Tecnoglass Reports Second Quarter 2018 Results
- Total Revenues Increase 10% to a Record
- Adjusted EBITDA1 Increases 36% to
- Backlog of
- Reaffirms Full Year 2018 Outlook -
Second Quarter 2018 Highlights
- Total revenues increased 10% to
$89.0 million on strongU.S. activity, marking the 5th consecutive quarter of record revenues - Net loss of
$3.9 million , or ($0.11 ) per diluted share, including non-cash FX losses during the period - Adjusted net income1 increased to
$7.3 milliom, or$0.20 per diluted share, excluding non-cash FX losses and non-recurring costs in both periods - Adjusted EBITDA1 grew 36% to
$18.3 million
Second Quarter 2018 Results
Total revenues for the second quarter of 2018 increased 10% to
Gross profit increased 9.3% to
Net loss of
Adjusted EBITDA1, as reconciled in the table below, increased 36.0% to
Dividend
The Company declared a regular quarterly dividend of
Full Year 2018 Outlook
The Company continues to anticipate growth in commercial construction end markets and additional market share gains for the full year 2018. The Company reiterates its expectation for full year 2018 revenues to grow to a range of
Conference Call
Management will host a conference call on
- (877) 705-6003 (Domestic)
- (201) 493-6725 (International)
If you are unable to listen live, a replay of the conference call will be archived on the website. You may also access the conference call playback by dialing (844) 512-2921 (Domestic) or (412) 317-6671 (International) and entering pass code: 13681222.
About
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' 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' filings with the
[1] Adjusted net income and Adjusted EBITDA in both periods are reconciled in the table below.
Investor Relations:
CFO
305-503-9062
investorrelations@tecnoglass.com
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 29,925 | $ | 40,923 | ||||||
Investments | 2,061 | 1,680 | ||||||||
Trade accounts receivable, net | 87,432 | 110,464 | ||||||||
Due from related parties | 7,428 | 8,500 | ||||||||
Inventories | 79,903 | 71,656 | ||||||||
Unbilled receivables on uncompleted contracts | - | 9,996 | ||||||||
Contract assets - current portion | 46,677 | - | ||||||||
Other current assets | 18,486 | 18,679 | ||||||||
Total current assets | $ | 271,912 | $ | 261,898 | ||||||
Long term assets: | ||||||||||
Property, plant and equipment, net | $ | 167,647 | $ | 168,701 | ||||||
Deferred taxes | - | 103 | ||||||||
Contract assets - non-current | 925 | - | ||||||||
Intangible Assets | 10,583 | 11,517 | ||||||||
23,561 | 23,130 | |||||||||
Other long term assets | 3,008 | 2,651 | ||||||||
Total long term assets | 205,724 | 206,102 | ||||||||
Total assets | $ | 477,636 | $ | 468,000 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Short-term debt and current portion of long term debt | $ | 11,498 | $ | 3,260 | ||||||
Trade accounts payable and accrued expenses | 59,440 | 55,182 | ||||||||
Accrued interest expense | 7,450 | 7,392 | ||||||||
Due to related parties | 1,002 | 975 | ||||||||
Payable associated to |
8,500 | 29,000 | ||||||||
Dividends payable | 734 | 585 | ||||||||
Current portion of customer advances on uncompleted contracts | - | 11,429 | ||||||||
Contract liability - current portion | 16,079 | - | ||||||||
Other current liabilities | 3,890 | 13,626 | ||||||||
Total current liabilities | $ | 108,593 | $ | 121,449 | ||||||
Long term liabilities: | ||||||||||
Deferred income taxes | $ | 3,246 | $ | 2,317 | ||||||
Customer advances on uncompleted contracts | - | 1,571 | ||||||||
Contract liability - non-current | 1,586 | - | ||||||||
Long term debt | 220,392 | 220,998 | ||||||||
Total Long Term Liabilities | 225,224 | 224,886 | ||||||||
Total liabilities | $ | 333,817 | $ | 346,335 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
SHAREHOLDERS' EQUITY | ||||||||||
Preferred shares, |
$ | - | $ | - | ||||||
Ordinary shares, |
4 | 3 | ||||||||
Legal Reserves | 1,367 | 1,367 | ||||||||
Additional paid-in capital | 148,375 | 125,317 | ||||||||
Retained earnings | 19,029 | 22,212 | ||||||||
Accumulated other comprehensive (loss) | (26,089 | ) | (28,651 | ) | ||||||
Shareholders' equity attributable to controlling interest | 142,686 | 120,248 | ||||||||
Shareholders' equity attributable to non-controlling interest | 1,133 | 1,417 | ||||||||
Total shareholders' equity | 143,819 | 121,665 | ||||||||
Total liabilities and shareholders' equity | $ | 477,636 | $ | 468,000 |
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share data)
(Unaudited)
Three months ended |
Six months ended |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Operating revenues: | ||||||||||||||||||||
External customers | $ | 87,785 | $ | 79,885 | $ | 173,992 | $ | 144,328 | ||||||||||||
Related parties | 1,184 | 1,091 | 2,137 | 2,465 | ||||||||||||||||
Total operating revenues | 88,969 | 80,976 | 176,129 | 146,793 | ||||||||||||||||
Cost of sales | 64,327 | 58,432 | 124,739 | 101,997 | ||||||||||||||||
Gross Profit | 24,642 | 22,544 | 51,390 | 44,796 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling expense | (8,567 | ) | (9,528 | ) | (17,704 | ) | (17,417 | ) | ||||||||||||
General and administrative expense | (8,453 | ) | (7,600 | ) | (16,074 | ) | (15,101 | ) | ||||||||||||
Total Operating Expenses | (17,020 | ) | (17,128 | ) | (33,778 | ) | (32,518 | ) | ||||||||||||
Operating income | 7,622 | 5,416 | 17,612 | 12,278 | ||||||||||||||||
Non-operating income | 709 | 922 | 1,808 | 1,949 | ||||||||||||||||
Foreign currency transactions gains (losses) | (8,307 | ) | (8,713 | ) | 1,666 | (6,288 | ) | |||||||||||||
Loss on extinguishment of debt | - | (2 | ) | - | (3,161 | ) | ||||||||||||||
Interest expense and deferred cost of financing | (5,361 | ) | (5,175 | ) | (10,411 | ) | (10,257 | ) | ||||||||||||
(Loss) Income before taxes | (5,337 | ) | (7,552 | ) | 10,675 | (5,479 | ) | |||||||||||||
Income tax benefit (provision) | 1,467 | 4,052 | (3,926 | ) | 3,010 | |||||||||||||||
Net (loss) income | $ | (3,870 | ) | $ | (3,500 | ) | $ | 6,749 | $ | (2,469 | ) | |||||||||
Less: (income) loss attributable to non-controlling interest | 212 | (60 | ) | 284 | (72 | ) | ||||||||||||||
(Loss) Income attributable to parent | $ | (3,685 | ) | $ | (3,560 | ) | $ | 7,033 | $ | (2,541 | ) | |||||||||
Comprehensive income: | ||||||||||||||||||||
Net (loss) income | $ | (3,870 | ) | $ | (3,500 | ) | $ | 6,749 | $ | (2,469 | ) | |||||||||
Foreign currency translation adjustments | (6,139 | ) | (5,250 | ) | 2,562 | (449 | ) | |||||||||||||
Total comprehensive (loss) income | $ | (10,009 | ) | $ | (8,750 | ) | $ | 9,311 | $ | (2,918 | ) | |||||||||
Less: Comprehensive (income) loss attributable to non-controlling interest | 212 | (60 | ) | 284 | (72 | ) | ||||||||||||||
Total comprehensive (loss) income attributable to parent | $ | (10,797 | ) | $ | (8,810 | ) | $ | 9,595 | $ | (2,990 | ) | |||||||||
Basic income per share | $ | (0.11 | ) | $ | (0.10 | ) | $ | 0.19 | $ | (0.07 | ) | |||||||||
Diluted income per share | $ | (0.11 | ) | $ | (0.10 | ) | $ | 0.19 | $ | (0.07 | ) | |||||||||
Basic weighted average common shares outstanding | 35,935,442 | 35,763,650 | 35,869,746 | 35,759,895 | ||||||||||||||||
Diluted weighted average common shares outstanding | 35,935,442 | 35,763,650 | 36,362,493 | 35,759,895 |
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six months ended |
||||||||||
2018 | 2017 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income | $ | 6,749 | $ | (2,541 | ) | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||
Provision for bad debts | (413 | ) | 2,617 | |||||||
Provision for obsolete inventory | 27 | 58 | ||||||||
Depreciation and amortization | 11,458 | 10,366 | ||||||||
Deferred income taxes | 2,126 | (6,870 | ) | |||||||
Extinguishment of debt | - | 2,585 | ||||||||
Director stock compensation | 142 | 142 | ||||||||
Other non-cash adjustments | 679 | 519 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Trade accounts receivables | (3,952 | ) | 5,830 | |||||||
Inventories | (7,329 | ) | (6,811 | ) | ||||||
Prepaid expenses | (425 | ) | 83 | |||||||
Other assets | (91 | ) | 1,984 | |||||||
Trade accounts payable and accrued expenses | (2,274 | ) | 8,224 | |||||||
Accrued interest expense | 41 | 7,175 | ||||||||
Taxes payable | (10,617 | ) | (15,104 | ) | ||||||
Labor liabilities | (114 | ) | (130 | ) | ||||||
Related parties | 1,279 | 1,784 | ||||||||
Contract assets and liabilities | (3,735 | ) | - | |||||||
Customer advances on uncompleted contracts | - | 2,283 | ||||||||
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (6,449 | ) | $ | 12,194 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Proceeds from sale of investments | 367 | 358 | ||||||||
Aquisition of businesses | (6,000 | ) | (7,873 | ) | ||||||
Purchase of investments | (662 | ) | (727 | ) | ||||||
Acquisition of property and equipment | (4,889 | ) | (4,295 | ) | ||||||
CASH USED IN INVESTING ACTIVITIES | $ | (11,184 | ) | $ | (12,537 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Proceeds from debt | 9,067 | 20,915 | ||||||||
Cash Dividend | (1,359 | ) | (1,219 | ) | ||||||
Proceeds from bond issuance | - | 201,716 | ||||||||
Repayments of debt | (1,934 | ) | (203,754 | ) | ||||||
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | $ | 5,774 | $ | 17,658 | ||||||
Effect of exchange rate changes on cash and cash equivalents | $ | 861 | $ | (551 | ) | |||||
NET (DECREASE) INCREASE IN CASH | (10,998 | ) | 16,764 | |||||||
CASH - Beginning of period | 40,923 | 26,918 | ||||||||
CASH - End of period | $ | 29,925 | $ | 43,682 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||
Cash paid during the period for: | ||||||||||
Interest | $ | 9,074 | $ | 6,864 | ||||||
Income Tax | $ | 5,517 | $ | 15,168 | ||||||
NON-CASH INVESTING AND FINANCING ACTIVITES: | ||||||||||
Assets acquired under capital lease and debt | $ | 703 | $ | - | ||||||
Gain in extinguishment of |
$ | 3.606 | $ | - |
Revenues by Region
(Amounts in thousands)
(Unaudited)
Three months ended |
Six months ended |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
$ | 15,557 | $ | 15,525 | $ | 37,381 | $ | 31,953 | |||||||||
69,852 | 60,342 | 132,845 | 106,650 | |||||||||||||
1043 | 830 | 1,857 | 2,093 | |||||||||||||
Other | 2,517 | 4,279 | 4,046 | 6,097 | ||||||||||||
Total Revenues | $ | 88,969 | $ | 80,976 | $ | 176,129 | $ | 146,793 |
Reconciliation of Non-GAAP Performance Measures to GAAP Performance Measures
(In thousands)
(Unaudited)
The Company believes that total revenues with foreign currency held neutral non-GAAP performance measures, which management uses in managing and evaluating the Company's business, may provide users of the Company's financial information with additional meaningful bases for comparing the Company's current results and results in a prior period, as these measures reflect factors that are unique to one period relative to the comparable period. However, these non‑GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company's reported results under accounting principles generally accepted in the United States.
