November 11, 2024

Tecnoglass, Inc. (NYSE: TGLS), a key player in high-end aluminum and vinyl window and architectural glass manufacturing, reported record-breaking Q3 results on November 7, 2024, achieving $238.3 million in revenue—a 13.1% increase from last year. The growth was fueled by a 25% jump in single-family residential revenue, as well as a 4.6% increase in multi-family/commercial revenues.

Gross margin reached 45.8%, up from 43% a year prior, a reflection of Tecnoglass’ efficiency and its vertically integrated model, which minimizes costs and adjusts quickly to market shifts. CEO José Manuel Daes remarked, “Our ability to control costs and adapt swiftly… drove strong gross profit and Adjusted EBITDA growth this quarter.” He cited automation and manufacturing upgrades as central to Tecnoglass’ capacity to meet increasing demand.

Demand was strong across multiple segments. Chief Operating Officer Christian Daes highlighted, “Our vertically integrated platform ensures a high level of quality, leverages operating efficiencies, and enables quick adaptation…” He underscored the company’s $1.04 billion backlog, marking the 30th consecutive quarter of backlog growth, as a foundation for its confidence in long-term demand.

The company’s Adjusted EBITDA increased to $81.4 million, representing 34.2% of revenue, bolstered by a $2.1 million contribution from its joint venture with Saint-Gobain. Net income stood at $49.5 million, or $1.05 per share.

Capital Strategy and Shareholder Returns

Following a strategic alternatives review, Tecnoglass’ Board affirmed its commitment to a long-term growth strategy. This plan includes organic market expansion and cash flow-focused operations. Additionally, Tecnoglass increased its quarterly dividend by 36% to $0.15 per share and expanded its share repurchase program to $100 million, reinforcing its dedication to shareholder returns. The board cited the company’s vertically integrated model, advantageous geographic location, and robust cash flow as drivers of continued success.

Tecnoglass reported strong cash flows of $41.5 million for the quarter, enabling a $17.5 million loan prepayment and maintaining liquidity of approximately $290 million. The company’s balance sheet remains solid, with a record low net leverage ratio of 0.01x.

Full-Year Outlook

Tecnoglass revised its 2024 guidance, projecting annual revenues between $880 million and $900 million and Adjusted EBITDA of $270 million to $280 million. Chief Financial Officer Santiago Giraldo emphasized the company’s confidence in sustained growth, driven by geographic expansion, increased vinyl window production, and its resilient operations.

Looking Forward

Tecnoglass aims to build on its recent growth through new showroom openings and increased focus on residential and commercial markets. Its strategies reflect confidence in demographic trends favoring its core segments, which, alongside a fortified balance sheet and extensive backlog, position Tecnoglass to maintain above-market growth and robust margins.