Tecnoglass Crushes Q1 2023 Results, Revenues Up Over 50% From 2022

Continuing an impressive string of quarterly results going back several years, Tecnoglass (NYSE: TGLS) has beaten guidance by over 20%, reporting total revenues in Q1 2023 of $202.6 million USD, up 50.6% over the same time last year.

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.