Tecnoglass(TGLS) - 2025 Q1 - Quarterly Report

Part I. Financial Information Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2025, including the balance sheets, statements of operations, cash flows, shareholders' equity, and accompanying notes Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $1.14 billion from $1.02 billion at year-end 2024, with total liabilities rising to $453.2 million and shareholders' equity growing to $685.1 million, driven by growth in cash, receivables, and property, plant, and equipment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $636,761 | $560,010 | | Total Assets | $1,138,289 | $1,016,648 | | Total Current Liabilities | $329,079 | $265,826 | | Total Liabilities | $453,152 | $385,465 | | Total Shareholders' Equity | $685,137 | $631,183 | Condensed Consolidated Statements of Operations and Other Comprehensive Income For the three months ended March 31, 2025, total operating revenues increased 15.4% year-over-year to $222.3 million, with net income growing 42.0% to $42.2 million and diluted EPS rising to $0.90 from $0.63 Q1 2025 vs. Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $222,288 | $192,627 | +15.4% | | Gross Profit | $97,525 | $74,660 | +30.6% | | Operating Income | $59,329 | $41,022 | +44.6% | | Net Income | $42,189 | $29,730 | +42.0% | | Diluted EPS | $0.90 | $0.63 | +42.9% | Condensed Consolidated Statements of Cash Flows In Q1 2025, net cash provided by operating activities increased to $46.9 million, while investing activities used $18.2 million and financing activities used $7.4 million, resulting in a $22.4 million increase in cash and cash equivalents, ending the period at $157.3 million Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $46,898 | $33,447 | | Cash Used in Investing Activities | ($18,190) | ($10,192) | | Cash Used in Financing Activities | ($7,437) | ($16,686) | | Net Increase in Cash | $22,420 | $6,373 | | Cash and Cash Equivalents - End of Period | $157,302 | $135,881 | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies and financial statement line items, highlighting strong U.S. market and residential sector revenue growth, $775.0 million in remaining performance obligations, a $110 million Senior Secured Credit Facility, and related party transactions including a joint venture with Saint-Gobain - The company operates as a single reporting segment: Architectural Glass and Windows[25] Revenue by Geography (Q1 2025 vs Q1 2024, in thousands) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $212,454 | $184,003 | | Colombia | $6,414 | $5,239 | | Other | $3,420 | $3,385 | | Total Revenues | $222,288 | $192,627 | Revenue by Market (Q1 2025 vs Q1 2024, in thousands) | Market | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Commercial | $133,359 | $119,473 | | Residential | $88,929 | $73,154 | | Total Revenues | $222,288 | $192,627 | - As of March 31, 2025, the company had $775.0 million of remaining performance obligations (backlog), which it expects to recognize as revenue over the next three years[41] - On March 12, 2025, the company declared a quarterly dividend of $0.15 per share, paid on April 30, 2025[77] Management's Discussion and Analysis of Financial Condition and Results of Operations Strong Q1 2025 performance, driven by robust U.S. market activity, resulted in a 15.4% YoY revenue increase to $222.3 million, gross margin expansion to 43.9%, and a strong liquidity position of $157.3 million in cash - Revenue growth in Q1 2025 was driven by a 15.5% increase in the U.S. market, with residential revenues up 21.6% and commercial revenues up 11.6% year-over-year[91] - Gross profit margin increased to 43.9% in Q1 2025 from 38.8% in Q1 2024, primarily due to better pricing, improved operating leverage, and a favorable FX impact from the Colombian peso's depreciation[92] - Operating expenses rose by 26.3%, mainly due to a $4.7 million expense from recent U.S. tariffs on imports and costs associated with geographic expansion[93] - The company ended Q1 2025 with $157.3 million in cash and cash equivalents and has approximately $175.0 million available under credit lines[100] - Capital expenditures in Q1 2025 were $30.4 million, focused on automating production lines and expanding facilities to support a manufacturing operating capacity of approximately $1.2 billion[103] Quantitative and Qualitative Disclosures about Market Risk The company faces market risks from foreign currency exchange rates, particularly the Colombian Peso, and aluminum price volatility, with a hypothetical 5% COP appreciation potentially decreasing net earnings by $2.1 million, while interest rate risk remains minimal due to debt management and hedging - The company is subject to foreign currency risk as approximately 25% of revenues and 3% of costs are in Colombian pesos. A hypothetical 5% appreciation of the COP against the USD would result in a $2.1 million decrease in net earnings based on Q1 2025 results[110] - The company faces market risk from volatile aluminum prices, a principal raw material. It attempts to mitigate this by aligning the cost of raw materials with selling prices[113] - Interest rate risk is not significant for the company's cost of financing due to recent debt repayments and the use of interest rate hedging instruments[108] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. There were no material changes in the company's internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[115] - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[116] Part II. Other Information Legal Proceedings The company is involved in various legal matters that arise in the ordinary course of business. Management currently believes these matters are not material and will not have a material adverse effect on the company's financial condition or results of operations - The company is involved in legal matters arising in the ordinary course of business, and management does not expect them to have a material adverse effect[118] Risk Factors A new material risk factor involves a universal 10% U.S. tariff on imports, effective April 5, 2025, which could materially impact production costs and price competitiveness, especially given that 96% of the company's 2024 sales were in the U.S. - A new risk factor has been identified related to a universal 10% U.S. tariff imposed on imports from all countries, including Colombia, effective April 2025[119] - Given that the company's manufacturing is in Colombia and 96% of its FY2024 sales were in the U.S., these tariffs could materially impact production costs, supply chain, and price competitiveness[120] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company repurchased 1,610 ordinary shares at an average price of $76.93 per share, with approximately $76.5 million remaining available for future repurchases under the authorized program as of March 31, 2025 Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2025 | - | - | | Feb 2025 | - | - | | Mar 2025 | 1,610 | $76.93 | | Total | 1,610 | $76.93 | - As of March 31, 2025, $76,527,637 remained available for repurchase under the company's share repurchase program[122] Other Information For the three months ended March 31, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[123] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications under the Sarbanes-Oxley Act (Sections 302 and 906) and the financial statements formatted in XBRL - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[124] - Financial statements are provided in Inline XBRL format as required[124] Signatures - The report is signed by Jose M. Daes, Chief Executive Officer, and Santiago Giraldo, Chief Financial Officer, on May 8, 2025[128]