TGLS 10-K & 10-Q changes, risk factors and insider trading
Tecnoglass Holdings Inc. · NYSE · Flat Glass · CIK 1534675 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
Colombia’s fiscal deficit and growing public debt could adversely affect the Colombian economy. Duringsee in full comparison2022,2024, Colombia’s fiscal deficit represented5.5%6.8% of itsGDP. As of December 31, 2023, the fiscal deficit closed at 4.3% ofGDP,due to higher tax collection, COP revaluation against USD, and lower costs of debt resulting from inflation indexed bonds, during the year. The fiscal deficit is expected to increase to 5.6% of Colombia’s GDP as of December 31, 2024,related to increased government spending to fund new social and environmental reforms, and lower expected tax collections during the year.Thisin 2025 the deficit widened even further, driven by sustained high spending and weaker revenues, with estimates suggesting Colombia’s fiscal deficitincreasecouldmightreachresultaround 7.1% of GDP, its highest level outside the pandemic era, even as tax revenue projections were revised and the statutory fiscal rule was suspended to accommodate larger deficits. This persistent and growing fiscal gap has added pressure ona lowersovereign creditrating,profiles, contributed to credit rating downgrades and could lead to higher interest ratesforon newissuedColombian sovereigndebt.debt issuances.
“During 2025, Moody’s, S&P and Fitch, three of the main rating agencies worldwide, downgraded Colombia’s credit profile due to weakening public finances, with Moody’s lowering its rating to “Baa3” while keeping a stable outlook as fiscal metrics deteriorated beyond original plans, S&P cutting its sovereign rating to “BB” with a negative look, and Fitch also downgrading the long-term foreign currency rating to “BB” amid persistently large fiscal deficits, rising public debt and challenges in fiscal consolidation, mirroring market concerns over the country’s fiscal trajectory even as moderate …”see in full comparison
“The Russian invasion of Ukraine starting in February 2022 escalated global tensions between the United States and NATO countries against Russia. Colombia has also condemned Russia’s invasion of Ukraine. Multiple economic sanctions against Russia were imposed by many countries worldwide which has impacted the global economy as many commercial, industrial and financial businesses closed operations in Russia. Trade restrictions imposed on Russia have led to increasing prices of oil, fluctuation in commodities markets and destabilizing many foreign currencies exchange rates.”see in full comparison
“The United States has imposed import tariffs on certain steel and aluminum articles under Section 232 of the Trade Expansion Act of 1962, and these measures have been adjusted over time through proclamations and related administrative actions (including changes to product coverage, rates, exclusions and enforcement). …”see in full comparison
“The Russian invasion of Ukraine starting in February 2022 has contributed to elevated global tensions and the imposition of economic sanctions and trade restrictions between the United States, the European Union and other countries.”see in full comparison
“In January 2025, the U.S. government abruptly announced a 25% punitive tariff on Colombian imports after Colombian President Gustavo Petro refused to accept two U.S. military planes carrying deported Colombian citizens. Although the tariff was revoked before taking effect (after Colombia agreed to certain terms and assumed repatriation costs using its own aircraft. This incident underscores the unpredictability of U.S. foreign relations with Colombia and other countries. The U.S. …”see in full comparison
Full comparison: every changed paragraph (25)
During 2025, Moody’s, S&P and Fitch, three of the main rating agencies worldwide, downgraded Colombia’s credit profile due to weakening public finances, with Moody’s lowering its rating to “Baa3” while keeping a stable outlook as fiscal metrics deteriorated beyond original plans, S&P cutting its sovereign rating to “BB” with a negative look, and Fitch also downgrading the long-term foreign currency rating to “BB” amid persistently large fiscal deficits, rising public debt and challenges in fiscal consolidation, mirroring market concerns over the country’s fiscal trajectory even as moderate growth continued and inflation pressures eased during the year. Colombia’s macroeconomic performance in 2025 showed a moderation in growth and inflation dynamics. Official data and projections indicate the country’s GDP is expected to increase around 2%-3%, while inflation closed at 5.1%, above the central bank’s 3% target, and similar to the 5.2% inflation rate of 2024. In addition, Colombia’s central bank (Banco de la República) is maintaining a restrictive monetary stance, raising its monetary policy interest rate 100 basis points to 10.25%, largely due to strong internal demand and cost pressures including significant labor cost increases from a higher minimum wage declared for 2026.
During
2024, Moody’s, S&P and Fitch, three of the main rating agencies worldwide, ratings for Colombia maintained at “Baa2”,
“BB+”, and “BB+” respectively, where Moody’s and Fitch had a Stable outlook and S&P reported a negative
outlook. The ratings reflect their expectation of fiscal deficit to remain under levels established by the Autonomous Fiscal Rule Committee,
and moderate economic growth. Colombia’s real GDP increased 1.7% in 2024. A high Monetary Interest Rate of 13% form Banco de la
Republica at December 2023 reduced the annual inflation rate from 9.28% as of December 2023 to 5.20% as of December 2024. In addition,
minimum wage for 2024 was agreed to increase by 9.5%.
In
2022,2026, CongressColombia will hold national elections, including Congressional elections on March 8, 2026 and Presidentialthe Electionsfirst tookround placeof inpresidential Colombia.elections
on May 31, 2026. We cannot assure you that measures adopted by the Colombian government
under its new regime continue to be consistent
with former policy and will not affect the country´scountry’s overall economic outlook and
performance. The new leadership under the elected government may have negative
effects on macroeconomic stability and therefore on the
construction industry as a whole and finally, on the company´scompany’s operations
and future prospects. Recent events also underscore the potential for policy volatility and legal uncertainty: in January 2026, Colombia’s
Constitutional Court provisionally suspended Decree 1390 of December 22, 2025, which declared a state of economic and social emergency,
pending a final decision on its constitutionality, and any similar measures—whether adopted, modified, suspended or invalidated—could
create uncertainty and impact economic conditions relevant to our business. Although we don’t estimate
a significant effect in
the short term based on current backlog and ongoing activity, it is uncertain as to how a new regime could affect
our business in the
longer term. In addition, we cannot predict the effects that such policies will have on the Colombian economy. Furthermore,
we cannot
assure you that the Colombian peso will not depreciate relative to the US dollar or other currencies in the future, which could have
a materially
adverse effect on our financial condition.
Colombia’s
fiscal deficit and growing public debt could adversely affect the Colombian economy. During 2022,2024, Colombia’s fiscal deficit represented
5.5%6.8% of its GDP. As of December 31, 2023, the fiscal deficit closed at 4.3% of GDP, due to higher tax collection, COP revaluation against
USD, and lower costs of debt resulting from inflation indexed bonds, during the year. The fiscal deficit is expected to increase to 5.6%
of Colombia’s GDP as of December 31, 2024, related to increased government spending to fund new social and environmental reforms,
and lower expected tax collections
during the year. Thisin 2025 the deficit widened even further, driven by sustained high spending and weaker revenues, with estimates suggesting
Colombia’s fiscal deficit increasecould mightreach resultaround 7.1% of GDP, its highest level outside the pandemic era, even as tax revenue projections
were revised and the statutory fiscal rule was suspended to accommodate larger deficits. This persistent and growing fiscal gap has added
pressure on a lowersovereign credit rating,profiles, contributed to credit rating downgrades and could lead to higher interest
rates foron new issued Colombian
sovereign debt.debt issuances.
In
recent years, the Colombian currency had shown some short-term volatility vis-à-vis the U.S. Dollar. The Colombian Peso depreciatedappreciated
15.4%14.8% in 2024,2025, after a 20.5%15.4% appreciationdepreciation during 2023, as a result of political instability since 2022 presidential elections.2024. Any international
conflicts or related events have the potential to create an
exchange mismatch, given the vulnerability and dependence of the Colombian
economy on external financing and its vulnerability to any
disruption in its external capital flows and its trade balance.
