Additionally, the ES Pivot Door was recognized in Luxe Magazine’s RED (Residential Excellence in Design) Awards, earning the Readers’ Choice award. This accolade, part of the luxury residential design sector, acknowledges achievements in residential architecture, interior design, and landscape architecture.

Tecnoglass CEO José Manuel Daes remarked that the awards reflect the company’s focus on innovation and design in high-performance window and door systems.

The announcement included a “new corporate identity” with a new logo, branding, and “Imagine Extraordinary” tagline that can already be seen across the company’s website, social platforms, advertising, and a video produced to showcase the change.

The company’s former logo.

The company’s new logo and tagline.

Tecnoglass, which was founded in Barranquilla and just recently relocated its headquarters to Miami, acquired ES in 2016 to further expand its presence in the US market. Its ongoing push to better serve what had long been its biggest markets was a leading motivation to both purchase ES and relocate to Miami.

“As we unveil our new logo and brand, we’re celebrating more than 40 years of history and success that has brought us here,” said Jose Manuel Daes, CEO of ES, in the announcement.

“This rebranding signifies our commitment to quality, innovation, and the continuous pursuit of delivering extraordinary products to our customers and the world. Our journey is just beginning, and the future holds remarkable opportunities for continued growth and innovation.”

The decision to enter the vinyl window market is directly aligned with Tecnoglass’ ongoing diversification strategy to expand its footprint and leverage its competitive advantages. The company has signed a long-term supply agreement to procure vinyl frame profiles from a premier global supply chain partner, and in line with its vertically integrated platform, Tecnoglass will reshape the profiles to custom made specifications and will use its internally produced glass plus its newly installed vinyl assembling lines to manufacture and distribute cutting-edge vinyl windows for new and existing customers.

The new vinyl product line will be marketed under the company’s ES Windows Legacy Brand

Given its comprehensive vertically integrated manufacturing platform and its growing network of dealers and distributors, many of which already sell vinyl products, Tecnoglass says it expects to start production and deliveries in November of this year, more than doubling its addressable market while increasingly diversifying its revenue base going forward.

The expansion into vinyl windows offers a range of benefits to Tecnoglass and its customers:

• Enhanced Product Portfolio:Tecnoglass’ entry into the vinyl window market expands its product portfolio, offering customers a wider selection of solutions to meet their project needs. The company’s current distribution base provides an immediate synergy given the significant number of current dealers and distributors that already sell both aluminum and vinyl windows.
• Expanded Addressable Market:Based on sources like IBISWorld, Fenestration & Glazing Industry Alliance (FGIA), and Arizton Advisory & Intelligence, vinyl windows are estimated to represent approximately 60% of the $26 billion architectural window market, with aluminum windows comprising the majority of the remainder. In line with the company´s ongoing geographical expansion, vinyl products provide another entry point given its versatility and adaptability for different regions and conditions.
• Energy Efficiency:Vinyl windows are known for their efficient thermal performance, which aligns well with ongoing sustainability trends and increased demand for energy efficient products.
• Reliability and Durability:Leveraging its manufacturing expertise, Tecnoglass will look to produce its vinyl products with the same level of durability and longevity that customers have come to expect from the Company’s existing product portfolio.

Tecnoglass’ vinyl window lines will ship this November, and there is already an order backlog for both residential and commercial sectors.

“Our planned introduction of vinyl windows is a significant milestone that more than doubles our addressable market and reflects our dedication to providing comprehensive architectural window solutions to our customers. We are excited to partner with a leading vinyl profile manufacturer while leveraging our existing experience and capabilities to deliver innovative, reliable, and visually appealing vinyl windows catering to the residential and commercial end markets,” said José Manuel Daes, Chief Executive Officer of Tecnoglass.

Tecnoglass CFO Santiago Giraldo (Photo: Loren Moss)

Santiago Giraldo, the company’s Chief Financial Officer, added, “The vinyl window market provides a great opportunity to further expand our revenue base. We expect this new initiative to deliver an attractive margin on our highly efficient, vertically-integrated platform, driving accretive benefits to our results. As with previous investments, we expect a very high return on invested capital and a short payback period, backed by a strong order book to begin deliveries by year end and our active marketing of these products to our existing dealer base and new potential clients. We have already deployed the $25 million budgeted to support our vinyl market entry, which in addition to the vinyl lines, include the investments already completed during 2023 on a new state of the art fully automated insulated glass line, plus capital expenditures in land and warehousing space. These investments should allow us to scale up our vinyl window opportunity to approximately $300 million in annual revenues over time.”

Finance Colombia: One of the things I wanted to ask you, since we are on the theme of Barranquilla and the community, you guys have an advantage being here because it’s a port city, but like I said, not enough people outside of Colombia know about Barranquilla. I know that when you bring big customers and investors in here, I bet for a lot of them it’s the first time that they’ve ever been to the city.

Chris Daes: And they love it. You know, the first time they come scared.

Finance Colombia: [Laughs].

Chris Daes: And then they come alone…And they go visit Cartagena, and they come to Barranquilla, and they go to Santa Marta, and they love it. Because hey, you know, the coast of Colombia is a beautiful sight, it’s two hours away by plane from Miami for example. It’s close, it’s nice, I mean people are friendly. Obviously, we have problems, like in every city, but Barranquilla deserves better luck than we have had so far. Barranquilla, like you’ve said before, most people don’t talk about it, but having a company in Barranquilla, you export a container from here to Miami, all included, all included, from Tecnoglass’ door to Miami’s door for $1,600 a container.

