Q2 2025 Tecnoglass Inc Earnings Call
Should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
Operator: I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.
After today's presentation there'll be an opportunity to ask questions too.
To ask a question you May press Star then one on your telephone keypad.
To withdraw your question. Please press Star then two.
Please note this event is being recorded.
I would now like to turn the conference over to Brad Cray Investor Relations. Please go ahead. Thank.
Thank you for joining us for technical losses second quarter, and 25 conference call.
Brad Cray: Thank you for joining us for Tecnoglass's Q2 2025 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the investors section of the Tecnoglass website. Our speakers for today's call are Chief Executive Officer, José Manuel Daes, Chief Operating Officer, Christian Daes, and Chief Financial Officer, Santiago Giraldo. I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth, and future acquisitions. These statements are based on Tecnoglass's current expectations or beliefs and are subject to uncertainty and changes in circumstances.
A copy of the slide presentation to accompany this call may be obtained on the investors section of the techno glass website.
Our speakers for today's call are Chief Executive Officer, Manuel <unk>, Chief Operating Officer, Chris <unk>, and Chief Financial Officer Santiago Giraldo.
I'd like to remind everyone that matters discussed in this call except for historical information are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, including statements regarding future financial performance future growth and future acquisitions.
These statements are based on technical athletes current expectations or beliefs and are subject to uncertainty and changes in circumstances.
Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic business competitive <unk> regulatory factors and.
Brad Cray: Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive, and/or regulatory factors, and other risks and uncertainties affecting the operation of Tecnoglass's business. These risks, uncertainties, and contingencies are indicated from time to time in Tecnoglass's filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass's financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise. I will now turn the call over to José Manuel, beginning on slide number 4.
And other risks and uncertainties affecting the operation of technical losses business.
These risks uncertainties and contingencies are indicated from time to time and techno glasses filings with the SEC.
The information discussed during the call is presented in light of such risks further investors should keep in mind that technical essence financial results in any particular period may not be indicative of future results.
Second request is under no obligation to and expressly disclaims any obligation to update or alter its forward looking statements, whether as a result of new information future events changes in assumptions or otherwise.
I'll now turn the call over to Jose Manuel beginning on slide number four.
Thank you.
And to everyone who are brokers.
José Manuel Daes: Thank you, Brad, and thank you everyone for participating on today's call. We are excited to report another exceptional quarter that demonstrates the strength and resilience of our business. Our Q2 total revenues reached a record $255.5 million, up 16.3% year over year. This strong growth was driven almost entirely by robust double-digit organic growth in both our single-family residential and multi-family commercial businesses. These outstanding results showcase our ability to consistently outperform market trends while expanding margins and gaining market share. Our vertically integrated platform continues to deliver exceptional value and flexibility, giving us confidence in our ability to respond effectively to evolving market conditions. At the same time, we are maintaining our industry-leading margins and commitment to operational excellence. In our single-family residential business, we grew revenues 14.5% year over year to a Q2 record of $109.6 million.
News Corp.
We are excited to report that Dover acceptable quarter blip Gerbils true the fluids.
The resilience.
Well the political quarter total revenues reached a record 200.
Paul.
Sure.
Well, 63%.
Year over year.
This is cool growth was driven all bolstered by robust.
Double digit or double digit growth in both of those should go further than usual.
Old preferreds in the commercial business.
Diesel study result show goods are really due to closures to blue.
Before Mark group trends, well spud big mergers.
Well sure.
Oh Robotically.
For good reviews to deliver exceptional value approach really.
Do those cold.
Religion to reform referred to really to evolving market conditions.
But at the same time, believing.
Our industry leading.
Right.
Operational excellence.
No single family residential business.
We grew revenue 40 ballpark preferred year over year to a circle.
Well 109.6.
This performance reflects continued success.
José Manuel Daes: This performance reflects continued success in our geographic expansion strategy, market share gains, and meaningful contributions from our vinyl product line. We were also pleased to see strong sequential growth of 29% single-family residential orders compared to Q1 2025, making the second highest quarter of orders in the history of the company. Our multi-family and commercial businesses delivered solid growth of 17.8% year-over-year to $145.9 million, demonstrating our ability to capitalize on healthy demand for luxury mid to high rise projects in Florida. The momentum we're seeing in project activity reinforces our confidence as we continue to execute on our growing backlog, now at an all-time high of $1.2 billion. In the face of ongoing macroeconomic uncertainty and a higher cost environment, we were pleased to expand our margins substantially during the quarter.
Geographic exposure the struggles.
Multi <unk>.
Meaningful contributions from our very little problem right.
We were also pleased to see sequential.
Sequential growth of 29.
For Sun.
You'll probably receive initial order book.
Compared to the first quarter of 225.
Welcome to the second highest quarter of orders in the history of the globe.
Or both probably in our commercial businesses delivered solid growth of.
43%.
Year over year to 145 points.
Global sources, our ability to capitalize on the healthy demand for luxury high.
High rise projects in Florida.
The momentum.
You'll see the brokerage activity reinforces our gold reserves as we continue to execute on our growing backlog.
No I don't know all time high of one 2 billion.
First of all going backwards, a little bit conservative.
About close to a room.
We're pleased to expand our merger substantially during the quarter.
We achieved a gross margin of 44, 7%.