The
2020 global economic crisis, resulting from the outbreak of the COVID-19 pandemic which negatively affected many economic sectors and
countries around the world, had negative effects on the Colombian economy. Although the Covid-19 effects have been contained as of December
2024, new variants may emerge and have a negative effect on the Colombian economy in the future.
Even though exports from Colombia, principally petroleum and petroleum products, and gold, have grown in recent years, fluctuations in commodity prices pose a significant challenge to their contribution to the country’s balance of payments and fiscal revenues. Unemployment continues to be high in Colombia compared to other economies in Latin America. Furthermore, recent political and economic actions in the Latin American region, including actions taken by United States in relation to the Venezuelan government, may negatively affect international investor perception of the region. We cannot assure you that growth achieved over the past decade by the Colombian economy will continue in future periods. The long-term effects of the global economic and financial crisis on the international financial system remain uncertain. In addition, the effect on consumer confidence of any actual or perceived deterioration of household incomes in the Colombian economy may have a material adverse effect on our results of operations and financial condition.
The United States has imposed import tariffs on certain steel and aluminum articles under Section 232 of the Trade Expansion Act of 1962, and these measures have been adjusted over time through proclamations and related administrative actions (including changes to product coverage, rates, exclusions and enforcement). In addition, on April 2, 2025, the President issued Executive Order 14257, which directed that imported articles be subject to an additional 10% ad valorem duty pursuant to a declared national emergency under the International Emergency Economic Powers Act (IEEPA), with specified effective dates. Multiple lawsuits have challenged the President’s authority to impose tariffs under IEEPA and stays and ongoing appeals have contributed to uncertainty regarding the ultimate outcome and any related changes to scope, duration, or potential refunds. The adoption, modification or escalation of these or other tariff regimes, as well as retaliatory measures by other countries, could materially and adversely affect our business, financial condition and results of operations.
In
January 2025, the U.S. government abruptly announced a 25% punitive tariff on Colombian imports after Colombian President Gustavo Petro
refused to accept two U.S. military planes carrying deported Colombian citizens. Although the tariff was revoked before taking effect
(after Colombia agreed to certain terms and assumed repatriation costs using its own aircraft. This incident underscores the unpredictability
of U.S. foreign relations with Colombia and other countries. The U.S. has since imposed similar tariffs on Canada, Mexico, and China,
further demonstrating the risk of sudden trade restrictions.
Given
that our primary manufacturing facilityfacilities isare basedlocated in Colombia and 96%approximately 94.8% of our sales for the fiscal year ended December
31, 20242025, ocurredwere generated in the
United States, any newthese tariffs ordirectly trade barriers could materially impactincrease our costs,costs disruptand may pressure our supplyprofit chain, and reduce our price competitiveness.
Additionally, future diplomatic disputes or broader protectionist policies may lead to further trade restrictions, negatively affecting
our financial performance.margins.
In response to these trade barriers, we have strategically shifted our supply chain to source U.S.-casted aluminum, which has allowed us to mitigate a portion of the financial impact. However, despite these mitigation efforts, any further escalation in tariff rates, the potential removal of U.S.-Colombia Trade Promotion Agreement benefits, or retaliatory measures by the Colombian government could still disrupt our supply chain and reduce our price competitiveness. Such developments could have a material adverse effect on our financial condition and results of operations.
In
2024 a coalition of U.S. producers of aluminum extrusions filed a petition with U.S. trade authorities requesting the imposition of anti-dumping
duties against imports of aluminum extrusions from Colombia. As we are the main extruder of aluminum in Colombia, we volunteered as a
mandatory respondent in the investigation and provided certain requested information. As a result of this investigation, imports of some
of our goods which are considered subject merchandise were subject to anti-dumping duties, until the International Trade Commission concluded
in October 21, 2024 that American Aluminum producers were not being harmed and revoked said anti-dumping duty.duty which as of today remain
in zero.
Armed conflicts around the globe, including sanctions and heightened geopolitical tensions involving the United States, NATO allies and other countries, may adversely affect the results of our operations.
The Russian invasion of Ukraine starting in February 2022 has contributed to elevated global tensions and the imposition of economic sanctions and trade restrictions between the United States, the European Union and other countries.
In addition, attacks and security threats in and around the Red Sea associated with Yemen’s Houthi group, and related military tensions involving the United States and certain allies, have disrupted maritime trade and affected shipping patterns for certain carriers, including through the Suez Canal corridor, resulting in rerouting, longer transit times and increased freight costs in certain periods.
The
Russian invasion of Ukraine starting in February 2022 escalated global tensions between the United States and NATO countries against
Russia. Colombia has also condemned Russia’s invasion of Ukraine. Multiple economic sanctions against Russia were imposed by many
countries worldwide which has impacted the global economy as many commercial, industrial and financial businesses closed operations in
Russia. Trade restrictions imposed on Russia have led to increasing prices of oil, fluctuation in commodities markets and destabilizing
many foreign currencies exchange rates.
In
addition, military tensions between the United States alongside certain allies, and Yemen’s Houthi group, has negatively impacted
global commercial trade, as many ships are not being able to navigate through the Suez Canal.
FurtherThese
escalationmeasures, oftogether conflictwith broader conflict-related uncertainty, can lead to severe constraints on global supply chains such as logistics obstructions,chains, raw material price
increases increases
and shortages, and higher energy costs. Disruptions in global supply chains can adversely affect our ability to manufacture
and deliver
product products to our customers. Additionally, fluctuating foreign currency exchange rates could impact on the profitability of
our foreign subsidiaries
which are at the core of our business.
Geopolitical instability in the Americas may also increase regional volatility. On January 3, 2026, U.S. forces captured Venezuelan President Nicolás Maduro in a military operation, which has heightened uncertainty regarding regional stability, diplomatic relations and sanctions policy.
Colombia has experienced, and continues to experience, internal security challenges that could adversely affect the Colombian economy and our business, results of operations and financial condition. These challenges include the activities of illegal armed groups—including the National Liberation Army (ELN), dissident factions formerly associated with the Revolutionary Armed Forces of Colombia (FARC), paramilitary successor groups and criminal organizations involved in narcotrafficking—which in certain regions engage in intimidation, extortion, and attacks that can disrupt commerce, transportation and governmental presence. Although Colombia has implemented peace and related security initiatives over time, violence and criminal activity persist and may escalate, and the government’s evolving security strategy may affect operating conditions for businesses in Colombia. Any deterioration in security conditions could negatively affect demand in the construction industry, the safety and availability of our employees and contractors, our logistics and supply chain, and overall economic and foreign-exchange stability in Colombia.
Colombia
has experienced and continues to experience internal security issues, primarily due to the activities of guerrilla groups, such as dissidents
from the former Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, or “FARC”) and
the National Liberation Army (Ejercito de Liberación Nacional, or “ELN,”) paramilitary groups and drug cartels.
