Caesarstone Ltd.

Welcome to the Caesarstone 4th Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then 1 on a touch-tone telephone. To withdraw your question, please press star then 2. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Cray of ICR. Thank you. You may begin.

Thank you, Operator, and good morning to everyone on the line. I am joined by Yof Sharan, Caesar Stone's Chief Executive Officer, and Nahum Trost, Caesar Stone's Chief Financial Officer. Certain statements in today's conference call and responses to various questions may constitute forward-looking statements. We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially. For more information, please refer to the risk factors contained in the company's most recent annual report on Form 20-F and subsequent filings with the SEC. In addition, on this call, the company will make reference to certain non-GAAP financial measures, including adjusted net loss income, adjusted net loss income per share, adjusted gross profit, adjusted EBITDA, and constant currency. The reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the company's fourth quarter 2023 earnings release, which is posted on the company's investor relations website. On today's call, Yos will discuss our business activity and Nahum will then cover additional details regarding financial results before we open the call for questions. Thank you, and I would now like to turn the call over to Yos. Please go ahead.

Thank you, Brad. Good day, and thank you, everyone, for joining us to discuss our fourth quarter and fully results. In 2023, we were able to navigate through challenging macroeconomic, regional, geopolitical, and regulatory dynamics occurring in our key markets. We have implemented a new strategic plan and initiated significant restructuring actions, which allowed us to accomplish our primary financial objective of generating positive cash flow from operations. We more than delivered on this front, as our working capital management and Ming foot savings stemming from our global restructuring actions generated positive operating cash flow in four consecutive quarters, totaling $66.5 million. This left us with a solid net cash position of $83.5 million. Overall, we are executing in accordance with our strategic plan. We believe actions taken during 2023 have set the foundation for an optimized production footprint, better utilization of resources, and improve cost structure and realign workforce, allowing us to capture greater efficiencies and opportunities. We believe that these factors will allow us to enhance our brand, better compete, grow market share, and get back to profitability. In regard to driving production cost efficiencies, we are quickly transitioning production to our global network of production business partners. In the second quarter of 2023, we made the decision to close our Stottier manufacturing facility. And in December, we announced the closing of our Richmond Hill facility. Following the strategic changes to our operations, we are now sourcing over 40% of our products from production business partners. We expect that percentage to trend up further as we move through 2024. As another result of the closure of these two facilities, we have reduced our spend on CAPEX and we're able to reduce our workforce by approximately 14% across the organization. In turn, we expect to realize annual cost savings of approximately $20 million in 2024 and $30 million in 2025 on top of the savings that were already realized during 2023. We also maintain our view that we have potential for additional cash inflows as subleases are executed on the non-cancellable long-term lease agreements associated with Sturteam facility and upon the potential realization of our Richmond Hill property. With all this in mind, we believe that we have a clear strategy in place to reduce our manufacturing cost base and invest a portion of our savings into our brand sales, marketing, R&D, and an expansion of our premium porcelain products to reignite profitable growth across the business. Now I would like to provide an update on our Australian market. As we previously announced in December 2023, the Australian federal, state, and territory governments announced a joint decision to ban the use supply and manufacture of engineered stone slabs containing crystalline silica in Australia, including Caesarstone's quartz-based products. The ban is expected to go into effect on July 1, 2024, in most Australian states and territories. The Caesarstone brand is well known in Australia, and our products have earned tremendous success in the region over the years. We have been proactive in our approach to supply our Australian market with alternative materials that will comply with the new regulations. By the end of the second quarter of 2024, we will have a full collection of alternative products, which we believe will allow us to retain our position in the Australian market. In conclusion, during 2023, we took significant actions to restructure and stabilize the business. We diverted resources to areas that we believe will allow us to capture profitable growth, all while achieving our goal to further improve our net cash position. While we are pleased with our progress as measured against our initial plan, there is more work to be done. With our restructuring and other cost-saving actions, we are prepared to prudently allocate capital back into the business, primarily into our branding and R&D, to drive top-line growth, margin expansion, and profitability. We believe we have the right global strategy in place to improve our results and drive value to all our stakeholders. Thank you, and I will now turn the call over to Nahum to walk through the details of our financial performance.