Tecnoglass Reports Third Quarter 2020 Results
Tecnoglass reported a net income of $8.3 million for Q3 2020, with adjusted net income at $12.7 million or $0.28 per diluted share. Total revenues reached $103.3 million, growing 3.1% in U.S. markets. The company achieved an Adjusted EBITDA of $28.5 million, improved gross margin to 38.8%, and generated $51 million in cash flow year-to-date. Tecnoglass announced a new $300 million credit facility to lower interest rates. The full-year EBITDA outlook is $95 million to $100 million.
- Net income for Q3 2020 was $8.3 million, up from a net loss of $1.3 million in Q3 2019.
- Adjusted EBITDA increased by 19% year-over-year to $28.5 million, marking 27.5% of total revenues.
- Gross margin improved to 38.8%, an increase of 580 basis points year-over-year.
- New $300 million credit facility expected to significantly reduce interest expenses by approximately $11 million annually.
- Cash flow from operations approximated 71% of Adjusted EBITDA year-to-date.
- Total revenues decreased from $108.5 million in Q3 2019 to $103.3 million in Q3 2020, largely due to declined revenues from Colombia and other Latin American regions.
- Adverse foreign currency exchange rates negatively impacted revenues by $0.9 million.
- Selling, general, and administrative expenses were 19.3% of total revenues, up from 18.6% in the previous year.
- Reports Net Income of
- Increases Adjusted EBITDA1 by
- Produces Cash Flow From Operations Approximating
- New
- Provides Full Year 2020 Outlook for Adjusted EBITDA of
Third Quarter 2020 Highlights
- Total revenues of
$103.3 million , with3.1% growth in U.S. revenues - Adjusted net income1 of
$12.7 million , or$0.28 per diluted share - Gross margin improved 580 basis points year-over-year to
38.8% - Adjusted EBITDA1 of
$28.5 million , representing27.5% of total revenues - Cash flow from operations of
$26.2 million brings year to date total to$51.0 million - Expanded backlog up slightly year-over-year to
$536 million - Declared a
$0.02 75 per share cash dividend - In November 2020, announced a new
$300 million credit facility, expanding the Company’s borrowing capacity, significantly reducing its cost of capital, lowering cash interest expense by an estimated$11 million annually, and extending debt maturities to 2025
BARRANQUILLA, Colombia, Nov. 06, 2020 (GLOBE NEWSWIRE) -- Tecnoglass, Inc. (NASDAQ: TGLS) (“Tecnoglass” or the “Company”), a leading manufacturer of architectural glass, windows, and associated aluminum products for the global residential and commercial construction industries, today reported financial results for the third quarter ended September 30, 2020.
José Manuel Daes, Chief Executive Officer of Tecnoglass, commented, “I could not be more thrilled with the truly outstanding performance of our Company, delivering record year-to-date Adjusted EBITDA of
José Manuel Daes continued, “We are extremely pleased that our consortium of mostly U.S. and European based lenders have recognized our record of success, as well as the benefits of our strategically located and vertically-integrated operations. This is reflected in our new
Christian Daes, Chief Operating Officer of Tecnoglass, added, “Our third quarter results reflect a continued recovery in the U.S., particularly in residential, and overall strong demand for our best-in-class architectural glass products. We recently introduced a new product for homebuilders that should help us further expand our addressable market in single family housing beyond renovation projects and outside of hurricane prone markets. Overall market share gains and successful expansion into new U.S. geographies are allowing us to produce growth in a complex environment. As we move to the end of 2020, we are excited by the momentum in our business. We believe our innovative product portfolio, strong industry relationships and structural competitive advantages position us to continue growing faster than our end markets into 2021 and beyond.”
Third Quarter 2020 Results
Total revenues for the third quarter of 2020 were
Gross profit for the third quarter of 2020 grew
Net income was
Adjusted net income1 was
Adjusted EBITDA1, as reconciled in the table below, was
Dividend
The Company declared a quarterly cash dividend of
Balance Sheet & Liquidity
On November 2, 2020, Tecnoglass announced a new
The Company intends to use the net proceeds to repay all outstanding borrowings under its previous credit facilities. On a pro forma basis giving effect to the addition of the new facility and pay down of previous facilities, the Company had total liquidity of approximately
The Company’s existing
Business Outlook
Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “Positive trends in our business have continued into the fourth quarter, with single-family residential representing a growing share of our revenues. Based on our current invoicing schedule and underlying market demand, we are providing a full year 2020 Adjusted EBITDA outlook of
Webcast and Conference Call
Management will host a webcast and conference call on Friday, November 6, 2020 at 10:00 a.m. eastern time (10:00 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 Third Quarter 2020 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: 13712052.
