Tecnoglass Reports Record Second Quarter 2022 Results

Barranquilla, COLOMBIA

- Record Total Revenues of $169.1 Million Up 39% Year-Over-Year, All through Organic Growth -

- Record Single-Family Residential Revenues Increased 86% Year-Over-Year, Representing 45% of Total Revenues

- Growth Capex Investments on Track to End Year with Installed Production Capacity of Over $800 Million -

- Gross Margin of 43.5%, Up 310 Basis Points Year-Over-Year -

- Record Net Income of $33.4 Million and $0.70 Per Diluted Share -

- Record Adjusted Net Income1 of $33.0 Million and $0.69 Per Diluted Share -

- Adjusted EBITDA1 Up 51.7% Year-Over-Year to a Record $54.6 Million, or 32.3% of Total Revenues -

- Cash Flow From Operations of $35.9 Million -

- Backlog Expanded 19.5% Year-Over-Year to a Record $668 Million

- Board Increases Quarterly Dividend by 15% -

- Increases Full Year 2022 Growth Outlook to Adjusted EBITDA1 of $208 Million to $220 Million on Total Revenues of $620 Million to $640 Million -

BARRANQUILLA, Colombia, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Tecnoglass, Inc. (NYSE: TGLS) (“Tecnoglass” or the “Company”), a leading manufacturer of architectural glass, windows, and associated aluminum products serving the global residential and commercial end markets, today reported financial results for the second quarter ended June 30, 2022.

José Manuel Daes, Chief Executive Officer of Tecnoglass, commented, "We are very pleased to report another quarter of record results led by continued strong demand for our single-family residential products and further sequential growth in our commercial business. The benefit of our vertically integrated business model and highly efficient manufacturing capacity are allowing us to maintain exceptional lead times for our customers, resulting in market share gains and profitable growth. The prudent investments we have made in automation, capacity enhancements and product innovation, in addition to our disciplined cost controls, are supporting our industry-leading adjusted EBITDA margin, which remains in excess of 30%. We believe the momentum in our business and established track record of exceptional cash flow further validates Tecnoglass’ unique vertically integrated business model and strategic positioning in attractive high-growth geographies across the U.S. We are excited by the trajectory of our business and look forward to delivering on our upwardly revised outlook for the full year 2022.”

Christian Daes, Chief Operating Officer of Tecnoglass, added, “Our activity in key U.S. regions remains strong for single-family and multifamily residential projects, as well as commercial projects, evidenced by record levels of invoicing during the month of July. Ongoing market share gains helped us produce revenue growth of 86% year-over-year in our single-family residential business, with projects in the historically resilient remodel and renovation end market representing approximately 65% of that business. The commercial side of our business has continued to experience sequential growth in each month this year, with the second quarter revenues up 15% compared to the prior year quarter. Furthermore, we ended the quarter with a record backlog of multifamily and commercial projects that now extend well into 2023. We intend to continue outperforming in our markets as a supplier of choice given our ability to maintain timely deliveries that help keep customers on schedule. We are reinvesting a portion of our significant cash flow into high-return capex investments that will allow us to end the year with installed production capacity equivalent to over $800 million of revenue. The Board’s 15% increase in our dividend demonstrates their confidence in our cash flow generation to remain strong. We are well positioned to drive additional success in our Company for many years to come.”

Second Quarter 2022 Results

Total revenues for the second quarter of 2022 increased 38.9% to $169.1 million, compared to $121.8 million in the prior year quarter, driven by strong growth in single-family residential activity, market share gains and the ongoing ramp up of the Company’s commercial activity. Single-family residential revenues increased approximately 86% year-over-year, representing 44.9% of total revenues for the second quarter, helped by continued strong demand within the repair and remodeling space, the ongoing expansion of the Company’s Multimax product line, and a larger customer base. Changes in foreign currency exchange rates had an adverse impact of $0.3 million on both Colombia revenues and total revenues in the quarter.

