Notes
to Consolidated Financial Statements
(Amounts
in thousands, except share and per share data)
Business
Description
The
Company manufactures hi-specification, architectural glass and windows for the global residential and commercial construction
industries. Currently the Company offers design, production, marketing, and installation of architectural systems for buildings
of high, medium and low elevation size. Products include windows and doors in glass and aluminum, office partitions and interior
divisions, floating façades and commercial window showcases. The Company sells to customers in North, Central and South
America, and exports about half of its production to foreign countries.
The
Company manufactures both glass and aluminum products. Its glass products include tempered glass, laminated glass, thermo-acoustic
glass, curved glass, silk-screened glass, acoustic glass and digital print glass. Its Alutions plant produces mill finished, anodized,
painted aluminum profiles and rods, tubes, bars and plates. Alutions’ operations include extrusion, smelting, painting and
anodizing processes, and exporting, importing and marketing aluminum products.
The
Company also designs, manufactures, markets and installs architectural systems for high, medium and low rise construction, glass
and aluminum windows and doors, office dividers and interiors, floating facades and commercial display windows.
In
2014, the Company established two Florida limited liability companies, Tecnoglass LLC (“Tecno LLC”) and Tecnoglass
RE LLC (“Tecno RE”) to acquire manufacturing facilities, manufacturing machinery and equipment, customer lists and
exclusive design permits.
In
December 2016, as part of our strategy to vertically integrate our operations, we acquired 100% of the stock of ESW LLC, 85.06%
of which was acquired directly by Tecnoglass and 14.94% by our subsidiary ES, for a total purchase price of $13.5 million, which
consisted of (i) 734,400 ordinary shares issued in connection with the transaction for approximately $9.2 million based on a stock
price of $12.50, (ii) approximately $2.3 million in cash, and (iii) approximately US$2.0 million related to the assignment of
certain accounts receivable. The Acquisition is deemed to be a transaction between entities under common control, which, under
applicable accounting guidelines, requires the assets and liabilities to be transferred at historical cost of the entity, with
prior periods retroactively adjusted to furnish comparative information.
On
March 1, 2017, the Company entered into and consummated a purchase agreement with Giovanni Monti, the owner of 100% of the outstanding
shares of GM&P. GM&P is a consulting and glazing contracting company located in Miami, Florida with over 15 years of experience
in the design and installation of various building enclosure systems such as curtain window walls and a long-standing commercial
relationship with the Company, working alongside it in different projects within the U.S, by providing engineering and installation
services to those projects. The Company acquired all of the shares of GM&P for a purchase price of $35 million, of which the
Company paid $6 million of the purchase price in cash within 60 days following the closing date and the remaining $29 million
of the purchase price to be originally payable on or before September 1, 2017 in cash, our ordinary shares or a combination of
both, at our sole option; subsequently modified to be payable by May 2018.
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Note
2.
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Basis of Presentation
and Summary of Significant Accounting Policies
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Basis
of Presentation and Management’s Estimates
The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of
the Securities and Exchange Commission (“SEC”).
Prior
year financial information has been retroactively adjusted for an acquisition under common control. As the acquisition of ESW
LLC was deemed to be a transaction between entities under common control, the assets and liabilities were transferred at the historical
cost of ESW LLC, with prior periods retroactively adjusted to include the historical financial results of the acquired company
for the period they were controlled by ESW LLC in the Company’s financial statements. The accompanying financial statements
and related notes have been retroactively adjusted to include the historical results and financial position of the acquired company
prior to the acquisition date during the periods the assets were under common control. All financial information presented for
the periods after the ESW LLC acquisition represent the consolidated results of operations, financial position and cash flows
of the Company with retroactive adjustments of the results of operations, financial position and cash flows of the acquired company
during the periods the assets were under common control.
The
preparation of the accompanying consolidated financial statements requires the Company to make estimates and judgments that affect
the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities
at the date of the Company’s financial statements. Actual results may differ from these estimates under different assumptions
and conditions. Estimates inherent in the preparation of these consolidated financial statements relate to the collectability
of account receivables, the valuation of inventories, estimated earnings on uncompleted contracts, useful lives and potential
impairment of long-lived assets, and valuation of warrants and other derivative financial instruments.
Principles
of Consolidation
These
financial statements consolidate TGI, its indirect wholly-owned subsidiaries TG, ES and ESW LLC, its direct wholly owned subsidiaries
GM&P, Tecno LLC and Tecno RE, and majority owned subsidiary Componenti, which are entities in which we have a controlling
financial interest because we hold a majority voting interest. To determine if we hold a controlling financial interest in an
entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise
the entity is evaluated under the voting interest model. All significant intercompany accounts and transactions are eliminated
in consolidation.
Foreign
Currency Translation and Transactions
The
consolidated financial statements are presented in U.S. Dollars, the reporting currency. Our foreign subsidiaries’ local
currency is the Colombian Peso, which is also their functional currency as determined by the market analysis, costs and expenses,
assets, liabilities, financing and cash flow indicators. As such, our subsidiaries’ assets and liabilities are translated
at the exchange rate in effect at the balance sheet date, with equity being translated at the historical rates. Revenues and expenses
of our foreign subsidiaries are translated at the average exchange rates for the period. The resulting cumulative foreign currency
translation adjustments from this process are included as a component of accumulated other comprehensive income (loss). Therefore,
the U.S. Dollar value of these items in our financial statements fluctuates from period to period.
Cash
and Cash Equivalents
Cash
and cash equivalents include investments with original maturities of three months or less. As of December 31, 2017, 2016 and 2015,
cash and cash equivalents were primarily comprised of deposits held in operating accounts in Colombia, Panama and United States.
As of December 31, 2017, 2016 and 2015 the Company had no restricted cash.
Investments
The
Company’s investments are comprised of marketable securities, short term deposits and income producing real estate.
Investments
which are held for trading are recorded at fair value and fluctuations in value are recorded as a non-operating income or expense.
In addition, we have investments in long-term marketable equity securities which are classified as available-for-sale securities
and are recorded at fair value.
Short-
term deposits and other financial instruments with maturities greater than 90 days and shares in other companies that do not meet
the requirements for equity method treatment are recorded for at cost.
We
also have investments in income-producing real estate. This real estate is recorded at cost and is depreciated using the straight-line
method over its estimated useful life. The depreciation and rental income associated with this real estate are recognized in the
consolidated statement of operations. These investments are recorded within long term assets on the Company’s balance sheet.
Trade
Accounts Receivable
Trade
accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts and sales returns.
The Company’s policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit
losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance
for doubtful accounts is necessary based on an analysis of past due accounts and other factors that may indicate that the collectability
of an account may be in doubt. Other factors that the Company considers include its existing contractual obligations, historical
payment patterns of its customers and individual customer circumstances, and a review of the local economic environment and its
potential impact on the collectability of accounts receivable. Account balances deemed to be uncollectible are written off after
all means of collection have been exhausted and the potential for recovery is considered remote.
On
certain fixed price contracts, a portion of the amounts billed are withheld by the customer as a retainage which typically amount
to 10% of the invoiced amount and can remain outstanding for several months until a final good receipt of the complete project
to the customers satisfaction.
Concentration
of Risks and Uncertainties
Financial
instruments which potentially subject the Company to credit risk consist primarily of cash and trade accounts receivable. The
Company mitigates its cash risk by maintaining its cash deposits with major financial institutions in the United States and Colombia.
As discussed above, the Company mitigates its risk to trade accounts receivable by performing on-going credit evaluations of its
customers.
Related
party transactions
The
Company has related party transactions such as sales, purchases, leases, guarantees, and other payments. We periodically performed
a related party analysis to identify transactions to disclose. Depending on the transactions, we aggregate some related party
information by type.
Inventories
Inventories
of raw materials, which consist primarily of purchased and processed glass, aluminum, parts and supplies held for use in the ordinary
course of business, are valued at the lower of cost or market. Cost is determined using a weighted-average method. Inventory consisting
of certain job specific materials not yet installed (work in process) are valued using the specific identification method. Cost
for finished product inventory are recorded and maintained at the lower of cost or market. Cost includes raw materials and direct
and applicable indirect manufacturing overheads. Also, inventories related to contracts in progress are included within work in
process and finished goods, and are stated at using the specific identification method and lower of cost or market, respectively,
and are expected to turn over in less than one year.
Reserves
for excess or slow-moving raw materials inventories are updated based on historical experience of a variety of factors including
sales volume and levels of inventories at the end of the period. The Company does not maintain allowances for the lower of cost
or market for inventories of finished products as its products are manufactured based on firm orders rather than built-to-stock.