José Manuel Daes: We achieved a gross margin of 40.7%, representing a 400 basis point improvement year-over-year. Our margin performance reflects the benefits of increasing our production to achieve a record revenue quarter, as well as favorable product mix, pricing, and cost control actions. Supported by our vertically integrated model, all these actions substantially minimize our exposure to market volatility and are expected to position us well as we move forward. In conclusion, our record Q2 results demonstrate the power of our vertically integrated business model. Our ability to execute in a dynamic environment. With our strong balance sheet, substantial cash position, and a growing backlog, we believe we will deliver additional shareholder value. We remain focused on being reliable partner to our customers and making necessary adjustments to maintain supply chain stability.
Representing a 400 basis point improvement.
Or.
Our margin performance reflects the benefits of regression or broad ocean to achieve a record revenue quarter.
A favorable product mix.
The cost control actions.
So Paul Byrd Blah Blah blah.
Virtually.
All of these actions will essentially be bugs or exposure to market volatility.
Our spectrum two boat shoes are those well.
We move forward.
In conclusion, our records circle boiler rituals levels towards the core of our rotary clean breathable and all that.
Religion to execute.
Dominic environment.
With a strong balance sheet.
Does your cash position.
Roy Baghla.
We really we will deliver our vision of shareholder value.
We remain focused on being a reliable partner to our customers.
Making necessary adjustments to buy things.
Jamie.
Overall, we are called.
For victory.
José Manuel Daes: Overall, we are confident in our trajectory and our ability to continue growing faster than the market in 2025 and beyond. I will now turn the call over to Christian.
Our religion or digital growing faster, but the bulk of the toilet before.
I will now turn the call over to Christian.
Thank you Jose Manuel moving to slide number five.
Christian Daes: Thank you, José Manuel. Moving to slide number 5. Our robust Q2 performance across both our single-family residential and multi-family commercial businesses reflects our consistency in delivering best-in-class products and service to our customers. Our single-family residential business achieved exceptional results, with revenues reaching a Q2 record of $109.6 million, representing strong growth of 14.5% year over year. Order levels remain healthy, with the Q2 marking the 2nd highest residential order quarter in Tecnoglass history, building a strong momentum into the H2 and beyond. This outstanding performance was driven by continued market share gains through geographic expansion and meaningful contributions from other geographies beyond our traditional markets. On the multi-family and commercial side, we delivered revenue growth of 17.8% year over year, reflecting continued strength in key markets and solid light commercial activity.
Our robust second quarter performance across both our single family residential and multi family commercial business as well.
Next our consistency in delivering best in class products and service to our customers.
Our single family residential business achieve exceptional results with revenues, reaching a second quarter record over homes around $9 6 million, representing strong growth of 14.5% year over year.
Order levels remain healthy with the second quarter, marking the second highest residential order quarter in taking over our history.
Building, a strong momentum into the second half and beyond.
These outstanding performance was driven by continued market share gains through geographic expansion and meaningful contributions from other geographies beyond our traditional markets.
Yeah.
On the multifamily and commercial side, we delivered revenue growth of 17, 8% year over year.
Reflecting continued strength in key markets and solid light commercial activity.
We ended the quarter with a record backlog of 1.2 billion, representing approximately 2.2 times, our LTM multifamily and commercial revenues, marking our 13th consecutive quarter of year over year backlog expansion.
Christian Daes: We ended Q2 with a record backlog of $1.2 billion, representing approximately 2.2x our LTM multi-family and commercial revenues, marking our 33rd consecutive quarter of year-over-year backlog expansion. This backlog provides exceptional visibility into our project pipeline, extending well into 2026 and beyond. The successful completion of our Continental Glass Systems asset acquisition in April further strengthens our capabilities in high-end architectural glass and glazing solutions. This action also diversifies our production footprint into the US market, providing additional growth avenues as we execute our strategic vision. Moving to slide number 6. Our backlog has shown consistent sequential growth since 2021, highlighting strong bidding activity and a solid project pipeline across our markets. Our book-to-bill ratio remained healthy at 1.2x as of Q2, continuing our track record of maintaining a ratio above 1.1x for 18 consecutive quarters.
This backlog provides exceptional visibility into our project pipeline.
Well into 2020 six and beyond.
The successful completion of our continental Josh sees demand should act precision, enabling further strengthen our capabilities in high end architecture. It doesn't leave you in solutions.
This action also diversifies, our production footprint into the U S market, providing additional growth avenues as we execute our strategic vision.
Moving to slide number six.
Our backlog has shown consistent sequential growth.
She is 2021 highlighting the strong leasing activity on their solid project pipeline across our markets.
Our book to Bill ratio remained healthy at 1.2 times as of the second quarter, continuing our track record of maintaining our ratio above one one times for 18 consecutive quarters.
Historically.
Roughly two thirds of our report the backlog convert to revenue over the following 12 months.
Christian Daes: Historically, roughly two-thirds of our reported backlog converts to revenue over the following 12 months. As previously discussed, our backlog composition has been shifting towards high-end, large-size projects which are less interest rate sensitive and are executed over a multi-year time horizon. The strength of our backlog is supported by several key factors. First, we experience virtually no project cancellation as we typically install windows in buildings that are already well advanced into the construction process. Second, our backlog is primarily composed of projects that have shown resilience to interest rate changes and economic fluctuations. Third, the continued geographic diversification of our project portfolio helps to reduce regional market concentration risks. While external factors may occasionally impact delivering timing, our consistently robust book-to-bill ratio reinforces our confidence in delivering sustained revenue growth for years to come.
