Tecnoglass Reports Second Quarter 2016 Results
- Reports Net Income of
- Adjusted EBITDA2 Grows to
- Backlog Expands 17.1% Year-over-Year to
- Revises Full Year 2016 Outlook -
Second Quarter 2016 Highlights as Compared to Second Quarter 2015
-
Total revenues increased 33.5% to
$77.5 million ; up 43.1% on a constant currency basis -
Adjusted EBITDA2 grew 25.2% to
$17.1 million - Operating expenses as a percent of sales improved 180 basis points to 18.1%
Second Quarter 2016 Results
Total revenues for the second quarter 2016 increased 33.5% to
Gross profit was
Net income was
Adjusted EBITDA2 increased 25.2% to
1 Adjusted net income in both periods excludes the non-cash impact associated with the change in the fair market values of the exchanged and remaining warrants and of the earn-out shares during each respective period, as reconciled in the table below. The respective fair values of the warrants and earn-out shares change in response to market factors not directly controlled by the Company such as the market price of the Company's shares of common stock and the volatility index of comparable companies.
2 Adjusted EBITDA excludes the impact of warrants and earn-out shares and further excludes foreign exchange gains and losses related to the effect on foreign exchange rates on monetary balance sheet accounts, as reconciled in the table below.
Financial Operations
The Company is committed to further strengthening its financial
operations. In
Full Year 2016 Outlook
Based on improving commercial construction markets, continued market
share gains and improving operating efficiencies, for the full year
2016, the Company continues to expect revenues to grow approximately 20%
to
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 (877) 870-5176 (Domestic) or (858) 384-5517 (International)
and entering pass code: 13641289 through
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
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Condensed Consolidated Balance Sheets | ||||||||
(In thousands, except share and per share data) | ||||||||
(Unaudited) | ||||||||
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 29,535 | $ | 18,496 | ||||
Investments | 26,860 | 1,470 | ||||||
Trade accounts receivable, net | 72,862 | 52,515 | ||||||
Due from related parties | 36,953 | 28,073 | ||||||
Inventories | 59,296 | 46,011 | ||||||
Other current assets | 25,436 | 20,814 | ||||||
Total current assets | $ | 250,942 | $ | 167,379 | ||||
Long term assets: | ||||||||
Property, plant and equipment, net | $ | 157,422 | $ | 135,974 | ||||
Long term receivables from related parties | 1,688 | 2,536 | ||||||
Other long term assets | 11,001 | 10,310 | ||||||
Total long term assets | 170,111 | 148,820 | ||||||
Total assets | $ | 421,053 | $ | 316,199 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt and current portion of long term debt | $ | 69,961 | $ | 16,921 | ||||
Note payable to shareholder | 79 | 79 | ||||||
Trade accounts payable | 59,452 | 39,142 | ||||||
Due to related parties | 1,991 | 1,283 | ||||||
Current portion of customer advances on uncompleted contracts | 11,646 | 11,841 | ||||||
Earnout Share Liability | 15,429 | 13,740 | ||||||
Warrant liability | 18,378 | 31,213 | ||||||
Other current liabilities | 18,559 | 22,530 | ||||||
Total current liabilities | $ | 195,495 | $ | 136,749 | ||||
Long term liabilities: | ||||||||
Earnout Share Liability | $ | - | $ | 20,414 | ||||
Customer advances on uncompleted contracts | 6,299 | 4,404 | ||||||
Long term debt | 140,925 | 121,493 | ||||||
Total Long Term Liabilities | 147,224 | 146,311 | ||||||
Total liabilities | $ | 342,719 | $ | 283,060 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Shareholders' equity | ||||||||
Preferred shares, |
$ | - | $ | - | ||||
Ordinary shares, |
3 | 3 | ||||||
Legal Reserves | 1,367 | 1,367 | ||||||
Additional paid-in capital | 57,511 | 45,584 | ||||||
Retained earnings | 45,391 | 17,354 | ||||||
Accumulated other comprehensive (loss) | (25,938) | ) | (31,169 | ) | ||||