Property,
Plant and Equipment
Property,
plant and equipment are recorded at cost. Significant improvements and renewals that extend the useful life of the asset are capitalized.
Interest caused while acquired property is under construction and installation are capitalized. Repairs and maintenance are charged
to expense as incurred. When property is retired or otherwise disposed of, the cost and related accumulated depreciation are removed
from the accounts and any related gains or losses are included in income as a reduction to or increase in selling, general and
administrative expenses. Depreciation is computed on a straight-line basis, based on the following estimated useful lives:
Buildings
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20 years
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Machinery and equipment
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10 years
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Furniture and fixtures
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10 years
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Office equipment and software
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5 years
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Vehicles
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5 years
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The
Company also records within fixed assets all the underlying assets of a capital lease. Initial recognition of these assets are
done at the present value of all future lease payments. A capital lease is a lease in which the lessor transferred substantially
all of the benefits and risks associated with the ownership of the property.
Long
Lived Assets
The
Company periodically reviews the carrying values of its long lived assets when events or changes in circumstances would indicate
that it is more likely than not that their carrying values may exceed their realizable values, and record impairment charges when
considered necessary.
When
circumstances indicate that an impairment may have occurred, the Company tests such assets for recoverability by comparing the
estimated undiscounted future cash flows expected to result from the use of such assets and their eventual disposition to their
carrying amounts. If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss, measured
as the excess of the carrying value of the asset over its estimated fair value, is recognized. Fair value is determined through
various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals,
as considered necessary.
Goodwill
We
review goodwill for impairment each year on December 31
st
or more frequently when events or significant changes in
circumstances indicate that the carrying value may not be recoverable. Under ASC 350-20-35-4 through 35-8A, the goodwill impairment
test requires a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying
amount of the reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit
is considered not impaired. The Company has only one reporting unit and as such the impairment analysis was done by comparing
the Company’s market capitalization with its book value of equity. As of our December 31, 2017, the Company’s market
capitalization exceeded its book value of equity and as such no impairment of goodwill was indicated. See Note 7- Goodwill and
Intangible Assets for additional information.
Intangible
Assets
Intangible
assets with definite lives subject to amortization are amortized on a straight-line basis. We also review these intangibles for
impairment when events or significant changes in circumstance indicate that the carrying value may not be recoverable. Events
or circumstances that indicate that impairment testing may be required include changes in building codes and regulation, loss
of key personnel or a significant adverse change in business climate or regulations. There were no triggering events or circumstances
noted and as such no impairment was needed for the intangible assets subject to amortization. See Note 7 - Goodwill and Intangible
Assets for additional information.
Common
Stock Purchase Warrants
The
Company classifies as equity any warrants contracts that (i) require physical settlement or net-share settlement or (ii) gives
the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The
Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net
cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty
a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).
The
Company assesses classification of its common stock purchase warrants and other freestanding derivatives, if any, at each reporting
date to determine whether a change in classification between assets and liabilities is required. As of December 20, 2016, the
Company no longer has warrants outstanding.
Financial
Liabilities
Financial
liabilities correspond to the financing obtained by the Company through bank credit facilities and accounts payable to suppliers
and creditors. Financial liabilities are initially recognized based on their fair value, which is usually equal to the transaction
value less directly attributable costs. Subsequently, such financial liabilities are carried at their amortized cost according
to the effective interest rate method determined at initial recognition, and recognized in the results of the period during the
time of amortization of the financial obligation.
Stock-Based
Compensation
We
account for stock-based compensation in accordance with
ASC 718, Compensation - Stock Compensation
. ASC 718 requires compensation
costs related to share-based transactions, including employee stock options, to be recognized based on fair value. The Company
accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. In October
2015, the Company authorized to grant each non-employee director $50 worth of ordinary shares of the Company payable annually
and first payment was made in October 2016. In November 2016 the Company authorized additional payment of $8 on an annual basis
to members of the Company´s Audit Committee members and $18 on an annual basis to the Chair of the Audit Committee, all
of whom are members of the board of directors. The Company recorded director stock compensation of $284 and $247 during the years
ended December 31, 2017 and 2016. No expense was recorded in 2015.
Fair
Value of Financial Instruments
ASC
820,
Fair Value Measurements
, establishes a fair value hierarchy which requires us to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. We primarily apply the market approach for financial assets
and liabilities measured at fair value on a recurring basis. Fair value is the price we would receive to sell and asset or pay
to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active
markets for identical assets or liabilities, such measurements involve developing assumptions based on market observable data
and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical
transaction that occurs at the measurement date.
The
standard describes three level of inputs that may be used to measure fair value:
Level
1: Quoted prices in active markets for identical assets or liabilities.
Level
2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets
that are not active; or other inputs that are observable by observable market data for substantially the full term of the assets
or liabilities.
Level
3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities.
See
Note 12 - Fair Value Measurements.
Revenue
Recognition
Our
principal sources of revenue are derived from product sales of manufactured glass and aluminum products. Revenue is recognized
when (i) persuasive evidence of an arrangement exists in the form of a signed purchase order or contract, (ii) delivery has occurred
per contracted terms, (iii) fees and prices are fixed and determinable, and (iv) collectability of the sale is reasonably assured.
All revenue is recognized net of discounts, returns and allowances. Delivery to the customer is deemed to have occurred when the
title is passed to the customer. Generally, title passes to the customer upon shipment, but title transfer may occur when the
customer receives the product based on the terms of the agreement with the customer.
Revenues
from fixed price contracts, which amount to approximately 47.0%, 16.0% and 21.6% of the Company’s sales for the year ended
December 31, 2017, 2016 and 2015, respectively, are recognized using the percentage-of-completion method, measured by the percentage
of costs incurred to date to total estimated costs for each contract. Revenues recognized in advance of amounts billable pursuant
to contracts terms are recorded as unbilled receivables on uncompleted contracts based on work performed and costs to date. Unbilled
receivables on uncompleted contracts are billable upon various events, including the attainment of performance milestones, delivery
and installation of products, or completion of the contract. Revisions to cost estimates as contracts progress have the effect
of increasing or decreasing expected profits each period. Changes in contract estimates occur for a variety of reasons, including
changes in contract scope, estimated revenue and estimated costs to complete. Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined. Changes in contract performance and estimated profitability may result
in revisions to costs and income and are recognized in the period in which the revisions are determined and do not have a material
effect on the Company’s financial statements.
Shipping
and Handling Costs
The
Company classifies amounts billed to customers related to shipping and handling as product revenues. The Company records and presents
shipping and handling costs in selling expenses.
Sales
Tax and Value Added Taxes
The
Company accounts for sales taxes and value added taxes imposed on its goods and services on a net basis - value added taxes paid
for goods and services purchased is netted against value added tax collected from customers and the net amount is paid to the
government. The current value added tax rate in Colombia for all of the Company’s products is 19%. A municipal industry
and commerce tax (ICA) sales tax of 0.7% is payable on all of the Company’s products sold in the Colombian market.
Product
Warranties
The
Company offers product warranties in connection with the sale and installation of its products that are competitive in the markets
in which the products are sold. Standard warranties depend upon the product and service, and are generally from five to ten years
for architectural glass, curtain wall, laminated and tempered glass, window and door products. Warranties are not priced or sold
separately and do not provide the customer with services or coverages in addition to the assurance that the product complies with
original agreed-upon specifications. Claims are settled by replacement of the warrantied products.
The
Company evaluated historical information regarding claims for replacements under warranties and concluded that the costs that
the Company has incurred in relation to these warranties have not been material.
Advertising
Costs
Advertising
costs are expensed as they are incurred and are included in general and administrative expenses. Advertising costs for the years
ended December 31, 2017, 2016 and 2015 amounted to approximately $1,385, $1,293 and $958, respectively.
Employee
Benefits
The
Company provides benefits to its employees in accordance with Colombian labor laws. Employee benefits do not give rise to any
long term liability.
Income
Taxes
The
Company’s operations in Colombia are subject to the taxing jurisdiction of the Republic of Colombia. Tecnoglass LLC and
Tecnoglass RE LLC are subject to the taxing jurisdiction of the United States. TGI and Tecnoglass Holding are subject to the taxing
jurisdiction of the Cayman Islands. Annual tax periods prior to December 2014 are no longer subject to examination by taxing authorities
in Colombia. GM&P, Componenti and ESW LLC are U.S. entities based in Florida subject to U.S. federal and state income taxes.
