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Tecnoglass Announces 2014 Third Quarter Financial Results

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Tecnoglass, Inc. (NASDAQ: TGLS; OTCBB: TGLSW) (“Tecnoglass” or the “Company”), a leading manufacturer of architectural glass, windows, and associated aluminum products for the global residential and commercial construction industries, today announced financial results for the third quarter (“Q3″) and nine months ended September 30, 2014.

Jos’e M. Daes, Chief Executive Officer of Tecnoglass, commented, “Our Q3 results were driven by continuing growth in the United States, including increased sales outside of our traditional base in south Florida, and the manufacturing and delivery cost advantages afforded by our location in Barranquilla, Colombia. We recorded record U.S. sales of $26.8 million in Q3 2014, which comprised over 50% of our total quarterly revenues. During Q3 2014, we signed a $40 million contract with one of the largest real estate development firms in the U.S. to manufacture and supply windows for 10 multi-dwelling residential buildings to be constructed in South Florida. Deliveries are expected to commence in Q1 2015.”

Mr. Daes concluded, “As reflected in our guidance, we are expecting continued growth in 2015 and 2016 for Tecnoglass. In this regard, we have commenced a fully-funded $50 million capital investment program at our facility in Barranquilla that, once completed in mid-2015, should increase our manufacturing capacity by approximately 50%. Including this current program, Tecnoglass has committed approximately $80 million in growth-related capital expenditures over the last four years.”

Third Quarter 2014 Results

Revenues for Q3 2014 rose 17.5% to $53.5 million from $45.5 million in Q3 2013. Q3 2014 U.S. sales increased by $9.1 million to $26.8 million, and sales to Panama rose by $0.6 million to $2.6 million. These increases more than offset lower sales to Colombia, which declined by $2.0 million to $22.4 million.

Gross profit rose to $16.4 million, or 30.8% of revenues, from $14.3 million, or 31.5% of revenues, in Q3 2013.

Selling and administrative expenses in Q3 2014 were $8.8 million, or 16.5% of revenues, as compared to $8.2 million, or 18.1% of revenues, in Q3 2013. The dollar increase was a result of higher personnel costs driven by the growth in the Company’s operations and higher public company expenses, offset by a decline in sales commissions resulting from new sales arrangements in key markets.

Operating income improved to $7.7 million from $6.1 million in the same period last year. As a percentage of revenues, operating income increased to 14.3% from 13.4% in Q3 2013, reflecting the operating leverage inherent in the Company’s business.

Net income for Q3 2014 was $11.3 million, or $0.40 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, in Q3 2013. Net income in Q3 2014 included an extraordinary, non-cash, non-operating gain of $6.8 million as a result of the decrease in the fair value of the warrant liability in the quarterly period ended September 30, 2014 relative to its fair value at the end of the previous quarter ended June 30, 2014. There was no comparable warrant liability at September 30, 2013 as this derivative obligation was included in the results of operations of the Company since the date of the merger on December 20, 2013 and thereafter. The fair value of the warrants liability changes in response to market factors not directly controlled by the Company such as the market price of the Company’s shares and the volatility index of comparable companies. There are no income tax effects as the Company is registered in the Cayman Islands.

Excluding the $6.8 million extraordinary gain for the warrant liability, net income for Q3 2014 was $4.5 million, or $0.16 per diluted share.

Adjusted EBITDA was $11.5 million, a 33.0% increase from $8.6 million in Q3 2013.


Consolidated backlog at September 30, 2014 was $220 million. This compared to consolidated backlog of $132 million at June 30, 2014 and $140 million at March 31, 2014. Backlog consists primarily of contract sales for projects that can last up to several years until completion. Backlog should not be considered a comprehensive indicator of future revenues or prospects, as a significant portion of Tecnoglass’ revenues are derived from non-contract, standard sales.

Reaffirms 2014 Forecast, Provides Guidance for 2015

Based on its year-to-date performance, current market conditions, and other factors, Tecnoglass reaffirms its 2014 guidance of approximately $206 million in revenue and Adjusted EBITDA of approximately $46.0 million. This guidance represents revenue growth of approximately 12.4% and growth in Adjusted EBITDA of approximately 19.5% from 2013.

For 2015, Tecnoglass estimates that revenues will approximate $240 million and Adjusted EBITDA will approximate $56 million. This guidance represents revenue growth of approximately 16.5% from the 2014 forecast and growth in Adjusted EBITDA of approximately 21.7% from the 2014 forecast.