Three months ended | ||||||
2018 | 2017 | % Change | ||||
Total Revenues with Foreign Currency Held Neutral | 88,542 | 80,976 | 9.3 | % | ||
Impact of changes in foreign currency | 427 | - | 0.5 | % | ||
Total Revenues, As Reported | 88,969 | 80,976 | 9.9 | % |
Currency impacts on total revenues for the current quarter have been derived by translating current quarter revenues at the prevailing average foreign currency rates during the prior year quarter, as applicable.
Reconciliation of Adjusted EBITDA and Adjusted net (loss) income to net (loss) income
(In thousands, except share and per share data)
(unaudited)
Adjusted EBITDA and adjusted net (loss) income are not measures of financial performance under generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA and adjusted net (loss) income, in addition to operating profit, net (loss) 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 and adjusted net (loss) income might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.
Reconciliations of the non-GAAP measures used in this press release are included in the tables attached to this press release, to the extent available without unreasonable effort. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures.
A reconciliation of Adjusted EBITDA and Adjusted net (loss) income to the most directly comparable GAAP measure in accordance with SEC Regulation G follows, with amounts in thousands:
Three months ended | Six months ended | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Net (loss) income | (3,870 | ) | (3,500 | ) | 6,749 | (2,469 | ) | ||||
Less: Income (loss) attributable to non-controlling interest | 212 | (60 | ) | 284 | (72 | ) | |||||
(Loss) Income attributable to parent | (3,658 | ) | (3,560 | ) | 7,033 | (2,541 | ) | ||||
Interest expense and deferred cost of financing | 5,361 | 5,175 | 10,411 | 10,257 | |||||||
Income tax (benefit) provision | (1,467 | ) | (4,052 | ) | 3,926 | (3,010 | ) | ||||
Depreciation & amortization | 5,793 | 5,461 | 11,458 | 10,366 | |||||||
Foreign currency transactions losses (gains) | 8,307 | 8,713 | (1,666 | ) | 6,288 | ||||||
Non Recurring expenses (extinguishment of debt, bond issuance costs, provision for bad debt, acquisition related costs and other) | 3,866 | 1,565 | 5,208 | 5,670 | |||||||
Director Stock compensation and provision for obsolete inventory | 71 | 129 | 142 | 200 | |||||||
Adjusted EBITDA | 18,273 | 13,431 | 36,512 | 27,230 | |||||||
Three months ended | Six months ended | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Net (loss) income | (3,870 | ) | 3,500 | ) | 6,749 | 2,469 | ) | ||||
Less: Income (loss) attributable to non-controlling interest | 212 | (60 | ) | 284 | (72 | ) | |||||
(Loss) Income attributable to parent | (3,658 | ) | (3,560 | ) | 7,033 | (2,541 | ) | ||||
Foreign currency transactions losses (gains) | 8,307 | 8,713 | (1,666 | ) | 6,288 | ||||||
Deferred cost of financing | 360 | - | 706 | - | |||||||
Non Recurring expenses (extinguishment of debt, bond issuance costs, provision for bad debt, acquisition related costs and other) | 3,866 | 1,565 | 5,208 | 5,670 | |||||||
Tax impact of adjustments at statutory rate | (1,564 | ) | (4,111 | ) | 1,502 | 4,783 | ) | ||||
Adjusted net (loss) income | 7,312 | 2,607 | 12,783 | 4,634 | |||||||
Basic income (loss) per share | (0.11 | ) | (0.10 | ) | 0.19 | (0.07 | ) | ||||
Diluted income (loss) per share | (0.11 | ) | (0.10 | ) | 0.18 | (0.07 | ) | ||||
Diluted Adjusted net income (loss) per share | 0.20 | 0.07 | 0.35 | 0.13 | |||||||
Diluted Weighted Average Common Shares Outstanding in thousands | 35,935 | 35,764 | 36,362 | 35,760 | |||||||
Basic weighted average common shares outstanding in thousands | 35,935 | 35,764 | 35,870 | 35,760 | |||||||
Diluted weighted average common shares outstanding in thousands | 35,935 | 35,764 | 36,362 | 35,760 |
Source:
News Provided by Acquire Media