Gross profit for the second quarter of 2022 grew 49.9% to $73.6 million, representing a 43.5% gross margin, compared to gross profit of $49.1 million, representing a 40.4% gross margin in the prior year quarter. The 310 basis point improvement in gross margin mainly reflected operating leverage on higher sales, greater operating efficiencies related to automation and a higher mix of revenue from manufacturing versus installation activity as Tecnoglass continues to increase its mix of single-family residential products. Selling, general and administrative expense (“SG&A”) was $28.1 million compared to $20.4 million in the prior year quarter, with the majority of the increase attributable to shipping expense as a result of a higher sales volume and higher shipping rates. As a percent of total revenues, SG&A improved to 16.6% compared to 16.7% in the prior year quarter, primarily due to higher sales and better operating leverage on personnel, professional fees and other fixed expenses.

Net income was $33.4 million, or $0.70 per diluted share, in the second quarter of 2022 compared to net income of $19.6 million, or $0.41 per diluted share, in the prior year quarter, including a non-cash foreign exchange transaction gain of $2.5 million in the second quarter of 2022 and a $0.2 million gain in the second quarter of 2021. As previously disclosed, these non-cash gains and losses are related to the accounting re-measurement of U.S. Dollar denominated assets and liabilities against the Colombian Peso as functional currency.

Adjusted net income1 was $33.0 million, or $0.69 per diluted share, in the second quarter of 2022 compared to adjusted net income of $20.1 million, or $0.42 per diluted share, in the prior year quarter. Adjusted net income1, as reconciled in the table below, excludes the impact of non-cash foreign exchange transaction gains or losses and other non-core items, along with the tax impact of adjustments at statutory rates, to better reflect core financial performance.

Adjusted EBITDA1, as reconciled in the table below, increased 51.7% to $54.6 million, or 32.3% of total revenues, in the second quarter of 2022, compared to $36.0 million, or 29.5% of total revenues, in the prior year quarter. The improvement was driven by higher sales, a stronger gross margin and operating leverage on SG&A. Adjusted EBITDA1 included a $0.9 million contribution from the Company’s joint venture with Saint-Gobain, compared to $0.5 million in the prior year quarter.


The Board of Directors of the Company today declared a quarterly cash dividend of $0.075 per share, representing a 15% increase from the previous dividend payment. The quarterly dividend will be paid on October 31, 2022 to shareholders of record as of the close of business on September 30, 2022.

Balance Sheet & Liquidity

The Company ended the second quarter of 2022 with total liquidity of approximately $270 million, including cash and cash equivalents of $99 million and availability under its committed revolving credit facilities of $170 million. Given the Company’s continued growth in adjusted EBITDA1 and strong cash generation, debt leverage continues to trend lower and now stands at 0.5 times LTM net debt to adjusted EBITDA1, compared to 1.1 times in the prior year quarter.

Based on the Company’s record of strong financial performance, in May 2022 the Company amended its Credit Agreement with its syndicate of banks to remove the cap on restricted payments (including stock buybacks and dividend payouts) pursuant to the Company´s leverage ratio as defined in its Credit Agreement remaining below 1.5x net debt to adjusted EBITDA1.

Full Year 2022 Outlook

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “The momentum in our business continued into the third quarter with single-family residential projects representing a growing share of our revenues and the commercial business continuing to grow sequentially each month through this year. Based on our current invoicing schedule and underlying market demand, we are increasing our full year 2022 outlook for revenues to grow to a range of $620 million to $640 million and for adjusted EBITDA1 to increase to a range of $208 million to $220 million. This implies adjusted EBITDA growth of approximately 42% at the midpoint, putting us firmly on the path to achieve another year of record results in full year 2022.”

Webcast and Conference Call

Management will host a webcast and conference call on August 4, 2022 at 10:00 a.m. Eastern time (9:00 a.m. Bogota, Colombia time) to review the Company’s results. The conference call will be broadcast live over the Internet. Additionally, a slide presentation will accompany the conference call. To listen to the call and view the slides, please visit the Investor Relations section of Tecnoglass' website at www.tecnoglass.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those unable to access the webcast, the conference call will be accessible by dialing 1-844-943-2944 (domestic) or 1- 973-528-0098 (international). Upon dialing in, please request to join the Tecnoglass Second Quarter 2022 Earnings Conference Call.

If you are unable to listen live, a replay of the webcast will be archived on the website. You may also access the conference call playback by dialing (800)-332-6854 (Domestic) or (973)-528-0005 (International) and entering passcode: 933766.

About Tecnoglass

Tecnoglass Inc. is a leading producer of architectural glass, windows, and associated aluminum products serving the multi-family, single-family and commercial end markets. Tecnoglass is the second largest glass fabricator serving the U.S. and the #1 architectural glass transformation company in Latin America. Located in Barranquilla, Colombia, the Company’s 3.8 million square foot, vertically-integrated and state-of-the-art manufacturing complex provides efficient access to over 1,000 global customers, with the U.S. accounting for more than 90% of revenues. Tecnoglass' tailored, high-end products are found on some of the world's most distinctive properties, including One Thousand Museum (Miami), Paramount (Miami), Salesforce Tower (San Francisco), Via 57 West (NY), Hub50House (Boston), Aeropuerto Internacional El Dorado (Bogotá), One Plaza (Medellín), Pabellon de Cristal (Barranquilla). For more information, please visit www.tecnoglass.com or view our corporate video at https://vimeo.com/134429998.

Forward Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Tecnoglass’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of Tecnoglass’ business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass’ filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that Tecnoglass’ financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events and changes in assumptions or otherwise, except as required by law.

Adjusted net income (loss) and Adjusted EBITDA in both periods are reconciled in the table below.

Investor Relations:

Santiago Giraldo

Tecnoglass Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)

  June 30,  December 31, 
  2022  2021 
Current assets:        
Cash and cash equivalents $98,620  $85,011 
Investments  2,407   1,977 
Trade accounts receivable, net  114,218   110,539 
Due from related parties  1,669   2,252 
Inventories  111,914   84,975 
Contract assets – current portion  16,310   18,667 
Other current assets  23,554   22,854 
Total current assets $368,692  $326,275 
Long-term assets:        
Property, plant and equipment, net $183,594  $166,629 
Deferred income taxes  2,526   596 
Contract assets – non-current  10,588   11,853 
Long-term trade accounts receivable  4,279   3,995 
Intangible assets  3,029   3,337 
Goodwill  23,561   23,561 
Long-term investments  55,059   51,160 
Other long-term assets  4,282   4,157 
Total long-term assets  286,918   265,288 
Total assets $655,610  $591,563 
Current liabilities:        
Short-term debt and current portion of long-term debt $591  $10,700 
Trade accounts payable and accrued expenses  89,406   68,087 
Due to related parties  4,186   3,857 
Dividends payable  3,143   3,141 
Contract liability – current portion  58,974   45,213 
Other current liabilities  24,379   24,017 
Total current liabilities $180,679  $155,015 
Long-term liabilities:        
Deferred income taxes $3,403  $3,417 
Contract liability – non-current  47   78 
Long-term debt  184,268   188,355 
Total long-term liabilities  187,718   191,850 
Total liabilities $368,397  $346,865 
Preferred shares, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively $-  $- 
Ordinary shares, $0.0001 par value, 100,000,000 shares authorized, 47,674,773 and 47,674,773 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively  5   5 
Legal Reserves  1,458   2,273 
Additional paid-in capital  219,290   219,290 
Retained earnings  139,709   91,045 
Accumulated other comprehensive loss  (74,404)   (68,751)
Shareholders’ equity attributable to controlling interest  286,058   243,862 
Shareholders’ equity attributable to non-controlling interest  1,155   836 
Total shareholders’ equity  287,213   244,698 
Total liabilities and shareholders’ equity $655,610  $591,563 

Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
 (In thousands, except share and per share data)

