; competitive pressures; disruptions to our information technology systems, fluctuations in currency exchange rates against the U.S. dollar; our ability to successfully integrate our acquisitions; our ability to meet ESG goals and targets; and other risks and uncertainties discussed under the sections "Risk Factors" and “Special Note Regarding Forward-Looking Statements and Risk Factor Summary” in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2025, and in other documents filed by Caesarstone with the SEC, which are available free of charge at www.sec.gov. 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.

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Investor Relations:
ICR, Inc. - Rodny Nacier
CSTE@icrinc.com
+1 (646) 200-8870

Source: Caesarstone Ltd.