The
Company accounts for income taxes using the asset and liability approach of accounting for income taxes (ASC 740 “Income
Taxes”). Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts
of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the
current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and
tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are
enacted. For each tax jurisdiction in which the Company operates, deferred tax assets and liabilities are offset against one another
and are presented as a single noncurrent amount within the consolidated balance sheets.
The
Company presents deferred tax assets and liabilities net as either a non-current asset or liability, depending on the net deferred
tax position. The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely
than not, based on the technical merits, that the position will be sustained upon examination. The Company accrues for other tax
contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of the contingency can
be reasonably estimated. Interest accrued related to unrecognized tax and income tax related penalties are included in the provision
for income taxes. The uncertain income taxes positions are recorded in “Taxes payable” in the consolidated balance
sheets.
Earnings
per Share
The
Company computes basic earnings per share by dividing net income by the weighted-average number of ordinary shares outstanding
during the period. Income per share assuming dilution (diluted earnings per share) would give effect to dilutive options, warrants,
and other potential ordinary shares outstanding during the period. See Note 16 - Shareholders’ Equity for further detail
on the calculation of earnings per share.
Recently
Issued Accounting Pronouncements
In
January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business” (“ASU 2017-01”).
ASU 2017-01 provides amendments to ASC No. 805, “Business Combinations,” which clarify the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses. The amendments in this update are effective prospectively during interim and annual periods
beginning after December 15, 2017, with early adoption permitted. We evaluated the effect of this ASU and thise standard had no
impact on our consolidated financial statements.
In
January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”).
ASU 2017-04 provides amendments to ASC No. 350, “Intangibles - Goodwill and Other” (“ASC 350”), which
eliminate Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair
value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount
exceeds the reporting unit’s fair value. The amendments in this update are effective prospectively during interim and annual
periods beginning after December 15, 2019, with early adoption permitted. We evaluated the effect of this ASU and this standard
had no material impact on our consolidated financial statements.
In
August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash
Payments (“ASU 2016-15”). ASU 2016-15 reduces diversity in practice by providing guidance on the classification of
certain cash receipts and payments in the statement of cash flows. ASU 2016-15 clarifies that when cash receipts and cash payments
have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source
or use. ASU 2016-15 is effective on a retrospective basis for fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2017, with early adoption permitted. Adoption of this ASU has no material impact our consolidated
financial statements.
In
May 2016, the FASB also issued ASU 2016-12, Revenue from Contracts with Customers - Narrow-Scope Improvements and Practical Expedients
(“ASU 2016-12”), which provides clarification on certain topics within ASU 2014-09, Revenue from Contracts with Customers
(Topic 606) (“ASU 2014-09”), including assessing collectability, presentation of sales taxes, the measurement date
for non-cash consideration and completed contracts at transition, as well as providing a practical expedient for contract modifications
at transition. The effective date and transition requirements for the amendments in ASU 2016-08, ASU 2016-10 and ASU 2016-12 are
the same as the effective date and transition requirements of ASU 2014-09, which is effective for fiscal years, and for interim
periods within those years, beginning after December 15, 2017. The Company has evaluated the effect of adopting this ASU and these
standards had no impact on our consolidated financial statements.In August 2015, the FASB issued ASU No. 2015-14, “Revenue
from Contracts with Customers - Deferral of the Effective Date.” ASU 2015-14 defers the effective date of Update 2014-09
for all entities by one year. Early adoption is permitted. Below is the description of ASU 2014-09 which the Company has evaluated.
In
May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09). ASU 2014-09 provides
guidance for revenue recognition and affects any entity that either enters into contracts with customers to transfer goods or
services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements
in Topic 605, “Revenue Recognition,” and most industry-specific guidance. The core principle of ASU 2014-09 is the
recognition of revenue when a company transfers promised goods or services to customers in an amount that reflects the consideration
to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process to
achieve this core principle and, in doing so, companies will need to use more judgment and make more estimates than under the
current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration
to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09
is effective for fiscal years beginning after December 15, 2017 and interim periods therein, using either of the following transition
methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the
option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting
ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company has identified all
of its contracts, identified its performance obligations, determined transaction prices and allocated the transaction price to
performance obligations as well as determining the amount of revenues to recognize under the new standatrd ASC 606. The Company
compared the results of this analysis and the results under the prior standard ASC 605 and does not result in material differences
on the Company’s financial statments. The Company continues to work on this analysis to ensure that in fact no differences
need to be recognized; nevertheless, it does not expect to reach a different conclusion once the analysis has been fully completed.
In
February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02
to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance
sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, a lessee will recognize in the statement of
financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to
use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising
from a lease by a lessee have not significantly changed from current GAAP. ASU 2016-02 retains a distinction between finance leases
(i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance
leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases
and operating leases under current GAAP. The amendments of this ASU are effective for reporting periods beginning after December
15, 2018, with early adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest
period presented using a modified retrospective approach. The Company is currently evaluating the potential effect of this ASU
on its consolidated financial statements.
ESWindows
Acquisition
On
December 2, 2016, we acquired 100% of the stock of ESW LLC, 85.06% of which was acquired directly by Tecnoglass and 14.94% by
our subsidiary ES, for a total purchase price of $13.5 million, which consisted of (i) 734,400 ordinary shares issued in connection
with the transaction for approximately $9.2 million based on a stock price of $12.50, (ii) approximately $2.3 million in cash,
and (iii) approximately $2.0 million related to the assignment of certain accounts receivable.
The
Company incurred expenses for $82 of acquisition related costs which are recorded in operating expenses in the Company’s
results of operations. Of the 734,400 shares paid in consideration for the acquisition of ESW LLC, 80,000 shares were placed in
Escrow for indemnification to the Company for a period of 18 months after the closing date.
As
the Acquisition of ESW LLC was deemed to be a transaction between entities under common control, the assets and liabilities were
transferred at the historical cost of ESW LLC, with prior periods retroactively adjusted to include the historical financial results
of the acquired company for the period they were controlled by the previous owners of ESW LLC in the Company’s financial
statements.
GM&P
Acquisition
On
March 1, 2017, the Company acquired a 100% controlling interest in GM&P, a Florida-based commercial consulting, glazing and
engineering company, specializing in windows and doors for commercial contractors. The primary reasons for the acquisitions are
to penetrate different markets in the U.S. to streamline its distribution logistics, and to fabricate in the United States when
economically advantageous. The purchase price for the acquisition was $35,000, of which $6,000 of the purchase price was paid
in cash by the Company on May 17, 2017, with the remaining amount to be originally payable by the Company in cash, stock of the
Company or a combination of both at the Company´s sole discretion within 180 days after closing, subsequently amended to
be paid by May 15, 2018
.
The total amount of acquisition-related costs was $189,
which is included in the Statement of Operations for the period ending December 31, 2016.
With
the acquisition of GM&P, the Company also acquired a 60% equity interest in Componenti USA LLC, a subsidiary of GM&P that
provides architectural specialties in the US, specializing in design-build systems for individual projects and with experience
in value engineering to create products that comply with the architects’ original design intent, while maintaining focus
on affordable construction methods and materials.
The
following table summarizes the consideration transferred to acquire GM&P and the amounts of identified assets acquired and
liabilities assumed at the acquisition date, as well as the fair value of the non-controlling interest in Componenti USA LLC as
of the acquisition date. Under ASC 805, a company can apply measurement period adjustments during the twelve-month period after
the date of acquisition. During this period, the acquirer may adjust preliminary amounts recognized at the acquisition date to
their subsequently determined final fair values. The allocation of the consideration transferred was based on management’s
judgment after evaluation of several factors, including a preliminary valuation assessment. Finalization of the analysis has not
been completed and could result in measurement periods adjustments that could change the composition of current asset, fixed assets,
intangible assets, goodwill, and liabilities. The goodwill is not expected to be deductible for tax purposes. The goodwill from
the GM&P acquisition represents the expected synergies from combining operations with Tecnoglass Inc.
The
following table summarizes the purchase price allocation of the total consideration transferred:
Consideration
Transferred:
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Notes payable (Cash or Stock)
|
|
$
|
35,000
|
|
Fair value of the non-controlling interest
in Componenti
|
|
|
1,141
|
|
Recognized
amounts of identifiable assets acquired and liabilities assumed:
|
|
Preliminary
Purchase Price
Allocation
|
|
|
Measurement
Period
Adjustments
|
|
|
Final
Purchase Price
Allocation
|
|
Cash and equivalents
|
|
$
|
509
|
|
|
|
|
|
|
|
509
|
|
Accounts receivable
|
|
|
42,314
|
|
|
|
|
|
|
|
42,314
|
|
Other current assets
|
|
|
5,287
|
|
|
|
242
|
|
|
|
5,529
|
|
Property, plant, and equipment
|
|
|
684
|
|
|
|
|
|
|
|
684
|
|
Other non-current tangible assets
|
|
|
59
|
|
|
|
|
|
|
|
59
|
|
Trade name
|
|
|
980
|
|
|
|
|
|
|
|
980
|
|
Non-compete agreement
|
|
|
165
|
|
|
|
|
|
|
|
165
|
|
Contract backlog
|
|
|
3,090
|
|
|
|
|
|
|
|
3,090
|
|
Customer relationships
|
|
|
4,140
|
|
|
|
|
|
|
|
4,140
|
|
Accounts payable
|
|
|
(22,330
|
)
|
|
|
275
|
|
|
|
(22,055
|
)
|
Other current liabilities assumed
|
|
|
(13,967
|
)
|
|
|
(242
|
)
|
|
|
(14,209
|
)
|
Non-current liabilities
assumed
|
|
|
(3,634
|
)
|
|
|
(3,231
|
)
|
|
|
(6,865
|
)
|
Total identifiable
net assets
|
|
|
17,297
|
|
|
|
(2,956
|
)
|
|
|
14,341
|
|
Goodwill (including Workforce)
|
|
$
|
18,844
|
|
|
|
2,956
|
|
|
$
|
21,800
|
|
The
adjustment made to the preliminary purchase price allocation to Non-current liabilities assumed is related to an adjustment in
deferred tax liability. The excess of the consideration transferred over the estimated fair values of assets acquired and liabilities
assumed was recorded as goodwill. The identifiable intangible asset subject to amortization was the tradename, customer relationships,
non-compete agreement, and backlog, which have a remaining useful life of two to five years. See Note 7 – Goodwill and Intangible
Assets for additional information.
The
following unaudited pro forma financial information assumes the acquisition had occurred as of January 1, 2015 which does not
include GM&P actual results for the entire period. Pro forma results have been prepared by adjusting our historical results
to include the results of GM&P adjusted for the amortization expense related to the intangible assets arising from the acquisition.
The unaudited pro forma results below do not necessarily reflect the results of operations that would have resulted had the acquisition
been completed at the beginning of the earliest periods presented, nor does it indicate the results of operations in future periods.
The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market
conditions which could alter the following unaudited pro forma results.
|
|
Pro-Forma
|
|
|
Pro-Forma
|
|
|
|
Twelve
months
|
|
|
Twelve
months
|
|
|
|
Ended
|
|
|
Ended
|
|
(in
thousands, except per share amounts)
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
Pro Forma Results
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
324,523
|
|
|
$
|
365,047
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to parent
|
|
$
|
4,719
|
|
|
$
|
27,600
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.14
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.13
|
|
|
$
|
0.85
|
|
Non-controlling
interest
With
the acquisition of GM&P, the Company also acquired a 60% equity interest in Componenti USA LLC, a subsidiary of GM&P that
provides architectural specialties in the US, specializing in design-build systems for individual projects and with experience
in value engineering to create products that comply with the architects’ original design intent, while maintaining focus
on affordable construction methods and materials. The 40% non-controlling interest in Componenti is included in the opening balance
sheet as of the acquisition date and its fair value amounted to $1,141. When the company owns a majority (but less than 100%)
of a subsidiary’s stock, the Company includes in its Consolidated Financial Statements the non-controlling interest in the
subsidiary. The non-controlling interest in the Condensed Consolidated Statements of Operations and Other Comprehensive Income
is equal to the non-controlling interests’ proportionate share of the subsidiary’s net income and, as included in
Shareholders’ Equity on the Condensed Consolidated Balance Sheet, is equal to the non-controlling interests’ proportionate
share of the subsidiary’s net assets. In determining the fair value we used the income approach amd the market approach
which was performed by third party valuation specialists under management.
|
Note
4.
|
Trade
Accounts Receivable
|
Trade
accounts receivable consists of the following:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Current accounts receivable
|
|
$
|
85,255
|
|
|
$
|
87,704
|
|
Retainage
|
|
|
27,938
|
|
|
|
6,676
|
|
Trade accounts
receivable
|
|
|
113,193
|
|
|
|
94,380
|
|
Less: Allowance
for doubtful accounts
|
|
|
(2,729
|
)
|
|
|
(2,083
|
)
|
|
|
$
|
110,464
|
|
|
$
|
92,297
|
|
GM&P’s
contractual amounts and fair value of its accounts receivable as of the acquisition date amounted to $42,314 of which $15,116
represent retainage. This is the best estimate at the acquisition date of the contractual cash flows expected to be collected.
The
changes in allowances for doubtful accounts for the years ended December 31, 2017 and 2016 are as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Balance at beginning of
year
|
|
$
|
2,083
|
|
|
$
|
189
|
|
Provision for bad debts
|
|
|
3,128
|
|
|
|
4,686
|
|
Deductions and
write-offs, net of foreign currency adjustment
|
|
|
(2,482
|
)
|
|
|
(2,792
|
)
|
Balance at end
of year
|
|
$
|
2,729
|
|
|
$
|
2,083
|
|
Other
assets consists of the following:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Advances to Suppliers and
Loans
|
|
$
|
795
|
|
|
$
|
716
|
|
Prepaid Income Taxes
|
|
|
15,573
|
|
|
|
14,080
|
|
Employee Receivables
|
|
|
455
|
|
|
|
489
|
|
Other Creditors
|
|
|
691
|
|
|
|
804
|
|
|
|
$
|
17,514
|
|
|
$
|
16,089
|
|
|
Note
6.
|
Other
Long Term Assets
|
Other
long term assets are comprised of the following:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Real estate investments
|
|
$
|
2,069
|
|
|
$
|
5,125
|
|
Cost method investment
|
|
|
500
|
|
|
|
500
|
|
Deferred tax
assets
|
|
|
103
|
|
|
|
-
|
|
Other long term
assets
|
|
|
82
|
|
|
|
1,687
|
|
|
|
$
|
2,752
|
|
|
$
|
7,312
|
|
|
Note
7.
|
Goodwill
and Intangible Assets
|
Goodwill
The
table below provides a reconciliation of the beginning and ending balances of the Goodwill recorded on the Company’s balance
sheet:
Beginning balance - December
31, 2016
|
|
$
|
1,330
|
|
GM&P Acquisition
|
|
|
21,800
|
|
Ending balance
– December 31, 2017
|
|
$
|
23,130
|
|
Intangible
Assets, Net
Intangible
assets include Miami-Dade County Notices of Acceptances (NOA’s), which are certificates in the required to market hurricane-
resistant glass in Florida. Also, it includes the intangibles acquired from the acquisition of GM&P.
|
|
December
31, 2017
|
|
|
|
Gross
|
|
|
Acc.
Amort.
|
|
|
Net
|
|
Trade Names
|
|
$
|
980
|
|
|
$
|
(163
|
)
|
|
$
|
817
|
|
Notice of Acceptances (NOAs), product
designs and other intellectual property
|
|
|
10,826
|
|
|
|
(5,467
|
)
|
|
|
5,359
|
|
Non-compete Agreement
|
|
|
165
|
|
|
|
(28
|
)
|
|
|
137
|
|
Contract Backlog
|
|
|
3,090
|
|
|
|
(1,287
|
)
|
|
|
1,803
|
|
Customer Relationships
|
|
|
4,140
|
|
|
|
(739
|
)
|
|
|
3,401
|
|
Total
|
|
$
|
19,201
|
|
|
$
|
(7,684
|
)
|
|
$
|
11,517
|
|
|
|
December
31, 2016
|
|
|
|
Gross
|
|
|
Acc.
Amort.
|
|
|
Net
|
|
Notice of Acceptances (NOAs)
and product designs
|
|
|
8,524
|
|
|
|
(3,969
|
)
|
|
|
4,555
|
|
|
|
December
31, 2015
|
|
|
|
Gross
|
|
|
Acc.
Amort.
|
|
|
Net
|
|
Notice of Acceptances (NOAs)
and product designs
|
|
|
6,446
|
|
|
|
(3,102
|
)
|
|
|
3,344
|
|
The
weighted average amortization period is 4.8 years.
During
the twelve months ended December 31, 2017, 2016 and 2015, the amortization expense amounted to $3,497, $1,014 and $1,658,
respectively, and was included within the general and administration expenses in our consolidated statement of operations.