Conference Call

Management will host a conference call on Thursday, November 13, 2014 at 11:00 am ET to discuss these results and other matters. Interested parties may participate in the call by dialing:

  • (877) 423-9820 (Domestic)
  • (201) 493-6749 (International)

The conference call will also be broadcast live via the Investor Information sector of Tecnoglass’s website at To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the website for approximately 90 days.

About Tecnoglass

Tecnoglass is the #1 architectural glass transformation company in Latin America, providing hi-spec glass, windows and aluminum products for the global residential and commercial construction industries. Headquartered in Barranquilla, Colombia, Tecnoglass operates out of a 2.3 million square foot vertically-integrated, state-of-the-art manufacturing complex that provides easy access to the Americas, the Caribbean, and the Pacific. Tecnoglass sells to more than 800 customers in North, Central and South America, with the United States accounting for approximately 36% of Company revenues in 2013. Tecnoglass’s tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), Imbanaco Medical Center (Cali), Trump Plaza (Panama), Trump Tower (Miami), and The Woodlands (Houston). For more information, please visit

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’s 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’s 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, changes in assumptions or otherwise.

Tecnoglass Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(Amounts in thousands, except share and per share amounts)


Three months ended September 30, Nine months ended September 30,
2014 2013 2014 2013

Operating revenues $ 53,453 45,501 $ 153,230 $ 129,462
Cost of sales 37,008 31,184 105,540 89,873
Gross Profit 16,445 14,317 47,690 39,589
Operating expenses, net 8,795 8,219 23,764 22,690
Operating income 7,650 6,098 23,926 16,899
(Gain)/Loss on change in fair value of warrant liability (6,756) 6,769
Non-operating revenues (1,003) (536) (3,480) (2,277)
Interest expense 2,380 1,888 6,647 5,375
Income before taxes 13,029 4,746 13,990 13,801
Income tax provision 1,770 1,552 7,004 4,902
Net income $ 11,259 $ 3,194 $ 6,986 $ 8,899
Comprehensive income
Net income 11,259 3,194 6,986 8,899
Foreign currency translation adjustments (6,680) (327) (3,971) 1,309
Total comprehensive income $ 4,579 $ 2,867 $ 3,015 $ 10,208
Basic income per share $ 0.46 $ 0.16 $ 0.29 $ 0.43
Diluted income per share $ 0.40 $ 0.16 $ 0.25 $ 0.43
Basic weighted average common shares outstanding 24,364,014 20,567,141 24,306,288 20,567,141
Diluted weighted average common shares outstanding 28,137,166 20,567,141 27,761,268 20,567,141

Tecnoglass Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

September 30, December 31,
2014 2013
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 17,744 $ 2,866
Restricted cash 3,633
Due from transfer agent 741 15,908
Subscription receivable 6,611
Trade accounts receivable, net 65,634 59,010
Due from related parties 20,504 19,058
Inventories 26,276 24,181
Other current assets 28,502 29,303
Total current assets 159,401 160,570
Long term assets:
Property, plant and equipment, net 102,620 87,382
Other long term assets 6,580 262
Total long term assets 109,200 87,644
Total assets $ 268,601 $ 248,214
Current liabilities:
Accounts payable and accrued expenses $ 34,407 $ 32,950
Due to related parties 2,444 8,397
Current portion of customer advances on uncompleted contracts 9,165 24,805
Short-term debt and current portion of long term debt 56,567 29,720
Note payable to shareholder 80 80
Other current liabilities 14,572 12,545
Total current liabilities 117,235 108,497
Long term liabilities:
Warrant liability 25,049 18,280
Customer advances on uncompleted contracts 10,754 8,220
Long term debt 45,686 48,097
Total liabilities 198,724 183,094
Shareholders’ equity
Preferred shares, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively
Ordinary shares, $0.0001 par value, 100,000,000 shares authorized, 24,402,933 and 24,214,670 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively 2 2
Legal reserves 1,367 1,367
Additional paid-in capital 47,590 45,850
Retained earnings 25,475 18,488
Cumulative translation Adjustment (4,557) (587)
Total shareholders’ equity 69,877 65,120
Total liabilities and shareholders’ equity $ 268,601 $ 248,214

Adjusted EBITDA Reconciliation

Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management believes Adjusted EBITDA, in addition to operating profit, net 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 might not be comparable to similarly-titled measures of other companies. This measure should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G follows:









Q3 2013








Q3 2014









9 Month








9 Month









2014 F









2015 F








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