In remote regions of the country with minimal governmental presence, these groups have exerted influence over the local population and
funded their activities by protecting, and rendering services to, drug traffickers. Even though the Colombian government’s policies
have reduced guerilla presence and criminal activity, particularly in the form of terrorist attacks, homicides, kidnappings and extortion,
such activity persists in Colombia, and possible escalation of such activity and the effects associated with them have had and may have
in the future a negative effect on the Colombian economy and on us, including on our customers, employees, results of operations and
financial condition. The Colombian government commenced peace talks with the FARC in August 2012, and peace negotiations with the ELN
began in November 2016. The Colombian government and the FARC signed a peace deal on September 26, 2016, which was amended after voters
rejected it in the referendum held on October 2, 2016. The agreement was signed on November 24, 2016, and was ratified by the Colombian
Congress on November 30, 2016, and is being implemented. Pursuant to the peace agreements negotiated between the FARC and the Colombian
government in 2016, the FARC occupies five seats in the Colombian Senate and five seats in the Colombian House of Representatives. The
agreement clarifies protection to private property, is expected to increase the government’s presence in rural areas and bans former
rebels from running for office in certain newly created congressional districts in post-conflict zones. As a result, during the transition
process, Colombia may experience an increase in internal security issues, drug-related crime and guerilla and paramilitary activities,
which may have a negative impact on the Colombian economy. Our business or financial condition could be adversely affected by rapidly
changing economic or social conditions, including the Colombian government’s response to implementation of the agreement with FARC
and ongoing peace negotiations, if any, which may result in legislation that increases the tax burden of Colombian companies.
Diplomatic
relations with Venezuela and other neighboring countries have from time to time been tensetense, andincluding havedue beento affecteddevelopments by events surrounding the
Colombian armed forces, particularly onalong Colombia’s borders
border with Venezuela. OnPolitical and diplomatic uncertainty in Venezuela increased following the country’s presidential election
held on July 28, 20242024, politicalwhich tensionsproduced rosedisputed asresults Nicolasand mixed international recognition. In addition, on January 3, 2026, U.S. forces
captured Venezuelan President Nicolás Maduro wasin reelecteda presidentmilitary ofoperation, Venezuelawhich forhas contributed to heightened regional uncertainty
and could affect diplomatic relations, sanctions policy, cross-border commerce, and overall economic conditions in the 2025-2031 period, although many countries, recognized Edmundo Gonzales as Venezuelan
head of state., the Colombian government haven’t officially pronounced on this matter as of the date of this report.region. Moreover,
in November 2012, the International Court of Justice placed a sizeable area of the Caribbean Sea within Nicaragua’s exclusive economic
zone. As of the date of this Annual Report, Colombia continues to deem this area as part of its own exclusive economic zone. Any future
deterioration in relations with Venezuela and Nicaragua may result in the closing of borders, risk of financial condition.
On December 13, 2022, a tax reform was enacted by means of Law 2277, which maintained corporate income tax rate at 35%, and increased income taxes to Free Trade Zones with single enterprise users and non-exporters, from 20% to 35%. We cannot predict whether Colombia will adopt additional tax reforms, surcharges, or other fiscal measures in the future, or how any such measures may be interpreted or applied to us, any of which could materially adversely affect our business, results of operations and financial condition.
Our
operations are exposed to natural disasters and extreme weather events in Colombia, such as earthquakes, volcanic eruptions, floods,
landslides, tornadoes, tropical storms and hurricanes.
High temperaturesClimate andvariability, decrease in rainfall in Colombia, attributable in part to theincluding El Niño weather pattern, have resulted in
severe droughts, affecting especially prices in Colombia, as hydropower accounts for approximately 70% of total country’s energy.
El Niño is a recurring weather phenomenon, and itLa mayNiña conditions, can
contribute to higher temperatures,temperatures and reduced rainfall (or, in La Niña periods, heavier rainfall), which may increase the risk
of droughts, water restrictions, floods, landslides, wildfires, or other natural
disasters on an equal or greater scale in the future.
Because Colombia’s electricity generation relies heavily on hydropower, drought conditions may increase the risk of higher electricity
costs or supply constraints. In the event of a natural disaster, our disaster recovery plans may prove to be
ineffective, which could
have a material adverse effect on itsour ability to conduct our businesses. In addition, if a significant number
of our employees and senior
managers were unavailable because of a natural disaster, our ability to conduct our businesses could be compromised.
Natural disasters
or similar events could also result in substantial volatility in our results of operations for any fiscal quarter or
year.
Prior
to August 2016, we had not paid any cash dividends on our ordinary shares. Since such time, we have paid regular quarterly dividends. However,
However, the payment of dividends in the future, if any, will be contingent upon our revenues and earnings, if any, capital requirements
and our
general financial condition and limitations imposed by our outstanding indebtedness.
Management's Discussion & Analysis (MD&A)
New heading “Comparison of years ended December 31, 2025 and December 31, 2024”
Removed heading “Comparison of years ended December 31, 2023 and December 31, 2022”
Largest changes
We expect to benefit from growth in our largest markets in the United States by gaining market share, broadening our geographic footprint. Favorable demographics in states such as South Carolina, Florida, Texas, and North Carolina, where we have a strong presence, contribute to continued growth. According to FMI’s 2025 Building Products Market Overview, annual spending for thesee in full comparisonU.S Census Bureau, averageresidentialconstruction spending increased 6.2% in 2024, from $875 billion in 2023, to $930 billion in 2024. Addittionally, single family housing stars increased 6.5% in 2024. According to the FMI’s 2025 north American engineeringwindow and doorcontruction overview, single family residential construction in the U.Smarket is expected toincreasegrow at acompoundCompoundaunualAnnualgrowthGrowth rate of6%6.2%,untiltotaling2028,$340highlybillion from 2025 to 2029, despite of current macroeconomic challenges of affordability, interest rates, and tariff uncertainties, negatively impacting the U.S. residential market as of 2025. This growth is anticipated to accelerate in 2027 and remain strong through 2029, mainly driven byinteresthighratesdemandbuydowns.forRemodelingenergy efficientandproductsreparing activity, Is also expected to trend up over the next yearssuch asnew home prices remain at all-time high levels.vinyl. On the other hand, Nonresidential building product spending is expected to experience a total growth of 22% from 2025 to 2029, or a total projected spending of around $260 billion. Additionally, the latest Nonresidential Construction Index (NRCI)scoreincreased from 47.9 in Q4’2025, to 54.5 in Q1’2026, reflecting improved expectations of56.9, 20% above the previous quarter, reflects improvingeconomic conditions and expanding industry opportunities from the commercial construction market for2025.2026. These stable to positive macro trends in our core markets and geographies combined with a lean cost structure, leave us well positioned to maintain industry leading margins and further diversify our presence into the U.S.
“Gross profit during the twelve months ended December 31, 2025, was $421.4 million, an increase of $41.4 million, or 10.9%, from $380.0 million during the twelve months ended December 31, 2024. The gross profit margin during the twelve months ended December 31, 2025, remained stable at 42.8% from 42.7% during the twelve months of 2024. During 2025, pricing action and improved operating leverage, balanced out inflationary pressures on input costs, mostly salary increases set at the beginning of the year, and rising cost of aluminum in part due to our tariff mitigation strategy. …”see in full comparison
The main sources of operating cash during the year ended December 31,see in full comparison2024,2025, weredriven by trade accounts payable, andcontract assets andliabilities.Tradeliabilities, and trade accounts payable and accrued expenses. Contract assets and liabilities generated$14.7$31.4 million during the fiscal year ended December 31,2024, mainly as a result of our growing operation, while our days payable outstanding increased only slightly, compared with $17.4 million used during the year ended December 31, 2023. In addition, contract assets and liabilities generated $14.3 million during the year ended December 31, 2024,2025, mostly due to an increase in billings in excess of costs, asmainlargeprojectscommercial jobs are being executed, and large projects from our backlog are starting operations; compared to$13.9$14.3 million generated during theyeartwelve months ended December 31,2023,2024.asInwe executed on our growing backlog. The largest use of cash in operating activities wasaddition, trade accounts payablereceivable,andwhichaccruedusedexpenses$44.4generated $8.1 millioninduring the fiscal year ended December 31,2024,2025, related to higher payables due to our higher raw material purchases as we procure a stock of U.S. sourced aluminum as part of our tariff mitigation strategy, compared withwith a$14.7 million during the fiscal ended December 31, 2024. In direct relation to that, the largest use of$0.8cash in operating activities was the purchase of inventories, which used $45.1 million during the twelve months ended December 31, 2025, in contrast to $2.9 million used during the prior yearperiod, driven by an increase in pace of large commercial installation jobs during the third and fourth quarter of 2024, which entail longer cash cycles. Additionally, taxes payable used $3.5 million during the year ended December 31, 2024, resulted from taxes being paid during the period, as the Colombian subsidiaries fully paid their 2023 income tax during the second quarter of 2024.period.