Total shareholders' equity | 78,334 | 33,139 | ||||||
Total liabilities and shareholders' equity | $ | 421,053 | $ | 316,199 | ||||
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Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income | |||||||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||
(unaudited) | |||||||||||||||
Three months ended |
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2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating revenues: | |||||||||||||||
External customers |
$ |
63,408 | $ | 45,830 | $ | 109,671 | $ | 83,930 | |||||||
Related parties | 14,105 | 12,223 | 28,745 | 26,166 | |||||||||||
Total operating revenues | 77,513 | 58,053 | 138,416 | 110,096 | |||||||||||
Cost of sales | 51,048 | 37,179 | 88,742 | 70,612 | |||||||||||
Gross Profit | 26,465 | 20,874 |
49,674 |
39,484 | |||||||||||
Operating expenses | (13,996) | (11,566) | (25,713) | (22,174) | |||||||||||
Operating income | 12,469 | 9,308 | 23,961 | 17,310 | |||||||||||
Gain (Loss) on change in fair value of earnout shares liabilities | 3,330 | (9,653) | 7,034 | (7,672) | |||||||||||
Gain (Loss) on change in fair value of warrant liability | 6,687 | (16,391) | 12,598 | (11,313) | |||||||||||
Non-operating income (loss), net | (56) | 1,417 | (732) | 5,142 | |||||||||||
Interest expense | (4,242) | (2,050) | (7,366) | (4,202) | |||||||||||
Income (Loss) before taxes | 18,188 | (17,369) | 35,495 | (735) | |||||||||||
Income tax provision | 3,815 | 3,631 | 7,458 | 8,403 | |||||||||||
Net income (loss) | $ | 14,373 | $ | (21,000) | $ | 28,037 | $ | (9,138) | |||||||
Comprehensive income (loss): | |||||||||||||||
Net income (loss) | $ | 14,373 | $ | (21,000) | $ | 28,037 | $ | (9,138) | |||||||
Foreign currency translation adjustments | 3,489 | (410) | 5,231 | (5,577) | |||||||||||
Total comprehensive income (loss) | $ | 17,862 | $ | (21,410) | $ | 33,268 | $ | (14,715) | |||||||
Basic income (loss) per share | $ | 0.53 | $ | (0.84) | $ | 1.04 | $ | (0.37) | |||||||
Diluted income (loss) per share | $ | 0.47 | $ | (0.84) | $ | 0.91 | $ | (0.37) | |||||||
Basic weighted average common shares outstanding |
27,234,664 | 25,147,286 | 27,071,931 | 24,975,165 | |||||||||||
Diluted weighted average common shares outstanding | 30,744,863 | 25,147,286 | 30,757,310 | 24,975,1658 | |||||||||||
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Condensed Consolidated Statements of Cash Flows | |||||||
(Amounts in thousands) | |||||||
(Unaudited) | |||||||
Six Months Ended |
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2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ | 28,037 | $ | (9,138) | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Provision for bad debt | - | 428 | |||||
Provision for obsolete inventories | - | (281) | |||||
Director share-based compensation | 166 | - | |||||
Depreciation and amortization | 6,920 | 5,246 | |||||
Change in fair value of investments | (27) | - | |||||
Change in fair value of derivative liability | (19) | (42) | |||||
Change in fair value of warrant liability | (12,598) | 11,313 | |||||
Change in fair value of earnout share liability | (7,034) | 7,672 | |||||
Deferred income taxes | (204) | (854) | |||||
Changes in operating assets and liabilities: | |||||||
Trade accounts receivable | (15,087) | (12,894) | |||||
Inventories | (8,887) | (13,721) | |||||
Prepaid expenses and other current assets | 816 | 198 | |||||
Other assets | (5,546) | (4,297) | |||||
Trade accounts payable | 16,043 | 12,685 | |||||
Customer advances on uncompleted contracts | 373 | 8,254 | |||||
Related parties | (4,839) | (2,740) | |||||
Other current liabilities | (5,487) | 5,418 | |||||
CASH PROVIDED (USED) BY OPERATING ACTIVITIES | (7,373) | 7,247 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Proceeds from sale of investments | 417 | 435 | |||||
Proceeds from sale of property and equipment | - | 34 | |||||
Purchase of investments | (22,765) | (1,148) | |||||
Acquisition of property and equipment | (5,113) | (15,188) | |||||