As previously discussed our backlog composition has been shifting towards high end larger size projects, which are less interest rate sensitive and are executed over a multiyear time horizon.
The strength of our backlog is supported by several key factors.
We experienced virtually no project cancellations, we typically install windows in buildings that are already well advanced into the construction process.
Second our backlog is primarily composed of prior years have shown resilience do you.
Interest rate changes and economic fluctuations.
And third the continued geographic diversification of our project portfolio hedge still reviews reunited market concentration risks.
While external factors may occasionally impact delivering time, and our consistently robust book to bill ratio reinforces our confidence in delivering sustained revenue growth for years to come.
I will now turn the call over to Santiago to these.
Of course, you our financial results and improved outlook for 2020 five.
Christian Daes: I will now turn the call over to Santiago to discuss our financial results and improved outlook for 2025.
Thank you Christian.
Turning to single family residential on slide number seven.
Santiago Giraldo: Thank you, Christian. Turning to single-family residential on slide number 7. Our single-family residential business continues to perform exceptionally well and represents a key driver of our overall growth strategy. Single-family residential revenues reached a record $109.6 million in Q2, representing robust growth of 14.5% year over year and our second highest quarter on record. This outstanding performance reflects several key factors. This includes our continued geographic expansion with contributions from new markets, our expanded product portfolio, included vinyl growth, and to a lesser extent, customers accelerating orders ahead of anticipated tariff-related pricing adjustments. In light of $5 to 7 million of residential revenue pull forward from Q3 into Q2, we were pleased to see 29% sequential growth in customer orders during the quarter, which puts us squarely on track to execute against our full year objectives.
Our single family residential business continues to perform exceptionally well.
It presents a key driver of our overall growth strategy.
Single family residential revenues reached a record $109 6 million in the second quarter.
Representing robust growth of 14.5% year over year, and our second highest quarter on record.
This outstanding performance reflects several key factors.
This includes our continued geographic expansion with contributions from new markets, our expanded product portfolio included Binal growth.
And to a lesser extent customers accelerating orders ahead of anticipated tariff related pricing adjustments.
In light of five to 7 million of residential revenue pull forward from Q3 into Q2.
We were pleased to see 29% sequential growth in customer orders during the quarter, which puts us squarely on track to execute against our full year objectives.
Looking ahead, we remain optimistic about the organic growth opportunities in our single family residential business, which are supported by several key drivers.
Santiago Giraldo: Looking ahead, we remain optimistic about the organic growth opportunities in our single-family residential business, which are supported by several key drivers. First, our expanding dealer network continues to benefit from our industry-leading 5 to 6-week lead times and our innovative high-performance product offerings. Second, we continue to see strong demographic trends, such as population migration patterns across our key markets, supporting our growth outlook. Third, our ongoing geographic expansion is gaining momentum. To that point, we were pleased to commence actions in April to open a new showroom in California, which is expected to help promote our newly developed Legacy aluminum product line. We're already seeing encouraging order momentum in advance of the showroom's expected opening in Q4, supported by our established sales presence and strong product availability in the region. Turning to the drivers of revenue on slide number 9.
First our expanding dealer network continues to benefit from our industry, leading five to six week lead times and our innovative high performance product offerings.
Second we continue to see strong demographic trends such as population migration patterns across our key markets supporting our growth outlook.
Third.
Our ongoing geographic expansion is gaining momentum.
That point, we were pleased to commence actions in April to open a new showroom in California, which is expected to help promote our newly developed legacy aluminum product line.
We're already seeing encouraging order momentum in advance of the showrooms expected opening in the fourth quarter.
Supported by our established sales presence and strong product availability in the region.
Turning to the drivers of revenue on slide number nine.
Total revenues for the second quarter increased 16, 3% year over year to a record $255 5 million.
Santiago Giraldo: Total revenues for Q2 increased 16.3% year over year to a record $255.5 million, with double-digit growth across both our single-family residential and multifamily and commercial businesses, reflecting strong demand for our best-in-class product offerings, geographic expansion, and early contributions from our Continental Glass Systems acquisition. Looking at the profit drivers on slide number 10. Adjusted EBITDA for Q2 of 2025 was $79.8 million, representing an adjusted EBITDA margin of 31.2%, increased on both metrics compared to $64.1 million, or a 29.2% margin in the prior year quarter. Q2 gross profit increased to $114.3 million, representing a 44.7% gross margin, compared to gross profit of $89.6 million, representing a 40.8% gross margin in the prior year quarter.
With double digit growth across both our single family residential and multifamily and commercial businesses.
Reflecting strong demand for our best in class product offerings geographic expansion and early contributions from our continental acquisition.
Looking at the profit drivers on slide number 10.
Adjusted EBITDA for the second quarter of 2025 was $79 8 million, representing an adjusted EBITDA margin of 31, 2%.
Increased on both metrics compared to $64 1 million or 29, 2% margin in the prior year.
Second quarter gross profit increased to $114 3 million representing.
