$Caesarstone(CSTE)$ NB ！！

Caesarstone Sdot-Yam Ltd. (CSTE), a manufacturer of high quality  engineered quartz surfaces, today reported financial results for its  second quarter ended June 30, 2014. Revenues in the second quarter of 2014 increased by 30.4% to $116.1  million compared to $89.0 million in the same quarter of the prior year.  This was a record for any quarter. On a constant currency basis, second  quarter revenue growth was 32.3% compared to the same period last year.  Growth in revenues was primarily driven by continued increases in the  United States, which grew 55.0% to $47.9 million, as well as  contributions from Australia, Canada and other regions.

 Yosef Shiran, Chief Executive Officer, commented, “This was a strong  quarter with significant growth. Market demand for our products is  robust and the Caesarstone brand continues to be a market leader, known  for quality and innovative design. We are operating well, controlling  our costs and growing our capacity to meet the demand for our products.”

Gross margin in the second quarter was 41.0% compared to 49.8% in the  same period of the prior year. The Company noted that the second quarter  this year includes $0.8 million of non-recurring cost related to an  adjustment of provision for taxable employee fringe benefits and the  second quarter last year included $3.5 million of credit related to a  change in the value of inventory. Excluding the above-mentioned one-time  items, a gross margin decline of 4.2 percentage points year-over-year  was driven primarily by the effects of foreign exchange fluctuations,  strong growth from IKEA which includes a significant portion of  lower-margin fabrication and installation revenue and, to a lesser  extent, raw material price increases.

 Operating expenses in the second quarter were $24.1 million, or 20.7% of  revenues. This compares to the prior year's second quarter level of  $22.1 million, or 24.8% of revenues. This 4.1 percentage point  improvement reflects the scale-related benefit of increased revenues.

 Operating income in the second quarter was up 5.9% to $23.6 million  compared to $22.2 million in the second quarter of 2013.

 Adjusted EBITDA, which excludes the non-recurring items as well as  share-based compensation and the excess cost of acquired inventory,  increased by 23.3% to $30.4 million in the second quarter, a margin of  26.2%. This compares to adjusted EBITDA of $24.6 million, a margin of  27.7% in the second quarter of the prior year.

 Finance expenses in the second quarter were $1.4 million compared to  finance income of $0.4 million during the same period in the prior year.  The increase was predominantly due to the impact of foreign exchange  fluctuations.

 The Company reported net income attributable to controlling interest for  the second quarter of 2014 of $18.2 million compared to $19.7 million in  the same quarter in the prior year.

 Diluted net income per share for the second quarter was $0.51 on 35.4  million shares compared to $0.56 per diluted share on 35.1 million  shares in the prior year's second quarter. On an adjusted basis, net  income in the second quarter was $20.7 million, or $0.58 per diluted  share compared to $18.6 million, or $0.53 per diluted share in the same  quarter of the prior year.

 The Company's balance sheet as of June 30, 2014 remained solid with cash  and short-term bank deposits of $80.3 million.

 The Company also provided an update with respect to its planned capacity  expansion projects. The Company continues to benefit from expanded  production in its Bar Lev facility. It also remains on schedule for its  Richmond Hill, Georgia manufacturing plant to be operational in the  second quarter of 2015 with a second line to become operational in the  fourth quarter of 2015. The Company has decided to increase its  investment in its US facility to approximately $115 million, compared to  its earlier estimate of approximately $100 million, mostly to  accommodate improvements in operations, including upgraded machinery for  higher manufacturing capacity. In addition to this investment, the  Company intends to start initial steps towards establishing its second  building in Richmond Hill to accommodate additional manufacturing  capacity in the future as needed to satisfy potential demand.

Guidance Increase

 Following a strong second quarter and to reflect an improvement in both  inventory and manufacturing throughput, the Company today increased its  revenue guidance for the full year of 2014 to a new range of $435 to  $445 million as compared to its prior range of $420 million to $430  million.

 The Company also increased its expected range of adjusted EBITDA for the  full year to $112 million to $117 million as compared to its prior  expected range of $108 million to $113 million.