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Tecnoglass (TGLS) Q1 Earnings & Revenues Beat, Guidance Up

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Tecnoglass Inc.’s TGLS shares jumped 4.6% on May 7, after it reported impressive first-quarter 2021 results. The top and bottom lines handily surpassed Zacks Consensus Estimate as well as improved year over year. The company recorded a backlog of $552 million for the period, up 1.1% year over year.

Christian Daes, COO of Tecnoglass, said, “Encouraging trends in housing starts and de-urbanization combined with our efforts to expand our customer relationships are all supporting the growth of our single-family residential revenue, which increased over 70% year-over-year. Additionally, we are pleased to see our large scale projects resuming activity, in line with improving fundamentals and the ABI index climbing higher into expansion territory for the second consecutive month in March. Looking ahead, our momentum has continued into April and May as new business wins and record levels of backlog leave us well positioned for further value creation.”

The company remains confident about its ability to maintain industry-leading margins and gain additional shares in the quarters ahead.

Quarter in Detail

Tecnoglass reported adjusted earnings of 35 cents per share, which topped the consensus mark of 22 cents by 59.1% and grew 250% from the year-ago figure of 10 cents. Continued positive reception of single-family residential products, vertically integrated architectural glass platform and prior automation investments aided the company’s results amid tight labor and material availability.

Total revenues of $110.9 million surpassed the consensus mark of $100 million by 11.2% and increased 27% year over year.

Tecnoglass Inc. Price, Consensus and EPS Surprise

Tecnoglass Inc. Price, Consensus and EPS Surprise
Tecnoglass Inc. Price, Consensus and EPS Surprise

Tecnoglass Inc. price-consensus-eps-surprise-chart | Tecnoglass Inc. Quote

U.S. revenues — which represented 91% of total revenues — grew 27.9% from the prior-year quarter driven by strong growth in residential activity, recovering commercial construction activity and market share gains. Colombia revenues (the majority of which is represented by long-term contracts priced in Colombian Pesos but indexed to the U.S. Dollar) increased 18.4% year over year. Other Countries’ revenues also grew 18.7% year over year.

Operating Highlights

SG&A, as a percentage of total revenues, decreased 200 basis points (bps) to 17.8% year over year. This reflects higher sales and better operating leverage on personnel, professional fees and other fixed expenses.

Adjusted EBITDA was up 64.8% year over year to $33.5 million. Adjusted EBITDA margin expanded a whopping 690 bps year over year to 30.2%.

Cash Position

At March-end, Tecnoglass had cash and cash equivalents of $85.2 million, up from $66.9 million at 2020-end.

Cash provided by operations was reported at $29 million in the first three months of 2021 compared with $0.5 million in the comparable year-ago period.

2021 View Up

Backed by a strong start to 2021 and stellar demand in April and May, the company has raised its 2021 total revenues and adjusted EBITDA guidance. It now expects total revenues within $420-$435 million (reflecting growth from $400-$415 million expected earlier), primarily driven by strengthening U.S. demand. In 2020, total revenues were $374.9 million. Adjusted EBITDA is now projected between $115 million and $125 million, implying year-over-year growth of 23% at the midpoint. The metric was anticipated within $100-$110 million earlier. The current projection indicates growth from $97.8 million reported a year ago.

Zacks Rank

Tecnoglass — which shares space with Fastenal Company FAST, Lumber Liquidators Holdings, Inc. LL and Beacon Roofing Supply, Inc. BECN in the Zacks Building Products - Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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