Representing a 44, 7% growth.
Compared to gross margin profit of $89 6 million, representing a 48% gross margin in the prior year quarter.
The 400 basis point improvement in gross margin was primarily driven by increased volumes on record revenues generating operating leverage as well a stable raw material cost favorable mix and weaker peso.
Santiago Giraldo: The 400 basis point improvement in gross margin was primarily driven by increased volumes on record revenues, generating operating leverage, as well as stable raw material costs, favorable mix, and weaker peso. In April, we hedged a large portion of our 2025 Colombian peso exposure at premium rates at roughly 9% better than last year. This effectively offsets local currency inflationary pressures. SG&A expenses were $53.1 million, or 20.8% of total revenues, compared to $38.4 million, or 17.5% of total revenues in the prior year quarter. The increase was primarily attributable to incremental selling expenses associated with tariffs, including approximately $5.9 million in aluminum tariffs paid in April, non-reoccurring expenses associated with the Continental acquisition, and higher transportation and commission expenses associated with our revenue growth, as well as increased personnel expenses related to annual salary adjustments implemented at the beginning of the year.
In April we hedged a large portion of our 2025 Colombian peso exposure.
Liam rates at roughly 9% better than last year.
This effectively offsets local currency inflationary pressures.
SG&A expenses were $53 1 million or 28% of total revenues compared.
Compared to $38 4 million or 17, 5% of total revenues in the prior year quarter.
The increase was primarily attributable to incremental selling expenses associated with tariffs, including approximately $5 9 million in aluminum tariffs paid in April.
Nonrecurring expenses associated with the Continental acquisition, and higher Transportation and commission expenses associated with our revenue growth.
As well as increased personnel expenses related to annual salary adjustments implemented at the beginning of the year.
As a reminder.
During the quarter, we took decisive measures to mitigate the impact of tariffs through our pricing and sourcing actions.
Santiago Giraldo: As a reminder, during the quarter, we took decisive measures to mitigate the impact of tariffs through our pricing and sourcing actions. We're beginning to see the benefits of our strategic supply chain diversification following our shift to US-sourced aluminum and an updating pricing model, with margins starting to strengthen toward the end of June once higher priced orders started getting invoiced. Looking forward, we do not expect to be as heavily impacted by tariffs, as we have adjusted our supply chain and have taken pricing actions in order to compensate for the incremental expense. Our proactive approach to supply chains optimization and pricing adjustments has positioned us to maintain our competitive position and margin profile. Now, examining our strong cash flow and balance sheet on slide number 11.
We're beginning to see the benefits of our strategic supply chain diversification.
Following our safe two U S source aluminium.
And and updating pricing model with margins starting to strengthen towards the end of June one.
One higher price orders started getting invoice.
Looking forward, we do not expect to be as heavily impacted by tariffs as we have adjusted our supply chain and have taken pricing actions in order to compensate for the incremental expense.
Their recurrent tariffs on standalone products continue to be effectively pass through to clients.
And our proactive approach to supply chain optimization and pricing adjustments has positioned us to maintain our competitive position and margin profile.
Now examining our strong cash flow and balance sheet on slide number 11.
We generated operating cash flow of $17 9 million in the second quarter.
Santiago Giraldo: We generated operating cash flow of $17.9 million in Q2, supported by our efficient working capital management and the favorable cash dynamics of our single-family residential business, which features upfront payments and shorter conversion cycles. We achieved this positive cash generation despite the annual timing of income tax payments, which totaled approximately $36 million during the quarter. Capital expenditures of $32.5 million in the quarter included scheduled payments on previous investments, along with $15.1 million of the Continental Glass Systems asset acquisition classified as capital expenditures. We continue to expect capital expenditures to drop significantly in H2 2025, driving even stronger free cash flow through the year end. Our balance sheet remains robust with total liquidity of approximately $310 million at quarter end, including a strong cash position of $137.9 million and $170 million of availability on their revolving credit facilities.
Supported by our efficient working capital management, and the favorable cash dynamics of our single family residential business, which features upfront payments and shorter conversion cycles.
We achieved these positive cash generation.
By the annual timing of income tax payments, which total approximately 36 million during the quarter.
Capital expenditures of $32 5 million in the quarter included scheduled payments on previous investments along with $15 1 million of the Continental glass systems after acquisition classified as capital expenditures.
We continue to expect capital expenditures to drop significantly in the back half of 2025, driving even stronger free cash flow through the year end.
Our balance sheet remains robust with total liquidity of approximately 310 million at quarter end, including a strong cash position of 137 9 million and $170 million of ABL ability under our revolving credit facilities.
<unk> total debt of $109 2 million, our strong liquidity position and solid cash flow generation position us well to achieve our growth objectives and further investing in strategic growth initiatives.
Santiago Giraldo: With total debt of $109.2 million, our strong liquidity position and solid cash flow generation position us well to achieve our growth objectives and further invest in strategic growth initiatives. On Slide 12, our ability to deliver exceptional returns continues to distinguish us within the industry. Over the past 3 years, our strategic investments and operational excellence initiatives have consistently generated superior value for our shareholders. This sustained outperformance demonstrates the resilience of our business model, our commitment to operational discipline, and our prudent approach to capital deployment. Now, moving to our outlook on Slide 14. We are proud of our robust performance through the H1 2025. The continued strength we are seeing across our business and our visibility into demand trends for the H2 of the year support an increase to the low end of our full year revenue guidance.