“Comparison of years ended December 31, 2023 and December 31, 2022”see in full comparison
“In April 2025, Tecnoglass acquired certain assets and assumed certain liabilities of Florida-based Continental Glass Systems, LLC. (“Continental”), a premier provider of innovative architectural glass and glazing solutions in the Southeast U.S. This acquisition included a manufacturing plant, various intangibles, and a substantial project backlog in both execution and pipeline phases. With annualized revenues of approximately $30 million, Continental’s production capabilities, high-quality product portfolio, and reputation for excellence strengthens Tecnoglass’ U.S. …”see in full comparison
Full comparison: every changed paragraph (37)
We
are experienced and highly skilled in the vertical integration of windows and architectural glass manufacturing, distribution, and professional
fitting. fitting.
Our expertise extends to the production of top-quality windows, as well as the supply of aluminum, vinyl, and other components.
Our dedicated
and knowledgeable team serves a diverse range of commercial and residential construction projects worldwide, guaranteeing
outstanding outstanding
products and seamless installation services. With a focus on innovation, combined with providing highly specified products
with the highest
quality standards at competitive prices, we have earned #1 spot in the Forbe’s list of America’s 100 most
successful small-cap
companies for 2024, and developed a leadership position in each of our core markets. In the United States, which
is our largest market,
we were ranked among the four largest glass fabricators serving the United States in 2023 by Glass Magazine. In
addition, we believe
we are the leading glass transformation company in Colombia. Our customers, which include developers, general contractors
or installers
for hotels, office buildings, shopping centers, airports, universities, hospitals and multi-family and residential buildings,
look to
us as a value-added partner based on our product development capabilities, our high-quality products and our unwavering commitment
to to
exceptional service.
OurThe
majority of our products are manufactured in a 5.86.1 million square foot, state-of-the-art manufacturing complex in Barranquilla, Colombia
that provides
easy access to North, Central and South America, the Caribbean and the Pacific. Our products can be found on some of the
most distinctive
buildings in these regions, including the Aston Martin Residences (Miami), Miami World Tower (Miami), 3ELEVEN (New York),
Raffles Hotel
(Boston), Norwegian Cruise Line Terminal B (Miami), One Thousand Museum (Miami), Paramount Miami Worldcenter (Miami), Salesforce
Tower Tower
(San Francisco) and AE’O Tower (Honolulu).. Our track record of successfully delivering high profile projects has earned
us an
increasing number of opportunities across the United States, evidenced by our expanding backlog and overall revenue growth.
We have a strong presence in the Florida market, which represents a substantial portion of our revenue stream and backlog. Our success in Florida has primarily been achieved through sustained organic growth, with further penetration now taking place into other highly populated areas of the United States. As part of our strategy to become a fully vertically integrated company, we have supplemented our organic growth with some acquisitions that have allowed us added control over our supply chain allowed for further vertical integration of our business and will act as a platform for our future expansion in the United States. In 2016, we completed the acquisition of ESW, which gave us control over the distribution of products into the United States from our manufacturing facilities in Colombia. In March 2017, we completed the acquisition of GM&P, a consulting and glazing installation business that was previously our largest installation customer. Most recently, on April 3, 2025, we completed the acquisition of certain assets and assume certain liabilities of Continental Glass Systems, LLC, a leading provider of architectural glass and glazing solutions in the Southeast U.S., that included manufacturing equipment, intangibles, and a strong project backlog, enhancing our U.S. presence, customer reach, and supply chain efficiency.
We
are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential and commercial construction
industries, operating through our direct and indirect subsidiaries. Headquartered in Barranquilla,Miami, Colombia,Florida,, wethe operateCompany maintains its principal
manufacturing operations in Colombia and operates out of aapproximately 5.8
6.5 million square foot vertically integrated,vertically-integrated, state-of-the-art
manufacturing complexand operational footprint across Colombia and the United States that provides easy access to North, Central and South America,
America, the Caribbean, and the Pacific.
We
sell to overapproximately 1,000 customers using several sales teams based out of Colombia and the United States to specifically target regional
markets markets
in South, Central and North America. The United States accounted for 96%,94.8%, and 95%95.5% of our combined revenues in 20242025 and 2023,2024,
respectively, respectively,
while Colombia accounted for approximately 2.8%3.2% and 3.0%,2.8%, and other Latin-American destinations accounted for approximately
2.0% 1.7%and during
both1.7%, years.respectively.
We
expect to benefit from growth in our largest markets in the United States by gaining market share, broadening our geographic footprint.
Favorable demographics in states such as South Carolina, Florida, Texas, and North Carolina, where we have a strong presence, contribute
to continued growth. According to FMI’s 2025 Building Products Market Overview, annual spending for the U.S Census Bureau, average residential construction spending increased 6.2% in 2024, from $875
billion in 2023, to $930 billion in 2024. Addittionally, single family housing stars increased 6.5% in 2024. According to the FMI’s
2025 north American engineeringwindow and
door contruction overview, single family residential construction in the U.Smarket is expected to increasegrow at
a compoundCompound aunualAnnual growthGrowth rate of 6%6.2%, untiltotaling 2028,$340 highlybillion from 2025 to 2029, despite of current
macroeconomic challenges of affordability, interest rates, and tariff uncertainties, negatively impacting the U.S. residential market
as of 2025. This growth is anticipated to accelerate in 2027 and remain strong through 2029, mainly driven by interesthigh ratesdemand buydowns.for Remodelingenergy
efficient andproducts reparing activity, Is also expected
to trend up over the next yearssuch as new home prices remain at all-time high levels.vinyl. On the other hand, Nonresidential building product spending is expected to experience a total growth
of 22% from 2025 to 2029, or a total projected spending of around $260 billion. Additionally, the latest Nonresidential Construction
Index (NRCI) scoreincreased from 47.9 in Q4’2025, to 54.5 in Q1’2026, reflecting improved expectations of 56.9, 20% above the previous quarter, reflects improving economic conditions
and expanding industry opportunities
from the commercial construction market for 2025.2026. These stable to positive macro trends in our core
markets and geographies combined
with a lean cost structure, leave us well positioned to maintain industry leading margins and further
diversify our presence into the
U.S.
In April 2025, Tecnoglass acquired certain assets and assumed certain liabilities of Florida-based Continental Glass Systems, LLC. (“Continental”), a premier provider of innovative architectural glass and glazing solutions in the Southeast U.S. This acquisition included a manufacturing plant, various intangibles, and a substantial project backlog in both execution and pipeline phases. With annualized revenues of approximately $30 million, Continental’s production capabilities, high-quality product portfolio, and reputation for excellence strengthens Tecnoglass’ U.S. market presence, broadens its client reach, and creates synergies that reinforce Tecnoglass’ leadership position in the architectural glass industry. Additionally, the Company anticipates operational benefits as it integrates Continental’s supply chains into its existing manufacturing operations. The purchase price for the acquisition was $10,429, of which $6,841 of the purchase price was paid in cash by the Company on April 3, 2025, with the remaining amount to be payable by the Company in cash within 365 days after closing date. The total amount of acquisition-related costs was $588, which are included in the Statement of operations for the period ending December 31, 2025.
