Barranquilla based architectural glass and aluminum manufacturer Tecnoglass (NASD: TGLS) this morning announced that the company has broken previous records for both revenues and net income for the fourth quarter 2021, and the full year. The company also announced that a special committee investigation demonstrated no evidence of related party transactions fraud or accounting irregularities, invalidating claims made by short sellers last December.
Fourth quarter total revenues increased 28.0% year-over-year to $131.8 million USD, with 142% growth in single-family residential revenues, while net income reached $19.8 million, or $0.41 per diluted shares. Adjusted net income was a record $24 million, or $0.50 per diluted share. The company said that gross margin improved 710 basis points YoY to 42.9%.
Fourth quarter EBITDA increased 65.7% YoY to a record $42.2 million, or $32% of revenues. Cash flow from operations was $23.8 million, and the cash dividend increased 136% to $0.065 per share. The Colombian company also announced an amendment to its senior secured revolving credit facility, expanding borrowing capacity from $50 million to $150 million, reducing its cost of capital and extending debt maturities to 2026.
The order backlog for Tecnoglass includes 20 of the 22 tallest skyscrapers currently under construction or planning to break ground in South Florida.
For the full year, single family residential revenues increased by 151% YoY, representing 36% of total revenues for the year. The line of business is relatively new for Tecnoglass, which built its reputation on large commercial and high-rise multifamily residential projects. Total revenues are up 32% YoY to a record $496.8 million for 2021.
Gross margin is also a record 40.8%, up 380 basis points, and full year net income is $68.4 million, or $1.43 per diluted share. Adjusted net income is $82.7 million, or $1.75 per diluted share. Cash flow from operations is also a record $117.3 million.
The company’s backlog of orders expands 7.2% to a record $584.6 million, including supplying energy efficient windows to 20 of the 22 tallest buildings currently under permitting or construction in South Florida.
“We are thrilled to report another quarter and year of record results for Tecnoglass. Strong fourth quarter performance reflects the combined benefit of our focused execution, prior investments in automation and capacity enhancements, and our ability to capitalize on strong residential demand. We continue to produce outstanding results in our shorter cash cycle single-family residential business, which in addition to our prudent working capital management, helped us generate our 8th straight quarter of exceptional cash flow. As we move into 2022, our strong capital position and structural advantages leave us well situated to further extend our leadership in the architectural glass industry and drive improved returns for our all our stakeholders for this year and beyond,” said CEO José Manuel Daes.
For the full year 2021, cash provided by operating activities of $117.3 million improved by $45.5 million compared to the prior year, attributable to higher profitability, more efficient inventory and working capital management, and interest expense savings. The company used a portion of its cash flow to voluntarily prepay $30 million under its Syndicated Term Loan facility during the year. The company ended 2021 with total liquidity of approximately $250 million, including cash and cash equivalents of $85.0 million and availability under its committed revolving credit facilities of $163 million. Given the company’s continued growth in adjusted EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.8 times LTM net debt to adjusted EBITDA, compared to 1.6 times in the prior year.
Headline photo: Tecnoglass COO Christian Daes & Colombian President Ivan Duque
Christian Daes, Chief Operating Officer of Tecnoglass, added, “We are extremely pleased with our 2021 accomplishments and the momentum in our business that has continued into 2022. Our success reflects rapid advances in our single-family residential revenues, which expanded 151% year-over-year and represented more than a third of our full year revenues. As we continue to win new customers in the single-family residential market, we are also poised for success in our high rise and commercial work, with Tecnoglass already contracted to supply architectural glass to 20 of the 22 tallest towers under construction in South Florida, and other geographies also showing positive trends. Looking ahead, we remain dedicated to leveraging our vertically integrated structure and innovative product development to create additional shareholder value.”
Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “We are pleased to introduce our full year 2022 outlook for revenues to grow to a range of $575 million to $600 million and for adjusted EBITDA to increase to a range of $170 million to $190 million. This implies adjusted EBITDA growth of approximately 20% at the midpoint. We believe our structural advantages, partial insulation from some inflationary pressures and faster lead times will continue to drive our record of strong cash flow generation in the full year 2022.”
Short Seller Claims Shown False
As previously announced on December 17, 2021 a Special Committee of the Board of Directors engaged Covington & Burling LLP who in turn engaged a leading Big 4 accounting firm to make an assessment on the allegations made against the Company and its Directors on December 9, 2021. Although the review is still being finalized, as of today, the assessment from these firms, which included a forensic evaluation and e-discovery process, has indicated no evidence of fraud associated with related party transactions or accounting irregularities.