On slide number 12.
Our ability to deliver exceptional returns continues to distinguish us within the industry.
Over the past three years, our strategic investments and operational excellence initiatives have consistently generated superior value for our shareholders.
These sustained outperformance demonstrates the resilience of our business model, our commitment to operational discipline and our prudent approach to capital deployment.
Now moving to our outlook on slide 14.
We are proud of our robust performance through the first half of 2025.
The continued strength, we are seeing across our business and our visibility into demand trends for the second half of the year support an increase to the low end of our full year revenue guidance.
We now expect revenues to be in the range of 980 million to 1.02 billion, reflecting growth of approximately 12% at the midpoint.
Santiago Giraldo: We now expect revenues to be in the range of $980 million to $1.02 billion, reflecting growth of approximately 12% at the midpoint. Additionally, we are narrowing our adjusted EBITDA outlook to a range of $310 to $325 million. This updated outlook maintains our assumption that our pricing initiatives and other cost mitigation efforts will more than compensate for a projected $25 million full-year impact from elevated input costs and tariffs on select products. In our single-family residential business, we estimate the significant majority of the 5 to 7 million of accelerated customer orders during Q2 were pulled from Q3.
Additionally, we are narrowing our adjusted EBITDA outlook to a range of 310 to 325 million.
This updated outlook maintains our assumption that our pricing initiatives and other cost mitigation efforts will more than compensate for a projected 25 million full year impact from elevated input costs and tariffs on select products.
In our single family residential business, we estimate the significant majority of the $5 million to $7 million of accelerated customer orders during the second quarter were pulled from the third quarter.
We have provided a detailed set of assumptions in the presentation to support both the high end and the low end of our revenue and adjusted EBITDA guidance encompassing our expectations for our vinyl business ramp up residential market performance pricing adjustments tariff impacts.
Santiago Giraldo: We have provided a detailed set of assumptions in the presentation to support both the high end and the low end of our revenue and adjusted EBITDA guidance, encompassing our expectations for our vinyl business ramp-up, residential market performance, pricing adjustments, tariff impacts, margin dynamics, and foreign exchange rates. These comprehensive assumptions reflect various scenarios, ranging from the more favorable interest rate environments and healthy residential business growth at the high end to a more conservative volume projection and other potential headwinds at the low end of our guidance range. We continue to expect a full year of a strong cash flow generation. That said, we are updating our projection for capital expenditures to be in the range of $65 to 75 million to reflect the tail end of previous investments, maintenance CapEx, further investments in efficiency initiatives, and expenditures related to our Continental Glass Systems asset acquisition.
<unk> margin dynamics and foreign exchange rates.
These comprehensive assumptions reflect various scenarios ranging from the more favorable interest rate environment and help your residential business growth at the high end.
So a more conservative volume projections and other potential headwinds at the low end of our guidance range.
We continue to expect a full year of strong cash flow generation.
That said, we're updating our projection for capital expenditures to be in the range of 65 to 75 million to reflect the tail end of previous investments maintenance Capex.
Further investments and efficiency initiatives and expenditures related to our continental glass systems outright acquisition.
Working capital should continue to be a source of cash as we expand our single family residential revenues.
Santiago Giraldo: Working capital should continue to be a source of cash as we expand our single-family residential revenues, though this will be partially offset by longer cash conversion cycles in our commercial and multi-family business. In conclusion, our Q2 2025 results demonstrate the strength of our business model and our ability to execute consistently across market cycles. We're seeing strong customer reception and growing demand for our innovative vinyl solutions, which complement our traditional aluminum and glass offerings and contribute meaningfully to our overall growth trajectory. We're navigating the shifting construction dynamics with flexibility, supported by a more resilient supply chain built through past disruptions. Our strategic initiatives, proactive management of external challenges, strong balance sheet, and growing backlog all position us very well for continued success.
Though these will be partially offset by longer cash conversion cycles in our commercial and multifamily business.
In conclusion, our second quarter 2025 results demonstrate the strength of our business model and our ability to execute consistently across market cycles.
We're seeing strong customer reception and growing demand for our innovative vinyl solutions, which complement our traditional aluminum and glass offerings and contribute meaningfully to our overall growth trajectory.
We're navigating the shifting construction dynamics with flexibility supported by our more resilient supply chain build through past disruptions.
Our strategic initiatives proactive management of external challenges strong balance sheet and growing backlog all position us very well for continued success.
Additionally, the completion of the Continental glass asset acquisition further cements our market presence in key geographies and provide additional growth avenues as we continue to execute on our strategic vision.
Santiago Giraldo: Additionally, the completion of the Continental Glass Systems asset acquisition further cements our market presence in key geographies and provides additional growth avenues as we continue to execute on our strategic vision. We remain committed to delivering industry-leading returns while maintaining the financial flexibility to capitalize on further growth opportunities in 2025 and beyond. With that, we will be happy to answer your questions. Operator, please open the line for questions.
We remain committed to delivering industry, leading returns while maintaining the financial flexibility to capitalize on further growth opportunities in 2025 and beyond.
With that we will be happy to answer your questions. Operator, Please open the line for questions.