About Tecnoglass
Tecnoglass Inc. is a leading manufacturer of architectural glass, windows, and associated aluminum products for the global commercial and residential construction industries. Tecnoglass is the #1 architectural glass transformation company in Latin America and the second largest glass fabricator serving the United States. Headquartered in Barranquilla, Colombia, the Company operates out of a 2.7 million square foot vertically-integrated, state- of-the-art manufacturing complex that provides easy access to the Americas, the Caribbean, and the Pacific. Tecnoglass supplies over 1000 customers in North, Central and South America, with the United States accounting for more than
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)
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 69,431 | $ | 47,862 | ||||
| Investments | 1,684 | 2,304 | ||||||
| Trade accounts receivable, net | 87,794 | 110,558 | ||||||
| Due from related parties | 8,667 | 8,057 | ||||||
| Inventories | 73,763 | 82,714 | ||||||
| Contract assets – current portion | 28,416 | 42,014 | ||||||
| Other current assets | 12,171 | 29,340 | ||||||
| Total current assets | $ | 281,926 | $ | 322,849 | ||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | $ | 134,643 | $ | 154,609 | ||||
| Deferred income taxes | 11,681 | 4,595 | ||||||
| Contract assets – non-current | 7,814 | 7,059 | ||||||
| Due from related parties - long term | 726 | 1,786 | ||||||
| Long-term trade accounts receivable | 1,101 | - | ||||||
| Intangible assets | 5,323 | 6,703 | ||||||
| Goodwill | 23,561 | 23,561 | ||||||
| Long-term investments | 46,385 | 45,596 | ||||||
| Other long-term assets | 2,914 | 2,910 | ||||||
| Total long-term assets | 234,148 | 246,819 | ||||||
| Total assets | $ | 516,074 | $ | 569,668 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term debt and current portion of long-term debt | $ | 174 | $ | 16,084 | ||||
| Trade accounts payable and accrued expenses | 46,605 | 61,878 | ||||||
| Accrued interest expense | 2,911 | 7,645 | ||||||
| Due to related parties | 4,056 | 4,415 | ||||||
| Dividends payable | 1,309 | 67 | ||||||
| Contract liability – current portion | 18,381 | 12,459 | ||||||
| Due to equity partners | 10,900 | 10,900 | ||||||
| Other current liabilities | 14,355 | 15,563 | ||||||
| Total current liabilities | $ | 98,691 | $ | 129,011 | ||||
| Long-term liabilities: | ||||||||
| Deferred income taxes | $ | 447 | $ | 411 | ||||
| Long-term payable associated to GM&P acquisition | - | 8,500 | ||||||
| Long-term liabilities from related parties | 639 | 622 | ||||||
| Contract liability – non-current | 883 | 187 | ||||||
| Long-term debt | 246,206 | 243,727 | ||||||
| Total long-term liabilities | 248,175 | 253,447 | ||||||
| Total liabilities | $ | 346,866 | $ | 382,458 | ||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Preferred shares, | $ | - | $ | - | ||||
| Ordinary shares, | 5 | 5 | ||||||
| Legal Reserves | 2,273 | 1,367 | ||||||
| Additional paid-in capital | 208,390 | 208,283 | ||||||
| Retained earnings | 17,181 | 16,213 | ||||||
| Accumulated other comprehensive (loss) | (59,150 | ) | (39,264 | ) | ||||
| Shareholders’ equity attributable to controlling interest | 168,699 | 186,604 | ||||||
| Shareholders’ equity attributable to non-controlling interest | 509 | 606 | ||||||
| Total shareholders’ equity | 169,208 | 187,210 | ||||||
| Total liabilities and shareholders’ equity | $ | 516,074 | $ | 569,668 | ||||
Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share data)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| External customers | $ | 102,980 | $ | 106,741 | $ | 270,676 | $ | 323,808 | ||||||||||||
| Related parties | 329 | 1,729 | 1,873 | 5,713 | ||||||||||||||||
| Total operating revenues | 103,309 | 108,470 | 272,549 | 329,521 | ||||||||||||||||
| Cost of sales | 63,188 | 72,729 | 170,205 | 223,051 | ||||||||||||||||
| Gross profit | 40,121 | 35,741 | 102,344 | 106,470 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Selling expense | (10,534 | ) | (11,334 | ) | (29,163 | ) | (32,115 | ) | ||||||||||||
| General and administrative expense | (9,381 | ) | (8,855 | ) | (24,601 | ) | (26,303 | ) | ||||||||||||
