UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 9, 2019

TECNOGLASS INC.

(Exact Name of Registrant as Specified in Charter)

Avenida Circunvalar a 100 mts de la Via 40, Barrio Las Flores, Barranquilla, Colombia

(Address of Principal Executive Offices) (Zip Code)

(57)(5) 3734000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

On August 9, 2019, Tecnoglass Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2019. The press release is included as Exhibit 99.1 hereto.

The information furnished under this Item 2.02, including the exhibit related thereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.

(d) Exhibits.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 9, 2019

Tecnoglass Reports Second Quarter 2019 Results

BARRANQUILLA, Colombia – August 9, 2019 – Tecnoglass, Inc. (NASDAQ: TGLS) (“Tecnoglass” or the “Company”), a leading manufacturer of architectural glass, windows, and associated aluminum products for the global commercial and residential construction industries, today reported financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 Highlights

José Manuel Daes, Chief Executive Officer of Tecnoglass, commented, “We closed out the first half of 2019 with record levels of gross profit, adjusted EBITDA and backlog, along with our 9th straight quarter of record revenues. This success was largely driven by continued expansion in single family residential and market share gains in the U.S., which represented 87% of our second quarter revenues. In addition, we generated cash flow from operations of $14 million in the quarter, reflecting increased profitability and enhanced working capital management. Overall, we are very pleased with our positive momentum, combined with continued backlog growth which provides us with strong visibility on our project pipeline over the coming years. Our year-to-date progress supports our upwardly revised full year outlook for revenue and adjusted EBITDA growth.”

Christian Daes, Chief Operating Officer of Tecnoglass, stated, “We ended the quarter with an attractively positioned backlog across a growing number of U.S. markets. Our strategic footprint, continued penetration into the residential market, and structural competitive advantages continue to support our ability to capitalize on strong bidding activity while maintaining our industry-leading margins. Additionally, the continued outperformance in our key operating metrics is underpinned by our high-return projects focused on innovation, strategic partnerships, improved productivity and capacity expansion. To that point, we were thrilled to complete the expansion of our aluminum extrusion facilities in July, and are well on track to fully complete our automation initiatives by year end. In conclusion, we are very pleased with our results so far in 2019 as we continue to target new customer relationships and leverage our growing and diversified U.S. footprint.”

Second Quarter 2019 Results

Total revenues for the second quarter of 2019 improved 28.0% to $113.9 million compared to $89.0 million in the prior year quarter. Excluding the impact of unfavorable foreign currency, total revenues increased 29.9% compared to the prior year quarter. U.S. revenues increased 42.2% to $99.3 million compared to $69.9 million in the prior year quarter, driven by stronger residential invoicing, healthy commercial construction activity, market share gains and slight pricing improvement. Colombia revenue, a majority of which is represented by long-term contracts priced in Colombian Pesos but indexed to the U.S. Dollar, was $12.2 million compared to $15.6 million in the prior year quarter, primarily attributable to slower construction activity.

Gross profit increased 57.6% to $38.8 million, representing a 34.1% gross margin, compared to gross profit of $24.6 million, representing a 27.7% gross margin, in the prior year quarter. The improvement in gross margin mainly reflected greater operating efficiencies and a favorable mix of higher margin products. Gross margin improved approximately 240 basis points year-over-year, excluding non-recurring costs of approximately $3.6 million in the prior year quarter. Operating expenses were $20.6 million compared to $17.0 million in the prior year quarter. As a percent of total revenues, operating expenses were 18.1% compared to 19.1% in the prior year quarter, primarily due to higher sales, and better operating leverage on personnel and professional fees. Excluding one-time items, operating expenses would have been 17.8% as a percent of total revenues compared to 18.9% in the prior year quarter. Operating income more than doubled to $18.3 million compared to $7.6 million in the prior year quarter.

Net income was $7.7 million, or $0.17 per diluted share in the second quarter of 2019, compared to a net loss of $3.9 million, or a $0.10 loss per diluted share in the prior year quarter, including non-cash foreign currency transaction gains in both periods related to the re-measurement of USD denominated assets and liabilities against the Colombian Peso as functional currency. Adjusted net income¹ increased 24.0% to $9.2 million, or $0.20 per diluted share, compared to adjusted net income of $7.3 million, or $0.19 per diluted share in the prior year quarter. Adjusted net income¹, as reconciled in the table below, excludes the impact of non-cash foreign exchange transaction gains or losses and other non-core items, along with the tax impact of adjustments at statutory rates, to better reflect core financial performance.

Adjusted EBITDA¹, as reconciled in the table below, increased 41.1% to $25.8 million, or 22.6% of sales, compared to $18.3 million, or 20.5% of sales, in the prior year quarter, primarily attributable to sales growth and higher operating income. Adjusted EBITDA in the second quarter 2019 included $1.0 million in contribution from the Company’s joint venture with Saint-Gobain.