The
estimated aggregate amortization expense for each of the five succeeding years as of December 31, 2017 is as follows:
Year
ending
|
|
(in
thousands)
|
|
2018
|
|
$
|
3,736
|
|
2019
|
|
|
2,406
|
|
2020
|
|
|
2,026
|
|
2021
|
|
|
1,996
|
|
2022
|
|
|
997
|
|
Thereafter
|
|
|
356
|
|
|
|
$
|
11,517
|
|
Inventories
are comprised of the following
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
Raw materials
|
|
$
|
40,509
|
|
|
$
|
40,219
|
|
Work in process
|
|
|
11,468
|
|
|
|
5,606
|
|
Finished goods
|
|
|
13,236
|
|
|
|
4,124
|
|
Stores and spares
|
|
|
6,134
|
|
|
|
5,016
|
|
Packing material
|
|
|
438
|
|
|
|
284
|
|
|
|
|
71,785
|
|
|
|
55,249
|
|
Less: inventory
allowances
|
|
|
(129
|
)
|
|
|
(157
|
)
|
|
|
$
|
71,656
|
|
|
$
|
55,092
|
|
There
are no third party liens or pledges on our inventories as of December 31, 2017.
|
Note
9.
|
Property,
Plant and Equipment
|
Property,
plant and equipment is comprised of the following:
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
Building
|
|
$
|
59,237
|
|
|
$
|
50,887
|
|
Machinery and equipment
|
|
|
134,536
|
|
|
|
132,333
|
|
Office equipment and software
|
|
|
5,936
|
|
|
|
4,980
|
|
Vehicles
|
|
|
1,834
|
|
|
|
1,648
|
|
Furniture and
fixtures
|
|
|
2,274
|
|
|
|
2,141
|
|
Total property, plant
and equipment
|
|
|
203,817
|
|
|
|
191,989
|
|
Accumulated depreciation
|
|
|
(66,083
|
)
|
|
|
(49,277
|
)
|
Net book value of property and equipment
|
|
|
137,734
|
|
|
|
142,712
|
|
Land
|
|
|
30,967
|
|
|
|
28,085
|
|
Total
property, plant and equipment, net
|
|
$
|
168,701
|
|
|
$
|
170,797
|
|
As
of December 31, 2017, the Company had $231 of machinery and equipment under capital lease included within property plant and equipment.
Differences between capital lease obligations and the value of property, plant and equipment under capital lease arises from differences
between the maturities of capital lease obligations and the useful lives of the underlying assets.
Depreciation
expense was $17,472, $14,508 and $10,806 for the years ended December 31, 2017, 2016 and 2015, respectively.
The
roll forward of Property, plant and equipment for the years ended December 31, 2017, 2016 and 2015 is as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Property, Plant and
Equipment
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
$
|
220,074
|
|
|
$
|
168,992
|
|
GM&P Acquisition
|
|
|
961
|
|
|
|
-
|
|
Additions
|
|
|
8,782
|
|
|
|
42,719
|
|
Disposals
|
|
|
(17
|
)
|
|
|
(381
|
)
|
Reclassifications
|
|
|
5,459
|
|
|
|
-
|
|
Effect
of Foreign currency translation
|
|
|
(475
|
)
|
|
|
8,744
|
|
Ending Balance
|
|
$
|
234,784
|
|
|
$
|
220,074
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation
|
|
|
|
|
|
|
|
|
Beginning Balance
|
|
$
|
(49,277
|
)
|
|
$
|
(33,018
|
)
|
GM&P Acquisition
|
|
|
(277
|
)
|
|
|
-
|
|
Depreciation Expense
|
|
|
(17,472
|
)
|
|
|
(14,508
|
)
|
Reclassification
to investment property
|
|
|
(585
|
)
|
|
|
-
|
|
Effect
of Foreign Currency Translation
|
|
|
1,528
|
|
|
|
(1,751
|
)
|
Ending balance
|
|
$
|
(66,083
|
)
|
|
$
|
(49,277
|
)
|
Property,
plant and Equipment, Net
|
|
$
|
168,701
|
|
|
$
|
170,797
|
|
The
effect of foreign currency translation is the adjustment resulting from translating the amounts from Colombian Pesos, functional
currency of some of the Company’s subsidiaries, into U.S. Dollars, the reporting currency.
The
Company’s debt is comprised of the following:
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
Revolving lines of credit
|
|
$
|
638
|
|
|
$
|
13,168
|
|
Capital lease
|
|
|
245
|
|
|
|
23,696
|
|
Unsecured senior note
|
|
|
210,000
|
|
|
|
-
|
|
Other loans
|
|
|
20,293
|
|
|
|
165,330
|
|
Less: Deferred
cost of financing
|
|
|
(6,918
|
)
|
|
|
(2,597
|
)
|
Total obligations
under borrowing arrangements
|
|
|
224,258
|
|
|
|
199,597
|
|
Less: Current portion of long-term debt
and other current borrowings
|
|
|
3,260
|
|
|
|
2,651
|
|
Long-term debt
|
|
$
|
220,998
|
|
|
$
|
196,946
|
|
As
of December 31, 2017, the Company owed approximately $224,258 under its various borrowing arrangements. This balance includes
$6,918 of deferred transaction costs which are reducing the debt balance. As of December 31, 2017 and 2016, the Company had $224,041
and $114,198 of debt denominated in US Dollars with the remaining amounts denominated in Colombian Pesos.
The
Company’s Other loans amounting to $20,293 have maturities ranging from twelve month to a 15 years Export Credit Agency
Facility. Our credit facilities bear interest at rates ranging from 3.3% to 8.2% and weighted average of 7.7%. Short term borrowings
outstanding bear a weighted average interest rate of 7.2%.
On
January 23, 2017, the Company issued a U.S. dollar denominated, $210 million offering of 5-year senior unsecured notes at a coupon
rate of 8.2% in the international debt capital markets under Rule 144A of the Securities Act to Qualified Institutional Buyers.
The Company used approximately $179 million of the proceeds to repay outstanding indebtedness, including Capital leases, and as
a result will achieve a lower cost of debt and strengthen its capital structure given the non-amortizing structure of the new
bond. Of these repayments, $59,444 were used to refinance short term debt into long term debt. The senior note does not have negative
covenants with an acceleration clause, however requires the Company to meet certain performance indicators in order to take on
more debt.
The
Company had $4,758 and $8,366 of property, plant and equipment as well as $0 and $4,757 of other long-term assets pledged to secure
$3,337 and $109,193 under various lines of credit as of December 31, 2017 and December 31, 2016, respectively. Differences between
pledged assets and the amount secured is related to the difference between carrying value of such assets recorded at historical
cost and the guarantees issued to the banks which are based on the market value of the real estate. The Company also has a revolving
line of credit for up to $4,250 in name of GM&P, of which $95 were outstanding as of December 31, 2017 secured by up to $50,548
of all of GM&P’s assets. Pursuant to the issuance of the unsecured senior note issued in January of 2017 and repayment
of $176,899 million of outstanding indebtedness, $8,366 of pledged property plant and equipment were released to the Company.
Maturities
of long term debt and other current borrowings are as follows as of December 31, 2017:
Year Ending December
31,
|
|
|
|
2018
|
|
$
|
3,260
|
|
2019
|
|
|
2,400
|
|
2020
|
|
|
2,379
|
|
2021
|
|
|
2,348
|
|
2022
|
|
|
212,350
|
|
Thereafter
|
|
|
8,439
|
|
Total
|
|
$
|
231,176
|
|
The
Company had $4,250 and $638 available and outstanding in several lines of credit under a revolving note arrangement as of December
31, 2017. The floating interest rates on the revolving notes range between DTF+4.2% and DTF+7%. DTF is the primary measure of
interest rates in Colombia. The notes are secured by all assets of the Company. At December 31, 2016 $13,168 were outstanding
under these lines, respectively.
Pursuant
to the issuance of the senior unsecured note issued in January 2017, the Company repaid the majority of outstanding balances at
the time and maintains available lines of credit with its relationship banks. As of December 31, 2017, the company had additional
$27.7 million available under a short term line of Credit.
As
of December 31, 2017, the Company was obligated under various capital leases under which the aggregate present value of the minimum
lease payments amounted to $245. The present vale of the minimum lease payments was calculated using discount rates ranging from
5.0% to 6.7% and maturities ranging from 3 years to 5 years. Differences between capital lease obligations and the value of property,
plant and equipment under capital lease arises from differences between the maturities of capital lease obligations and the useful
lives of the underlying assets.
Interest
expense for the year ended December 31, 2017, 2016 and 2015 was $19,872, $16,814 and 9,274, respectively. The increase is associated
to the added debt to address the company´s growth capital expenditure requirements. During the years ended December 31,
2017, 2016 and 2015, the Company capitalized interests in the amounts of $10, $377 and $1,383, respectively.
