Tecnoglass Provides Update on High-Return Strategic Capex Propelled by Incremental Demand
September 15 2022 - 7:00AM
Tecnoglass,
Inc.
(NYSE:
TGLS) ("Tecnoglass" or the
"Company"),
a leading manufacturer
of architectural glass, windows, and associated aluminum products
serving the global residential and commercial end markets, today
announced that its previously-announced capital investments across
its manufacturing facility network are now expected to increase its
installed production capacity by over 35% to an amount equivalent
to approximately $950 million of annual sales by the end of the
second quarter of 2023.
José Manuel Daes, Chief Executive Officer of
Tecnoglass, stated, “We have achieved record levels of gross profit
and Adjusted EBITDA in each year since 2018 and we are well on our
way to deliver another record year in 2022. With the success we
have had in diversifying our business with new customers, products,
end markets and geographies, the increased capacity is expected to
enable us to meet the ever-growing demand for our high-performance
architectural glass, window and aluminum products. In the event
that macro pressures intensify in our industry, we believe the
Company is extremely well-positioned to gain market share given its
advantageous cost structure and the significant investments
underway to make our business even more efficient. Fortunately, at
this time, demand, orders and invoicing remain strong through the
third quarter of 2022, supporting our robust growth expectations
for the full year and continued strength into 2023.”
During 2022, the Company initiated enhancements
at its glass and aluminum facilities to increase production
capacity and automate operations. These investments across its
vertically-integrated operations include further automating its
glass and window assembly production lines, adding glass production
lines and expanding its aluminum facilities, among other
initiatives to generate high-returns. The Company expects the
resulting increase in output to improve efficiency throughout its
operations while reducing material waste and overall lead
times.
Based on capital investments already in process,
the Company maintains its expectation to end the year with
installed production capacity of an amount equivalent to over $800
million of annual sales. The subsequent expansion of installed
production capacity to an amount equivalent to approximately $950
million of annual sales in the second quarter of 2023 is
attributable to additional investments to automate sorting
capabilities within glass production lines, which will allow for
the processing of approximately 50% more glass compared to current
levels.
Christian Daes, Chief Operating Officer of
Tecnoglass, commented, “We believe the proactive investments to
enhance, automate and expand our facilities are well timed. As
demonstrated in the past, we are taking a prudent course of action
to ensure that our lead times remain among the best in the
industry, and that our world-class vertically-integrated operations
have room for long-term growth with both our existing and new
customers. While we have not fully stretched the capacity of our
current operations, we continue to rapidly expand, led by our
single-family residential products, which now represent 44% of our
sales. We are in process of opening showrooms in New York and South
Carolina, with additional showroom openings planned in other
regions, to fuel the geographic expansion of our single-family
residential business, which mostly serves the historically
resilient remodel and renovation category. At the same time, our
activity in commercial end markets continues to pick up despite
higher interest rates, as customers select Tecnoglass as their
supplier of choice for lead time reliability and our structural
advantages, particularly in the Southeast region, driving share
gains. Our anticipated high-return investments illustrate the
confidence we have in our ability to innovate, obtain new business,
and deliver exceptional results.”
The total capital investment is anticipated to
be approximately $52 million, of which approximately $35 million
has already been spent, funded by the Company’s operating cash flow
generation.
Santiago Giraldo, Chief Financial Officer,
added, “The long-standing differentiating factors in our strategy
and structural competitive advantages give us confidence to
continue investing for future expected share gains and growth. Our
tight working capital management, increasing mix of revenues from
single-family remodel and renovation channels, expanding presence
in high performing geographic markets, and prior high-return
investments have already demonstrated the significant cash flow
generating power of our business. We are poised to advance our
premier position within our industry and continue to deliver solid
returns in the years to come.”
About Tecnoglass
Tecnoglass Inc. is a leading producer of
architectural glass, windows, and associated aluminum products
serving the multi-family, single-family and commercial end markets.
Tecnoglass is the second largest glass fabricator serving the U.S.
and the #1 architectural glass transformation company in Latin
America. Located in Barranquilla, Colombia, the Company’s 4.0
million square foot, vertically-integrated and state-of-the-art
manufacturing complex provides efficient access to over 1,000
global customers, with the U.S. accounting for more than 90% of
revenues. Tecnoglass' tailored, high-end products are found on some
of the world's most distinctive properties, including One Thousand
Museum (Miami), Paramount (Miami), Salesforce Tower (San
Francisco), Via 57 West (NY), Hub50House (Boston), Aeropuerto
Internacional El Dorado (Bogotá), One Plaza (Medellín), Pabellon de
Cristal (Barranquilla). For more information, please visit
www.tecnoglass.com or view our corporate video at
https://vimeo.com/134429998.
Forward Looking Statements
This press release includes certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
regarding future financial performance, future growth and future
acquisitions. These statements are based on Tecnoglass’ current
expectations or beliefs and are subject to uncertainty and changes
in circumstances. Actual results may vary materially from those
expressed or implied by the statements herein due to changes in
economic, business, competitive and/or regulatory factors, and
other risks and uncertainties affecting the operation of
Tecnoglass’ business. These risks, uncertainties and contingencies
are indicated from time to time in Tecnoglass’ filings with the
Securities and Exchange Commission. The information set forth
herein should be read in light of such risks. Further, investors
should keep in mind that Tecnoglass’ financial results in any
particular period may not be indicative of future results.
Tecnoglass is under no obligation to, and expressly disclaims any
obligation to, update or alter its forward-looking statements,
whether as a result of new information, future events and changes
in assumptions or otherwise, except as required by law.
Investor
Relations:
Santiago
GiraldoCFO305-503-9062investorrelations@tecnoglass.com
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