- As Part of its Strategic Plan that
Includes Optimization of Production Sources, Announces Closure of
Its Manufacturing Facility in Richmond Hill -
- Reports on a Decision by the Australian
Governmental Bodies Regarding Engineered Stone -
Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and
manufacturer of high-quality engineered surfaces, today provided an
update on the closure of its manufacturing facility located in
Richmond Hill, Georgia and an update on the Australian market.
Richmond Hill Update
Consistent with the Company’s restructuring plan initiated in
mid-2023, today the Company announced the closure of its Richmond
Hill manufacturing facility, effective mid-January 2024. This
decision is expected to contribute savings of approximately $20
million annually by optimizing its manufacturing footprint.
Yos Shiran, Chief Executive Officer of Caesarstone, commented,
“Our manufacturing network has been undergoing restructuring since
earlier this year with the focus of optimizing our global
production footprint. This transition will allow us to better serve
our customers’ needs, streamline our operations and improve our
overall competitiveness. This is part of the strategic plan we are
implementing to focus on product innovation, investment in our
brand, improve our go to market strategy and better position
Caesarstone for long-term profitable growth in the years to come. I
would like to thank the Richmond-Hill Community, Bryan County, the
Georgia Government and all our valued employees and business
partners there for their work and support over the years”
In connection with the facility closure, the Company expects to
incur restructuring expenses and a one-time non-cash impairment
charge totaling $45 million to $55 million during the fourth
quarter of 2023. The Company estimates total cash costs will be in
the amount of $3 million to $5 million related to operations,
through 2024. Caesarstone expects annualized cash savings of
approximately $20 million with the effect commencing during 2024,
in addition to exploring opportunities to monetize the asset in the
future.
The estimates of the impairment and expenditures that the
Company expects to incur in connection with the closure, and the
timing thereof, are subject to a number of assumptions and actual
amounts may differ materially from estimates.
Australian Market Update
On December 13, 2023, Australian federal, state and territory
governments announced a joint decision to ban the use, supply and
manufacture of engineered stone slabs containing crystalline silica
(including our quartz-based products) in Australia. Subject to the
formal adoption of the legislation and regulations, the ban will go
into effect on July 1, 2024 in most Australian states and
territories.
The Company notes that the safety of Caesarstone’s installed
products to its end consumer was never an issue, and the products
are safe to fabricate under safe working practices. While the
Company disagrees with this decision, believes that the focus
should be aimed at improving occupational health and safety, and
has communicated its position to Australian governments, it is
taking the necessary steps to ensure supply of alternative
materials to its Australian customers in line with its high
standards. This process is expected to negatively impact the
Company's sales in the near-term in the Australian market, which
accounted for approximately 18% of revenue in the nine months ended
September 2023.
Yos Shiran, added “The Caesarstone brand is well known in
Australia and its products have earned tremendous success over the
years. We are already taking steps to supply our Australian market
with alternative products while maintaining our strong market
presence.”
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, Twitter, YouTube, Pinterest, and
Instagram
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
sustainability goals and plans, intentions, expectations,
assumptions, goals and beliefs regarding the Company’s business and
sustainability vision. These forward-looking statements also may
relate to the Company's plans, objectives and expectations for
future operations, including estimations relating to the
restructuring plan, the closure of the Sdot Yam Facility, the
estimated closure costs and the estimated potential savings
relating to the facility closure, the ability to sublease all or
part of the facility covered by the long-term non-cancellable lease
agreement, the impact of the COVID-19 pandemic and mitigation
measures in connection thereto, and expectations of the results of
the Company’s business optimization initiatives. These
forward-looking statements are based upon management's current
estimates and projections of future results or trends. Actual
results may differ materially from those projected as a result of
certain risks and uncertainties, both known or unknown. These
factors include, but are not limited to: the implementation of the
proposed restructuring plan, the closure of the Sdot Yam Facility
and Richmond Hill facilities, the estimated closure costs and
ability to realize potential savings relating to the closure, the
ability to effectively manage through transitions in the Australian
market, the ability to sublease all or part of the facility covered
by the long-term non-cancellable lease agreement, the impact of the
COVID-19 pandemic on end-consumers, the effects of global economy
and geo-politics on the Company’s business and operations; managing
constraints in the global supply chain, raw material shortages,
increased prices and effects of challenges in global shipping and
transportation; Company’s ability to pass all or some of these
increases to its customers; the strength of the home renovation and
construction sectors; intense competitive pressures; disruptions to
our information technology systems globally, including by
deliberate cyber-attacks; the degree of the Company’s ability to
develop, produce and deliver high quality and safe products;
fluctuations in currency exchange rates against the U.S. Dollar;
Company’s ability to raise funds to finance our current and future
capital needs; Company’s ability to build-out and expand into
certain markets and successfully integrate our acquisitions; the
Company’s ability to effective manage its relationship with key
suppliers; the outcome of silicosis and other bodily injury claims;
regulatory requirements relating to hazards associated with our
operations and products; efficiently manufacturing our products and
managing changes in production and supply chain; economic
conditions within any of our key existing markets; the success of
our expansion efforts in the United States; the extent of the
Company’s ability to meet its ESG goals and targets, management of
GHG and other emissions; the impacts of conditions in Israel, such
as negative economic, labor or geopolitical events; the
unpredictability of seasonal fluctuations in revenues; disturbances
to the Company’s operations or the operations of its suppliers,
distributors, customers or other third parties and other factors,
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
15, 2023, 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.
Further, the estimates of the charges and expenditures that the
Company expects to incur in connection with the restructuring plan
and facility closure and the timing thereof, are subject to a
number of assumptions, and actual amounts may differ materially
from estimates. In addition, the Company may incur other charges or
cash expenditures not currently contemplated due to unanticipated
events that may occur, including in connection with the
implementation of the restructuring plan and facility closure.
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version on businesswire.com: https://www.businesswire.com/news/home/20231213134792/en/
Investor Relations: ICR, Inc. - Rodny Nacier
CSTE@icrinc.com +1 (646) 200-8870
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