Additionally, we acquired $9.0 million and $6.4 million of property plant and equipment under credit during the twelve months ended December 31, 2025, and 2024, respectively. These investments across our vertically-integrated operations include further automating our glass and window assembly production lines, adding glass production lines, expanding our aluminum facilities, putting new vinyl windows lines to penetrate this new product segment and purchasing land to grow beyond current installed capacity.
The Company estimates that current manufacturing operating capacity has reached approximately $1.3 billion which does not account for incremental installation revenue capacity. Additionally, the Company expects the resulting increase in output to improve efficiency throughout its operations while reducing material waste and overall lead times.
In
2019 we entered into a joint venture agreement with Saint-Gobain, a world leader in the production of float glass, a key component of
our manufacturing process, whereby we acquired a 25.8% minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of Saint-Gobain.
Income from this investment is recorded using the equity method and is presented within the Consolidated Statement of Operations as a
component of non-operating income as the Company is not subject to income tax over this investment. The joint venture agreement includes
plans to build a new plant that will be located approximately 20 miles from our primary manufacturing facility in Barranquilla Colombia,
in which we will also have a 25.8% interest. The new plant will be funded with proceeds from the original cash contribution made by us,
operating cash flows from the Bogota plant, debt incurred at the joint venture level that will not be consolidated into our company.
Comparison of years ended December 31, 2025 and December 31, 2024
Our operating revenue increased $93.4 million, or 10.5%, from $890.2 million in the year ended December 31, 2024, to $983.6 million in the year ended December 31, 2025. Strong sales during 2025 were driven by U.S. commercial and single-family residential market activity. U.S. sales increased $83.0 million, or 9.8%, from $849.9 million in 2024 to $932.9 million in 2025. U.S. Commercial market sales increased $51.7 million, or 10.8%, from $477.8 million in 2024 to $529.5 million in 2025 as we continue to execute on our growing backlog. U.S. single family residential market sales increased $31.3 million, or 8.4%, from $372.1 million in 2024 to $403.4 million in 2025 and accounted for 41.0% of total sales in the year ended December 31, 2025. Sales to Latin-American markets increased $10.4 million, or 25.8%, from $40.3 million in 2024 to $50.8 million in 2025.
Gross profit during the twelve months ended December 31, 2025, was $421.4 million, an increase of $41.4 million, or 10.9%, from $380.0 million during the twelve months ended December 31, 2024. The gross profit margin during the twelve months ended December 31, 2025, remained stable at 42.8% from 42.7% during the twelve months of 2024. During 2025, pricing action and improved operating leverage, balanced out inflationary pressures on input costs, mostly salary increases set at the beginning of the year, and rising cost of aluminum in part due to our tariff mitigation strategy. Average FX rates remained relatively stable year over year despite some short term volatility.
Operating expenses increased $43.3 million, or 28.3%, from $153.0 million to $196.3 million for the twelve months ended December 31, 2024, and 2025, respectively. The increase was mainly driven by tariffs on imports into the U.S. which generated $19.9 million expense. Additionally, the nominal increase was driven by administrative salary adjustments and higher transportation and commission expenses related to higher revenues.
During the twelve months ended December 31, 2025, the Company recorded other operating income of $5.6 million mainly related to a gain on the sale of an aircraft and the recognition of a refund related to Employee Retention Credits under government relief programs. There was no comparable income recorded during the previous year period.
During the twelve months ended December 31, 2025, and 2024, the Company recorded non-operating income of $3.1 and $5.9 million, respectively. Non-operating income for the period is comprised primarily of income from rental properties and gains on sale of scrap materials as well as non-operating expenses related to certain charitable contributions outside of the Company’s direct sphere of influence.
During the twelve months ended December 31, 2025, the Company recorded a non-operating net gain of $3.8 million associated with foreign currency transactions, compared to a net loss of $5.7 million during the twelve months ended December 31, 2024.
In September 2025, the Company entered into a new Senior Secured Credit Facility to replace its prior credit agreement dated November 2021. The new facility transitions the Company from a term-loan-plus-revolver structure to a fully committed revolving facility and (i) increases total committed borrowing capacity from $150 million to $500 million, (ii) reduces borrowing costs by approximately 25 basis points, and (iii) extends the initial maturity date by five years to December 2030. Borrowings under the new facility bear interest at the Secured Overnight Financing Rate (SOFR) with no floor, plus a spread of 1.25%, based on the Company’s net leverage ratio. The effective interest rate for this facility, including deferred issuance costs, is 6.98% as of December 31, 2025. In connection with the establishment of the new facility, the Company incurred total costs and fees of $2,783 which were capitalized as deferred financing costs.
The transaction was accounted for as a debt extinguishment in accordance with ASC 470-50. As a result, the Company recognized a loss on extinguishment of debt of $1,380, representing the write-off of the remaining unamortized deferred financing costs related to the prior credit facilities and termination costs associated with closing the previous facility.
Interest expense and deferred cost of financing decreased by $0.5 million, or 7.2%, to $6.9 million for the twelve months ended December 31, 2025, primarily reflecting the discontinuation of hedge accounting for the Company’s interest rate swap contracts upon the extinguishment of the prior credit facility and issuance of the new revolving facility. Following this discontinuation, the periodic settlements and fair value changes of these swaps are now recognized within Interest income (expense), net and deferred cost of financing on the Consolidated Statement of Operations and Comprehensive Income. During the twelve months ended December 31, 2025, the Company recorded a gain of $3.3 million related to derivative financial instruments.
The effective income tax rate of 32.2% and 28.4% for the years ended December 31, 2025 and 2024. Our effective rate generally reflects a blended statutory rate, primarily driven by the 35% corporate tax rate in Colombia, where most of our manufacturing operations are located, and the 21% U.S. federal statutory rate.
As a result of the foregoing, the Company recorded a net income for the year ended December 31, 2025 of $159.6 million, compared to $161.3 million for the year ended December 31, 2024.
Comparison
of years ended December 31, 2023 and December 31, 2022
Our
operating revenue increased $116.7 million, or 16.3%, from $716.6 million in the year ended December 31, 2022 to $833.3 million in the
year ended December 31, 2023. Strong sales during 2023 were driven by U.S. commercial and single-family residential market activity.
U.S. sales increased $106.7 million, or 15.5%, from $688.4 million in 2022 to $795.1 million in 2023. U.S. Commercial market sales increased
$77.7 million, or 20.3%, from $382.0 million in 2022 to $459.7 million in 2023 as we continue to execute on our growing backlog. U.S.
single family residential market sales increased $29.0 million, or 9.5%, from $306.4 million in 2022 to $335.4 million in 2023 and accounted
for 40.3% of total sales in the year ended December 31, 2023. Sales to Latin-American markets increased $10.0 million, or 35.6%, from
$28.2 million in 2022 to $38.2 million in 2023.
Gross
profit increased $41.5 million, or 11.9%, to $391.0 million during the year ended December 31, 2023, compared with $349.5 million during
the year ended December 31, 2022. This resulted in gross profit margin reaching 46.9% during the year ended December 31, 2023, down from
48.8% during the year ended December 31, 2022. The 190-basis point decrease in gross margin can be mainly attributable to our revenue
mix which included more installation and stand-alone product sales during the current period. Installation and stand-alone product revenues
were up 21.4% and 9.5% respectively year over year, weighting down overall gross margin. Additionally, unfavorable currency exchange
dynamics impacted our costs denominated in the Colombian Peso against our predominantly US Dollar revenue stream.
Operating
expenses increased $8.1 million, or 6.6%, from $123.1 million for the year ended December 31, 2022, to $131.2 million for the year ended
December 31, 2023. Administrative and selling Personnel expense increased 27%, from $28.1 million in 2022 to $35.7 in 2023, related to
a larger operation and ongoing geographical expansion. Additionally, provision for accounts receivable increased $2.2 million, from $0.6
million in 2022 to $2.8 million in 2023. However, as a result of our continued effort to enhance our lean administrative structure and
tight cost controls, our operating expenses as a percentage of sales improved from 17.2% in 2022 to 15.7% in 2023.
