Barranquilla based architectural glass and aluminum manufacturer Tecnoglass (NASDAQ: TGLS NYSE: TGLS) has announced that it has transferred its common share listing from the NASDAQ stock exchange to the New York Stock Exchange (NYSE) under its current symbol TGLS, after continuing a string of record quarterly results, with total quarterly revenues now exceeding $134 million USD.
Total revenues for the first quarter of 2022 increased 20.6% to $134.5 million, compared to $111.6 million in the prior year’s same quarter, driven by strong growth in single family residential activity and market share gains. Single-family residential revenues increased approximately 155% year-over-year, representing 44.4% of total revenues for the first quarter, helped by the introduction of new products, an expanding customer base and robust housing demand. Changes in foreign currency exchange rates had an adverse impact of $400,000 USD on Colombia and total revenues in the quarter.
“The strong momentum in our business has continued through 2022, driving yet another quarter of record results across our industry leading platform. As we’ve previously highlighted, the step-change in our performance continues to be derived from our strategic automation and capacity enhancements, focused efforts to control costs, and our ability to leverage our vertically integrated structure to deliver best-in-class service with attractive lead times to our expanding customer base,” said CEO and Co-Founder José Manuel Daes.
“We also continue to experience favorable single-family residential trends and market share gains as we further strengthen our presence in key U.S. regions, particularly in the Southeast where secular demand tailwinds drove our outperformance. These factors, along with our careful working capital management, helped to generate our 9th consecutive quarter of strong cash flow. Looking to the balance of 2022, we are situated to grow our position as an industry leader and drive operational excellence throughout our organization to create additional value for all our stakeholders,” he continued.
Tecnoglass declared a quarterly cash dividend of $0.065 per share for the first quarter of 2022
Regarding the company’s move to the NYSE, he added: “Our transfer to the NYSE marks a significant milestone in Tecnoglass’ evolution as a publicly traded company. The NYSE is home to many of the world’s most well-established and valuable companies and we believe it provides unparalleled exposure to reach more investors, increase trading liquidity and raise visibility with many stakeholders, ultimately enhancing value for our highly successful company.”
Christian Daes, Chief Operating Officer and Co-Founder also added “We are excited to become a part of the world´s largest stock exchange. We are joining a very exclusive club of companies that adhere to best practices and corporate governance. Thanks to the NYSE for recognizing the Company´s successful strategy and trajectory. We also want to thank NASDAQ for its partnership with Tecnoglass since becoming a publicly traded company and for its support throughout the years.”
Discussing the quarterly results, Christian Daes elaborated: “We are extremely pleased with the growth in our single-family residential business in which our quarterly revenues again more than doubled year-over-year, representing 44% of our total revenues. Our commercial business also continues to strengthen, with our record backlog at quarter end reflecting an increasing number of commercial projects in our pipeline through 2022. The combination of our solid trajectory in single-family activity, our growing base of commercial projects and the proven efficiencies in our operations put us on path for another record year of adjusted EBITDA margins. Overall, we are thrilled to report another consecutive quarter of outstanding results and reiterate our view that Tecnoglass’ unique vertically integrated model, innovative product pipeline, and strong geographic positioning collectively put us in prime position to accomplish our objectives in 2022 and beyond.”
Gross profit for the first quarter of 2022 grew 33.2% to $60.3 million, representing a 44.8% gross margin, compared to gross profit of $45.3 million, representing a 40.6% gross margin in the prior year quarter. The 420 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 $26.4 million compared to $19.9 million in the prior year quarter, with approximately half of the increase attributable to shipping expense because of a higher sales volume and higher shipping rates. The remainder, or $2.7 million, of the increase in SG&A was due to non-recurring professional fees and other costs to finalize a Special Committee assessment in response to a short seller’s report issued in December 2021. The findings from the Special Committee’s review, completed in March 2022, did not result in an adverse effect on the company’s consolidated financial statements, results of operations, or liquidity for the fiscal year ended December 31, 2021 or other previously reported periods.
Net income was $21.0 million, or $0.44 per diluted share, in the first quarter of 2022 compared to net income of $8.3 million, or $0.17 per diluted share, in the prior year quarter, including a non-cash foreign exchange transaction loss of $2.9 million in the first quarter of 2022 and a $0.05 million loss in the first quarter of 2021. As previously disclosed, these non-cash gains and losses are related to the accounting re-measurement of US Dollar denominated assets and liabilities against the Colombian Peso as functional currency.
Adjusted net income was $25.4 million, or $0.53 per diluted share, in the first quarter of 2022 compared to adjusted net income of $16.6 million, or $0.35 per diluted share, in the prior year quarter. Adjusted net income, 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 EBITDA, as reconciled in the table below, increased 35.1% to $45.4 million, or 33.7% of total revenues, in the first quarter of 2022, compared to $33.6 million, or 30.1% 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 EBITDA included a $0.8 million contribution from the company’s joint venture with Saint-Gobain during both the first quarter 2022 and the prior year quarter.
Tecnoglass declared a quarterly cash dividend of $0.065 per share for the first quarter of 2022, which was paid on April 29, 2022 to shareholders of record as of the close of business on March 31, 2022.
Tecnoglass ended the first quarter of 2022 with total liquidity of approximately $250 million, including cash and cash equivalents of $84.4 million and availability under its committed revolving credit facilities of $165 million. Given the company’s continued growth in adjusted EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.6 times LTM net debt to adjusted EBITDA, compared to 1.4 times in the prior year quarter. Given its strong cash flow generation, the company voluntarily prepaid $15 million under its Syndicated Term Loan facility during the quarter.
“Based on our strong momentum into the second quarter and growing project pipeline, we are increasing our full year 2022 outlook for revenues to grow to a range of $580 million to $605 million and for adjusted EBITDA to increase to a range of $185 million to $195 million,” said CFO Santiago Giraldo. “This implies adjusted EBITDA growth of approximately 26% at the midpoint. Our structural advantages through our vertically integrated business model, along with our expectations for robust demand to continue for our products and services in the US collectively provide us with confidence in our ability to report another year of record results and cash flow in the full year 2022.”
Above photo: Christian Dae (L)s & Jose Manuel Daes (R) of Tecnoglass (Photo credit – https://imgur.com/user/josemanueldaes)