  Three months ended  Six months ended 
  June 30,  June 30, 
  2022   2021   2022   2021  
Operating revenues:                
External customers $168,657   $121,401   $302,679   $232,576  
Related parties  467    351    993    731  
Total operating revenues  169,124    121,752    303,672    233,307  
Cost of sales  95,492    72,622    169,707    138,868  
Gross profit   73,632      49,130      133,965      94,439   
Operating expenses:                
Selling expense  (16,616)   (12,030)   (29,984)   (23,113) 
General and administrative expense  (10,851)   (8,332)   (21,126)   (17,125) 
Other professional fees  (678)   -    (3,402)   -  
Total operating expenses  (28,145)   (20,362)   (54,512))  (40,238) 
Operating income   45,487      28,768      79,453      54,201   
Non-operating income (expenses), net  161    (229)   503    (70) 
Equity method income  1,669    788    3,249    1,879  
Foreign currency transactions gains (loss)  2,503    190    (406)   145  
Gain (loss) on debt extinguishment  -    169    -    (10,978) 
Interest expense and deferred cost of financing  (1,715)   (2,442)   (3,183)   (5,964) 
Income before taxes  48,105    27,244    79,616    39,213  
Income tax (provision)  (14,692)   (7,601)   (25,250)   (11,289) 
Net income $ 33,413    $ 19,643    $ 54,366    $ 27,924   
(Loss) Income attributable to non-controlling interest  (219)   (51)   (319)   (140) 
Income attributable to parent $ 33,194    $ 19,592    $ 54,047    $ 27,784   
Comprehensive income:                
Net income $33,413   $19,643   $54,366   $27,924  
Foreign currency translation adjustments  (23,621)   (1,185)   (9,987)   (16,819) 
Change in fair value derivative contracts  1,710    -    4,332    (159) 
Total comprehensive income $ 11,502    $ 18,458    $ 48,711    $ 10,946   
Comprehensive (loss) income attributable to non-controlling interest  (219)   (51)   (319)   (140) 
Total comprehensive income attributable to parent $ 11,283    $ 18,407    $ 48,392    $ 10,806   
Basic income per share $0.70   $0.41   $1.14   $0.59  
Diluted income per share $0.70   $0.41 1 $1.14   $0.59  
Basic weighted average common shares outstanding  47,674,773    47,674,773    47,674,773    47,674,773  
Diluted weighted average common shares outstanding  47,674,773    47,674,773    47,674,773    47,674,773  

Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)

  Six months ended June 30, 
  2022   2021  
Net income $54,366   $27,924  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Allowance for credit losses  580    748  
Depreciation and amortization  10,462    10,515  
Deferred income taxes  (1,016)   424  
Equity method income  (3,249)   (1,879) 
Deferred cost of financing  726    623  
Other non-cash adjustments  6    (19) 
Loss on debt extinguishment  -    2,333  
Unrealized currency translation losses  911    2,555  
Changes in operating assets and liabilities:        
Trade accounts receivable  (4,792)   (6,069) 
Inventories  (31,343)   (2,082) 
Prepaid expenses  (690)   (2,015) 
Other assets  1,652    (6,718) 
Trade accounts payable and accrued expenses  16,489    23,375  
Accrued interest expense  (1)   (7,171) 
Taxes payable  2,260    3,389  
Labor liabilities  125    (132) 
Other liabilities  (2,047)   (342) 
Contract assets and liabilities  17,538    14,677  
Related parties  1,020    (23) 
Proceeds from sale of investments  -    166  
Proceeds from sale of property and equipment  -    7  
Purchase of investments  (933)   (49) 
Acquisition of property and equipment  (26,250)   (18,325) 
Cash dividend  (6,196)   (2,621) 
Loss on debt extinguishment - call premium  -    (8,610) 
Deferred financing transaction costs  -    (88) 
Proceeds from debt  241    221,146  
Repayments of debt  (15,367)   (216,676) 
Effect of exchange rate changes on cash and cash equivalents $(883)  $(2,334) 
NET INCREASE IN CASH  13,609    32,729  
CASH - Beginning of period  85,011    67,668  
CASH - End of period $98,620   $100,397  
Cash paid during the period for:        
Interest $2,387   $12,286  
Income Tax $7,552   $9,471  
Assets acquired under debt or supplier credit $5,835   $937  

Revenues by Region
(Amounts in thousands)

 Three months ended Twelve months ended
 June 30, June 30,
2022 2021 % Change 2022 2021 % Change
Revenues by Region            
United States161,478 109,879 47.0% 534,103 393,177 35.8%
Colombia4,816 8,166 -41.0% 19,385 31,717 -38.9%
Other Countries2,830 3,708 -23.7% 13,662 14,689 -7.0%
Total Revenues by Region 169,124 121,752 38.9% 567,150 439,583 29.0%

Reconciliation of Non-GAAP Performance Measures to GAAP Performance Measures
(In thousands)

The Company believes that total revenues with foreign currency held neutral non-GAAP performance measures, which management uses in managing and evaluating the Company's business, may provide users of the Company's financial information with additional meaningful bases for comparing the Company's current results and results in a prior period, as these measures reflect factors that are unique to one period relative to the comparable period. However, these non‑GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company's reported results under accounting principles generally accepted in the United States.

