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Caesarstone Sdot-Yam Ltd. (CSTE), a manufacturer of high quality engineered quartz surfaces, today reported financial results for its third quarter ended September 30, 2013.
Revenues in the third quarter of 2013 increased by 21.6% to $94.3 million compared to $77.6 million in the same quarter of the prior year. On a constant currency basis, third quarter revenue growth was 24.0% compared to the same period last year. Growth in revenues was broad-based, but primarily driven by continued increases in the United States and Canada, up 47.8% and 22.2%, respectively, compared to the same period in the prior year.
Yosef Shiran, Chief Executive Officer, commented, "We are pleased with our results for the third quarter, particularly in the United States, which is our largest and fastest growing market. Our strong brand, leading products and improved market conditions all contributed to our significant increase in revenues and our strong cash flow. We expect to continue to drive value to our shareholders, partners and customers through ongoing growth in our business."
Gross margin in the third quarter was 44.5% compared to 45.0% in the same period in the prior year. This slight decline was driven by increased manufacturing costs, including those associated with the planned expansion in the Company’s Bar Lev manufacturing facility, and the overall negative currency impact in the quarter. These factors were partially offset by favorable changes in the mix of revenues and scale-related benefits.
Operating expenses in the third quarter were $21.1 million, or 22.4% of revenues. This compares to the prior year's third quarter level of $18.2 million, or 23.5% of revenues.
Operating income in the third quarter was up 25.2% to $20.9 million, a margin of 22.2%, compared to $16.7 million, a margin of 21.5%, in the third quarter of 2012.
Adjusted EBITDA, which excludes share-based compensation, the excess cost of acquired inventory and other non-recurring costs, increased by 18.4% to $25.2 million in the third quarter, a margin of 26.8%. This compares to adjusted EBITDA of $21.3 million, a margin of 27.5% in the third quarter of the prior year.