We will now begin the question and answer session.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Julio Romero with Sidoti & Company. Please go ahead.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question is from Julio Romero with Sidoti <unk> Company. Please go ahead.
Great. Thanks, Hey, good morning, Jose Manuel just progression of Santiago.
Julio Romero: Great. Thanks. Hey, good morning, José Manuel, Christian, Santiago.
Good morning, all.
Hey, so I wanted to start out on the revenue line I. Appreciate you calling out the pull forward of $5 million to $7 million in the second quarter.
Santiago Giraldo: Good morning.
José Manuel Daes: Good morning.
Julio Romero: Okay, I wanted to start out on the revenue line. I appreciate you calling out the pull forward of $5 to 7 million in Q2. How much of that pull forward in your view was after the Section 232 increase in June? More broadly, how has that announcement translated to any change in customer behavior?
How much of that pull forward in your view was after the section 232 increase in June and more broadly how has that announcement translated to any change in customer behavior.
It was it was before we announced so we announced price increases to take place towards the beginning to middle of May.
Christian Daes: It was before we announced. We announced price increases to take place towards the beginning to middle of May, so it was done then. What you saw was a little bit of that effect towards the end of June, but largely everything that was pulled forward will actually become invoice July, August, and September. We expect most of that to impact Q3, not Q4.
So it was done then.
So.
What you saw was a little bit of that effect towards the end of June but largely everything that was pull forward.
Truly becoming voice.
July August and September so we expect most of that two two impact.
Q3, not Q4.
Got it Okay. That's helpful and then.
It sounds like you've made progress with narrowing down locations for the plans to build out a manufacturing facility in the U S. Just any early takeaways you can call out from having continental glass under your belt that you're applying to the feasibility study for the fully automated plant.
Julio Romero: Got it. Okay, that's helpful. Then, it sounds like you've made progress with narrowing down locations for the plans to build out a manufacturing facility in the US. Just any early takeaways you can call out from having Continental Glass under your belt that you're applying to the feasibility study for the fully automated plant?
Well, we are in the stages of.
Christian Daes: Well, we are in the stages of doing the math, the engineering, the location, and everything is coming out looking really good, but we don't want to say too much at this time. The level of automation that we're going to have is going to make us be very close to the levels of EBITDA that we're looking at today from Colombia producing in the US. We have a good feeling about the plant in the US. We're well into the design, but still a little early to make an announcement or a decision, but it is coming soon.
Doing the math.
And engineering and a location on averaging is coming out looking really good but we don't want to.
Say too much at this time, but.
Sure.
The level of.
Automation that we're going to have is going to make us.
Be very close to the levels of our.
And we've done that we're looking at today from Colombia.
In the U S O.
We are really well.
We have a good feeling our the plant in the U S.
Where.
Well into the design, but still a little early to make.
There's been a decision, but it is coming soon.
Yeah.
Great good context I'll pass it on.
Thanks.
Julio Romero: Great. Good context. I'll pass it on. Thanks.
The next question is from Tim Weiss with Baird. Please go ahead.
Operator: The next question is from Timothy Wojs with Baird. Please go ahead.
Hey, everybody good morning.
Timothy Wojs: Hi, everybody. Good morning. Nice job.
Good morning.
Hey, just to just to clarify Santiago, so the $5 million to $7 million pull forward. That's an order number right like that didn't get pulled really into the second quarter revenue.
Christian Daes: Good morning.
Timothy Wojs: Hey, just to clarify, Santiago, the $5 to 7 million of pull forward, that's an order number, right? Like that didn't get pulled really into Q2 revenue, did it?
So some of it did Tim because.
These orders started getting done ahead of that price increases at the beginning of May and.
Christian Daes: Some of it did, Tim, because-
Timothy Wojs: Okay
Christian Daes: If these orders started getting done ahead of that price increases at the beginning of May, and you place those orders towards the end of April, beginning of May, you get some of that into Q2, towards the end of Q2.
And you place those orders towards the end of April beginning of May you get some of that into Q2 towards the end of June.
That's a calculation that we did.
Okay. So there is a part of the five to seven in Q2 and then the rest is in Q3 days ago.
Timothy Wojs: Okay.
Christian Daes: That's the calculation that we did.
Timothy Wojs: Okay. There's a part of the $5 to $7 in Q2, and then the rest is in Q3, basically?
No no no. The five to seven is Q2, the rest of that in Q2, Okay. Got you, yes, okay. Okay I got you okay.
Christian Daes: No, the $5 to $7 is Q2. The rest is-
Timothy Wojs: That is Q2. Okay.
Christian Daes: Q3.
And then I guess on the margins just the midpoint of the guidance.
Timothy Wojs: Got you.
Christian Daes: Yes.
Timothy Wojs: Okay. I got you. Okay. I guess on the margins, just the midpoint of the guidance, just doing some math, I think it suggests that the margins might be down a little bit in H2 of the year. I'm just trying to kind of think through the puts and takes there. How are you thinking about the margin cadence in H2, especially since I think you grew EBITDA or EBITDA margin this quarter, despite having those kind of aluminum tariff costs. Just kind of puts and takes there would be helpful.
I'm just doing some math I think I think it suggests that the margins might be down a little bit in the second half of the year I'm just trying to kind of think through the puts and takes there how youre thinking about the margin cadence in the second half, especially since I think you grew EBITDA or <unk>.