CASH USED IN INVESTING ACTIVITIES | (27,461) | (15,867) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from debt | 156,200 | 57,462 | |||||
Repayments of debt | (109,993) | (49,093) | |||||
CASH PROVIDED BY FINANCING ACTIVITIES | 46,207 | 8,369 | |||||
Effect of exchange rate changes on cash and cash equivalents | (334) | 339 | |||||
NET INCREASE IN CASH | 11,039 | 88 | |||||
Cash and equivalents - Beginning of period | 18,496 | 15,930 | |||||
Cash and equivalents - End of period | $ | 29,535 | $ | 16,018 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 4,063 | $ | 3,239 | |||
Taxes | $ | 13,677 | $ | 7,188 | |||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Assets acquired under capital lease and debt | $ | 11,438 | $ | 20,180 | |||
Revenues by Region | ||||||
(Amounts in thousands) | ||||||
(unaudited) | ||||||
Three months ended |
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2016 | 2015 | % Change | ||||
Revenues by Region | ||||||
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36.4% | |||
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28,300 | 21,869 | 29.4% | |||
Other Countries | 3,739 | 2,840 | 31.7% | |||
Total Revenues by Region |
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33.5% | |||
Reconciliation of Non-GAAP Performance Measures to GAAP Performance
Measures
(Amounts 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
Three months ended |
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2016 | 2015 | % Change | ||||
Total Revenues with Foreign Currency Held Neutral |
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43.1% | |||
Impact of changes in foreign currency | (5,586) | - | (9.6%) | |||
Total Revenues, As Reported |
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33.5% | |||
Currency impacts on total revenues have been derived by translating
current period revenues at the quarter-to-date 2016 average foreign
currency rates for the period ending
Reconciliation of Adjusted EBITDA, Adjusted EBIT and Adjusted Net
Income to Net Income
(In thousands, except share and per
share data)
(unaudited)
Adjusted EBITDA, Adjusted EBIT and Adjusted Net Income are not measures of financial performance under generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA, Adjusted EBIT and Adjusted Net Income, 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, Adjusted EBIT and Adjusted Net 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, Adjusted EBIT and Adjusted Net Income to the most directly comparable GAAP measure in accordance with SEC Regulation G follows, with amounts in thousands:
Three months ended | ||||||||||
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Adjusted EBITDA |
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Depreciation | 2,745 | 3,085 | 3,538 | 3,261 | 3,659 | |||||
Adjusted EBIT |
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Interest Expense | 2,050 | 2,307 | 2,765 | 3,124 | 4,242 | |||||
FX Transaction (Gain)/ Loss | 168 | (8,136) | 1,450 | 1,257 | 1,009 | |||||
Tax Provision | 3,631 | 8,524 | 3,764 | 3,643 | 3,815 | |||||
Adjusted Net Income |
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Earn out Share | 9,653 | 2,519 | 667 | (3,704) | (3,330) | |||||
Warrant Liability | 16,391 | 10,148 | 3,440 | (5,911) | (6,687) | |||||
Net (Loss) Income |
( |
( |
( |
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Diluted Adjusted Income (Loss) Per Share |
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Earn out Share | 0.38 | 0.10 | 0.03 | (0.13) | (0.11) | |||||
Warrant Liability | 0.65 | 0.40 | 0.13 | (0.20) | (0.22) | |||||
Diluted Income (Loss) Per Share |
( |
( |
( |
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Diluted Weighted Average Common Shares Outstanding | 25,147 | 25,426 | 26,398 | 29,328 | 30,745 | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160801005600/en/
Investor Relations:
Deputy CFO
investorrelations@tecnoglass.com
Source:
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