Tecnoglass Reports Third Quarter 2017 Results
- Total Revenues Increase to Record
- Backlog Expands to Record
Third Quarter 2017 Highlights
- Total revenues of
$83.4 million - The Company estimates the impact of Hurricane Irma deferred approximately
$5.0 million to$7.0 million of revenue for the second half 2017, including approximately$2.0 million of revenue for the third quarter 2017, into 2018. - Net income of
$6.9 million , or$0.20 per share - Adjusted net income1 of
$3.8 million , or$0.11 per share - Adjusted EBITDA1 of
$17.6 million - Completed second phase of Colombian solar installation project, which is expected to provide incremental savings in 2018
- Increased quarterly dividend by 12% to
$0.14 per share for the third quarter 2017 - Raised full year 2017 outlook for Adjusted EBITDA despite weather-related revision to revenue projection
Third Quarter 2017 Results
Total revenues for the third quarter 2017 increased 2.9% to
Gross profit was
Net income was
Adjusted EBITDA1, as reconciled in the table below, was
Dividend
The Company declared and raised its regular quarterly dividend by 12% to
Full Year 2017 Outlook
For the
full year 2017, the Company now expects to see total revenues in the 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: 13672411 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
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
Condensed Consolidated Balance Sheets | ||||||||
(In thousands, except share and per share data) | ||||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 36,153 | $ | 26,918 | ||||
Investments | 1,943 | 1,537 | ||||||
Trade accounts receivable, net | 108,536 | 92,297 | ||||||
Due from related parties | 7,701 | 10,995 | ||||||
Inventories | 65,144 | 55,092 | ||||||
Other current assets | 22,098 | 23,897 | ||||||
Total current assets | $ | 241,575 | $ | 210,736 | ||||
Long term assets: | ||||||||
Property, plant and equipment, net | $ | 173,719 | $ | 170,797 | ||||
Deferred taxes | 719 | - | ||||||
Intangible assets | 12,035 | 4,555 | ||||||
23,130 | 1,330 | |||||||
Other long-term assets | 2,684 | 7,312 | ||||||
Total long-term assets | 212,287 | 183,994 | ||||||
Total assets | $ | 453,862 | $ | 394,730 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt and current portion of long term debt | $ | 3,650 | $ | 2,651 | ||||
Trade accounts payable and accrued expenses | 48,252 | 42,546 | ||||||
Due to related parties | 1,181 | 3,668 | ||||||
Payable associated to | 29,000 | - | ||||||
Dividends payable | 652 | 3,486 | ||||||
Current portion of customer advances on uncompleted contracts | 10,940 | 7,780 | ||||||
Other current liabilities | 7,887 | 18,255 | ||||||
Total current liabilities | $ | 101,562 | $ | 78,386 | ||||
Long term liabilities: | ||||||||
Deferred income taxes | $ | 6,985 | $ | 3,523 | ||||
Customer advances on uncompleted contracts | 1,937 | 2,310 | ||||||
Long term debt | 220,427 | 196,946 | ||||||
Total Long-Term Liabilities | 229,349 | 202,779 | ||||||
Total liabilities | $ | 330,911 | $ | 281,165 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Preferred shares, | $ | - | $ | - | ||||
Ordinary shares, | 3 | 3 | ||||||
Legal reserves | 1,367 | 1,367 | ||||||
Additional paid-in capital | 120,730 | 114,847 | ||||||
Retained earnings | 26,023 | 26,548 | ||||||
Accumulated other comprehensive (loss) | (26,486 | ) | (29,200 | ) | ||||
Shareholders' equity attributable to controlling interest | 121,637 | 113,565 | ||||||
Shareholders' equity attributable to non-controlling interest | 1,314 | - | ||||||
Total shareholders' equity | 122,951 | 113,565 | ||||||
Total liabilities and shareholders' equity | $ | 453,862 | $ | 394,730 | ||||
Condensed Consolidated Statements of Operations and Other Comprehensive Income | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Operating revenues: | ||||||||||||||||
External customers | $ | 82,117 | $ | 78,076 | $ | 226,445 | $ | 217,313 | ||||||||
Related parties | 1,267 | 2,997 | 3,732 | 7,428 | ||||||||||||
Total operating revenues | 83,384 | 81,073 | 230,177 | 224,741 | ||||||||||||
Cost of sales | 56,200 | 49,778 | 158,197 | 140,766 | ||||||||||||
Gross Profit | 27,184 | 31,295 | 71,980 | 83,975 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling expense | (7,810 | ) | (8,800 | ) | (22,610 | ) | (24,096 | ) | ||||||||
General and administrative expense | (7,851 | ) | (7,319 | ) | (22,952 | ) | (20,222 | ) | ||||||||
Provision for bad debt and write offs | (122 | ) | (887 | ) | (2,739 | ) | (892 | ) | ||||||||
Total Operating Expenses | (15,783 | ) | (17,006 | ) | (48,301 | ) | (45,210 | ) | ||||||||
Operating income | 11,401 | 14,289 | 23,679 | 38,765 | ||||||||||||
Gain on change in fair value of earnout shares liabilities | - | (2,630 | ) | - | 4,404 | |||||||||||
Gain on change in fair value of warrant liability | - | (12,885 | ) | - | (287 | ) | ||||||||||
Non-operating income | 656 | 569 | 2,605 | 2,832 | ||||||||||||
Foreign currency transactions gains (losses) | 5,394 | 2,434 | (894 | ) | 168 | |||||||||||
Gain (Loss) on extinguishment of Debt | 13 | - | (3,148 | ) | - | |||||||||||
Interest expense and amortization of deferred cost of financing | (4,633 | ) | (4,771 | ) | (14,890 | ) | (12,137 | ) | ||||||||
Income (Loss) before taxes | 12,831 | (2,994 | ) | 7,352 | 33,745 | |||||||||||
Income tax provision | (5,806 | ) | (5,789 | ) | (2,796 | ) | (13,493 | ) | ||||||||
Net income (loss) | 7,025 | (8,783 | ) | 4,556 | 20,252 | |||||||||||
Less: Net income attributable to non-controlling interest | 101 | - | 173 | - | ||||||||||||
Net income (loss) attributable to parent | $ | 6,924 | $ | (8,783 | ) | $ | 4,383 | $ | 20,252 | |||||||
Comprehensive income: | ||||||||||||||||
Net income (loss) attributable to parent | $ | 6,924 | $ | (8,783 | ) | $ | 4,383 | $ | 20,252 | |||||||
Foreign currency translation adjustments | 3,163 | 3,459 | 2,714 | 8,690 | ||||||||||||
Total comprehensive income (loss) | $ | 10,087 | $ | (5,324 | ) | $ | 7,097 | $ | 28,942 | |||||||
Basic income (loss) per share | $ | 0.20 | $ | (0.29 | ) | $ | 0.13 | $ | 0.69 | |||||||
Diluted income (loss) per share | $ | 0.20 | $ | (0.29 | ) | $ | 0.13 | $ | 0.61 | |||||||
Basic weighted average common shares outstanding | 34,211,265 | 30,349,145 | 34,233,851 | 29,526,731 | ||||||||||||
Diluted weighted average common shares outstanding | 34,801,215 | 30,349,145 | 34,823,801 | 33,373,649 | ||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Amounts in thousands) | ||||||||
(Unaudited) | ||||||||
Nine months ended | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 4,556 | $ | 20,252 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Provision for bad debts | 2,739 | 892 | ||||||
Provision for obsolete inventory | 80 | - | ||||||
Depreciation and amortization | 15,692 | 11,152 | ||||||
Change in fair value of earnout share liability | - | (4,404 | ) | |||||
Change in fair value of warrant liability | - | 287 | ||||||
Deferred income taxes | (3,625 | ) | (232 | ) | ||||
Extinguishment of debt | 2,569 | - | ||||||
Director stock compensation | 213 | 229 | ||||||
Other non-cash adjustments | 827 | (58 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts receivables | 6,460 | (26,758 | ) | |||||
Inventories | (8,923 | ) | (8,020 | ) | ||||
Prepaid expenses | 248 | 1,279 | ||||||
Other assets | (5,814 | ) | (7,410 | ) | ||||
Trade accounts payable and accrued expenses | 901 | 7,672 | ||||||
Taxes payable | (13,077 | ) | (5,196 | ) | ||||
Labor liabilities | 686 | 805 | ||||||
Related parties | 3,097 | (392 | ) | |||||
Customer advances on uncompleted contracts | 2,497 | (1,958 | ) | |||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 9,126 | (11,860 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Proceeds from sale of investments | 456 | 24,226 | ||||||
Proceeds from sale of property and equipment | - | - | ||||||
Business acquisitions | (8,382 | ) | - | |||||
Cash acquired from | 509 | - | ||||||
Purchase of investments | (716 | ) | (25,077 | ) | ||||
Acquisition of property and equipment | (6,701 | ) | (15,862 | ) | ||||
CASH USED IN INVESTING ACTIVITIES | (14,834 | ) | (16,713 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from debt | 20,313 | 187,442 | ||||||