The
Company files income tax returns for TG and ES in the Republic of Colombia. On December 28, 2016, the Colombian congress enacted
a structural tax reform that took effect on January 1, 2017 which reduces corporate income tax from 42% to 40% for fiscal year
2017, 37% in 2018 and 33% in 2019 and thereafter. As a result of the Colombian tax reform from December 28, 2016, the Company’s
net deferred tax liability decreased $586 as of December 31, 2016.
GM&P,
Componenti and ESW LLC are U.S. entities based in Florida subject to U.S. federal and state income taxes. The estimated comined
state and federal income tax rate ranges between 34% and 39.5%. Tecnoglass Inc. as well as all the other subsidiaries in the Cayman
Islands and Panama do not currently have any tax obligations.
On December 20, 2017, the
Tax Cuts and Jobs Act (the “2017 Act”) was signed into law.
On December 22, 2017, the SEC staff issued Staff
Accounting Bulletin No. 118 (SAB 118) to address the application of US GAAP in situations when a registrant does not have the
necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting
for certain income tax effects of the 2017 act. Registrants must report provisional amounts for those specific income tax effects
of the 2017 Act for which the accounting is incomplete but a reasonable estimate can be determined. Provisional amounts or adjustments
to provisional amounts identified in the measurement period, as defined, should be included as an adjustment to tax expense or
benefit from continuing operations in the period the amounts are determined.
We analyzed
the impact of the 2017 Act on our accounting for income taxes, including the remeasurement of our deferred tax assets and liabilities,
and expect to see a reduction in U.S. tax expense as the new reform reduces the federal corporate tax rate from 35% to 21%.
ESW
is an LLC that was not subject to income taxes during the year 2015 and the eleven months period ending December 2, 2016, since
it was a pass-through entity for tax purposes. ESW was converted to a C-Corporation and will be subject to income taxes starting
on December 3, 2016.
The
components of income tax expense (benefit) are as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Current income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
$
|
4,558
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Colombia
|
|
|
7,372
|
|
|
|
16,318
|
|
|
|
20,809
|
|
|
|
|
11,930
|
|
|
|
16,318
|
|
|
|
20,809
|
|
Deferred income Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
(2,328
|
)
|
|
|
-
|
|
|
|
-
|
|
Colombia
|
|
|
(3,809
|
)
|
|
|
(246
|
)
|
|
|
(118
|
)
|
|
|
|
(6,137
|
)
|
|
|
(246
|
)
|
|
|
(118
|
)
|
Total Provision
for Income Tax
|
|
$
|
5,793
|
|
|
$
|
16,072
|
|
|
$
|
20,691
|
|
A
reconciliation of the statutory tax rate in Colombia to the Company’s effective tax rate is as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Income tax expense at
statutory rates
|
|
|
37.0
|
%
|
|
|
40.0
|
%
|
|
|
39.0
|
%
|
Change in fair value of warrant liability
|
|
|
-
|
%
|
|
|
-0.8
|
%
|
|
|
122.5
|
%
|
Change in fair value of Earnout shares
|
|
|
-
|
%
|
|
|
-4.8
|
%
|
|
|
53.4
|
%
|
Other non-deductible expenses
|
|
|
14,7
|
%
|
|
|
-4.2
|
%
|
|
|
48.4
|
%
|
Withholding tax on debt payments
|
|
|
9.3
|
%
|
|
|
-
|
%
|
|
|
-
|
%
|
Other non-taxable
income
|
|
|
-9.5
|
%
|
|
|
10.7
|
%
|
|
|
-2.2
|
%
|
Effective
tax rate
|
|
|
51.5
|
%
|
|
|
40.9
|
%
|
|
|
261.1
|
%
|
The
Company has the following deferred tax assets and liabilities:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Accounts Receivable Clients
- not delivered FOB
|
|
$
|
-
|
|
|
$
|
930
|
|
Property, plant and equipment adjustments
|
|
|
483
|
|
|
|
564
|
|
Financial Liabilities
|
|
|
-
|
|
|
|
24
|
|
Deferred profit on other assets
|
|
|
108
|
|
|
|
107
|
|
Foreign currency transactions
|
|
|
1,551
|
|
|
|
|
|
Provision Inventory
obsolescence
|
|
|
35
|
|
|
|
36
|
|
Total deferred
tax assets
|
|
$
|
2,178
|
|
|
$
|
1,661
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Inventory - not delivered FOB
|
|
$
|
1,134
|
|
|
$
|
1,507
|
|
Unbilled receivables uncompleted contracts
|
|
|
726
|
|
|
|
2,649
|
|
Depreciation
and Amortization
|
|
|
2,532
|
|
|
|
1,028
|
|
Total deferred
tax liabilities
|
|
$
|
2,124
|
|
|
$
|
5,184
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax
|
|
$
|
2,214
|
|
|
$
|
3,523
|
|
Net
deferred tax is presented on the balance sheet as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Long
term deferred income tax asset
|
|
$
|
103
|
|
|
$
|
-
|
|
Less: long term
deferred income tax liability
|
|
$
|
2,317
|
|
|
$
|
3,523
|
|
As
of December 31, 2017, the Company has an uncertain tax position amounting to $2,041 related to $8,351 gross unrecognized tax benefit
associated with a conversion of GM&P’s cash basis accounting for tax purposed to accrual basis for Fiscal years 2016
and 2015. Before 2015, GM&P was using the cash method of accounting and due to IRS regulations it needed to convert to accrual
method and pay the IRS taxes over the gross unrecognized tax benefit associated with the conversion. The unrecognized tax benefits
may increase or change during the next year for items that arise in the ordinary course of business and may be subject to inspection
by the Colombian tax authorities for a period of up to two years until the statute of limitations period elapses and US tax authorities
for a period of up to six years until the statute of limitations period elapses.
|
Note
12.
|
Fair
Value Measurements
|
The
Company accounts for financial assets and liabilities in accordance with accounting standards that define fair value and establish
a framework for measuring fair value. The hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted
prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets
and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through
market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based
on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s
classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
The
carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable and advances from customers approximate their fair value due to their relatively short-term maturities. The Company bases
its fair value estimate for long term debt obligations on its internal valuation that all debt is floating rate debt based on
current interest rates in Colombia.
As
of December 31, 2017, financial instruments carried at amortized cost that do not approximate fair value consist of long-term
debt. See Note 10 - Debt. The fair value of long term debt was calculated based on an analysis of future cash flows discounted
with our average cost of debt which is based on market rates, which are level 2 inputs.
The
following table summarizes the fair value and carrying amounts of our long-term debt:
|
|
December
31
|
|
|
|
2017
|
|
|
2016
|
|
Fair Value
|
|
|
240,057
|
|
|
|
190,190
|
|
Carrying Value
|
|
|
220,998
|
|
|
|
196,786
|
|
The
following is a summary of assets, liabilities, and income and expense transactions with all related parties, shareholders, directors
and managers:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Due
from VS
|
|
$
|
6,240
|
|
|
$
|
9,143
|
|
Due
from other related parties
|
|
|
2,260
|
|
|
|
1,852
|
|
|
|
$
|
8,500
|
|
|
$
|
10,995
|
|
|
|
|
|
|
|
|
|
|
Long Term Trade
receivable from VS
|
|
$
|
-
|
|
|
$
|
-
|
|
Investments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Due
to related parties
|
|
$
|
(975
|
)
|
|
$
|
(3,668
|
)
|
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
5,081
|
|
|
$
|
9,742
|
|
|
$
|
9,942
|
|
Interest Income
|
|
|
-
|
|
|
|
235
|
|
|
|
451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses-
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid to other related parties
|
|
|
2,880
|
|
|
|
2,395
|
|
|
|
3,036
|
|
Ventanas
Solar S.A. (“VS”), a Panama
sociedad anonima,
is an importer and installer of the Company’s products
in Panama. Family members of the Company’s CEO and COO and other related parties own 100% of the equity in VS. The Company’s
sales to VS for the year ended December 31, 2017, 2016 and 2015 were $3,670, $8,269 and $5,437, respectively.
During
2015 and 2014, the Company and VS executed a short-term payment agreement and a three-year payment agreement that were mainly
created to fund working capital to VS due the timing difference between the collections from VS’s customers. The interest
rate of these payment agreements is Libor + 4.7% paid semiannually and Libor +6.5% paid monthly for the short-term agreement and
the three-year agreement, respectively. On December 2, 2016 the outstanding amount of $2,016 was reassigned to the former shareholders
of ESW LLC as part of the consideration paid for the acquisition of ESW. As a result, the Company does not have any outstanding
receivable under these payment agreements as of December 31, 2016.
