Tecnoglass Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : Good morning, Jose Manuel, Chris, Santiago. How are you?

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : A few questions, if I could. I'll start with the obvious one at the conclusion of the strategic review. I mean, presumably, you were looking into potentially a transaction that would involve selling the company. What do you see as the company being generally valued at in the -- as a private market transaction versus the public markets right now. And associated with that question with the share repurchase authorization having been raised, do you anticipate using repo at current stock prices.

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : And the repo question, Santiago, I'm sorry.

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : Okay. Thank you for that question and answer. The next obvious question, obviously, is your first look at '25. What's your first guess as to -- initial guess as to sales, gross margin and EBITDA margins as we look into '25?

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : And my final question, there was obviously good news that the East Coast and Southeast ports, the strike was minimal. If, however, the ports eventually strike in January, if talks break down, what sorts of options are available to you to satisfy demand in Florida and the Southeast? And are you anticipating shipping product ahead of the mid-January potential port situation? Thanks.

Question: Samuel Darkatsh - Raymond James & Associates Inc - Analyst : Very helpful.

Question: Alex Hantman - Sidoti & Company LLC - Analyst : Good morning. This is Alex on for Julio. Thank you for taking questions. Just a follow-up, post strategic review, is there any change expected to what avenues you're considering to pursue growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, TGLS.N - Q3 2024 Tecnoglass Inc Earnings Call

Question: Alex Hantman - Sidoti & Company LLC - Analyst : Thank you. And one follow-up. In terms of the SG&A increase year-over-year, do you see that continuing to rise at the same pace? And if so, would you attribute the raise to the same drivers mentioned in the press release and on the call?

Question: Alex Hantman - Sidoti & Company LLC - Analyst : Thank you, very much.

Question: Tim Wojs - Robert W. Baird & Co Inc - Analyst : Hey guys. Good morning.

Question: Tim Wojs - Robert W. Baird & Co Inc - Analyst : Maybe just the first question on the tariffs, Santiago, I guess. First, do you get that back in terms of any tariffs that you've incurred? I mean does that kind of come back in the fourth quarter? I guess that's the first question. And then obviously, we're a couple of days from the election, but the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, TGLS.N - Q3 2024 Tecnoglass Inc Earnings Call President that is going to be President has run on a tariff ticket. And so I know China has been focused, but it could also kind of expand to just any sort of import. So what type of flexibility do you guys have around any prospective tariffs that could kind of happen just on imports in general?

Question: Tim Wojs - Robert W. Baird & Co Inc - Analyst : Okay. That's helpful. And then just as you think about backlog conversion, your backlog now is up north of 20%, I think, year-to-date. Your commercial US revenue, I think, is actually down slightly. And so should we see a pretty big inflection in the implied US commercial business in 2025 as that backlog starts to convert?

Question: Tim Wojs - Robert W. Baird & Co Inc - Analyst : Okay. Good. And then just last one. Can you just remind us kind of where you are on the vinyl ramp within residential? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, TGLS.N - Q3 2024 Tecnoglass Inc Earnings Call

Question: Tim Wojs - Robert W. Baird & Co Inc - Analyst : Okay. Very good. I'll hop back into queue. Thanks, everybody.

Question: Alex Rygiel - B. Riley Securities Inc - Analyst : Thank you. Good morning, gentlemen. A couple of quick questions. First, Santiago, can you quantify the pull-forward effect related to the expiration of the Florida sales tax waiver?

Question: Alex Rygiel - B. Riley Securities Inc - Analyst : And is there any chance the waiver is reauthorized?

Question: Alex Rygiel - B. Riley Securities Inc - Analyst : And on that topic of hurricanes, can you sort of remind us how the demand pull-through sort of plays out over the next couple of quarters for repairs and if your new vinyl window products can sort of play into that opportunity at all?

Question: Alex Rygiel - B. Riley Securities Inc - Analyst : Thank you.

Question: Jean Ramirez - D.A. Davidson & Co - Analyst : Hi, thank you for the time. Yeah, this is Jean for Brent Thielman. Thinking about the backlog in context of the pipeline visibility going into 2026. Can you give a little more color as to what the burn rate looks like? Is it more second half weighted given that you have projects that take a little longer to revenue? Yes, I'll start with that.

Question: Jean Ramirez - D.A. Davidson & Co - Analyst : Perfect. Thank you. And regarding vinyl, are you -- do you guys still think it will be $5 million to $10 million contribution per month in 2025? Or is there more of a target that you guys have thought of? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, TGLS.N - Q3 2024 Tecnoglass Inc Earnings Call

Question: Jean Ramirez - D.A. Davidson & Co - Analyst : All right. And just thinking about your relationship with Saint-Gobain and the possible discount and contribution to margins. Can you provide a little more color into how they might show up in the P&L, at least some preliminary expectations?

Question: Jean Ramirez - D.A. Davidson & Co - Analyst : Right. But the sort of discount that you guys are expected to get from them, just wanted to know how you guys are thinking about that in terms of margin contribution?

Question: Jean Ramirez - D.A. Davidson & Co - Analyst : Thank you. I appreciate the time.