Cash Dividend | (1,864 | ) | - | |||||
Proceeds from bond issuance | 201,769 | - | ||||||
UPO exercise | - | 404 | ||||||
ESW distributions prior to acquisition | - | (1,325 | ) | |||||
Repayments of debt | (205,615 | ) | (158,192 | ) | ||||
CASH PROVIDED BY FINANCING ACTIVITIES | 14,603 | 28,329 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 340 | 759 | ||||||
NET (DECREASE) INCREASE IN CASH | 9,235 | 515 | ||||||
CASH - Beginning of period | 26,918 | 22,671 | ||||||
CASH - End of period | 36,153 | 23,186 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
Cash paid during the period for: | ||||||||
Interest | 15,700 | 8,720 | ||||||
Income Tax | 15,651 | 25,669 | ||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Assets acquired under capital lease | - | 19,249 | ||||||
Revenues by Region | ||||||
(Amounts in thousands) | ||||||
(unaudited) | ||||||
Three months ended | ||||||
2017 | 2016 | % Change | ||||
Revenues by Region | ||||||
68,117 | 50,919 | 33.8 | % | |||
13,339 | 26,460 | (49.6 | %) | |||
Other Countries | 1,928 | 3,694 | (47.8 | %) | ||
Total Revenues by Region | 83,384 | 81,073 | 2.9 | % | ||
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 | |||||||
2017 | 2016 | % Change | |||||
Total Revenues with Foreign Currency Held Neutral | 83,520 | 81,073 | 3.0 | % | |||
Impact of changes in foreign currency | (136 | ) | - | (0.2 | %) | ||
Total Revenues, as Reported | 83,384 | 81,073 | 2.9 | % | |||
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 | |||||||||||||||
September 30, 2016 | December 31, 2016 | March 31, 2017 | June 30, 2017 | September 30, 2017 | |||||||||||
Net (loss) income | (8,783 | ) | 2,928 | 1,019 | (3,560 | ) | 6,924 | ||||||||
Interest expense and amortization of deferred cost of financing | 4,771 | 4,677 | 5,082 | 5,175 | 4,633 | ||||||||||
Income tax benefit (provision) | 5,789 | 2,579 | 1,042 | (4,052 | ) | 5,806 | |||||||||
Depreciation & amortization | 4,086 | 4,368 | 4,905 | 5,461 | 5,326 | ||||||||||
Foreign currency transactions losses (gains) | (2,434 | ) | 1,555 | (2,425 | ) | 8,713 | (5,394 | ) | |||||||
One-timers (extinguishment of debt, bond issuance costs and other non-recurring) | - | 4,509 | 4,105 | 1,565 | 206 | ||||||||||
Stock based compensation and inventory provision | - | - | 71 | 129 | 93 | ||||||||||
Gain on change in fair value of earnout shares liabilities | 2,630 | (270 | ) | - | - | - | |||||||||
Gain on change in fair value of warrant liability | 12,885 | (1,063 | ) | - | - | - | |||||||||
Adjusted EBITDA | 18,944 | 19,283 | 13,799 | 13,431 | 17,594 | ||||||||||
Three months ended | |||||||||||||||
September 30, 2016 | December 31, 2016 | March 31, 2017 | June 30, 2017 | September 30, 2017 | |||||||||||
Net income (loss) attributable to parent | (8,783 | ) | 2,928 | 1,019 | (3,560 | ) | 6,924 | ||||||||
Foreign currency transactions losses (gains) | (2,434 | ) | 1,555 | (2,425 | ) | 8,713 | (5,394 | ) | |||||||
Gain on change in fair value of earnout shares liabilities | 2,630 | (270 | ) | - | - | - | |||||||||
Gain on change in fair value of warrant liability | 12,885 | (1,063 | ) | - | - | - | |||||||||
One-timers (extinguishment of debt, bond issuance costs and other non-recurring) | - | 4,509 | 4,105 | 1,565 | 206 | ||||||||||
Tax impact of adjustments at statutory rate | (5,232 | ) | (1,892 | ) | (672 | ) | (4,111 | ) | 2,075 | ||||||
Adjusted net (loss) income | (934 | ) | 5,766 | 2,027 | 2,607 | 3,811 | |||||||||
Basic income (loss) per share | (0.29 | ) | 0.10 | 0.03 | (0.10 | ) | 0.20 | ||||||||
Diluted income (loss) per share | (0.29 | ) | 0.09 | 0.03 | (0.10 | ) | 0.20 | ||||||||
Diluted adjusted net (loss) income per share | (0.03 | ) | 0.19 | 0.06 | 0.08 | 0.11 | |||||||||
Diluted Weighted Average Common Shares Outstanding | 30,349 | 30,859 | 34,791 | 34,211 | 34,801 | ||||||||||
Basic weighted average common shares outstanding | 30,349 | 30,261 | 34,204 | 34,211 | 34,211 | ||||||||||
Diluted weighted average common shares outstanding | 34,203 | 30,859 | 34,791 | 34,801 | 34,801 | ||||||||||
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