Finance Colombia: Wow!

Chris Daes: $1600 a container! All included! The land and the freight. I don’t know where you can get it cheaper than that.

Finance Colombia: I know somebody that is getting shipments from Bogota to the US, and they are paying $3200 a pallet!

Chris Daes: That is simply too much, because they are located in the wrong place. That’s why locating the company in Barranquilla is so important, and that’s why Tecnoglass won’t move out of here. I have said that the day I have to move the company, I’d prefer to go.

Finance Colombia: I got you. You know, so just briefly to finish that theme up, when you talk to companies outside of Colombia, let’s say in the US, why should they consider Barranquilla for their base of operations, whether that’s manufacturing, logistics, I know that there are contact centers here, I know that you have bilingual people, I know that you have good universities…

Chris Daes: Here everything is made simple. We are not complicated people. We handle people right, we welcome the people from outside, the guys are good workers, they learn quickly, they are not complainers, they are happy, the help you out, they really love the company where they work, so it’s the perfect environment! Barranquilla is everything to us.

Finance Colombia: Wow. That’s great to know. Now, you guys are almost at your 40^th anniversary, 40^th birthday-

Chris Daes: Almost no, we are 40.

Finance Colombia: 40 years old, wow, wow, congratulations!

Chris Daes: 8^th of March we were 40 years old.

Finance Colombia: Well, happy birthday to Tecnoglass!

Chris Daes: Thank you.

Finance Colombia: And you know, is there anything that you wanted to mention? You guys are moving so quickly, I told Santiago, it’s hard to report on Tecnoglass, because every time there’s a headline, it’s “Tecnoglass breaks new records,” I’m like, I need to, as an editor, come up with better headlines!

Chris Daes: I am sorry to tell you but you are going to keep being harassed by us!

Finance Colombia: [Laughs].

Chris Daes: And by what we do, because there are three or four things that you are going to find out soon that we are working on that will be game changers, like usual. I mean, we always try to make it good, make it right, go forward, and we will continue to work that path.

Finance Colombia: Wonderful, it’s always good to catch up with you, I know that you are a busy man. I feel honored you made time for me, thanks a lot.

With its hurricane resistant and energy efficient high-technology glass products, Tecnoglass and its subsidiary ES Windows dominates the South Florida market but is just now starting to expand in earnest throughout the rest of the United States. Finance Colombia executive editor Loren Moss sat down with Tecnoglass Chief Operating Officer and co-founder (along with his brother José Manuel) Christian Daes to talk about how the company’s solid foundations underpin its high-growth outlook and recent activity.

Finance Colombia: I’m here with Chris Daes, the COO and cofounder of Tecnoglass. We are here in sunny Barranquilla, it’s always sunny here. I saw it only rain once, and boy did it rain! [Laughs].

Chris Daes: [Laughs] When it rains, it pours.

Finance Colombia: Well, it’s great to be here again at Tecnoglass operational headquarters, the factory site basically, and you guys are coming off of a great year, so first, congratulations. I already talked to (CFO) Santiago about that. So let’s talk a little bit about…I know that you just came off of a great quarter too, that was announced last week, so the good news just keeps coming. So I think that you guys obviously have been doing a good job here. I’ve seen you grow from…the first time I was here you had less than 4,000 employees, I think you’re now about 10,000, that’s amazing. And so, tell me a little bit. We won’t go too deep into the numbers, but just tell me a little bit about, let’s recap the great first quarter that you had and the strong start to the year.

Chris Daes: Well, it’s becoming usual that every quarter we give good news: that we grew, that we are doing better, that our margins are improving, that our backlog is growing, so I sometimes think that I’m living in a dream, and I wouldn’t like to wake up. The truth is the company is doing so good, we’re trying to keep it that way, we’re working hard to make sure that it continues to be moving that way. Quarter two is looking great too. So here we are, looking for opportunities, looking for new markets, looking for new geographies. Sales went up 60% in quarter one compared to quarter one last year, EBITDA almost doubled, profit almost doubled, and we think the rest of the year is going to be very similar to quarter one, only better, and we really believe that 2024 is gonna be the best year for the company ever. It’s looking that way, we get in a lot of new orders, construction is booming, still, you know, we’re getting, I don’t know if the market is slowing down or not but we are growing, maybe we are eating too much of the pie.

Which, either way is good news, and we are moving into new geographies to make sure we can continue the train.

Finance Colombia: You know let’s talk a little bit about that, because you guys already have a great strong base in Florida, as most of your sales go into the United States, but you guys now are expanding. I know that you attended a major trade show a few months ago, you guys are opening showrooms across the country, you know I was in the Bahamas, and I was at my cousin’s restaurant, which is on one of the remote islands, and I met a guy, and I said, you know, “what do you do?” And he said “I’m a Tecnoglass dealer (Palm Beach Glass Specialties)” and I said “really?!”, you know, so you guys really are growing. But tell me a little bit about the expanded footprint in this new… I guess not retail, like to the consumer, but showrooms and a new presence across the country.

Chris Daes: Well it’s a lot easier, I mean it makes a lot more sense to open new geographies, because then we take the stress off of Florida, we don’t need to, you know, worry too much about Florida. Even though, like I was saying yesterday in a phone call with some stockholders that were interviewing me, I said, “we don’t want Florida to be 50% of the pie, but we grow outside of Florida, and Florida keeps growing stronger than the outside too!” So even though we try to move away from Florida, Florida has a hold of us and won’t let us go. But anyways, we opened in South Carolina a show room, in Texas, Arizona, Manhattan, in California, and in so many places where they want our windows. And we’re coming with new products, for example what happened with the garage door; we developed a new garage door and it’s already selling two and a half to three million dollars a month. So it’s unbelievable what the company is doing, what our research and development team is doing, the production guys, the selling side is, I mean, we have no complaints, so it’s like a perfect story.

Finance Colombia: That’s great, you know I talked to Santiago a little bit about the backlog increasing, and there’s two ways that happens, you can either get more sales, or not have enough capacity. Now, I know you are getting more sales, but you guys are also taking steps to increase your capacity, your output, your production capacity here in Barranquilla, right?

Tecnoglass has its primary manufacturing facilities in Barranquilla, Colombia with convenient port access.

Chris Daes: We have increased the capacity so much that now we can produce 20% or 30% more not working on Sundays. Before we used to invoice 30% less and have to work on Sundays, that’s how much the capacity has increased. And we are adding more, now in September and October we’ll add another big percentage of capacity that will make us be, you know, we can [our delivery times] to three weeks to be there in the States, this is gonna be unbelievable, what we are going to be able to do. We want to have our customer’s satisfaction at the maximum level possible, customers are happy, services are getting there soon, reports are coming soon, the replacements are coming soon, I mean, like I said before, this is a dream come true.

Finance Colombia: You know it’s great, and I’d love to—now is not the time, but I know you guys have a tremendous story going back to how you and your brother first started. You know, even making solar stoves, and that’s a story that I’d love to tell with you one day, even before that, even the story—your family’s story and everything like that, we won’t go into that here. But really, when you say it’s a dream come true, it’s amazing, because I know, knowing a little bit about your story and the Tecnoglass story I know that’s true on so many levels, and I want to get into kind of, some of the things that you’re going to give back. But before we do that, I want to talk a little bit about…you know I’ve been down on the floors, you guys have automation in place, you guys have state of the art facilities, all coupled with the robotics, and the computerized measurements and quality controls and things like that. So I do want to talk a little bit about: do you need to expand the output capacity here in Barranquilla to meet current demands, are you concerned about the—there’s not really a slowdown right now in the US but the growth is slowed, it’s still growing, are there any concerns about the economy right now, and how that fits into your prognosis?

Chris Daes: I like to read a lot, and one of the things I read lately from somebody in the US, was that they were in another business, and they were expanding and he got a question saying, “why do you expand if the economy might slow down?” And he says, “maybe we’ll miss it now, and with it too much today, but in a year and a half, this comes around, turns around, then we’ll be ready when the economy booms again.” We are ready for the next high, because economy always keeps; you know, slows down, goes down, and then goes up again then slows down and  goes up again. If you look at the chart from the Dow Jones for example, the last 50 years, it’s always going up.

A Tecnoglass employee working within the company’s factory in Barranquilla, Colombia (Photo credit: Liliana Padierna)

Finance Colombia: Yeah.

Chris Daes: You see it slows down, but it always comes back to normal and continues to grow. So we have nothing to worry about, we are doing it not with debt but we are doing it with the cash flow, the company doesn’t owe too much money, I think net debt is 30 or 40 million dollars. This couldn’t be better, we couldn’t be doing any better, we are not afraid of having too much capacity because, you know, we can rationalize later and wait for the good moment again, but even though we have built so much capacity, we are still sold out! I mean, we are not working on Sundays but we have enough on our hands, I mean, right now we couldn’t [do anything else] but sell glass and aluminum, I mean, we are waiting for more machines to do more windows, we are waiting for more machines to do more laminated glass and insulated glass…Simply, we are taking the right steps, and there is a lot of news that you will hear within the next few months that is going to make a lot of sense of why we are doing this.

Finance Colombia: Wow, that’s great, and I’m excited to hear that, knowing what can be coming. Now, you know, you guys always have had a great record of giving back. We are here in Barranquilla, and I think that Barranquilla does not get enough credit. In Colombia, Bogota gets a lot of attention, Medellin gets a lot of attention, but Barranquilla, I mean, you’ve got a great public-private partnership as far as the relationship between the private sector, not just Tecnoglass but other companies in the area working, there’s a lot of civic engagement that I see when I come in here, and you can feel it. Now, we talked to some people, and I think this is really important.

Outside we can see the “Ventana al Mundo”, which is a monument sculpture that you guys gave to the city, but more important than that, we talked to, I talked to various people, I talked to some people that are receiving scholarships from Tecnoglass, we talked to a lady who has been working here for 15 years and you guys went out and looked at her house to see what it needed and fixed up her house. Now I know that you’ve been shy about talking about this, but when it comes to ESG (Environmental, Social, Governance), investors want to know, so maybe if you could talk a little bit about the philosophy. I know you don’t like to brag, I know that you don’t do things to go “oh look how great we are, look at us!” I know that’s not how you do things, but I think that it’s important that stakeholders, that customers, that investors, understand the commitment that Tecnoglass has made to Barranquilla, to the Atlantic coast, and to Colombia.

‘Miami’s Icon Brickell development is a Tecnoglass installation

Chris Daes: We definitely love to help, I mean it’s in our system, in our blood. We see every opportunity to make Barranquilla better, beautiful, exciting, I mean, we don’t have enough hands to do all the things that we would like to do for Barranquilla. We are building a third monument that is going be close to here, to the plant, in Puerto Colombia, the city next door, like five, six kilometers away from here, 3 miles, and is gonna be the most beautiful of the three sisters.

Finance Colombia: Okay.

Chris Daes: “La Ventana al Mundo” (Window to The World), “La Ventana de Campeones” (Window of Champions) and “La Ventana de Sueños” (Window of Dreams). And we are going to build a school for poor people here in La Playa.

Finance Colombia: Okay.

Chris Daes: We are going to  invest 2 to 3 million dollars. We have 500 people going to the university, we pay for their scholarship, we fix 10 houses of employees every month. We invest money in them, and we have many other things that we do for people here, because we would like—I mean, our dream is, for the people at least, for the people that work with us, to make them the happiest that we could, and for the city of Barranquilla that they could be proud that Tecnoglass one day was here. We don’t want to be rich and: what did we leave? Nothing. We: “oh, we came out in the list of the richest guys,” no no no, like I say always, I don’t wanna be rich, I wanna be ‘sabroso’ (savory).

Finance Colombia: [Laughs].

Chris Daes: I wanna be you know, desired, that we were good people, that we helped the city, that we were always constantly thinking of the wellbeing of everybody around us, because that’s within our DNA.

Finance Colombia: Yeah. You know I was going to ask you to tell me a little bit about the prognosis for the coming year but you’ve actually already done a very good job about that. But one of the things I wanted to ask you, since we are on the theme of Barranquilla and the community, you guys have an advantage being here because it’s a port city, but like I said, not enough people outside of Colombia know about Barranquilla. I know that when you bring big customers and investors in here, I bet for a lot of them it’s the first time that they’ve ever been to the city.

Chris Daes: And they love it. You know, the first time they come scared.

Finance Colombia: [Laughs].

Chris Daes: And then they come alone…And they go visit Cartagena, and they come to Barranquilla, and they go to Santa Marta, and they love it. Because hey, you know, the coast of Colombia is a beautiful sight, it’s two hours away by plane from Miami for example. It’s close, it’s nice, I mean people are friendly. Obviously, we have problems, like in every city, but Barranquilla deserves better luck than we have had so far. Barranquilla, like you’ve said before, most people don’t talk about it, but having a company in Barranquilla, you export a container from here to Miami, all included, all included, from Tecnoglass’ door to Miami’s door for $1,600 a container.

Finance Colombia: Wow!

Chris Daes: $1600 a container! All included! The land and the freight. I don’t know where you can get it cheaper than that.

Finance Colombia: I know somebody that is getting shipments from Bogota to the US, and they are paying $3200 a pallet!

Chris Daes: That is simply too much, because they are located in the wrong place. That’s why locating the company in Barranquilla is so important, and that’s why Tecnoglass won’t move out of here. I have said that the day I have to move the company, I’d prefer to go.

Finance Colombia: I got you. You know, so just briefly to finish that theme up, when you talk to companies outside of Colombia, let’s say in the US, why should they consider Barranquilla for their base of operations, whether that’s manufacturing, logistics, I know that there are contact centers here, I know that you have bilingual people, I know that you have good universities…

Chris Daes: Here everything is made simple. We are not complicated people. We handle people right, we welcome the people from outside, the guys are good workers, they learn quickly, they are not complainers, they are happy, the help you out, they really love the company where they work, so it’s the perfect environment! Barranquilla is everything to us.

Finance Colombia: Wow. That’s great to know. Now, you guys are almost at your 40^th anniversary, 40^th birthday-

Chris Daes: Almost no, we are 40.

Finance Colombia: 40 years old, wow, wow, congratulations!

Chris Daes: 8^th of March we were 40 years old.

Finance Colombia: Well, happy birthday to Tecnoglass!

Chris Daes: Thank you.

Finance Colombia: And you know, is there anything that you wanted to mention? You guys are moving so quickly, I told Santiago, it’s hard to report on Tecnoglass, because every time there’s a headline, it’s “Tecnoglass breaks new records,” I’m like, I need to, as an editor, come up with better headlines!

Chris Daes: I am sorry to tell you but you are going to keep being harassed by us!

Finance Colombia: [Laughs].

Chris Daes: And by what we do, because there are three or four things that you are going to find out soon that we are working on that will be game changers, like usual. I mean, we always try to make it good, make it right, go forward, and we will continue to work that path.

Finance Colombia: Wonderful, it’s always good to catch up with you, I know that you are a busy man. I feel honored you made time for me, thanks a lot.

The results are driven by organic growth in the company’s traditional base of multifamily and commercial building products (up 55%), along with its relatively new business in the US single-family residential market, (up 40%). The gross margin of 53.2% is also a new record.

José Manuel Daes, Chief Executive Officer of Tecnoglass, said in a statement: “Our strong momentum continued into 2023 with record first quarter results. We generated year-over-year growth in all of our key operating metrics, resulting in record first quarter revenues, gross profit, Adjusted EBITDA, operating cash flow and free cash flow. This performance further builds upon our established track record of achieving strong financial performance and returns for shareholders, derived from a multi-year effort to fortify our architectural glass platform through sound investments in strategic automation and capacity enhancements. Our continued expanding backlog resulted in a third straight quarter of approximately 60% year-over-year growth in multifamily/commercial revenues. We were also particularly pleased with the continued rapid growth of our single-family residential products. The shorter cash cycle in our single-family residential business, along with our prudent working capital management, also helped us generate our 13th consecutive quarter of strong cash flow. Achieving these results amid a challenging macro-economic backdrop further validates our growth strategy and our structural competitive advantages. Overall, I am proud of the efforts of all of our team members and as we look to the balance of the year, we believe we have all of the tools in place to execute against our multi-faceted growth strategy to further cement our position as an industry leader in the architectural glass market.”

Record cash flow from operations hit $43.1 Million USD and Free Cash Flow reached $27.5 million. The company says it is continuing with its facility investments that should increase operational capacity to meet demand. Earlier this year, Tecnoglass announced new product lines, and in an interview with Finance Colombia, indicated that it continues to research areas of innovation and growth.

“We are thrilled to report an excellent start to the year as demand for our single-family residential and multifamily/commercial products remains strong. We are encouraged by the solid levels of quoting and bidding activity in our markets, with the accelerating growth in our backlog to a record $776 million at quarter-end, reflecting an increasing number of projects in our commercial pipeline with visibility well into 2024. We are encouraged to see the Architectural Billings Index (ABI), which forecasts business conditions for the mid-to-high-rise end-market, return to expansionary levels in March, which further validates what we are seeing in our main markets. On all sides of our business, our ability to timely deliver best-in-class products is driving significant revenue growth and market share gains. We remain focused on consistently improving within our vertically-integrated operations as we continue to produce innovative new products and geographic diversification,” said COO and co-founder Christian Daes.

Tecnoglass ended the first quarter of 2023 with total liquidity of approximately $300 million, including cash and cash equivalents of $128.5 million and availability under its committed revolving credit facilities of $170 million. Given the company’s continued growth in Adjusted EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.1 times net debt to LTM Adjusted EBITDA, compared to 0.6 times in the prior year quarter.

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “We are increasing our full year 2023 outlook to reflect our strong start to 2023 and positive sales momentum into the second quarter, reflected by record invoicing months in March and April. We now expect full year 2023 revenues to grow organically to a range of $810 million to $850 million (approximately 16% growth at the midpoint of the range) and for Adjusted EBITDA to increase to a range of $315 million to $335 million. This implies Adjusted EBITDA growth of approximately 23% at the midpoint driven by stronger than originally anticipated gross margins. The structural advantages provided by our vertically integrated business model, as well as the investments we have made in our production capabilities, put Tecnoglass firmly on track to meet the strong demand anticipated in our updated outlook for the full year 2023.”

The company declared a quarterly cash dividend of $0.09 per share for the first quarter of 2023, representing a 20% increase from the previous dividend, which was paid on April 28, 2023 to shareholders of record as of the close of business on March 31, 2023.

The StormArmour product, which fits as an attachment onto a sliding door, has been in development for several years and can be installed within minutes without the need for tools. Additionally, after having been thoroughly tested at different levels of hurricane simulations, StormArmour has proven to reduce the risk of water intrusion in any house or building by approximately 99%. StormArmour products will be priced in the range of $200 to $500 per unit and are expected to become available for purchase by the end of 2023. Tecnoglass will maintain exclusive distribution rights for StormArmour in the United States and several countries throughout Latin America and the Caribbean.

According to Property Management Magazine, there are 14.6 million houses in coastal areas alone, and likely many million more in other areas that are at risk of flooding in the US. Based on this research, over 11,000 yearly home water damage claims totaling up to $20 billion USD are placed nationwide in the US.

The inventors believe this innovation in architectural glass systems will revolutionize the way homes are protected from extreme weather conditions, and reaffirms Tecnoglass’ commitment to R&D, new technologies, and to offering best-in-class solutions for the most complex projects that meet the most demanding international standards.

CEO José Manuel Daes offered: “We look forward to introducing the StormArmour product into the market by the end of 2023. We are proud to be the first and only company to make such a product available, helping to prevent major water damages while providing greater security for families.”

ES Windows says that it is also working with the US government to offer a benefit plan program designed to help individuals save on insurance costs for properties in Florida and other states that face destructive weather events. In conjunction with this program, for each StormArmour unit purchase, Tecnoglass has agreed to donate an additional device to government partners that will then distribute the devices to individuals in vulnerable areas who are prone to the risk of storm damage.

“Several years of rigorous research & development efforts resulted in the creation of StormArmour, a patented and one-of-a-kind lightweight, compact device that effectively diverts water and wind away from the track of the sliding glass door during severe weather,” said Samir Sabagh, Director of Design and Product Development for Tecnoglass and ES Windows.

“Currently, there are no practical methods to reduce water intrusion through sliding glass doors. Those that exist are difficult to install and/or hard to store. Through this alliance with Storm Shield, we seek to strengthen our architectural systems with more effective products that guarantee greater protection compared to what is currently available on the market. We plan to provide homeowners with doors and windows that easily incorporate StormArmour technology, preventing water from flooding into the sliding glass door weep holes while still allowing the sliding doors to open and close. This is something sandbags fail to accomplish and ensures double protection.”

Friends and colleagues, welcome to the first Colombia business news recap brought to you by Finance Colombia. My name is Loren Moss and I have been covering Colombian business and investment sector news since 2014. Let’s get started.

Last week, Barranquilla based Tecnoglass, which trades under the symbol TGLS moved from NASDAQ to the New York Stock Exchange. While the stock markets in the US continue to convulse, the underlying financial results of Tecnoglass are very strong, with the company breaking quarterly and annual records for revenues and net income.

This past Wednesday, low cost carrier Viva launched its nonstop route between Medellín and Buenos Aires, Argentina. It was a very proud moment for CEO Felix Antelo, who happens to be from Argentina himself.

Artificial Intelligence company Cogniflow officially launched its low-code solution that allows non-programmers to use artificial intelligence to solve scientific and practical challenges without coding. Cogniflow has leadership based in Colombia, Uruguay, and the US.

Vostock Capital’s Oil & Gas Congress will take place next Thursday and Friday, the 23^rd and 24^th of June at the DoubleTree by Hilton Salitre in Bogotá. I will be moderating a couple of panels, so if you also attend, be sure to say hi!

Tomorrow, Sunday June 19, Colombians will go to the polls to elect their next president. This evening at 6pm all land borders in and out of Colombia will close until Monday morning. Alcohol sales will also halt from this afternoon until Monday; the so-called Ley Seca common in many Latin American countries during elections.

For more details on any of this, be sure to subscribe to financecolombia.com

Tomorrow’s runoff election pits Gustavo Petro, a far-left former armed guerilla, former mayor of Bogotá and current senator against Rodolfo Hernandez, a tik tok performing real estate developer and former mayor of Bucaramanga, a populist who does not easily fit into a left / right political categorization.

After a few seconds for our sponsors, we will continue.

Mary Anastasia O Grady from the Wall Street Journal had an interesting take on these elections, she said Colombians are choosing between the devil and the deep blue sea.

Now I am not going to characterize anyone as the devil just yet, but I think what she means by that is that we have one candidate where you know exactly what you are getting based on his past track record, and the other candidate, the alternative, where you don’t really know what to expect.

Petro has stated that he plans to nationalize future pension contributions that currently go into a variety of privately managed pension funds, along with a government option, chosen by Colombian workers.  He has said he wants to end new petroleum production in Colombia, where roughly half the country’s foreign exchange comes from petroleum exports, he wants to raise tariffs on imported food because he thinks it will help Colombian farmers, impose rent controls on residential housing, print money to finance public expenditures – which of course would collapse the peso and send inflation skyrocketing, he wants to renegotiate mining concessions, calling foreign mining companies operating in the country “predators.”

Petro’s words, translated here of course:

“I have proposed to cease oil exploration. Colombia has to leave 80% of the coal deposits underground and that merits a whole transition program. When oil exploration ceases, we have 12 years of reserves. If we stop exporting, we have 12 years in which the reserves are going to sustain the internal demand for oil.”

On the other hand, we have Rodolfo Hernandez, an anti-establishment foul mouthed real estate developer who is very fond of his social media accounts. For those of you from the US, this sort of profile sounds familiar, doesn’t it?

Hernandez is from Bucaramanga, a lovely 2^nd-tier Colombian city of about a million people. He built a real estate empire specializing in subsidized public housing projects where units were sold to moderate income residents with government support. He served 3 years of a 4 year term as mayor of the city, resigning a year early after being suspended for slapping a city councilman. Hernandez has run on an anti-corruption platform, but he is under investigation for allegedly steering a contract to a friend of his son. When he left office in Bucaramanga, he had an  80% approval rating.

Hernandez refused to participate in any of the early presidential debates but built a base of followers of his Tik Tok account. He supports legalizing drugs and treating drug addiction as a public health issue. He supports legalization of euthanasia, he wants to re-establish relations with neighboring Venezuela and reform the police. Even though his father was a kidnapping victim, and his daughter allegedly kidnapped and killed by the ELN leftist guerilla group, he supports the 2016 peace process and wants to offer a negotiated peace to the ELN as former President Juan Manuel Santos did with the FARC.

He also thinks abortion should be legal, so he doesn’t really follow the typical pattern of a conservative pattern. Even though he is sort of a big unknown, as a successful developer, the business community isn’t as afraid of him as they are Petro, who has been very clear about his antagonisms and sympathies.

Polls are showing a very tight race tomorrow. We don’t know who will win, but we do know that whoever it is Colombians will have plenty of drama in Casa Nariño, which is like Colombia’s version of The White House or 10 Downing Street, for the next four years.

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Petro’s own words https://www.semana.com/nacion/articulo/toda-la-titulacion-minera-va-a-entrar-en-revision-gustavo-petro/202242/

In a recent statement, the company says it remains on pace to deliver another year of record cash flow with cash flow from operations at approximately $100 million year to date through November 2021. Based on the financial performance through November 2021, the company is increasing its full year outlook, with its expectation for revenue to be in the range of $490 million to $495 million and Adjusted EBITDA in the range of $147 million to $150 million.

Last week, Tecnoglass increased its quarterly cash dividend by 136%, as a sign of its confidence in the company’s ability to achieve its growth objectives and the strength of the momentum in the U.S. single-family residential business. Additionally, the favorable terms and increased financial capacity afforded by the upsizing of its oversubscribed credit revolver in November 2021 reinforce the company´s financial and operational strength.

