Tecnoglass(US:TGLS)2022-03-03 20:14Financial Data and Key Metrics Changes - Tecnoglass achieved record results in Q4 2021, with total revenues increasing by 28% year-over-year to $131.8 million and full-year revenues rising by 32% to $496.8 million [31][42] - Adjusted EBITDA for Q4 2021 increased by 65.7% to a record $42.2 million, with a margin of 32%, while full-year adjusted EBITDA rose by 54.1% to $150.3 million, representing a margin of 30.2% [34][42] - Gross margins improved significantly, reaching 42.9% in Q4 2021, up 710 basis points year-over-year, and a full-year gross margin of 40.8%, an increase of 380 basis points [11][35] Business Line Data and Key Metrics Changes - Single-family residential sales surged over 140% year-over-year in Q4 and over 150% for the full year, accounting for 41% of total Q4 sales and 36% for the full year [10][26] - The backlog increased by approximately 7.2% year-over-year to a record $585 million, primarily driven by medium and high-rise residential projects [17][18] Market Data and Key Metrics Changes - The majority of the backlog is concentrated in the attractive southeast and south-central US regions, with strong demand reflected in the January ABI readings of 61.0 for the US south, the highest since 2005 [19] - The company has contracted to supply architectural glass to 20 of the 22 tallest towers under construction in South Florida for 2022 and 2023 [19] Company Strategy and Development Direction - The company aims to leverage its vertically-integrated structure and geographic positioning to capture additional market share while maintaining industry-leading margins [15][45] - Future growth is expected to be driven by single-family residential sales, with a target growth rate of at least 20% annually [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue growth in 2022, with revenue guidance set between $575 million to $600 million, representing an 18% growth at the midpoint [42] - The company anticipates adjusted EBITDA for 2022 to be in the range of $170 million to $190 million, with gross margins expected around 40% [43] Other Important Information - The company voluntarily prepaid $30 million of debt during the year, achieving the lowest leverage ratio in its history at 0.8 times net debt to adjusted EBITDA [13][39] - A 136% increase in dividends was announced in December 2021 to enhance capital returns to shareholders [13] Q&A Session Summary Question: Can you discuss the adjusted EBITDA outlook and the factors influencing the range? - Management indicated that gross margin will be a key determinant, with input costs on raw materials and SG&A expected to remain flat [48] Question: What is the progress on the Multimax line and its revenue contribution? - The Multimax line accounts for about 20% of the residential sales, indicating ongoing growth in that sector [49] Question: Can you elaborate on the revenue guidance and contributions from different segments? - Residential is expected to grow between 30% to 35%, while commercial is projected to grow about 15% at the higher end of the guidance range [54] Question: Are there supply chain issues affecting residential products? - Management noted that while homebuilders face challenges, Tecnoglass maintains short delivery times and high product quality, leading to customer satisfaction [83] Question: What are the pricing dynamics in the commercial backlog? - Prices are being adjusted in response to rising aluminum costs, with long-term contracts allowing for price locking [84][85]