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Mar 31, 2020
Tecnoglass Q1 2020 Earnings Report
Reported highest first quarter gross margin and Adjusted EBITDA margin since 2016, despite the pandemic’s temporary impact.
Key Takeaways
Tecnoglass reported a decrease in revenue due to temporary suspension of plant operations, but achieved its highest first quarter gross margin and Adjusted EBITDA margin since 2016. The company is focused on maintaining financial flexibility and generating cash flow amidst the COVID-19 crisis.
Total revenues for the first quarter of 2020 were $87.3 million compared to $107.2 million in the prior year quarter.
Gross profit for the first quarter of 2020 was $30.5 million, representing a 34.9% gross margin compared to gross profit of $31.9 million, representing a 29.8% gross margin in the prior year quarter.
Net loss was $18.7 million, or $0.40 loss per diluted share in the first quarter of 2020 compared to a net income of $7.3 million, or $0.18 per diluted share in the prior year quarter.
Adjusted EBITDA was $20.3 million, or 23.3% of revenues compared to $21.1 million, or 19.7% of revenues, in the prior year quarter.
Tecnoglass
Tecnoglass
Tecnoglass Revenue by Geographic Location
Revenue by Geographic Location
United States Revenue
CapyFin.com Forward Guidance
Given the uncertain scope and duration of the COVID-19 pandemic, and uncertain timing of a global recovery and economic normalization, the Company is withdrawing its previously communicated full year 2020 revenue and Adjusted EBITDA outlook. The Company has suspended all future financial guidance for the balance of the year.
Positive Outlook
- Most of Tecnoglass’ U.S. and Latin American customers remain operational with many construction projects typically considered by jurisdictions to be essential business activities.
- The Company’s backlog has historically provided a high degree of visibility for commercial revenues over a twelve month period.
- Tecnoglass entered this pandemic operating on a larger scale and with a better capital structure than at any point in our Company’s history.
- As of May 1, 2020, our liquidity further improved to approximately $105 million, including cash of approximately $50 million, as a result of proactive measures to build cash.
- We will continue to monitor and adjust plans for our business that are aligned with our expectation to emerge as a stronger Company when global market conditions begin to improve.
Challenges Ahead
- The Company's sales are dependent on nonresidential construction activity and housing starts.
- On the commercial side, net sales for the remainder of 2020 will be influenced by the timing, length or any delays of projects related to the pandemic.
- In residential, U.S. housing starts are expected to be unfavorably affected by the crisis.
- The commencement of the Company’s previously announced construction of a second float glass plant through its joint venture with Saint Gobain, which had been scheduled to begin in 2020, has been put on hold at this time, pending better market visibility.
- The Company has suspended all future financial guidance for the balance of the year.