During
the years ended December 31, 2023, and 2022, the Company recorded a net non-operating income of $5.1 million and $4.2 million, respectively.
Non-operating income is comprised primarily of interest income from short term investments and deposits, rental properties and gains
on sale of scrap materials and charges to customers on credit card payments, as well as non-operating expenses related to certain charitable
contributions outside of the Company’s direct sphere of influence.
Interest
expense and deferred cost of financing increased $1.0 million, or 12.5%, to $9.2 million during the year ended December 31, 2023, from
$8.2 million during the year ended December 31, 2022, reflecting an increase in floating interest rates while our debt balance remained
stable.
During
the year ended December 31, 2023, the Company recorded a non-operating gain of $0.7 million associated with foreign currency transactions.
Comparatively, the Company recorded a net gain of $2.0 million during the year ended December 31, 2022, within the statement of operations
as the Colombian peso appreciated 20.5% during the period.
During
the years ended December 31, 2023 and 2022, the Company recorded an income tax provision of $77.9 million and $74.8 million, respectively,
reflecting an effective income tax rate of 30.4% and 33.3%, respectively.
As
a result of the foregoing, the Company recorded net income for the year ended December 31, 2023 of $183.5 million compared to $156.4
million in the year ended December 31, 2022.
During
the years ended December 31, 20242025 and 2023,2024, operating activities generated approximately $170.5$135.8 million and $138.8$170.5 million, respectively.
The strong cashflow from operations during the year ended December 31, 2024,2025, was mainly associatedwithassociated with our industry leading profitability,profitability
and enhancedeffective working capital efforts.management, partially offset by incremental input costs and tariff expenses in 2025.
The
main sources of operating cash during the year ended December 31, 2024,2025, were driven by trade accounts payable, and contract assets and
liabilities. Tradeliabilities, and trade accounts payable
and accrued expenses. Contract assets and liabilities generated $14.7$31.4 million during the fiscal year ended December 31, 2024, mainly as a result of our growing
operation, while our days payable outstanding increased only slightly, compared with $17.4 million used during the year ended December
31, 2023. In addition, contract assets and liabilities generated $14.3 million during the year ended December 31, 2024,2025, mostly
due to
an increase in billings in excess of costs, as mainlarge projectscommercial jobs are being executed, and large projects from our backlog are
starting operations;
compared to $13.9$14.3 million generated during the yeartwelve months ended December 31, 2023,2024. asIn we executed on our growing backlog. The largest use of
cash in operating activities wasaddition, trade accounts
payable receivable,and whichaccrued usedexpenses $44.4generated $8.1 million induring the fiscal year ended December 31, 2024,2025, related to higher payables due to
our higher raw material purchases as we procure a stock of U.S. sourced aluminum as part of our tariff mitigation strategy, compared
with with
a$14.7 million during the fiscal ended December 31, 2024. In direct relation to that, the largest use of $0.8cash in operating activities
was the purchase of inventories, which used $45.1 million during the twelve months ended December 31, 2025, in contrast to $2.9 million
used during the prior year period, driven by an increase in pace of large commercial installation jobs during the third
and fourth quarter of 2024, which entail longer cash cycles. Additionally, taxes payable used $3.5 million during the year ended December
31, 2024, resulted from taxes being paid during the period, as the Colombian subsidiaries fully paid their 2023 income tax during the
second quarter of 2024.period.
We used $87.5 million and $77.3 million in investing activities during the twelve months ended December 31, 2025, and 2024, respectively. During the year ended December 31, 2025, we paid $101.3 million to acquire property plant and equipment, which is partially offset by $12.3 million sale of property, plant and equipment. This included scheduled payments on previous investments to increase capacity and efficiency, as well as $15.0 million of real estate in south Florida. Additionally, we spent $6.8 million to acquire certain assets and assume certain liabilities of Continental Glass Systems, LLC, a leading provider of architectural glass and glazing solutions in the Southeast U.S., that included manufacturing equipment, intangibles, and a strong project backlog, enhancing our U.S. presence, customer reach, and supply chain efficiency. The price of this purchase was $10.4 million, of which $3.6 million remains to be paid in the short term. During the twelve months ended December 31, 2024, we used $79.6 million for the acquisition of property and equipment.
Financing activities reflected gross debt proceeds of $176.0 million and repayments of $114.4 million, primarily related to the replacement of the Company’s prior credit facility with a new $500 million revolving facility in September 2025. The transaction was accounted for as a debt extinguishment under ASC 470-50, resulting in the recognition of $1.0 million in deferred financing costs associated with the new facility, which extends the maturity to December 2030 and provides increased borrowing capacity and enhanced financial flexibility.
We
used $77.3 million and $76.0 million in investing activities during the years ended December 31, 2024, and 2023, respectively. The main
use of cash in investing activities during the year ended December 31, 2024 was related to scheduled payments on previous investments
to increase capacity and efficiency as well as new investments in land and equipment. During the year ended December 31, 2024, we paid
$79.6 million to acquire property plant and equipment, which in combination with $6.4 million acquired under credit or debt, amount to
total capital expenditures of $86.0 million. During the year ended December 31, 2023, we used $78.0 million for the acquisition of property
and equipment. Including assets acquired with debt or supplier credit, total capital expenditures during the period were $87.3 million.
Financing
activities used $84.5 million and $42.8 million during the year ended December 31, 2024, and 2023, respectively. On April 10, 2024, we
paid $2,500 to Incantesimo SAS, related to the acquisition of the remaining 31% equity interest of ES Metals. We paid $19.7 million and
$16.4 million of dividends to holders of our ordinary shares during the years ended December 31, 2024 and 2023, respectively. Additionally,
during the year ended December 31, 2024, we used $64.5 million to repay debt from our Senior Secured Line of Credit and other smaller
facilities.
What changed in the latest 10-Q
Risk Factors
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Comparison of six-month periods ended June 30, 2026 and 2025”
New heading “Non operating income and expenses, net”
New heading “Foreign currency transaction gains and losses”
New heading “Interest income (expense), net and deferred cost of financing”
Largest changes
“Operating expenses increased $8.4 million, or 19.8%, from $42.5 million to $50.9 million for the quarters ended March 31, 2025, and 2026, respectively. The increase resulted primarily from increased personnel cost, on higher salaries and a stronger Colombian Peso. Additionally the Government of Colombia imposed a one-time, non-recurring $2.9 million wealth tax on larger Colombian companies in order to subsidy certain unexpected climate related emergencies. This measure is currently being challenged under the Supreme Court. …”see in full comparison
“Operating expenses increased $28.8 million, or 30.1%, from $95.7 million to $124.4 million for the six months ended June 30, 2025, and 2026, respectively. The increase resulted primarily from tariffs on imports into the U.S. which generated a net expense of $20.0 million during the first half of 2026. …”see in full comparison
Full comparison: every changed paragraph (37)
This
Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking
statements on our current expectations and projections about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,”
“could,” “would,” “expect,” “plan,” “anticipate,” “believe,”
“estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause
or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission
(“SEC”) filings. References to “we”, “us” or “our” are to Tecnoglass Holdings Inc., except
where where
the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed consolidated
financial financial
statements and related notes thereto included elsewhere in this report.
We
have focused on working with The Power of Quality, always making sure that our vision of sustainability is immersed into every
aspect of our business, including social, environmental, economic and governance variables, that help us make decisions and create value
for our stakeholders. We carry out a series of initiatives based on our global sustainability strategy, which is supported on three fundamental
pillars: promoting an ethical and responsible continuous growth, leading eco-efficiency and innovation, and empowering our environment.