| Total operating expenses | (19,915 | ) | (20,189 | ) | (53,764 | ) | (58,418 | ) | ||||||||||||
| Operating income | 20,206 | 15,552 | 48,580 | 48,052 | ||||||||||||||||
| Non-operating income (expenses), net | (138 | ) | 450 | (232 | ) | 1,078 | ||||||||||||||
| Equity method (loss) income | 695 | 295 | 789 | 273 | ||||||||||||||||
| Foreign currency transactions gains(losses) | (3,066 | ) | (12,006 | ) | (22,223 | ) | (9,921 | ) | ||||||||||||
| Interest expense and deferred cost of financing | (6,147 | ) | (5,876 | ) | (17,236 | ) | (17,220 | ) | ||||||||||||
| Income (Loss) before taxes | 11,550 | (1,585 | ) | 9,678 | 22,262 | |||||||||||||||
| Income tax provision | (3,279 | ) | 266 | (4,021 | ) | (8,590 | ) | |||||||||||||
| Net income (loss) | $ | 8,271 | $ | (1,319 | ) | $ | 5,657 | $ | 13,672 | |||||||||||
| Loss (Income) attributable to non-controlling interest | 52 | 144 | 97 | (30 | ) | |||||||||||||||
| Income (Loss) attributable to parent | $ | 8,323 | $ | (1,175 | ) | $ | 5,754 | $ | 13,642 | |||||||||||
| Comprehensive income: | ||||||||||||||||||||
| Net income (loss) | $ | 8,271 | $ | (1,319 | ) | $ | 5,657 | $ | 13,672 | |||||||||||
| Foreign currency translation adjustments | (4,024 | ) | (8,486 | ) | (18,945 | ) | (8,768 | ) | ||||||||||||
| Change in fair value derivative contracts | 506 | (941 | ) | (941 | ) | (941 | ) | |||||||||||||
| Total comprehensive income (loss) | $ | 4,753 | $ | (10,746 | ) | $ | (14,229 | ) | $ | 3,963 | ||||||||||
| Comprehensive loss (income) attributable to non-controlling interest | 52 | 144 | 97 | (30 | ) | |||||||||||||||
| Total comprehensive income (loss) attributable to parent | $ | 4,805 | $ | (10,602 | ) | $ | (14,132 | ) | $ | 3,933 | ||||||||||
| Basic income (loss) per share | $ | 0.18 | $ | (0.03 | ) | $ | 0.12 | $ | 0.31 | |||||||||||
| Diluted income (loss) per share | $ | 0.18 | $ | (0.03 | ) | $ | 0.12 | $ | 0.31 | |||||||||||
| Basic weighted average common shares outstanding | 46,117,631 | 46,291,032 | 46,117,631 | 44,395,504 | ||||||||||||||||
| Diluted weighted average common shares outstanding | 46,117,631 | 46,291,032 | 46,117,631 | 44,395,504 | ||||||||||||||||
Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine months ended September 30, | ||||||||||
| 2020 | 2019 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Net (loss) income | $ | 5,657 | $ | 13,672 | ||||||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||||
| Provision for bad debts | 1,035 | 1,046 | ||||||||
| Depreciation and amortization | 15,421 | 17,189 | ||||||||
| Deferred income taxes | (7,612 | ) | (5,140 | ) | ||||||
| Equity method (loss) income | (789 | ) | (273 | ) | ||||||
| Deferred cost of financing | 1,306 | 1,213 | ||||||||
| Other non-cash adjustments | 158 | 41 | ||||||||
| Unrealized currency translation losses (gains) | 24,197 | 13,812 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Trade accounts receivables | 6,353 | (29,779 | ) | |||||||
| Inventories | (5,127 | ) | 3,939 | |||||||
| Prepaid expenses | (686 | ) | (3,013 | ) | ||||||
| Other assets | 12,455 | (4,829 | ) | |||||||
| Trade accounts payable and accrued expenses | (14,612 | ) | 3,576 | |||||||
| Accrued interest expense | (4,678 | ) | (4,362 | ) | ||||||
| Taxes payable | (569 | ) | 3,645 | |||||||
| Labor liabilities | 5 | 626 | ||||||||
| Contract assets and liabilities | 18,851 | (5,099 | ) | |||||||
| Related parties |
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FAQ
What was Tecnoglass's net income for Q3 2020?
Tecnoglass reported a net income of $8.3 million for Q3 2020.
How did Tecnoglass's Adjusted EBITDA perform in Q3 2020?
Adjusted EBITDA increased by 19% year-over-year to $28.5 million, representing 27.5% of total revenues.
What are the projected Adjusted EBITDA figures for Tecnoglass in 2020?
Tecnoglass provided a full-year Adjusted EBITDA outlook of $95 million to $100 million.
What impact did foreign currency exchange rates have on Tecnoglass's revenues?
Foreign currency exchange rates had an adverse impact of $0.9 million on revenues.
What was Tecnoglass's gross margin in Q3 2020?
The gross margin for Q3 2020 improved to 38.8%, an increase of 580 basis points year-over-year.
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