TGLS

Overall Business Strength & Market Positioning

• Reported another quarter of record total revenue with robust double-digit growth across both business segments, with backlog reaching a new record and continued market share gains
• The company's vertically integrated low-cost model, high product quality, and deep customer relationships create durable competitive differentiation
• Completed redomestication from the Cayman Islands to the United States in July 2026, aligning corporate structure with the U.S. listing, improving index eligibility, and expanding the potential investor base
• The company maintains a focus on long-term durable cash flow generation, supporting both capital return to shareholders and continued investment in growth initiatives

Geographic Expansion & New Market Growth

• Geographic diversification of the project portfolio has reduced Florida's share of backlog to ~75% in Q2 2026, down from ~80% in Q1 2026 and ~90% in Q2 2025, while Florida's underlying demand pipeline remains healthy
• A new West Coast/Los Angeles showroom is on track to open in late September 2026, marking the company's seventh U.S. showroom (fifth outside Florida) to support growing West Coast demand
• Year-to-date 2026 single-family residential revenue outside Florida reached $15 million, on track to hit the full-year target of $30 million
• The dealer network has expanded over 20% in the last 12 months, supported by industry-leading 5-6 week lead times

Product & Operational Updates

• The recently launched legacy aluminum window line has received strong market reception, and the vinyl product line continues to gain traction, more than doubling the company's addressable market
• Approximately 65-70% of single-family residential revenue comes from more resilient repair and remodel demand, which is less sensitive to mortgage rate fluctuations
• The automation and efficiency program has reduced total headcount by 10% as of the end of Q2 2026, with additional automation coming online by year-end to further improve cost efficiency, while maintaining sufficient capacity to serve the strong backlog
• There have been virtually no project cancellations, as the company typically installs windows in already well-advanced construction projects; the backlog mix is increasingly weighted toward larger high-end projects (luxury condos, upscale lodging) that are less sensitive to interest rate changes
• Purchase of land for a potential new U.S. manufacturing facility is expected to be completed in the coming weeks; discussions with state and local authorities for project incentives are ongoing, and the project will proceed in phases if approved, with optionality retained based on market conditions

• Full-year 2026 revenue guidance is narrowed to $1.08 billion to $1.12 billion, maintaining the expectation of double-digit full-year revenue growth, with sequential Q3 revenue expected to step down from the record Q2 level due to order pull-forward ahead of May pricing actions, but still growing YoY
• Full-year 2026 adjusted EBITDA guidance is set to $220 million to $230 billion, revised lower from prior expectations primarily due to a stronger-than-anticipated Colombian peso; the revised guidance incorporates prevailing high aluminum costs and FX headwinds
• Third quarter 2026 gross margin is expected to be roughly flat or slightly higher sequentially compared to Q2 2026; Q3 adjusted EBITDA is expected to be roughly flat sequentially compared to Q2's $51.7 million
• Capital expenditures for full-year 2026 are guided to $80 million to $95 million, which includes the $20 million to $25 million expected for the new U.S. facility land purchase
• Pricing benefits from May 2026 actions will begin flowing to revenue primarily in the third quarter of 2026 for the single-family segment, and will be phased for commercial/multifamily: quick turnaround small commercial projects will see benefit starting in late 2026, while larger commercial projects will see pricing benefits starting in late 2027
• The company reaffirms its target to fully offset the impact of Section 232 aluminum tariffs via pricing actions and automation efficiency savings by 2027

Total company revenue for Q2 2026 grew 15.6% year-over-year (YoY) to a record $295.3 million. The Multifamily and Commercial segment achieved record revenue of $168.8 million, growing 15.7% YoY, accounting for 57.2% of total Q2 2026 revenue. The Single-Family Residential segment achieved record revenue of $126.5 million, growing 15.4% YoY, accounting for 42.8% of total Q2 2026 revenue. Company-wide adjusted EBITDA for Q2 2026 was $51.7 million, with an adjusted EBITDA margin of 17.5% (down from 31.2% YoY), and gross margin of 37.3% (down from 44.7% YoY). Operating cash flow for the quarter was $4.4 million, and capital expenditures totaled $35.4 million. Total ending backlog grew 15.6% YoY to a record $1.4 billion, with a book-to-bill ratio of 1.1 (the 23rd consecutive quarter above 1.0x).

• High and volatile U.S. aluminum prices and Colombian peso appreciation create significant margin headwinds: a 5% movement in the Colombian peso impacts gross margin by ~120 basis points, and the peso has strengthened to levels not seen since 2019, far outpacing prior guidance assumptions
• Section 232 10% tariffs on finished aluminum windows added ~$17 million in incremental expenses in Q2 2026, pressuring margins and near-term profitability
• Higher than expected labor costs (driven by a 23% Colombian minimum wage increase at the start of 2026 and annual salary increases for U.S. personnel) also pressure margins
• Working capital demands from seasonal tax payments, aluminum pre-purchasing for supply chain resilience, and 15% YoY revenue growth can limit near-term capacity for share repurchases
• Demand for large commercial projects can be impacted by macroeconomic conditions and interest rate changes, even though high-end segments have remained resilient to date
• The potential new U.S. facility project is subject to ongoing incentive negotiations, feasibility, and favorable market demand and return conditions, with no guarantee of final approval or completion

Q: What drove the downward revision to full-year 2026 EBITDA guidance, and what is the revenue split between quick-turnaround commercial projects that see pricing benefit in late 2026 and larger projects that see it in 2027?

A: Most of the EBITDA guidance reduction comes from a far stronger-than-expected Colombian peso; aluminum prices were broadly in line with prior assumptions. Quick-turnaround light commercial projects generate $12 to $15 million in monthly revenue; all new pricing for this segment will be reflected in invoices by Q4 2026, with full benefit starting in 2027. Pricing benefits for the remaining larger commercial project segment will start hitting revenue in Q2 or Q3 2027.

Q: Is the estimate of $45 to $50 million in Q3 2026 EBITDA roughly accurate, why was there no material share repurchase activity in Q2, and when will repurchases resume?

A: Q3 2026 EBITDA will be slightly higher than that range, and will likely end up roughly flat sequentially compared to Q2. The Q2 pause in large share repurchases was driven by temporary working capital demands: seasonal $26 million in Colombian income tax payments, pre-purchasing U.S. aluminum for supply chain resilience, and working capital growth tied to 15% YoY revenue expansion. Stronger operating cash flow in the second half of 2026 is expected to enable resumption of share repurchases, subject to board approval.

Q: How would you describe current underlying demand trends in Florida versus out-of-state markets, and what is the company's current hedging strategy for aluminum and the Colombian peso?

A: Demand is surprisingly strong across all U.S. markets, including both Florida and out-of-state regions, with quoting activity at unprecedented levels that required additional hiring to manage; New York demand in particular has rebounded strongly. The company has already pre-purchased all aluminum needed for the second half of 2026, so aluminum prices are not expected to be a major source of volatility for the rest of the year. The company will not hedge peso exposure at current seven-year high strength levels, but will opportunistically add hedges if the peso weakens and normalizes to more expected levels.

Q: Is the company still on track to fully offset tariff impacts by 2027?

A: Yes, the tariff offset plan remains on schedule. Ongoing automation and efficiency initiatives are already delivering initial results, with new productivity-enhancing machinery now coming online. Within six months, the company expects these changes to deliver meaningful efficiency gains and cost savings that will strengthen profitability and fully offset remaining tariff impacts by 2027.