As part of this strategy, we have voluntarily adhered to UN Global Compact Principles since 2017 and in pursuit of our cooperation with
the attainment of the SDGsSustainable Development Goals joined in 2021 a program to dynamize, strengthen and make visible the management
of greenhouse gas emissions
as a carbon neutral strategy set out by the Colombian government for 2050. Additionally, we are advancing
initiatives in circular economy
and implementing comprehensive water management and treatment strategies aimed at improving efficiency,
reuse and replenishment, in order
to maintain our water-positive operations.
Comparison
of quarterly periods ended MarchJune 31,30, 2026,2026 and 2025
Operating
revenues increased $26.7$39.7 million, or 12.0%,15.6%, from $222.3$255.5 during the quarter ended MarchJune 31,30, 2025, to $249.0$295.3 million, during the quarter
ended MarchJune 31,30, 2026. Strong revenues during the firstsecond quarter of 2026 were driven by market share gains and stronger activity in our
core U.S markets, where revenues increased $24.7$43.9 million, or 11.6%18.1% year over year, to $237.1$286.2 million. In terms of end markets, the increase
was driven by strong growth in theboth US commercial market,and upresidential 20.4%market. Revenues from the commercial market rose 15.7% or $25.1$22.8 million
year over yearyear, as we continue to execute on our growing
project backlogbacklog. andIn market share gains, while USaddition, residential market sales wasincreased relatively15.4% flator year$16.9
million yar over year.year, reflecting market share gains in new geographies and a modest pull-forward effect when we announced a mid-single
digit price increase for quotes issued after May. Revenues from Latin America
and the Caribbean increaseddecreased $2.0$4.1 million, or 20.7%31.4% year
over year.
Gross
profit during the firstsecond quarter of 2026 was $95.8$110.0 million, a decrease of $1.7$4.3 million, or 1.7%,3.8%, from $97.5$114.3 million during the firstsecond
quarter quarter
of 2025. The gross profit margin during the three months ended MarchJune 31,30, 2026, was 38.5%,37.3%, compared to 43.9%44.7% during the firstsecond
quarter quarter
of 2025, primarily driven by higher input costs associated with increasing aluminum prices, as well as higher salaries given
the one-time
double digit minimum wage increase put in place in Colombia at the beginning of the year.2026. Additionally, we had an unfavorable revenue
mix as commercial revenues with installation services rose year over year as we execute on our growing backlog of projects with installation.
Finally, we had a stronger local
currency year over year, impacting our local currency costs on a comparable basis..basis. The aforementioned
factors were partially offset by
positive pricing adjustments implemented in the second quarter of last year.year and by operating leverage on higher revenues.
Operating expenses increased $20.3 million, or 38.3%, from $53.1 million to $73.4 million for the quarters ended June 30, 2025 and 2026, respectively. The increase resulted primarily from Tariffs on imports into the U.S. which generated a total expense of $18.7 million during the second quarter of 2026, an increase of $10.6 million or 129.2% year over year, from a total Tariff expense of $8.1 million during the second quarter of 2025. Additionally, increased personnel cost, on higher salaries and a stronger Colombian Peso.
Operating
expenses increased $8.4 million, or 19.8%, from $42.5 million to $50.9 million for the quarters ended March 31, 2025, and 2026, respectively.
The increase resulted primarily from increased personnel cost, on higher salaries and a stronger Colombian Peso. Additionally the Government
of Colombia imposed a one-time, non-recurring $2.9 million wealth tax on larger Colombian companies in order to subsidy certain unexpected
climate related emergencies. This measure is currently being challenged under the Supreme Court. These increases were partially offset
by a $1.9 million recovery of previously paid import tariffs recorded as a reduction to selling expense during the three months ended
March 31, 2026 on certain products imported to the United States under the International Emergency Economic Powers Act after the U.S.
Supreme Court ruled that certain tariffs imposed under the IEEPA were not valid in February 2026.
During
the three months ended MarchJune 31,30, 2026 and 2025, the Company recorded net non-operating income of $0.9$0.6 million andin $1.0both million,periods. respectively.Non-operating
Non-operating income is comprised of interest income from short termshort-term investments, as well as non-operating expenses related to certain
charitable contributions.
Equity method income, mainly from our joint venture
with Saint Gobain decreased $1.2 million, or 92.4%,124.5%, toafter $0.1recording a loss of $0.2
million during the quarter ended MarchJune 31,30, 2026, compared to $1.3an income of $0.9 million
recorded during the quarter ended March 31June 30, 2025.
During
the three months ended MarchJune 31,30, 2026, the Company recorded a non-operating income of $0.9$5.2 million associated with foreign currency transactions
compared to a net non-operating lossincome of $0.5$0.8 million during the three months ended March 31June 30, 2025.
Interest expense and deferred cost of financing increased by $2.2 million, or 160.8%, to $3.5 million for the quarter ended June 30, 2026, as a result of higher amount of debt from our Senior secured credit facility further explained under capital resources.
Interest
expense and deferred cost of financing increased by $1.7 million, or 127.3%, to $3.0 million for the quarter ended March 31, 2026, primarily
reflecting the discontinuation of hedge accounting for the Company’s interest rate swap contracts upon the extinguishment of the
prior credit facility and issuance of the new revolving facility, as further described above. Following this discontinuation, the periodic
settlements and fair value changes of these swaps are now recognized within Derivative financial instruments gain (loss) rather than
offsetting interest expense, which had resulted in a lower reported amount in the prior period.
During
the three months ended March 31, 2026, the Company recorded a loss of $0.3 million related to derivative financial instruments, compared
to no gain or loss during the three months ended March 31, 2025. In connection with the replacement of our Senior Secured Credit Facility
in September 2025, the Company discontinued hedge accounting for its existing interest rate swap contracts that had a highly effective
relationship with the hedged transaction as of June 30,2025 under ASC 815 but due to changes in critical terms of the relationship with
the new debt these instruments are not in accordance to the hedge accounting principles. These swap contracts remain outstanding and
continue to be periodically settled in accordance with their original terms. Upon settlement and the extinguishment of the prior term
loan, hedge accounting was discontinued, and the cumulative deferred gains or losses previously recorded in Accumulated other comprehensive
income were reclassified into current-period earnings.
Following
the discontinuation of hedge accounting for the interest rate swap contracts, changes in the fair value of these instruments, as well
as ongoing periodic settlements on these instruments, are now recognized directly through earnings within Derivative financial instruments
gain (loss).
We
recorded income tax expense of $11.9$14.1 million and $17.7$18.1 million during the three months ended MarchJune 31,30, 2026, and 2025, respectively. The
The effective income tax rate of 27.2%36.5% for the three months ended MarchJune 31,30, 2026, approximatesprimarily reflects the statutoryimpact of certain foreign expenses incurred by the Company’s Colombian subsidiaries that are not deductible for income tax rate.purposes.
As
a result of the foregoing, the Company recorded net income for the three months ended MarchJune 31,30, 2026, of $31.9$24.6 million compared to net
income of $42.2$44.1 million for the three months ended MarchJune 31,30, 2025.
Comparison of six-month periods ended June 30, 2026 and 2025
Revenues
Operating revenues during the six months ended June 30, 2026 was $544.3 million, compared to $477.8 million during the six months ended June 30, 2025, an increase of $66.5 million or 13.9%, year over year. Strong revenues during the first half of 2026 were driven by strong activity in the U.S market, where revenues increased $68.6 million, or 15.1% year over year, to $523.4 million. The increase was driven by higher U.S. commercial market revenues, up $50.0 million, or 17.9% year over year, as we continue to execute on our growing backlog of projects. Residential revenues increased $16.4 million, or 8.3% year over year, resulting from strong demand momentum in core markets and our ongoing geographical expansion, and a modest pull-forward effect when we announced a mid-single digit price increase for quotes issued after May. Revenues from Latin America and the Caribbean decreased $2.1 million, or 9.2% year over year.
