Tecnoglass Inc., a manufacturer of architectural glass, windows and associated aluminum products located in Barranquilla, Colombia, reported positive financial results for the fourth quarter of 2020 ending December 31, 2020, but saw a decrease in full year revenues.

Total revenues for the fourth quarter of 2020 increased 1% to $102.4 million, compared to $101.4 million in the prior year quarter. U.S. revenues of $87.8 million, which represented 86% of total revenues, grew 4.8% compared to $83.8 million in the prior year quarter, primarily driven by strong growth in residential activity. The contribution of U.S. revenue growth to total revenues was partly offset by lower revenue from Colombia, primarily attributable to delayed activity at many customer jobsites due to COVID-19 related factors. Changes in foreign currency exchange rates had an adverse impact of $0.7 million on Colombia and total revenues in the quarter.

Gross profit for the fourth quarter of 2020 grew 25.8% to $36.9 million, representing a 36.1% gross margin, compared to gross profit of $29.3 million, representing a 28.9% gross margin in the prior year quarter. The improvement in gross margin mainly reflected greater operating efficiencies from prior automation initiatives and a higher mix of revenue from manufacturing versus installation activity. Selling, general and administrative expense (SG&A) was $19.4 million compared to $18.6 million in the prior year quarter, primarily attributable to higher variable expenses related to shipping, as well as COVID-19-related expenses. As a percent of total revenues, SG&A was 18.9% compared to 18.3% in the prior year quarter.

Net income was $18.5 million, or $0.39 per diluted share, in the fourth quarter of 2020 compared to net income of $10.9 million, or $0.23 loss per diluted share, in the prior year quarter, including an after-tax non-cash foreign exchange transaction gain of $13.6 million in the fourth quarter 2020 and an $8.9 million gain in the fourth quarter 2019. As previously disclosed, these gains and losses are related to the accounting re-measurement of U.S. Dollar denominated assets and liabilities against the Colombian Peso as functional currency.

“2020 was a milestone year for Tecnoglass. Our exceptional results reflect the resilience and dedication of our team as we capitalized on strong residential macro tailwinds and recovering commercial end market conditions to post our second straight quarter of growth in the U.S.,” says Tecnoglass CEO José Manuel Daes. “Additionally, we delivered on our goal to produce strong returns on our previously implemented automation and capacity investments, contributing to record full year gross profit and adjusted EBITDA levels, both on a dollar basis and as a percentage of sales. Just as important, our success is translating into a step-change in cash generation, with our operating cash flow representing over 70% of adjusted EBITDA in 2020. We were thrilled to exit the year with a much stronger and leaner company, underpinned by a significantly improved capital position to further extend our leadership in the architectural glass industry.”

“Fourth quarter results were encouraging and marked a return to growth in total revenues to close out an extraordinary year. Single family residential revenues expanded more than 50% year-over-year in the quarter, and represented nearly 20% of our revenues for the full year 2020,” adds Christian Daes, chief operating officer of Tecnoglass. “Overall quoting and bidding activity continued to strengthen since mid-year 2020, resulting in defensible backlog position of $545 million. Our strong performance in 2020 was augmented by winning new customers, entering new markets and maintaining our commitment to innovation through the introduction of new best-in-class products, particularly in residential. As we move into 2021, we remain focused on expanding our addressable market in single family housing in the U.S.”

Full Year 2020 Results

Total revenues for the full year 2020 were $374.9 million compared to $430.9 million in the prior year with the decrease mainly related to one month less of invoicing in the second half of March and first half of April. This was a result of the previously communicated suspension of plant operations, as well as a slower recovery in Latam markets since the onset of the COVID-19 pandemic. Excluding the impact of unfavorable foreign currency exchange, total revenues were lower by 12.3% compared to the prior year.

Gross profit increased 2.5% year-over-year to a full year record of $139.3 million, representing a 37.1% gross margin, compared to $135.8 million, representing a 31.5% gross margin in the prior year. Operating income was $66.1 million compared to $58.8 million in the prior year.

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