Due
to related party as of December 31, 2016 includes a $2,303 payable to the former shareholders of ESW LLC as part of the consideration
paid for the acquisition (See Note 3 – ESWindows for further details). During the years ended December 31, 2016 and 2015,
ESW made distributions to its former shareholders amounting to $2,263 and 1,409, respectively, which are distributions made prior
to acquisition date, as further described in Note 3 – ESWindows Acquisition.
The
balance of receivables due from VS at the end of 2017 is higher than the revenues invoiced during the year, given the fact that
a large component of those receivables is associated with retainage that is due from VS´s clients to VS, and that becomes
payable when projects are fully completed and certain conditions have been met. We expect that a large portion of those receivables
will be paid during 2018 given the stages of the aforementioned projects.
Paid
to other related parties during the year ended December 31, 2017, 2016 and 2015 include charitable contributions to the Company’s
foundation for $2,787, $1,340, and $1,234, respectively, and sales commissions for $691, $392, and $1,107, respectively.
|
Note
14.
|
Warrant
Liability and Earnout Shares Liability
|
Warrant
Liability
On
August 4, 2016, the Company commenced a warrant exchange offer, under which each Tecnoglass warrant holder had the opportunity
to receive one Tecnoglass ordinary share in exchange for every 2.5 of the Company’s outstanding warrants tendered by the
holder and exchanged pursuant to the offer. As of the expiration of the exchange offer period on September 8, 2016, 5,479,049
outstanding warrants, or approximately 82% of the outstanding warrants, were tendered. Those tenders were accepted by Tecnoglass,
which issued 2,191,608 new ordinary shares on September 14, 2016. As a result, the warrant liability decreased by $26,300 and
the additional paid in capital increased by the same amount.
On
December 20, 2016, the ordinary warrants expired by their terms. There were 1,275,823 warrants outstanding as of September 30,
2016 following completion of the Company’s September 2016 warrant exchange offer. Of such amount, 1,265,842 warrants were
exercised prior to the expiration of the warrants, resulting in 478,218 ordinary shares being issued, with the remaining unexercised
warrants expiring by their terms. The warrant liability associated with the warrants was reclassified into equity once adjusted
to fair value at the date of expiration.
Earnout
Shares Liability
Pursuant
to the business combination closed on December 20, 2012, the Company issued 500,000 ordinary shares upon achievement of the EBITDA
target for the year ended December 31, 2014 and 1,000,000 ordinary shares upon achievement of the EBITDA target for the year ended
December 31, 2015. Additionally, on December 20, 2016, we notified the Escrow Agent that the earnout target for the year ended
December 31, 2016 had been met in full, notwithstanding the fact that the audit of such period had not yet been completed. Through
November 30, 2016, Tecnoglass had achieved an EBITDA substantially higher than the one between $40 million and $45 million required
to trigger the release of the shares from escrow. As a result, Tecnoglass instructed the Escrow Agent to release the remaining
1,500,000 ordinary shares held in escrow to Energy Holding Corp., the former stockholder of Tecnoglass prior to the Business Combination
and an affiliate of Jose M. Daes, our Chief Executive Officer, and Christian T. Daes, our Chief Operating Officer.
|
Note
15.
|
Commitments
and Contingencies
|
Commitments
As
of December 31, 2017, the Company has an outstanding obligation to purchase an aggregate of at least $40,537 of certain raw materials
from a specific supplier before May 2026.
Guarantees
As
of December 31, 2017, the Company does not have guarantees on behalf of other parties.
General
Legal Matters
From
time to time, the Company is involved in legal matters arising in the regular course of business. Some disputes are derived directly
from our construction projects, related to supply and installation, and even though deemed ordinary, they may involve significant
monetary damages. We are also subject to other type of litigations arising from employment practices, worker’s compensation,
automobile claims and general liability. It is very difficult to predict precisely what the outcome of these litigations might
be. However, with the information at out disposition as this time, there are no indications that such claims will result in a
material adverse effect on the business, financial condition or results of operations of the Company.
|
Note
16.
|
Shareholders’
Equity
|
Preferred
Shares
TGI
is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences
as may be determined from time to time by the Company’s board of directors.
As
of December 31, 2017, there are no preferred shares issued or outstanding.
Ordinary
Shares
The
Company is authorized to issue 100,000,000 ordinary shares with a par value of $0.0001 per share. As of December 31, 2017, a total
of 34,836,575 Ordinary shares were issued and outstanding.
Legal
Reserve
Colombian
regulation requires that companies retain 10% of net income until it accumulates at least 50% of subscribed and paid in capital.
Earnings
per Share
The
following table sets forth the computation of the basic and diluted earnings per share for the years ended December 31, 2017,
2016 and 2015:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Numerator for basic
and diluted earnings per shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
5,725
|
|
|
$
|
23,180
|
|
|
$
|
(11,020
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings per
ordinary share - weighted average shares outstanding
|
|
|
34,822,313
|
|
|
|
30,850,866
|
|
|
|
29,081,196
|
|
Effect
of dilutive securities and stock dividend
|
|
|
499,080
|
|
|
|
1,521,094
|
|
|
|
-
|
|
Denominator
for diluted earnings per ordinary share - weighted average shares outstanding
|
|
|
35,321,393
|
|
|
|
32,371,866
|
|
|
|
29,081,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share
|
|
$
|
0.16
|
|
|
$
|
0.75
|
|
|
$
|
(0.38
|
)
|
Diluted earnings per ordinary share
|
|
$
|
0.16
|
|
|
$
|
0.72
|
|
|
$
|
(0.38
|
)
|
The
weighted average number for shares outstanding for calculation of basic earnings per share for the year ended December 31, 2015
considers 734,400 ordinary shares issued in December 2016 as part of the consideration paid the acquisition of ESW LLC, acquisition
of an entity under common control as further described in Note 3. As per
ASC 260 – Earnings Per Share
, 2,626,727
and 3,125,807 ordinary shares issued in connection with the share dividend paid since December 31, 2015 and 2016 are considered
in the denominator for basic and diluted earnings per ordinary share, respectively.
The
effect of dilutive securities includes 499,080 and 1,521,094 as of December 31, 2017 and 2016, respectively, for shares potentially
issued in relation to the dividends declared.
Long
Term Incentive Compensation Plan
On
December 20, 2013, our shareholders approved our 2013 Long-Term Equity Incentive Plan (“2013 Plan”). Under the 2013
Plan, 1,593,917 ordinary shares are reserved for issuance in accordance with the plan’s terms to eligible employees, officers,
directors and consultants. As of December 31, 2017, no awards had been made under the 2013 Plan.
Dividend
The
Company has authorized the payment of four regular quarterly dividends to holders of ordinary shares at a quarterly rate of $0.125
per share, or $0.50 per share on an annual basis, with the first quarterly dividend being payable on November 1, 2016. The dividends
are payable in cash or ordinary shares, at the option of the holders of ordinary shares. On May 11, 2017, the Company announced
that commencing with the declared quarterly dividend for the third quarter of 2017 through any future dividends to be declared
and paid through the second quarter of 2018, a 12% increase to $0.14 per share, or $0.56 per share on an annual basis would apply.
As
a result, the Company has a dividend payable amounting to $585 as of December 31, 2017. The Company issued 1,619,812 shares for
the share dividends paid during the year ended December 31, 2017.
The
Company analyzed the accounting guidance under ASC 505 and determined that this guidance is not applicable since the dividend
are shares of the same class in which each shareholder is given an election to receive cash or shares. As such, the Company analyzed
the dividend under ASC 480 — Distinguishing Liabilities from Equity and concluded that the dividend should be accounted
for as a liability since the dividend is a fixed monetary amount known at inception. A reclassification from dividend payable
to additional paid-in capital was done for the stocks dividend elections.
Energy
Holding Corp., the majority shareholder of the Company, has irrevocably elected to receive any quarterly dividends declared through
the second quarter of 2018 in ordinary shares, as opposed to cash.
Dividend
declarations and the establishment of future record and payment dates are subject to the Board of Directors’ continuing
determination that the dividend policy is in the best interests of the Company and its shareholders. The dividend policy may be
changed or cancelled at the discretion of the Board of Directors at any time.
|
Note
17.
|
Segment
and Geographic Information
|
The
Company has one operating segment, Architectural Glass and Windows, which is also its reporting segment, comprising the design,
manufacturing, distribution, marketing and installation of high-specification architectural glass and windows products sold to
the construction industry.
In
reviewing the Company’s segmentation, the Company followed guidance under ASC 280-10-50-1 which states that “an operating
segment is a component of a public entity that has all of the following characteristics: (i) it engages in business activities
from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components
of the same public entity), (ii) its operating results are regularly reviewed by the public entity’s chief operating decision
maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and (iii) its discrete
financial information is available. Based on the Company’s review discussed below, the Company believes that its identification
of a single operating and reportable segment - Architectural Glass and Windows - is consistent with the objectives and basic principles
of Segment Reporting, which are to “help financial statement readers better understand the public entity’s performance,
better assess its prospects for future net cash flows and make more informed judgments about the public entity as a whole.”
The
Company analyzed the Company’s segmentation after the acquisition of ESW LLC and GM&P and concluded that the operations
of ESW LLC and GM&P fall within our single operating segment, Architectural Glass and Windows. The CODM reviews financial
information of the Company on a consolidated basis including GM&P and ESW LLC on a comparative basis including an analysis
with the consolidated budget and forecast. These acquisitions have not changed the products and services offered
in prior years and as such the Company believes that there is no need of an additional segment due to the aforementioned
above. Furthermore, a large part of the strategy behind the acquisition of GM&P was to use this entity as a platform to sell
the Company´s products into the U.S, serving our clients by providing a ful “end to end” portafolio of products
and services integrated into one.
The
following tables present geographical information about external customers and revenues from external customer by product groups.
Geographical information is based on the location where there the customer is located.
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Colombia
|
|
$
|
63,539
|
|
|
$
|
98,758
|
|
|
$
|
81,290
|
|
United States
|
|
|
238,529
|
|
|
|
189,985
|
|
|
|
145,207
|
|
Panama
|
|
|
4,259
|
|
|
|
9,444
|
|
|
|
7,329
|
|
Other
|
|
|
8,129
|
|
|
|
6,829
|
|
|
|
8,413
|
|
Total
Revenues
|
|
$
|
314,456
|
|
|
$
|
305,016
|
|
|
$
|
242,239
|
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Glass and framing components
|
|
$
|
67,311
|
|
|
$
|
89,850
|
|
|
$
|
85,034
|
|
Windows and architectural
systems
|
|
|
247,144
|
|
|
|
215,166
|
|
|
|
157,205
|
|
Total
Revenues
|
|
$
|
314,456
|
|
|
$
|
305,016
|
|
|
$
|
242,239
|
|
During
the year ended December 31, 2017, no single customer accounted for more than 10% of our revenues. Only GM&P before being acquired
by the Company in 2017 accounted for more than 10% or more of our net sales, amounting to $80.0 million, or 26% of total sales,
and $32.0 million, or 13% of sales during the years ended December 31, 2016 and 2015.
The
Company’s long-lived assets are distributed geographically as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Colombia
|
|
$
|
166,380
|
|
|
$
|
172,478
|
|
|
$
|
137,080
|
|
United States
|
|
|
39,037
|
|
|
|
5,631
|
|
|
|
5,314
|
|
Total
long lived assets
|
|
$
|
205,417
|
|
|
$
|
178,109
|
|
|
$
|
142,394
|
|
|
Note
18.
|
Operating
Expenses
|
Selling
expenses for the years ended December 31, 2017, 2016 and 2015 were comprised of the following:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Shipping and Handling
|
|
$
|
13,068
|
|
|
$
|
15,568
|
|
|
$
|
11,955
|
|
Personnel
|
|
|
6,219
|
|
|
|
5,679
|
|
|
|
5,128
|
|
Sales commissions
|
|
|
4,527
|
|
|
|
4,346
|
|
|
|
4,298
|
|
Services
|
|
|
2,024
|
|
|
|
1,723
|
|
|
|
1,571
|
|
Packaging
|
|
|
1,306
|
|
|
|
950
|
|
|
|
1,093
|
|
Other Selling
Expenses
|
|
|
3,512
|
|
|
|
4,001
|
|
|
|
3,558
|
|
Total
Selling Expense
|
|
$
|
30,656
|
|
|
$
|
32,267
|
|
|
$
|
27,603
|
|
General
and administrative expenses for the years ended December 31, 2017, 2016 and 2015 were comprised of the following:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Personnel
|
|
$
|
10,631
|
|
|
$
|
7,938
|
|
|
$
|
6,015
|
|
Professional Fees
|
|
|
4,207
|
|
|
|
5,395
|
|
|
|
4,596
|
|
Taxes
|
|
|
895
|
|
|
|
1,302
|
|
|
|
1,628
|
|
Services
|
|
|
2,850
|
|
|
|
2,302
|
|
|
|
1,685
|
|
Depreciation and Amortization
|
|
|
4,404
|
|
|
|
1,788
|
|
|
|
2,684
|
|
Bank charges and tax on financial transactions
|
|
|
1,647
|
|
|
|
2,881
|
|
|
|
1,499
|
|
Charitable contributions
|
|
|
1,537
|
|
|
|
1,504
|
|
|
|
1,425
|
|
Other expenses
|
|
|
4,867
|
|
|
|
4,736
|
|
|
|
2,654
|
|
Total
General and administrative expenses
|
|
$
|
31,038
|
|
|
$
|
27,846
|
|
|
$
|
22,186
|
|
|
Note
19.
|
Non-Operating
Income and Expenses
|
Non-operating
income (net) on our consolidated statement of operations amounted to $3,190, $4,155 and $5,054 for the years ended December
31, 2017, 2016 and 2015, respectively. These amounts are primarily comprised of income from interests on receivables and short-term
investments, rent income and recoveries on scrap materials.
|
Note
20.
|
Selected
Quarterly Financial Data (unaudited)
|
The
following tables contain (unaudited) quarterly financial statement information for the years ended December 31, 2017 and 2016.
|
|
2017
Quarters Ended
|
|
|
|
March
31,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
65,817
|
|
|
$
|
80,976
|
|
|
$
|
83,384
|
|
|
$
|
84,279
|
|
Gross profit
|
|
|
22,252
|
|
|
|
22,544
|
|
|
|
27,184
|
|
|
|
27,202
|
|
Net income (loss)
|
|
|
1,031
|
|
|
|
(3,500
|
)
|
|
|
7,025
|
|
|
|
1,169
|
|
Net income (loss) attributable to parent
|
|
|
1,019
|
|
|
|
(3,560
|
)
|
|
|
6,924
|
|
|
|
1,066
|
|
Basic income (loss) per share*
|
|
|
0.03
|
|
|
|
(0.10
|
)
|
|
|
0.20
|
|
|
|
0.03
|
|
Diluted income (loss) per share*
|
|
$
|
0.03
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.20
|
|
|
$
|
0.03
|
|
|
|
2016
Quarters Ended
|
|
|
|
March
31,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
63,855
|
|
|
$
|
79,813
|
|
|
$
|
81,073
|
|
|
$
|
80,275
|
|
Gross profit
|
|
|
24,690
|
|
|
|
27,990
|
|
|
|
31,295
|
|
|
|
28,672
|
|
Net income (loss)
|
|
|
14,356
|
|
|
|
14,679
|
|
|
|
(8,783
|
)
|
|
|
2,928
|
|
Net income (loss) attributable to parent
|
|
|
14,356
|
|
|
|
14,679
|
|
|
|
(8,783
|
)
|
|
|
2,928
|
|
Basic income (loss) per share*
|
|
|
0.49
|
|
|
|
0.47
|
|
|
|
(0.28
|
)
|
|
|
0.09
|
|
Diluted income (loss) per share*
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.09
|
|
*Per
share amounts have been retroactively adjusted to include the dilutive effect of shares issued in relation to a share dividend
payment .
|
Note
21.
|
Subsequent
Events
|
On
March 8, 2018, Tecnoglass Inc. (the “Company”) announced the timing for the payment of its declared regular quarterly
dividend of $0.14 per share for the first quarter of 2018. The dividend will be payable on April 30, 2018 to shareholders of record
as of the close of business on March 29, 2018. The dividend will be paid in cash or ordinary shares, to be chosen at the option
of holders of ordinary shares during an election period beginning April 2, 2018 and lasting until 5:00 P.M. Eastern Time on April
18, 2018. The value of the ordinary shares to be used to calculate the number of shares to be issued with respect to that portion
of the dividend payable in ordinary shares shall be the average of the closing price of the Company’s ordinary shares on
NASDAQ during the period from April 5, 2018 through April 18, 2018. If no choice is made during this election period, the dividend
for this election period will be paid in ordinary shares of the Company.