Tecnoglass, Inc. Q4 FY2024 earnings call

• Record revenues of $890 million and strong profitability in 2024, with single-family residential reaching an all-time high of $372 million and multifamily/commercial at $518 million.
• Strategic investment in automation and manufacturing capacity to improve operational efficiencies and meet growing demand.
• Maintained industry-leading margins despite currency headwinds and freight expenses, with margins improving as currency rates normalized.
• Strong operating cash flow of $170.5 million for 2024, net cash position by year-end, and $19.7 million returned to shareholders via dividends.
• Backlog reached an all-time high of $1.1 billion at quarter-end 2024, with a book-to-bill ratio of 1.3 times as of Q4 2024.
• Expansion into vinyl window market, with deliveries picking up towards end of 2024 and expected momentum in 2025.
• Monitoring of 25% US tariffs on aluminum imports and taking steps to secure alternative US aluminum sources.

For the fourth quarter of 2024, total revenues were $239.6 million. The single-family residential segment generated revenues of $93.5 million in the fourth quarter, compared to $77.1 million in the prior year quarter. Full-year 2024 single-family residential revenues reached an all-time high of $372.1 million, representing approximately 41.8% of the full-year total revenue of $890.2 million. The multifamily and commercial segment achieved revenues of $518 million for the full year 2024, which is approximately 58.2% of the total revenue, and in the fourth quarter, it contributed $146.1 million.

• Full-year 2025 revenue guidance: $940 million to $1.02 billion, representing ~10% organic growth midpoint.
• Adjusted EBITDA target: $300 million to $340 million.
• Vinyl revenues projected to be between $15 million and $40 million in 2025.
• CapEx projected to be in the range of $65 million to $70 million, including efficiency investments and new Miami showroom.
• Expectation of continued growth in single-family residential and multifamily/commercial, leveraging geographic expansion and product diversification.

• Potential impact of 25% US tariffs on aluminum imports, which could affect costs and pricing.
• Currency headwinds and increased freight expenses early in 2024.
• Persistent labor shortages and wage inflation pressure in the construction industry.
• Uncertainties related to economic, business, competitive, and regulatory factors affecting the business.

Q: On vinyl, can you talk about the cadence expected of vinyl revenues you're projecting of $15 to $40 million for the year? Secondly, what monthly run rate are you expected to exit 2025 with?

A: Jose Manuel Daes responded that they expect vinyl to keep growing, with new salesmen in states like Louisiana, Alabama, Georgia, and hope it will double from the previous year. Christian Daes mentioned they are running at about 65% to 70% capacity and making investments in automation for the factory.

Q: Good morning. Yeah. I mean, you saw nice single-family growth here in the fourth quarter. I do not get the sense that that is downshifting here in the first quarter. Maybe to the extent you could talk about that, I'm just wondering if it's still outpacing. But it seems like a sort of still sort of a sheepish new construction market so far.

A: Jose Manuel Daes stated the beginning of 2025 in single-family has been extraordinary with a lot of growth compared to December and January 2024. Santiago Giraldo added that based on orders for January and February, it is pretty much in line.

Q: Hey, everybody. Good morning. Nice job. Good one. Maybe just on the pricing question. I have a couple of questions on that. So I guess, did you have you guys raised price within your portfolio for anything in 2025?

A: Jose Manuel Daes replied they haven't raised prices yet, waiting to see how tariffs play out. Santiago Giraldo discussed the potential impact of aluminum tariffs on raw materials, with a rough estimate of a $25 million annual impact, and mentioned their peers have adjusted pricing in the past, but they are positioned to counter with alternative sources and pricing adjustments if needed.