Caesarstone (NASDAQ: CSTE) reported Q1 EPS of $0.13, $0.04 better than the analyst estimate of $0.09. Revenue for the quarter came in at $126 million versus the consensus estimate of $119.01 million.

• Revenue of $126.6 Million
• Net Income of $2.7 Million, or $0.08 Per Share
• Adjusted Net Income of $4.6 Million, or $0.13 Per Share
• Adjusted EBITDA of $13.1 Million
• $131.9 Million Cash Position with No Financial Debt
• Withdraws Full Year 2020 Outlook Due to COVID-19 Related Demand Uncertainty

Yuval Dagim, Chief Executive Officer commented “Solid first quarter 2020 results reflect the focused execution and implementation of our plan. Our aggressive efforts to control costs, streamline processes, and place the right talent have allowed us to achieve strong first quarter performance. In addition, these actions have provided Caesarstone with the added financial and operational flexibility to navigate the unprecedented global impact of the COVID-19 crisis. During the quarter, we rapidly implemented necessary procedures to preserve capital and ensure continuity of operations with a safety first emphasis. However, the impact of the crisis and the evolving pandemic response efforts by local governments across our global footprint have limited our near term visibility on industry demand.”

Yuval Dagim, Chief Executive Officer continued, “In this uncertain environment, our top priority is the health and safety of our employees, partners and customers. At the same time, through our business continuity plans we have turned our immediate focus to the controllable aspects of our business to apply necessary enhancements to our cost structure and operations to mitigate an uncertain period of lower demand. That said, we remain committed to our Global Growth Acceleration Plan to improve operational inefficiencies and better align resources throughout our business over the long term. While current market challenges will delay a portion of our strategic initiatives in 2020, our long-term strategy to reignite growth is unchanged. I am very proud of our team’s achievements and have the confidence in our ability to overcome this challenging period.”

Ophir Yakovian, Chief Financial Officer, added, “We were pleased with our performance in the first quarter. We continued the positive momentum in our U.S. business while improving our production productivity and controlling costs to expand gross margin and Adjusted EBITDA year-over-year. First quarter results were encouraging despite COVID-19 related impacts that we started to experience with greater significance during the final two weeks of March. With this in mind, we understand that challenging market conditions lie ahead, evidenced by a substantial softening of demand across our global markets during the month of April. Given the lack of visibility on the overall economic impact of COVID-19, and the related effects on the demand environment, we are withdrawing our previously communicated full year 2020 financial outlook. Fortunately, our prudent efforts in recent periods to control costs, improve our operational structure, reduce inventory and manage production capacity have collectively allowed us to build a substantial cash position of $131.9 million as of March 31st with zero financial debt. At this time, we believe that we have the necessary resources and the right strategy to weather the storm and be positioned to take advantage of opportunities when the economy recovers.”

Outlook

The Company believes it is well prepared operationally and financially to face the unprecedented macro-economic impacts presented by the COVID-19 pandemic. Although there was only a limited adverse impact to first quarter of 2020 results, the Company began to experience significant softening of demand for its products as a result of COVID during the month of April. Given the volatility of the ongoing crisis and the lack of visibility on the global economic impact of COVID-19, and the related effects on the demand environment, it is difficult to predict with certainty the impact of the virus on its business, operations and financial condition for the remainder of the year. The Company is therefore withdrawing its previously communicated full year 2020 financial outlook.

For earnings history and earnings-related data on Caesarstone (CSTE) click here.