Gross profit
Gross profit during the first half of 2026 was $205.9 million, a decrease of $6.0 million, or 2.8%, from $211.9 million during the first half of 2025. The gross profit margin during the six months ended June 30, 2026, was 37.8%, compared to 44.3% during the same period of 2025, primarily driven by higher input costs associated with increasing aluminum prices, as well as higher salaries given the one-time double digit minimum wage increase put in place in Colombia at the beginning of 2026. Additionally, we had a stronger local currency year over year, impacting our local currency costs on a comparable basis. The aforementioned factors were partially offset by positive pricing adjustments implemented in the second quarter of last year.
Expenses
Operating expenses increased $28.8 million, or 30.1%, from $95.7 million to $124.4 million for the six months ended June 30, 2025, and 2026, respectively. The increase resulted primarily from tariffs on imports into the U.S. which generated a net expense of $20.0 million during the first half of 2026. including a $1.9 million recovery of previously paid import tariffs following the invalidation of certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), an increase of $7.0 million or 53.8% year over year, from a total Tariff expense of $13.0 million during the first half of 2025. Additionally, operating expenses increased due to higher personnel costs resulting from higher salaries and a stronger Colombian Peso.
Non operating income and expenses, net
During the six months ended June 30, 2026 and 2025, the Company recorded net non-operating income of $1.5 million and $1.6 million, respectively. Non-operating income is comprised of interest income from short-term investments, as well as non-operating expenses related to certain charitable contributions. Equity method income, mainly from our joint venture with Saint Gobain, decreased $2.4 million, or 105.6%, after recording a net loss of $0.1 million during the six months ended June 30, 2026, compared to an income of $2.3 million recorded during the six months ended June 30, 2025.
Foreign currency transaction gains and losses
During the six months ended June 30, 2026, the Company recorded a non-operating income of $6.1 million associated with foreign currency transactions compared to a net non-operating income of $0.3 million during the six months months ended June 30, 2025.
Interest income (expense), net and deferred cost of financing
Interest expense and deferred cost of financing increased by $3.9 million, or 144.1%, to $6.5 million for the six months ended June 30, 2026, as a result of higher amount of debt from our Senior secured credit facility further explained under capital resources
Income Taxes
We recorded income tax expense of $26.0 million and $35.8 million during the six months ended June 30, 2026, and 2025, respectively. The effective income tax rate of 31.5% for the six months ended June 30, 2026, primarily reflects the impact of certain foreign expenses incurred by the Company's Colombian subsidiaries that are not deductible for income tax purposes.
As a result of the foregoing, the Company recorded net income for the six months ended June 30, 2026, of $56.4 million compared to net income of $86.3 million for the six months ended June 30, 2025.
As
of MarchJune 31,30, 2026,2026 and December 31, 2025, we had a cash and cash equivalents balance of approximately $91.1$80.8 million and $100.9 million,
respectively. Additionally, we currently have approximately $325$280 million available under several lines of credit.
We
transform glass and aluminum into high specification architectural glass and custom-made aluminum profiles which require significant
investments in state-of-the-art technology. During the three months ended MarchJune 31,30, 2026,2026 and 2025, we made investments primarily in building,
building, machinery and equipment in the amounts of $17.3$52.7 million and $30.4$62.9 million, respectively. Additionally, we acquired $7.9$9.8 million
and $11.1 $7.7
million of property plant and equipment under credit during the threesix months ended MarchJune 31,30, 2026, and 2025, respectively.
Investments made
during the first quartersix months of 2026 were mainly related an ongoing broad automation project to increase efficiency, improve headcount
and increase capacity given the Company´s current growth which has reduced excess capacity. Additionally, we continue to amortize
scheduled payments on recentprevious investments to increase capacity
and efficiency.
TheWhile
the Company estimates that current manufacturing operating capacity has reached approximately $1.3 billion (which does not account for
incremental incremental
installation revenue capacity.capacity) it expects to finish the year at a higher level, once current investments become operational.
Additionally, the Company expects the resulting increase in output to improve efficiency throughout its
operations while reducing material
waste, wastereducing headcount and improving overall lead times.
During
the threesix months ended MarchJune 31,30, 2026,2026 and 2025, operating activities generated approximately $6.7$11.1 million and $46.9$64.8 million, respectively.
The main source of operating cash during the threesix months ended MarchJune 31,30, 2026, were driven by taxes payable and trade accounts payable.
Taxes Trade accounts payable
and accrued expenses generated $16.9$31.3 million during the threesix months ended MarchJune 31, 2026, as the Company’s subsidiaries filed income
tax returns for fiscal year 2025, compared with $15.6 million during the three months ended March 31, 2025. Trade accounts payable and
accrued expenses generated $13.5 million during the three months ended March 31,30, 2026, related to higher unpaid balance of higher than
usual raw material purchases as we procure a stock of U.S. sourced aluminum as part of our tariff mitigation strategy, compared with
$11.7$21.8 million during the threesix months ended MarchJune 31,30, 2025. Conversely,In theconnection, largest usepurchase of cash in operating activities was the purchase
of inventories, whichinventories used $34.3$35.8 million during the threesix months
ended MarchJune 31,30, 2026, as we continue procure in advance, a higher stock
of U.S. sourced aluminum as part of our supply chain resilience
and tariff mitigation strategy, in contrast to $8.7$24.0 million generated
during the prior year period. The larges use of cash in operating
activities during the six months ended June 30, 2026 were taxes payable, which used $39.2 million and $18.5 million during the six months
ended June 30, 2026 and 2025, respectively, following seasonal tax payment schedules. Additionally, trade accounts receivables, used $16.5
$32.3 million in the threesix months ended MarchJune 31,30, 2026,
compared with $19.0$20.4 million during the prior year period, driven by a continued
elevated pace of large commercial installation jobs during
the first quartersix months of 2026, which entail longer cash cycles.
We
used $17.9$51.0 million and $18.2$48.6 million in investing activities during the threesix months ended MarchJune 31,30, 2026, and 2025, respectively. During
the threesix months ended MarchJune 31,30, 2026, we paid $17.3$52.7 million to acquire property plant and equipment, mainly related to scheduled payments
on previous investments to increase capacity and efficiency. During the threesix months ended MarchJune 31,30, 2025, we used $30.4$62.9 million for the
the acquisition of property and equipment.
Financing
activities also reflected gross debt proceeds of $39.4$63.8 million and repayments of $15.3$15.7 million, mainly used to repurchase $16.4$16.5 million
of our stock during the threesix months ended MarchJune 31,30, 2025, leaving $92.5$92.4 million remaining under our $250 million Share Repurchase Program.
TGLS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 2 trade dates, 100,000 shares, about $4.1M) and open-market sales in 0 filings. Net open-market shares: 100,000 (purchases minus sales); net value about $4.1M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-15 | Energy Holding Corp |
Open-market purchase | 19,121 | $40.27 | $770.0K |
| 2026-05-14 | Energy Holding Corp |
Open-market purchase | 80,879 | $40.56 | $3.3M |
Well-known investors holding TGLS (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 627,142 | $27.9M | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 102,118 | $4.8M | 0.0% | Reduced 65% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 40,997 | $1.9M | 0.0% | Added 263% |
| Two Sigma Investments | 2026-06-30 | 36,353 | $1.7M | 0.0% | Added 182% |
| D. E. Shaw & Co. | 2026-06-30 | 24,924 | $1.2M | 0.0% | Added 109% |
| Renaissance Technologies | 2026-06-30 | 13,300 | $622.6K | 0.0% | New position |