EBITDA margin this quarter, despite having those kind of aluminum tariff costs. So just kind of puts and takes there would be helpful.
From a gross margin perspective.
We're modeling at the midpoint of guidance in line with year to date, so not not a whole lot of difference there.
Christian Daes: From a gross margin perspective, we're modeling at the midpoint of guidance in line with year to date, so not a whole lot of difference there.
You always have to remember that we'd like to be conservative on the.
José Manuel Daes: You always have to remember that we like to be conservative on the projections because we never want to miss, but we want to succeed.
On the projections, because we never want to Miss but we want to.
To succeed.
The one the one other put and take here Tim is that we're expecting commercial construction to ramp up quite a bit the rest of the year. So obviously as you know that comes with with more installation. So if anything a potential headwind on margins.
Christian Daes: The one other put and take here, Tim, is that we're expecting commercial construction to ramp up quite a bit the rest of the year. Obviously, as you know, that comes with more installation. If anything, a potential headwind on margins would be from that. You also have the full impact of the price increases that were done in May that are going to start fully hitting in Q3. On a conservative basis, we're modeling gross margins at the same level as what you have seen year to date.
B from that by you also have.
The full impact of the price increases that were done in may that are going to start fully hitting in Q3.
You know on a.
A conservative basis, we were modeling gross margins at the same level as what you have seen year to date.
Okay. Okay and then that's helpful. And then just on pricing I guess.
Timothy Wojs: Okay. That's helpful. Then just on pricing, I guess, we're a few months delay, on now from the tariffs. Where are your pricing increases landing relative to the competition as they're layering things in, and are you in line or are you below, above? Is that pricing all in residential, or have you been able to pass through some pricing in commercial? Sorry, there's a bunch of questions there.
You know what kind of a few months delay you know kind of kind of on now from the tariffs just where where are your pricing increases kind of landing relative to the competition.
Kind of layering things Ana are you in line or are you kind of below above and just is that is that pricing all in residential or have you been able to kind of pass through some pricing in commercial so sorry, there is a bunch of questions there, but just yet.
<unk> is in line, we had announced.
Christian Daes: Yeah. No, it's in line. We had announced, prior to this call, something around 5% to 7%, strictly on the residential side, because you also have, on the commercial side, contracts that have already been in place. Any new commercial jobs that are being signed are signed with the new pricing. You might actually get the benefit of short-dated, kind of light commercial projects that get invoiced this year, but most of the impact will be on the single-family residential side orders that came in after May. In line with what we've seen from others, but I would say on the low end, as far as that benchmark goes. We've heard of kind of high single digits to low double digits even price increases across the board.
Prior to this call.
Around 5% to 7% strictly on the residential side because you also have on the commercial side contracts that have already been in place.
But any any new commercial jobs that are being signed are signed with the new pricing. So you might actually get the benefit of short dated.
In light commercial projects that getting voice this year, but most of the impact will be on the single family residential side orders that came in after after may.
And in line with.
What we've seen from from others, but I would say on the on the low end.
As far as that benchmark goes we've we've heard of kind of high single digits to low double digits, even price increases across the board.
Okay sounds good thanks, a lot guys.
Timothy Wojs: Okay. Sounds good. Thanks a lot, guys.
Thanks.
The next question is from Rohit, Seth with B Riley. Please go ahead.
Christian Daes: Thanks.
Operator: The next question is from Rohit Seth with B. Riley. Please go ahead.
Hey, Thanks for taking my question.
Just building on your order questions, maybe you can use that center or what you've seen so far in July.
Rohit Seth: Hey, thanks for taking my question. Just building on your order questions that maybe you can give us a sense of what you've seen so far in July?
They're very good month I mean, he is been kind of very robust across the board you saw what we what we said about orders in Q2, 29% up sequentially from Q1.
Santiago Giraldo: Very good month. It's been very robust across the board. You saw what we said about orders in Q2, 29% up sequentially from Q1. July was a very strong month. I would say it was the highest revenue month that we've had to date in the company's history. As far as order goes, continues to be strong, which gives us good visibility for the rest of Q3.
July was was a very strong month I would say it was the highest revenue month that we've had to date in the company's history.
And as far as order goes continues.
Now to be strong, which gives us kind of a good visibility for the rest of Q3.
Thank you and then just on the new product lines. The vinyl windows gives us a status update.
Rohit Seth: All right. Thank you. Just on the new product lines, the vinyl windows, maybe just give a status update. You guys had talked last quarter about getting some of those new specs certified. Just any update on that front.
You guys talked last quarter about some of those new.
New specs kind of certified.
Any update on that one.
Those were all Gisela.
<unk>.
José Manuel Daes: Yes, we're working on that. We have new lines that are selling already in Utah, Nevada, California, Arizona. The complete line is going to be ready by the end of the year. We expect that next year, with the vinyl complete, the new Legacy line complete, and some other new products that we're testing, we expect to ramp it up next year for sure.
We have.
New lines.
Selling already in Utah.
Nevada, California.
Sure.
The complete learning, there's going to be ready by the end of the year.
But.
Next year will be vital to complete.
Let us go blue and some other new products that were opposed to.
We expect to ramp a little bit next year for sure.