Watch: Christian Daes of Tecnoglass discusses facing challenges & the future of the company (2017)

A day later, Tecnoglass shares plunged over 40% on NASDAQ after a report was released by short seller Hindenburg Research. Short selling is a practice where a speculator borrows shares in a company and then hopes (or tries to make) the value of those shares fall significantly. The short seller then buys the now cheaper shares at a low price returning them to make good on the loan, but profiting in the difference between the original share price and the now depleted share price. While many consider short selling unethical when tied to practices designed to manipulate the stock price, it is not always illegal.

The report by Hindenburg Research says that long before Tecnoglass was a public company, charges were filed by US prosecutors against the Tecnoglass founders, but then all charges were completely dismissed. The Daes brothers have passed background investigations and hold valid US visas and residency, and have been cleared by the SEC to serve as directors and officers of a public company.

Above photo: Despite attempts to mischaracterize the company, Tecnoglass has been both proud and open about its heritage as a family business.

Even the Hindenburg report had to admit that: “A May 2006 court order (from the United States District Court, Southern District of Florida) clarified that Jose Daes was no longer considered a fugitive and that the “case was disposed of. A separate June 2011 court order indicated that the indictment against Christian Daes had been previously dismissed.”

The report accuses Tecnoglass as having a shady relationship with the glazing firm, GM&P, but in 2017 Finance Colombia reported on the Tecnoglass acquisition of the firm. As far back as 2016, Finance Colombia reported on Tecnoglass’ acquisition of Miami based E.S. Windows, where the Daes brothers openly disclosed that 1: It was a company that they had a stake in, and 2:  Cherry Bekaert LLP, a member within accounting and advisory network of Baker Tilly International, carried out the financial due diligence.

The rambling report continues on an apparent fishing expedition and attempts to string together various histories and events in Barranquilla from between 10-20 years ago, such as an alleged 33 million peso fine. The exhibit the report links to is a ticket that shows a fine of zero pesos.

Tecnoglass, in its early days going from a local family business to a public company had a CFO who was not accustomed to the rigors of SEC reporting and struggled to comply with the dual requirements of being listed on both the BVC and NASDAQ. The company appointed Santiago Giraldo, a capital markets veteran with US experience as the new CFO to manage the books with the requisite level of compliance demanded by institutional investors, bank lenders, and regulators. Finance Colombia conducted the first interview with Giraldo upon his hire in August, 2017. The company has maintained stable relationships with auditors and held BB- and Ba3 ratings from Fitch and Moody’s until it paid off all outstanding bonds early, eliminating the need to maintain ratings.

Tecnoglass issued a public statement on Monday saying: “that it believes the recent report issued by a short seller contains inaccurate statements, groundless claims, character attacks, and speculation with the intent of misleading investors and driving down the value of the company’s shares for their personal gain. The personal, and arguably discriminatory, attacks on Tecnoglass executives made by the short seller appear to have been made to distract from the company’s achievements and progress. The company also notes that following the issuance of the short report, multiple stakeholders that are very familiar with the company, including long-term clients, have expressed their continued support of the company and the management team.”

Tecnoglass shares already appear to be shaking off the short attack, up 5.36% in Tuesday’s trading as analysts and the company responded.

“Tecnoglass remains focused on executing its strategy and encourages shareholders to read the company’s filings with the Securities and Exchange Commission, including its financial results, audited by PricewaterhouseCoopers Ltda., including its New York based National Office, the company’s independent registered public accounting firm, for the third quarter ended September 30, 2021 for more details on Tecnoglass’ performance, related party transactions, accounting policies and practices, and its outlook. The company urges investors to not make decisions based on the short seller report and to review public filings for material information that pertains to its business,” the company concluded in its statement.

Analysts not impressed with Hindenburg.

Sidoti analyst Julio Romero upgraded Tecnoglass to a Buy rating with a $34 price target in light of the bargain created by the Hindenburg report.

Timothy Wojs of Baird said that the 20 year old activities cited in the report are “largely known” to investors.

Alex Rygiel of B. Riley also said that much of the factual information in the Hindenburg report has been in the public domain for many years (as Finance Colombia reporting shows). “Although we recognize that some of the disclosures in the report may be new to some investors, upon our initial review, we do not see evidence to change our current forecasts or thesis,” said Rygiel.

Federal Prosecutors May Turn The Tables On Short Selling “Researchers”

The next day after Hindenburg published its Tecnoglass report, Bloomberg reported that the US Justice Department has launched “an expansive criminal investigation into short selling by hedge funds and research firms” run by the Department of Justice’s fraud section in Los Angeles. The government is looking at how research funds like Hindenburg, though they are not mentioned by name, may manipulate stock prices for their own gain by issuing self-serving research

According to Bloomberg, “The government is examining how the investors handle information and set up their bets, especially in the run-up to publication of reports that move stocks. Authorities are looking for signs that money managers sought to engineer startling stock drops or engaged in other abuses, such as insider trading, said two of the people, asking not to be named because the inquiries are confidential.”

Corporate executives and retail investors alike have long called for more scrutiny of short sellers and what they see as blatant and sometimes nefarious manipulation of stock values for their own gain. Short sellers defend themselves by saying they act in some ways as investigative reporters—though investigative reporters don’t generally take financial stakes in or against the companies they rake muck upon.

Tecnoglass has purchased display advertising on Finance Colombia, but did not participate in, or have any prior knowledge of the preparation or publishing of this news article.

