Why Glass Fabricator Tecnoglass' Shares Are Losing Its Charm Today

Tecnoglass Inc TGLS shares are trading lower after it reported Q3 FY23 results and tightened its full-year sales outlook. 

Revenue grew 4.4% Y/Y to $210.7 million, beating the consensus of $207.6 million, led by improved multi-family/commercial business, growth in single-family residential business, and market share gains.

Single-family residential revenues rose 2% Y/Y, aided by market share gains and the continued positive demographic trends in main markets. Multi-family/commercial revenues increased 6% Y/Y, led by increased previously-held projects.

Gross profit fell to $90.5 million from $105.3 million a year ago, with a margin of 43.0% vs 52.2% the prior year, reflecting a non-cash unfavorable foreign exchange impact of 660 bps.

Adjusted EBITDA declined to $71.3 million from $78.5 million the prior year. Backlog stood at a record level of $836 million, up 20% Y/Y 

Adjusted EPS of $0.98, beating the consensus of $0.97.

Operating cash flow came in at $51.3 million, and capital expenditures stood at $24.3 million in the quarter.

In Q3, TGLS returned capital to shareholders through $8.9 million in share repurchases and $4.3 million in cash dividends.

The company repurchased an additional $11.2 million of stock after the Q3-end and, as of November 6, 2023, had about $30 million remaining under the current repurchase program.

As of September 30, cash and cash equivalents stood at $119.0 million and had $170.0 million available under its revolving credit facilities.

FY23 Outlook: TGLS tightened sales outlook to $835 million - $848 million (consensus $854.32 million) from $830 million - $855 million.

The company revised the adjusted EBITDA outlook to $300 million-$308 million (from $320 million-$335 million earlier), representing growth of about 14% at the midpoint. 

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, "Our backlog of multi-family/commercial projects has accelerated and our single-family residential expansion strategy continues to gain traction, which gives us confidence that 2024 will be another year of double-digit growth at attractive margins with significant cash flow generation."

Also Read: Tecnoglass' New Product Line - Doubles Addressable Market With Entry Into Vinyl Windows

Price Action: TGLS shares are down 9.81% at $30.90 premarket on the last check Monday.