 Three months ended Twelve months ended
 June 30, June 30,
2022  2021 % Change 2022  2021 % Change
Total Revenues with Foreign Currency Held Neutral169,417  121,752 39.1% 568,714  439,583 29.4%
Impact of changes in foreign currency(293) -   (1,564) -  
Total Revenues, As Reported169,124  121,752 38.9% 567,150  439,583 29.0%

Currency impacts on total revenues for the current quarter have been derived by translating current quarter revenues at the prevailing average foreign currency rates during the prior year quarter, as applicable.

Reconciliation of Adjusted EBITDA and Adjusted net (loss) income to net (loss) income
(In thousands, except share and per share data)

Adjusted EBITDA and adjusted net (loss) income are not measures of financial performance under generally accepted accounting principles (“GAAP”). Management believes Adjusted EBITDA and adjusted net (loss) income, in addition to operating profit, net (loss) income and other GAAP measures, is useful to investors to evaluate the Company’s results because it excludes certain items that are not directly related to the Company’s core operating performance. Investors should recognize that Adjusted EBITDA and adjusted net (loss) income might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.

Reconciliations of the non-GAAP measures used in this press release are included in the tables attached to this press release, to the extent available without unreasonable effort. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures.

A reconciliation of Adjusted net (loss) income and Adjusted EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G follows, with amounts in thousands:

  Three months ended  Six months ended
  Jun 30, Jun 30,
  2022  2021  2022  2021 
Net (loss) income 33,413  19,642  54,366  27,924 
Less: Income (loss) attributable to non-controlling interest (219) (51) (319) (140)
(Loss) Income attributable to parent 33,194  19,591  54,047  27,784 
Foreign currency transactions losses (gains) (2,503) (190) 406  (145)
Non Recurring expenses (extinguishment of debt, bond issuance costs, provision for bad debt, acquisition related costs and other) 646  975  1,409  2,258 
Non Recurring professional fees 678  -  3,402  - 
Extinguishment of debt - Call Option Premium -  -  -  8,610 
Extinguishment of debt - Deferred Costs -  (169) -  2,368 
Joint Venture VA (Saint Gobain) adjustments 936  68  972  147 
Change in FV of Hedging Derivatives -  3  -  (182)
Tax impact of adjustments at statutory rate 73  (206) (1,857) (3,917)
Adjusted net (loss) income 33,024  20,072  58,379  36,923 
Basic income (loss) per share 0.70  0.41  1.13  0.58 
Diluted income (loss) per share 0.70  0.41  1.13  0.58 
Diluted Adjusted net income (loss) per share 0.69  0.42  1.22  0.77 
Diluted Weighted Average Common Shares Outstanding in thousands 47,675  47,675  47,675  47,675 
Basic weighted average common shares outstanding in thousands 47,675  47,675  47,675  47,675 
Diluted weighted average common shares outstanding in thousands 47,675  47,675  47,675  47,675 
  Three months ended Six months ended
  Jun 30, Jun 30,
  2022  2021  2022  2021 
Net (loss) income 33,413  19,643  54,366  27,924 
Less: Income (loss) attributable to non-controlling interest (219) (51) (319) (140)
(Loss) Income attributable to parent 33,194  19,592  54,047  27,784 
Interest expense and deferred cost of financing 1,715  2,442  3,183  5,964 
Income tax (benefit) provision 14,692  7,601  25,250  11,289 
Depreciation & amortization 5,211  5,218  10,462  10,507 
Foreign currency transactions losses (gains) (2,503) (190) 406  (145)
Non Recurring expenses (extinguishment of debt, bond issuance costs, provision for bad debt, acquisition related costs and other) 646  975  1,409  2,003 
Non Recurring professional fees 678  -  3,402  - 
Extinguishment of debt - Call Option Premium -  -  -  8,610 
Extinguishment of debt - Deferred Costs -  (169) -  2,368 
Joint Venture VA (Saint Gobain) EBITDA adjustments 936  503  1,761  1,341 
Change in FV of Hedging Derivatives -  3  -  (182)
Adjusted EBITDA 54,569  35,975  99,920  69,539