Above photo © Loren Moss

Total revenues for the third quarter of 2021 increased 26.2% to $130.4 million, compared to $103.3 million in the prior year quarter. US revenues of $123.2 million, which represented 94.5% of total revenues, grew 28.8% compared to $95.7 million in the prior year’s quarter, driven by strong growth in single family residential activity and market share gains. Latin American revenue, a majority of which is represented by long-term contracts priced in Colombian Pesos but indexed to the US Dollar, decreased slightly to $7.2 million, compared to $7.6 million in the prior year quarter. Changes in foreign currency exchange rates had a negligible impact on Colombia and total revenues in the quarter.

Tecnoglass is being awarded the Syndicated Loan Deal of the Year Award at next month’s  Bonds & Loans Latin America & Caribbean Awards at the Ritz Carlton in Miami.

Adjusted EBITDA increased 36.1% to $38.7 million, or 29.7% of total revenues in the third quarter of 2021, compared to $28.5 million, or 27.5% 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 EBITDA in the third quarter 2021 included $800,000 in contribution from the company’s joint venture with Saint-Gobain, compared to $0.7 million in the prior year quarter.

“We can make glass that protects from the weather, while letting you have a great view. People like that you can now be in harmony with the surroundings.” – José M. Daes. Above: Suburban Miami’s beachfront Regalia condo tower, featuring Tecnoglass materials.

“I could not be more proud of our exceptional third quarter performance that marked our 4th consecutive quarter of year-over-year revenue growth and another period of record quarterly revenues and adjusted EBITDA. In addition, continued momentum in our U.S. single-family residential business combined with careful working capital management collectively helped generate our 7th straight quarter of robust cash flow, allowing us to pay down debt while further investing in automation capabilities and capacity enhancements to address expected growth,” said CEO José Manuel Daes (above, right).

“As a result of our vertically integrated platform and strategic geographic positioning, we continue to enjoy a healthy competitive advantage that has mostly insulated Tecnoglass thus far from widespread supply chain disruptions and inflationary pressures affecting our industry. Our structural advantages have allowed us to achieve additional share gains as new and existing customers value our shorter lead times, continuity of product availability and unrelenting commitment to exceptional service. We expect to continue executing our highly profitable growth strategy and generating cash flow to deliver additional value for our shareholders.”

Net income was $20.9 million, or $0.44 per diluted share in the third quarter of 2021 compared to net income of $8.3 million, or $0.18 per diluted share in the prior year quarter, including an after-tax non-cash foreign exchange transaction gain of $200,000 in the third quarter of 2021 and a $3.1 million loss in the third quarter of 2020. 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 income was $21.6 million, or $0.45 per diluted share, in the third quarter of 2021 compared to adjusted net income of $12.7 million, or $0.28 per diluted share in the prior year quarter. Tecnoglass declared a quarterly cash dividend of $0.0275 per share for the third quarter of 2021, which was paid on October 29, 2021.

Gross profit for the third quarter of 2021 grew 28.7% to $51.6 million, representing a 39.6% gross margin, compared to gross profit of $40.1 million, representing a 38.8% gross margin in the prior year quarter. The 80 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 expenses (SG&A) were $21.5 million compared to $19.9 million in the prior year quarter, primarily attributable to higher variable expenses related to ground and marine transportation as well as commission expenses. As a percent of total revenues, SG&A improved to 16.5% compared to 19.3% in the prior year quarter, primarily due to higher sales and better operating leverage on personnel, professional fees, and other fixed expenses.

Christian Daes (above, left), Chief Operating Officer of Tecnoglass, commented on the results: “Our proven track record of innovation, strategic footprint expansion, and returns-oriented investments in our operations have distinguished Tecnoglass as a dominant player in the architectural glass market with industry-leading margins. During the third quarter, we were pleased to begin invoicing best-in-class products from our new Multimax product line targeting production homebuilders as well as legacy and new dealers, which further augments our positioning in the U.S. single-family residential market.”

Given its strong cashflow generation, the company voluntarily prepaid $30 million under its Syndicated Term Loan facility during the quarter.

“Additionally, we are encouraged to report a record backlog at quarter end which reflects an increasing number of commercial projects in our pipeline through 2022. As we move forward, we are very pleased with our project pipeline and are excited by the strong momentum in our single-family residential business where we continue to see an immense opportunity for growth and additional share gains. Our strong geographical positioning, innovative product portfolio, and unique vertically integrated model give us confidence in the trajectory of our business.”

Tecnoglass CFO Santiago Giraldo (Photo: Loren Moss)

Tecnoglass ended the third quarter of 2021 with total liquidity of approximately $150 million, including cash and cash equivalents of $86.5 million and availability under its committed revolving credit facilities of $65 million. Cash provided by operating activities of $32.6 million improved by $6.4 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 EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.9 times LTM net debt to adjusted EBITDA, compared to 1.9 times in the prior year quarter. Given its strong cashflow generation, the company voluntarily prepaid $30 million under its Syndicated Term Loan facility during the quarter.

Santiago Giraldo, Chief Financial Officer of Tecnoglass, explained: “Based on our strong third quarter performance and expectations for a favorable growth environment across our end markets through year-end, we are increasing our full year 2021 growth outlook for revenues and adjusted EBITDA. We now expect 2021 revenues to grow to a range of $485 million to $495 million. We now anticipate full year adjusted EBITDA to increase to a range of $140 million to $145 million, implying year-over-year growth of approximately 46% at the midpoint. We continue to expect that robust demand for our products and services in the US will be the primary driver of these anticipated record full year 2021 results.”