Tecnoglass announces 2014 second quarter
financial results
Barranquilla, colombia--(business wire)--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 second quarter (q2) and six months ended june 30, 2014. josÉ m. daes, chief executive officer of tecnoglass, commented, “our q2 results reflect our continuing expansion in the u.s. market, and the substantial manufacturing and delivery cost advantages afforded by our location in barranquilla, colombia. sales to the u.s. rose to $26 million in q2 2014 and comprised 50% of our total quarterly revenues, both records. sales in our traditional u.s. base of south florida were strong, and we are now selling in u.s. regions including baltimore-washington, california, new york, new jersey and texas.” mr. daes concluded, “demand for our products remains strong, driven by a healthy commercial construction outlook in the u.s. and latin america. although not included in our results for q2 2014, we expect that the july 2014 acquisition of rc aluminum industries will positively impact our operations in the second half of 2014 and beyond. we also continue to invest in the growth of our business, with a focus on expanding our manufacturing capabilities in order to deliver the highest quality products and benchmark client service. our bonding capacity has increased to more than $500 million on combined projects. we believe that 2014 will be a year of growth and progress for tecnoglass.” second quarter 2014 results revenues for q2 2014 rose 17% to $51.9 million from $44.3 million in q2 2013. q2 2014 sales to the u.s. increased by $10.5 million to $26.0 million and sales to panama rose by $1.2 million to $3.4 million. these increases more than offset lower sales to colombia, which declined by $3.6 million to $21.8 million. gross profit rose 24% to $16.6 million, or 32.1% of revenues, from $13.4 million, or 30.1% of revenues, in q2 2013. selling and administrative expenses in q2 2014 increased to $8.2 million, or 15.8% of revenues, from $7.5 million, or 16.9% of revenues, in q1 2013, reflecting a decline in sales commissions resulting from new arrangements in key markets, partially offset by modest increases in personnel costs driven by growth, significant public company expenses, and favorable exchange rates used in translating expenses to u.s. dollars. operating income improved to $8.4 million from $5.9 million in the same period last year. as a percentage of revenues, operating income increased to 16.2% from 13.3% in q2 2013, reflecting the operating leverage inherent in the company’s business. net income for q2 2014 was $0.4 million, or $0.02 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, in q2 2013. net income in q2 2014 included an extraordinary, non-cash, non-operating loss of $4.6 million as a result of the increase in the fair value of the warrant liability in q2 2014 relative to its fair value at december 31, 2013. there was no comparable warrant liability in q2 2013 since the company only accrued the derivative obligation as a result of the merger which closed on december 20, 2013. 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. excluding the $4.6 million extraordinary loss for the warrant liability, net income for q2 2014 was $5.1 million, or $0.18 per diluted share. adjusted ebitda was $12.6 million, a 38 % increase from $ 9.1 million in q2 2013. backlog consolidated backlog at june 30, 2014 was $132 million, a 5.7% decline from $140 million at march 31, 2014 in part as a result of a shift in the mix in company production to export, non-contract sales. 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’s revenues are derived from non-contract, standard sales. 2014 forecast 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. conference call management will host a conference call on tuesday, august 19, 2014 at 10:00 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 www.tecnoglass.com. 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 a leading manufacturer of hi-spec, architectural glass and windows 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 www.tecnoglass.com 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. 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: adjusted depreciation adjusted warrants interest tax net net ebitda ebit liability expense provision income income w/o warrants
