Tecnoglass, Inc. :TGLS-US: Earnings Analysis: Q1, 2017 By the Numbers : June 21, 2017

Tecnoglass, Inc. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of Tecnoglass, Inc. – Ply Gem Holdings, Inc., PGT Innovations, Inc., Masonite International Corp. and Huttig Building Products, Inc. (PGEM-US, PGTI-US, DOOR-US and HBP-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 65.82 million, Net Earnings of USD 1.02 million.
  • Gross margins narrowed from 38.11% to 32.88% compared to the same period last year, operating (EBITDA) margins now 17.88% from 24.22%.
  • Year-on-year change in operating cash flow of 212.42% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 65.82 80.28 80.03 77.51 60.9
Revenue Growth (%YOY) 8.07 20.89 27.24 33.52 17.02
Earnings (mil) 1.02 2.93 -7.92 14.37 13.66
Earnings Growth (%YOY) -92.54 635.28 -204.48 226.67 38.29
Net Margin (%) 1.55 3.65 -9.9 18.54 22.44
EPS 0.03 0.09 -0.28 0.47 0.47
Return on Equity (%) 3.47 11.19 -36.42 90.47 133.46
Return on Assets (%) 0.94 2.9 -7.61 14.28 15.61

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Market Share Versus Profits

Revenues History
Earnings History

TGLS-US‘s change in revenue this period compared to the same period last year of 8.07% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that TGLS-US is holding onto its market share. Also, for comparison purposes, revenues changed by -18.01% and earnings by -65.20% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 38.11% to 32.88%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 24.22% to 17.88% in this time frame. For comparison, gross margins were 35.72% and EBITDA margins were 17.06% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

TGLS-US‘s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 183.06 days, compared to last year’s level of 55.07 days.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

TGLS-US‘s change in operating cash flow of 212.42% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 18.87% to 10.43% and (2) one-time items that contributed to a decrease in pretax margins from 28.42% to 3.15%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Tecnoglass, Inc. operates as a holding company, which engages in the design, manufacture, and trade of architectural glass. Its products include the following types of glass: laminated, thermo-laminated, tempered, silk-screened, curved, and digital print. It also distributes floating facades, bathroom dividers, automatic doors, and hurricane-proof and commercial display windows. The company operates under the Alutions by TG and Alutions trademarks. Tecnoglass was founded on September 21, 2011 and is headquartered in Barranquilla, Colombia.

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