Okay.
Last quarter, you mentioned, a catapulting itself.
Rohit Seth: Last quarter, you mentioned a catapulting of sales, and you still feel the same?
Do you still feel the same.
Yes.
I mean, the reaction of the market towards.
José Manuel Daes: Yes. The reaction of the market towards our products is well received. They love it. We've been doing rounds in all those western states. It's really exciting. We are more than hilarious about it.
<unk>.
Well well received.
We've been doing rose gold does.
<unk>.
Page.
It's really exciting.
We are more nervous about it.
That's again and maybe if I could squeeze the last one.
Rohit Seth: All right. Fantastic. Maybe if I could squeeze a last one. You've had a great run here with replacing windows in Florida. Maybe just give us a sense of what's happening in the marketplace.
<unk>.
<unk> had a great run here with.
Replacing windows in Florida, maybe just give us a sense of what's happening in the marketplace.
Yeah.
Oh demand could be.
Really strong in every segment.
José Manuel Daes: No, the market is really strong in every segment, even though the months of July and August are the worst because all the fathers go on vacation with their sons, and it is the summer months. What I hear from everybody, all the GCs, all the developers, is that things are coming back. People are getting used to the mortgages at those levels.
Even though most of July or August.
The wars, because all the father rolled my pleasure.
<unk>.
Shlomo.
But we're here.
Hello, everybody all the disease.
Hello, Bruce.
Things are covered book.
People are getting used to the mortgages.
Those levels so.
Sure Richard.
Please go ahead with <unk>.
Santiago Giraldo: Residential
We are very excited about Florida about group.
José Manuel Daes: Residential is going to start picking up again. We are very excited about the Florida market and even more excited about the new markets that we're entering because the reception is unbelievable.
Even more so.
Bob do bulk there's no read through because the reception.
Believable.
Alright, Fantastic I'll pass it along thank you.
Rohit Seth: All right. Fantastic. I'll pass it on. Thank you.
Again, if you have a question. Please press Star then one.
Operator: The next question comes from John Velez with D.A. Davidson. Please go ahead.
The next question comes from John <unk> with D. A Davidson. Please go ahead.
Hi, good morning.
Good morning.
John Velez: Hi, good morning. Congrats on the quarter.
Thank you.
Santiago Giraldo: Good morning. Thank you.
I want to start.
Just sort of wondering what sort of opportunities are there outside of your current footprint within Florida.
John Velez: I want to start, just sort of wondering, what sort of opportunities are there outside of your current footprint within Florida?
Hello.
Just wondering.
José Manuel Daes: Well, we are just entering the market in vinyl. By the end of the year, vinyl is going to be ready. From Tampa up, there is a huge market for those windows. Everybody, all the dealers that we have, they buy aluminum and they buy vinyl, and they want to buy the vinyl from us. We don't have the complete line, which we're going to have by the end of the year. That's one. Number two, we, for example, are selling now in Jacksonville, in the Panhandle, that we were non-existent before.
The bug Baidu.
But at the end of the year viable theres going to be eroded.
Oh.
There is a huge market for both windows.
Everybody.
All the dealers that we have.
The aluminum and the very very low.
And they wonder why the Bible for loans, but we don't have the complete which will go there.
Yeah. So.
That's one.
Two.
We reported a couple of billion dollars Jackson.
Hello.
We were non existent before.
As a follow up to two that from year end to June we've increased our dealers by about 15%, 20% and a lot of those come from other geographies outside of Florida.
Santiago Giraldo: As a follow-up to that, from year-end to June, we've increased our dealers by about 15% to 20%, and a lot of those come from other geographies outside of Florida. To the point of José, now having the product to sell in other states and having dealers in place, is paving the way when the seed has been planted for us to start growing those markets significantly. They're already contributing, by the way. There's already evidence of that happening.
What I'm, saying now having the product to sell in other states and having dealers in place.
Is paving the way even in the.
There is already evidence of that.
And just a follow up does that apply as well for the commercial side of the business.
John Velez: Just a follow-up. Does that apply as well for the commercial side of the business?
No you don't.
We are doing a low commercial awards, though.
José Manuel Daes: Yes, it does. We are doing a lot of commercial works now in Tampa and Jacksonville, Georgia and Atlanta, and now we're going to open in Nashville, which is a hot market. We're going to open in Austin, Texas, in Dallas, and Houston. The country is big, and there are many states that we were not present. Now we're going to be nationwide.
Hum.
Thanks Bill.
Georgia plant.
No we're going to open in Nashville.
<unk> merger.
Operator.
Austrian culture.
Alright.
He used to.
Uh huh.
The country.
<unk>.
Managed page we were known pressure.
We're going to be major world.
Yeah.
Perfect I appreciate it.
Thanks, Tony.
John Velez: Perfect. I appreciate the help. Thanks. Thank you.
This concludes our question and answer session I would like to turn the conference back over to Jose Manuel Dias for any closing remarks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to José Manuel Daes for any closing remarks.
Well the <unk> today.
José Manuel Daes: Well, thanks everyone for participating today. We are very excited about the future of the company. We have planted the seeds, as Santiago said, and we expect much better news. Thank you.
We're excited about the future of the company, we have planted the seeds.
Sure.
We expect much better news.
Thank you.
The conference.
It has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.