Financing Initiatives

In May 2019, the Company entered into a new 5 year $30 million facility, with a portion of available borrowings used to repay existing short-term working capital facilities. The new facility will extend the average maturity of the Company’s debt, reduce its weighted average cost of funding and provide added financial flexibility to execute strategic initiatives.

Strategic Joint Venture and High-Return Initiatives

In May 2019, the Company completed its previously announced strategic joint venture with Saint-Gobain, through the purchase of a minority ownership interest in Vidrio Andino, a Colombia-based float glass manufacturing subsidiary of Saint-Gobain with annualized sales of approximately $100 million. The $34 million cash portion of the transaction was funded with cash on hand.

In July 2019, the Company completed its previously announced aluminum production capacity expansion in response to strong customer demand for aluminum products. The Company’s other high-return investments to automate key operations at several glass and aluminum facilities remain on track to be completed by the end of 2019. As of June 30, 2019, the Company has deployed approximately 60% out of the total anticipated growth and efficiency capital investment of approximately $20 million, and intends to fund the remaining portion with cash on hand.

Dividend

The Company declared a regular quarterly dividend of $0.14 per share, or $0.56 per share on an annualized basis, for the second quarter of 2019, which will be paid on August 30, 2019 to shareholders of record as of the close of business on July 31, 2019.

Full Year 2019 Outlook

For the full year 2019, the Company has increased its outlook for revenues to grow to a range of $415 to $430 million, based on its solid first half performance, a favorable growth environment on its construction end markets and additional anticipated market share gains in the U.S. The Company has also raised its Adjusted EBITDA outlook to a range of $90 million to $98 million, representing growth of 16.4% at the midpoint year-over-year, driven by higher revenues and greater operational efficiencies.

Conference Call

Management will host a conference call on Friday, August 9, 2019 at 10:00 a.m. eastern time (9:00 a.m. Bogota, Colombia time) to review the Company’s results. The conference call will be broadcast live over the Internet. Additionally, a slide presentation will accompany the conference call. To listen to the call and view the slides, please visit the Investor Relations section of Tecnoglass’ website at www.tecnoglass.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software. To participate by telephone, please dial:

If you are unable to listen live, a replay of the conference call will be archived on the website. You may also access the conference call playback by dialing (844) 512-2921 (Domestic) or (412) 317-6671 (International) and entering pass code: 13692591.

About Tecnoglass

Tecnoglass Inc. is a leading manufacturer of architectural glass, windows, and associated aluminum products for the global commercial and residential construction industries. Tecnoglass is the leading architectural glass transformation company in Colombia and the second largest glass fabricator serving the United States. Headquartered in Barranquilla, Colombia, the Company operates out of a 2.7 million square foot vertically-integrated, state-of-the-art manufacturing complex that provides easy access to North, Central and South America, the Caribbean, and the Pacific. Tecnoglass supplies over 1,000 customers in North, Central and South America, with the United States accounting for over 80% of revenues. Tecnoglass’ tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), 50 United Nations Plaza (New York), Trump Plaza (Panama), Icon Bay (Miami), and Salesforce Tower (San Francisco).

Forward Looking Statements

This press release includes certain 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’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially 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’ business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass’ filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that Tecnoglass’ 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 and changes in assumptions or otherwise, except as required by law.

¹ Adjusted net income and Adjusted EBITDA in both periods are reconciled in the table below.

Investor Relations:

Santiago Giraldo

CFO

305-503-9062

investorrelations@tecnoglass.com

Tecnoglass Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

Tecnoglass Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except share and per share data)

(Audited)

Tecnoglass Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Audited)

Revenues by Region

(Amounts in thousands)

(Audited)

Reconciliation of Non-GAAP Performance Measures to GAAP Performance Measures

(In thousands)

(Unaudited)

The Company believes that total revenues with foreign currency held neutral non-GAAP performance measures, which management uses in managing and evaluating the Company’s business, may provide users of the Company’s financial information with additional meaningful bases for comparing the Company’s current results and results in a prior period, as these measures reflect factors that are unique to one period relative to the comparable period. However, these non-GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.

Currency impacts on total revenues for the current quarter have been derived by translating current quarter revenues at the prevailing average foreign currency rates during the prior year quarter, as applicable.

Reconciliation of Adjusted EBITDA and Adjusted net (loss) income to net (loss) income

(In thousands, except share and per share data)

(unaudited)

Adjusted EBITDA and adjusted net (loss) income are not measures of financial performance under generally accepted accounting principles (“GAAP”). Management believes Adjusted EBITDA and adjusted net (loss) income, in addition to operating profit, net (loss) income and other GAAP measures, is useful to investors to evaluate the Company’s results because it excludes certain items that are not directly related to the Company’s core operating performance. Investors should recognize that Adjusted EBITDA and adjusted net (loss) income might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.

Reconciliations of the non-GAAP measures used in this press release are included in the tables attached to this press release, to the extent available without unreasonable effort. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures.

A reconciliation of Adjusted net (loss) income and Adjusted EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G follows, with amounts in thousands: