Tecnoglass Reports Record Second Quarter 2021 Results

- Single-Family Residential Revenues Increased 159% Year-Over-Year, Representing 37% of U.S. Revenues -

- Commercial Revenues Expanded 22% Year-Over-Year Driven by Continued End Market Recovery -

- Total Revenues Up 49% Year-Over-Year to a Record $121.7 Million -

- Record Second Quarter Gross Margin of 40.0%, Up 120 Basis Points Year-Over-Year -

- Net Profit of $19.2 Million; Adjusted Net Income¹ of $19.7 Million, or $0.41 Per Diluted Share

- Adjusted EBITDA¹ Up 52.7% Year-Over-Year to a Record $35.6 Million, or 29.3% of Total Revenues -

- Record Cash Flow From Operations of $31.8 Million -

- Backlog Expands to a Record $559 Million, Despite Single Family Residential Activity Largely Underrepresented in Backlog -

- Increases Full Year 2021 Growth Outlook to Adjusted EBITDA¹ of $125 Million to $135 Million on Total Revenues of $450 Million to $465 Million -

BARRANQUILLA, Colombia, Aug. 06, 2021 (GLOBE NEWSWIRE) -- Tecnoglass, Inc. (NASDAQ: 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, 2021.

José Manuel Daes, Chief Executive Officer of Tecnoglass, commented, “I am thrilled to announce our most profitable quarter on record, building on our team’s outstanding performance which again drove record results in nearly all financial metrics. During the quarter, we were able to drive substantial operating leverage while expanding our mix of single-family residential sales in the U.S., resulting in another quarter of record revenues, margin expansion, and our 5^th straight quarter of significant cash flow generation. Our strategically located, vertically integrated and low cost operations have provided us with sustainable competitive advantages that truly differentiate Tecnoglass in the tight supply environment that our industry is experiencing. We are winning new business and strengthening our existing customer relationships because we are able to supply superior quality products with short lead times at an attractive value, which is undoubtedly advancing our reputation as a global leader in both architectural glass innovation and service. Moving forward, we will continue to execute our proven strategy to capture elevated demand in the U.S., while approaching capital allocation with a returns oriented mindset. Our strong balance sheet, very low leverage profile and ample capital resources squarely position us to do so as we plan to further invest in operational enhancements. The future remains extremely bright for Tecnoglass and we are firmly situated to deliver another year of record results in 2021.”

Christian Daes, Chief Operating Officer of Tecnoglass, added, “Our ability to timely deliver best-in-class products led to outsized revenue growth and market share gains in the U.S. during the second quarter. Revenues in single-family residential increased by almost 160% year-over-year and nearly doubled compared to the second quarter of 2019. This accomplishment is a testament to the market leading platform we have created and we could not be more pleased with our progress since we entered the single-family residential business four years ago. This attractive category now represents 34% of our total revenues compared to 19% in the prior year period. Additionally, we ended the second quarter with a record backlog across our growing footprint as large scale commercial projects continue to resume construction activity. Looking to the remainder of 2021, we are pleased with our positioning and continue to expect strength in residential demand to drive the majority of our growth.”

Second Quarter 2021 Results

Total revenues for the second quarter of 2021 increased 48.5% to $121.7 million, compared to $81.9 million in the prior year quarter. U.S. revenues of $109.9 million, which represented 90% of total revenues, grew 38.8% compared to $79.1 million in the prior year quarter, driven by strong growth in single family residential activity, a continued recovery in commercial construction activity, and market share gains. Colombia revenue, a majority of which is represented by long-term contracts priced in Colombian Pesos but indexed to the U.S. Dollar, grew to $8.2 million, compared to $1.8 million in the prior year quarter. Changes in foreign currency exchange rates had a negligible impact on Colombia and total revenues in the quarter.

Gross profit for the second quarter of 2021 grew 52.9% to $48.6 million, representing a 40.0% gross margin, compared to gross profit of $31.8 million, representing a 38.8% gross margin in the prior year quarter. The 120 basis point improvement in gross margin mainly reflected greater operating efficiencies and a higher mix of revenue from manufacturing versus installation activity as Tecnoglass increased its mix of single family residential products. Selling, general and administrative expense (“SG&A”) was $20.2 million compared to $16.6 million in the prior year quarter, primarily attributable to higher variable expenses related to ground and marine transportation. As a percent of total revenues, SG&A improved to 16.6% compared to 20.2% 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 $19.2 million, or $0.40 per diluted share, in the second quarter of 2021 compared to net income of $16.2 million, or $0.35 per diluted share, in the prior year quarter, including an after-tax non-cash foreign exchange transaction gain of $0.2 million in the second quarter of 2021 and a $13.3 million gain in the second quarter of 2020. 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 $19.7 million, or $0.41 per diluted share, in the second quarter of 2021 compared to adjusted net income of $9.4 million, or $0.20 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 52.7% to $35.6 million, or 29.3% of total revenues in the second quarter of 2021, compared to $23.3 million, or 28.4% 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 in the second quarter 2021 included $0.5 million in contribution from the Company’s joint venture with Saint-Gobain, compared to $0.9 million in the prior year quarter.

Dividend

The Company declared a quarterly cash dividend of $0.0275 per share for the second quarter of 2021, which was paid on July 30, 2021 to shareholders of record as of the close of business on June 30, 2021.

Balance Sheet & Liquidity

The Company ended the second quarter of 2021 with total liquidity of approximately $167 million, including cash and cash equivalents of $100.3 million and availability under its committed revolving credit facilities of $66.9 million. Cash provided by operating activities of $31.8 million improved by $7.6 million compared to the prior year quarter, attributable to higher profitability as well as more efficient inventory and working capital management. Given the Company’s continued growth in adjusted EBITDA¹ and strong cash generation, debt leverage continues to trend lower and now stands at 1.1 times LTM net debt to adjusted EBITDA¹, compared to 2.2 times in the prior year quarter.

Full Year 2021 Outlook

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “We are increasing our full year 2021 outlook for total revenues and adjusted EBITDA¹ growth to reflect our continued outperformance in the first half of 2021, including strong demand into July and August and further share gains. We now expect full year 2021 total revenues to grow to a range of $450 million to $465 million. We now anticipate full year adjusted EBITDA¹ to increase to a range of $125 million to $135 million, implying year-over-year growth of approximately 33% at the midpoint. We continue to believe our ability to efficiently manage costs while providing exceptional delivery lead times should collectively allow us to achieve above market growth and record results for the full year 2021.”

Webcast and Conference Call

Management will host a webcast and conference call on Friday, August 6, 2021 at 9:00 a.m. eastern time (8:00 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. Due to potential extended wait times to access the conference call via dial-in, the Company encourages use of the webcast. For those unable to access the webcast, the conference call will be accessible by dialing 1-877-705-6003 (domestic) or 1-201-493-6725 (international). Upon dialing in, please request to join the Tecnoglass Second Quarter 2021 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 (844) 512-2921 (Domestic) or (412) 317-6671 (International) and entering pass code: 13721832.

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 2.7 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.

¹ Adjusted net income (loss) and Adjusted EBITDA in both periods are reconciled in the table below. 

Investor Relations:

Santiago Giraldo
CFO
305-503-9062
investorrelations@tecnoglass.com

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

Tecnoglass Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share data)
(Unaudited)

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

Revenues by Region
(Amounts in thousands)
(Unaudited)

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

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.

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)
(Unaudited)

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: