Good morning, and welcome to the Tecnoglass Third Quarter 2025 Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.

Thank you for joining us for Tecnoglass' Third Quarter 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, Jose Manuel Daes; Chief Operating Officer, Chris 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' 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 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 SEC. The information discussed during the call is presented 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, changes in assumptions or otherwise. I will now turn the call over to Jose Manuel, beginning on Slide #4.

Thank you, Brad, and thank you, everyone, for participating on today's call. We are pleased to report another exceptional quarter that demonstrates the strength and resilience of our business model even under challenging macroeconomic conditions. Our third quarter total revenues reached a record $260.5 million, up 9.3% year-over-year driven by strong organic growth from both our single-family residential and multifamily commercial businesses. Our robust results in the face of market uncertainty and ongoing inflationary pressure showcase our team's dedication to excellence and our ability to consistently outperform market trends. In our single-family residential business, we grew revenue by 3.4% year-over-year to a record $113.5 million. This performance reflects the early benefits from our pricing initiatives implemented earlier this year. Continued market share gains through geographic and leadership expansion contributed to our growing vinyl portfolio. Our multifamily and commercial business delivered impressive growth of 14.3% year-over-year to a record $147 million. The improvement reflects both market share gains in key markets and solid execution on our expanding project pipeline. The industry outperformance we are seeing in our commercial activity has resulted in a record backlog of $1.3 billion, up over 20% year-over-year. We maintained a strong profitability with a gross margin of 42.7% and an adjusted EBITDA margin of 30.4%. Our vertically integrated platform and previously implemented strategic pricing actions are helping to mitigate various cost pressures, positioning us well as we move into 2026. This margin resilience, combined with our disciplined working capital management, drove robust cash flow from operations. This cash generation enabled us to return significant capital to shareholders while maintaining strategic flexibility. To that end, we were pleased to repurchase $30 million in shares and paid $7 million in dividends during the quarter. Our Board authorization to expand our share repurchase program to $150 million reinforces their confidence in the business and our commitment to balanced capital allocation. Our third quarter results demonstrate the power of our vertically integrated business model and our ability to execute in a dynamic environment. With our strong balance sheet, record backlog providing multiyear visibility, and multiple growth initiatives advancing, we remain as confident as ever in our ability to continue delivering exceptional shareholder value for years to come. I will now turn the call over to Christian.

Thank you, Jose Manuel. Moving to Slide #5 and 6. Our third quarter performance reflects the successful execution of our growth strategy across both businesses with stable order activity and continued market share gains across our key regions. Our multifamily and commercial business delivered record revenue driven by robust activity within the key markets. We ended the quarter with another record backlog of $1.3 billion, up substantially over 20% year-over-year. This expanding pipeline provides strong visibility through 2026 and 2027 with additional market share gain opportunities across our core geographies and project execution on track. Our backlog has seen consistent sequential growth since 2021, reflecting the sustainability of our structural competitive advantages even under challenging macroeconomic conditions. Our book-to-bill ratio remained healthy at 1.3x for the third quarter, continuing our track record of maintaining a ratio above 1.1x for the past 19 consecutive quarters. As previously stated, the composition of our backlog has changed during the last year, shifting more towards high-end, large-sized projects, which tend to be less sensitive to higher interest rates and overall affordability. Moving to Slide #7. Our single-family residential business achieved record revenues on entirely organic growth. This performance was driven by previously enacted pricing initiatives that are now flowing through the P&L and helping to offset higher input costs. We were encouraged by a double-digit year-over-year increase in residential orders during this quarter. This is very notable because we had $5 million to $7 million in orders that were pulled forward into the second quarter ahead of our price increase. This positive performance demonstrates successful geographic expansion, a strong reception of our expanded product offering, more than 20% year-over-year growth in our dealer network, and growing contributions from our vinyl product line. We are excited about several growth initiatives that we expect will further strengthen our market position. Our dealer network expansion continues to drive market penetration supported by short lead times and initiative product offerings. Better than nationwide demographic trends across our key Southeast markets, combined with our geographic diversification efforts are creating multiple avenues for continued market share gains. The California showroom opening in the fourth quarter and the introduction of the light aluminum legacy line designed for new geographies represent an important milestone in our geographical expansion, where we are already seeing encouraging growth in orders. With our expanded product line portfolio spanning aluminum and vinyl solutions, we are well positioned to continue to grow into 2026. Additionally, we continue to advance our feasibility study for a new fully automated facility in Florida, which would diversify our manufacturing footprint and provide logistics and lead time advantages in many of our target markets, further strengthening our vertically integrated platform. I will now turn the call over to Santiago to discuss our financial results and full-year outlook.

Thank you, Christian. Turning to the drivers of revenue on Slide #9. Total revenues for the third quarter increased 9.3% year-over-year to a record $260.5 million, with growth in both our single-family residential and multifamily commercial businesses. This performance reflects pricing gains as well as robust demand for our best-in-class product offerings driving strong organic momentum. Our Continental Glass asset acquisition contributed approximately $4 million to revenue during the quarter. Looking at the profit drivers on Slide #10. Adjusted EBITDA for the third quarter of 2025 was $79.1 million, representing an adjusted EBITDA margin of 30.4% compared to $81.4 million or a 34.2% margin in the prior year quarter. This quarter gross profit was $111.3 million, representing a 42.7% gross margin compared to gross profit of $109.2 million, representing a 45.8% gross margin in the prior year quarter. The year-over-year change in gross margin reflected several factors. First, we had an unfavorable revenue mix with a higher proportion of installation revenue. Second, raw material costs were impacted by U.S. aluminum premiums reaching all-time highs during the quarter. Third, the Colombian peso strengthened significantly during the quarter, affecting our non-hedged portion of local costs. SG&A expenses were $47.3 million or 18.2% of total revenues compared to $41.5 million or 17.4% of total revenues in the prior year quarter. The increase included approximately $3.1 million in aluminum tariffs on stand-alone component sales, which we are mitigating through our pricing actions. Additionally, we had 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. Our strategic pricing initiatives and cost control measures are gaining traction. We implemented mid-single-digit pricing adjustments on residential products and shifted to U.S. sourced aluminum, and we are beginning to see the benefit of those actions as higher priced orders are invoiced. We expect our pricing actions and supply chain optimization efforts to offset an estimated $25 million full year impact of tariffs and increased premiums on U.S. aluminum. Now examining our strong cash flow and balance sheet on Slide #11. We generated operating cash flow of $40 million in the third quarter, driven by strong profitability and efficient working capital management, which more than offset incremental inventory purchases of U.S. aluminum and increased receivables on higher installation revenues, which carry longer cash cycles. Capital expenditures of $18.8 million in the quarter included scheduled payments on previous investments and continued progress on our growth initiatives. We continue to expect capital expenditures to moderate through year-end, driving strong free cash flow generation in the fourth quarter. Our balance sheet remains exceptionally strong with total liquidity of approximately $550 million at quarter end, including a cash position of $124 million and $425 million of availability under our recently refinanced and expanded senior secured credit facility and other bilateral bank facilities. In September, we expanded our syndicate facility to $500 million from $150 million, reducing spreads by 25 basis points and extending the maturity to 2030, providing significant financial flexibility for growth and other strategic capital allocation initiatives. With total debt of $111.9 million, we maintained a net debt to LTM adjusted EBITDA ratio of negative 0.04x, providing us with tremendous financial flexibility to execute on growth initiatives while returning capital to shareholders. On Slide #12, our strong track record of generating returns above the broader industry continues to validate our disciplined capital allocation approach. Over the past 3 years, our strategic investments in operational excellence and capacity expansion have consistently delivered superior returns for our shareholders. This outperformance reflects our focus on high-return investments in our vertically integrated platform as well as our industry-leading profitability and significant improvements to working capital, which are driving sustainable cash generation and shareholder value while maintaining our financial flexibility to pursue additional growth opportunities. We're also pleased to continue returning a portion of capital to shareholders through share repurchases and dividends. During the quarter, we repurchased $30 million in shares and paid $7 million in dividends. Given the Board's confidence in our continued cash flow generation capabilities, prudent balance sheet management, and commitment to delivering superior returns to shareholders, they have authorized an expansion of Tecnoglass' share repurchase authorization to $150 million. Following the expansion, the company had approximately $96.5 million remaining under its existing share repurchase program. Now moving to our outlook on Slide 14. Based on our strong performance through the first 9 months of 2025 and the expectations for the fourth quarter of the year based on current market conditions, we're updating our full year 2025 financial guidance. We now expect revenues to be in the range of $970 million to $990 million, reflecting growth of approximately 10% at the midpoint. This updated range reflects lower project starts in light commercial due to current macroeconomic uncertainty while maintaining our confidence in double-digit top-line growth for the full year 2025 as well as for the full year 2026. Additionally, we're updating our adjusted EBITDA outlook to a range of $294 million to $304 million, representing approximately 8% growth at the midpoint. This guidance assumes that pricing initiatives and other mitigation efforts will help compensate for the projected $25 million full year impact from elevated input costs and tariffs on select products, but now accounts for higher-than-expected aluminum cost, U.S. aluminum premiums, and a stronger local currency. Key assumptions supporting our outlook include stable volumes on residential orders for the rest of the year, lower volumes in light construction activity, continued downtrend in interest rates driving mortgage rates lower, FX headwinds from a stronger Colombian peso year-over-year and healthy cash flow generation during the rest of the year. We expect low single-digit growth for legacy single-family residential revenue with a higher mix of commercial jobs with installation. We now anticipate gross margins in the low to mid-40% range. In conclusion, our third quarter 2025 results demonstrate our ability to execute effectively in all environments by leveraging our competitive advantages to gain market share while maintaining industry-leading margins and generating exceptional cash flow. With our record backlog providing multiyear visibility, expanding market presence through geographic and product diversification, and a strong balance sheet supporting strategic flexibility, we are well positioned to continue our track record of outperformance. We remain confident in our ability to deliver another year of strong growth in revenues and adjusted EBITDA while creating lasting value for our shareholders and also anticipate to be able to again grow our top line by double digits in 2026. With that, we will be happy to answer your questions. Operator, please open the line for questions.

Our first question comes from Tim Wojs with Baird.

Maybe just first on 2026 and kind of calling out double-digit growth. I'm just curious if you could add a little bit of context around the visibility to that, what kind of you're assuming in that number for some of your larger project work, residential and then also just kind of acknowledging some of the weaker smaller commercial projects right now.

Tim, I'll take this first. Obviously, we have a record backlog in place that gives us visibility, especially on the larger projects that are either in execution or already breaking ground that have financial closings in place already. So that gives us a lot of visibility. And I think the single-family residential component, a lot of the growth is coming from what we're seeing as far as the geographical expansion into other places and the vinyl product ramp-up. We'll obviously come back to you guys with more granular detail. This is kind of like what we're seeing based on making some general assumptions and having a lot of confidence in that. But as far as the breakdown goes and where we think specifically each bucket is going to contribute, I think we'll give you more detail in the next call.

Okay. As I consider the cost side of things, can you provide some insights on the aluminum situation? I understand it was a $5 million challenge, and there were a couple of million dollars impacted by foreign exchange. How is the aluminum aspect expected to trend in the fourth quarter and early 2026? Additionally, could you discuss when we might see the peso challenges begin to normalize? Is that expected around mid-2026?

Yes. On the aluminum, if you look at what's happened here in the last 3 months, LME has gone up 15% from about $2,500 to $2,900. So that's been a pretty fast ramp-up. And the U.S. aluminum premiums have gone up even faster, about 67% from about $1,000 to $1,800, right? So that's happened fast as of late. I think the thought process here is that as volumes and demand subside, those are going to correct. But as of now, it is anybody's guess as to what's going to happen there. Hopefully that won't stay at record high levels for a prolonged period of time. And if you look at what's happened with the FX since our last call, we were at $41.70 and now we're at $38.50. That's an 8% revaluation in 90 days. So again, it's a headwind of a very rapid ramp-up over the last 90 days. What's happening there as well is that the government of Colombia did a liability management deal where they have monetized a lot of dollars as of late. The expectation is for the peso probably to come back up about 4,000 by year-end. Luckily, we're covered on about 60% of our cost and expenses, and we'll be looking to be opportunistic and find an attractive entry point to mitigate that risk going forward. But the expectation based on economist expectations is that we should be closer to the 4,000 level by year-end.

Okay. And then I guess just last one for me. On the vinyl business, could you just give us an update maybe on kind of where that business is tracking in 2025 and maybe your kind of initial expectations for next year there?

Listen, this year, Tim, this is Jose. This year, we duplicated what we did last year, but it's still minimum compared to what is going to be next year. We expect next year to be from 7 to 10 times more than we have done this year because we're going to have a complete line, and we have already like 50 new dealers lined up just waiting for the line to be complete.

So I wanted to piggyback a little bit on Tim's questions around '26. Can you remind us what the price and tariff cost rollovers are from '25 into '26? And I guess what I'm getting at, Santiago, is what do you figure, generally speaking, '26 gross margins might shake out? And can you lever EBITDA margins next year?

Yes. So obviously, there are a few moving pieces here. As far as pricing goes, as you know, we increased single-family residential pricing by 5% to 7% in May. So obviously, all of that now has the new pricing. And on the commercial side, you see a lot more of the backlog that was signed earlier in the year coming in with new pricing. Obviously, we're still executing some of the older backlog where we didn't adjust pricing. As far as gross margin goes, I mean, it's early to tell, but I think the idea, depending on what happens with the inputs that we just discussed is that we can be able to maintain the low to mid-40s type profile. But as you see, there are FX factors, aluminum costs, and mix playing in. We're doing more installation based on the high-end projects that GMMP is executing. And you've got operating leverage, right? I mean, if we're saying that we can grow top line double digits again next year, we would obviously expect to get operating leverage in there. But again, we'll get you guys more detail as the time approaches and we report Q4 and full 2026 guidance in the next call.

Got you. And then as it relates to pricing, as it stands right now, do you anticipate further pricing actions to mitigate some of your costs? And what are you seeing out in the field in terms of a competitive response to all the aluminum pressures?

Generally, you're seeing tight pricing, as you would expect. Everybody is trying to maintain their market share. So for as much as we would like to take further pricing actions, the market dictates really what you can do. So the expectation for our growth next year is more on the volume side, as Jose was mentioning. Not only are we expecting the full ramp-up on vinyl, but all of the other geographies are contributing much more meaningfully. So when we're talking about double-digit growth, it's more coming from volume rather than the assumption that we're going to be able to raise prices again based on what the competition is doing and the dynamics for the industry.

And then my last question, the prospective U.S. facility that you are contemplating, I know it's still in the semi-early stages. But can you give us a sense of how much capacity you're looking at, what the CapEx cost might be and the timing of those sorts of expenditures?

Well, we're still designing and doing engineering, but we do believe that the building and land will be around $225 million, and the machines will be around $150 million. It will have the capacity of 40% of most lines. It's still too early to tell. We do have a piece of land that we like, is in a very special place. We're going to bid on it. And when we have all the numbers together, because it's going to be a fully automatic robotic factory that will employ like 1/8 of the people that we normally employ to make the same window. When we have all that, we'll give you more color on what we have to do. But we are really looking into it because it's a good thing to do, especially since we want to do it on the East Coast and also on the West Coast.

Samuel, just to add to Christian's comments, obviously, that CapEx is multiyear, right? So this is something where if the factory is going to take 2 to 3 years to get built out, this is something that gets spent over a multiyear horizon. And also, it can be built gradually, right, depending on demand. So you don't have to make a full investment without having the demand for the excess capacity as well.

So roughly $350 million to $400 million in total costs and maybe $500 million in capacity. Is that the broad brush way of looking at it?

Yes. That roughly sounds good. So if you extrapolate to decent margins, the payback is attractive, obviously.

Just on the guidance, you cited slower-than-anticipated invoicing light commercial construction as the driver of the guidance cut. Can you quantify how much revenue maybe slipped from Q4 into 2026? Is this like 1 or 2 projects? Or is this more a broader issue in the commercial side?

Well, we're talking about a $20 million reduction at the midpoint of the guidance, more or less. We would estimate that at least half of that is 2026 business, which obviously further supports the idea of double-digit growth next year. And I would say some of that is coming from more stable residential invoicing than previously anticipated. But these are projects that are obviously in the backlog and are not expected to drop off. It's more a timing issue.

Okay. And then on the 2026 double-digit growth guide on revenues, could you maybe narrow that down to a specific range? Is it 10% to 12% or 13% to 15%?

I mean, at this point, I would assume low double-digit growth. But again, more details to come. We're basically working with back-of-the-envelope calculations and assumptions. But when we report Q4 and give you full guidance, we'll provide more granular detail on that.

Your gross margins are in the mid-40s. Looking ahead to 2026, what are the main factors influencing your margin expectations? Is there a way to return to the mid-40s, or do you see the low 40s as the new baseline?

Low to mid-40s is what we had talked about on the earlier question. And if you kind of back into the math, that's more or less where we can end up this year. Next year, again, there are different variables related to input cost. Hopefully, some of the recent spikes in aluminum cost and premiums will come down to normalized levels. FX is also in question. So it's an important input, and the installation mix versus manufacturing mix also comes into play. And finally, how much operating leverage can we get on those incremental sales. So again, there are different variables. We'll provide more color when we report next quarter.

Okay. And just on the higher mix of revenues with installation, it's been a headwind. Just can you quantify what percentage of your commercial revenue is installation versus product only?

If you look at the overall revenue for the year, we're doing about $990 million. Take about $200 million of that which is going to be installation for the year, and that is up 50% versus last year. This quarter, the impact on mix alone for the fourth quarter is roughly about $2 million of EBITDA versus where we were in the prior midpoint.

Just coming back to the sort of the short-cycle commercial work that's maybe pushed some revenue out or delayed revenue, however you want to frame it. I mean what is sort of, in your view, kind of changed in the last few months that's influenced that? And I guess as a follow-up question, the backlog continues to grow here. Maybe what you see across the country in terms of high-end base? Is the market getting better? Is the backlog growth clearly an influence of you taking share? If you could comment on those 2 things, that would be great.

Well, I think that the input costs that we're mentioning here are playing a part in many other segments in the construction industry, right? So when you have light commercial construction dependent on those input costs, it's probably prudent to kind of push up some of those projects until things normalize. So I think in what you have seen, we talked about LME going up 15% in 90 days and U.S. aluminum premiums up 65% in the same time period. That's translating into other things, right? So for somebody that is putting in place a smaller project where they don't have necessarily financial closings of people that have already bought condos, for instance, that's a different story. It's a matter of timing and having things normalized. At some point, there's going to be some type of correction. So I think that's what's playing a part there. And on your second question, can you repeat? I think Jose is going to address that.

Well, we are expanding geographically. For example, before, we didn't have any work in the Tampa-St. Petersburg area. And now we have a lot of work there. We have work in Jacksonville, and we have 3 buildings where we never had any, and we keep quoting. We have a lot of work in the Panhandle area, and that's only in Florida. And now we see a resurgence in the Boston and New York area. And also, we are quoting directly with the GMP brand, which is the installation brand, in Texas, California, and even Hawaii. So we're not just relying on Florida anymore. We are expanding from South Florida all over the state, and we are expanding outside the state with really good results.

Okay. And then maybe just one more follow-up on the single-family product line. When you look outside of Florida, where are you getting the most traction? Like where are you getting a lot of momentum building, the Texas, East Coast, West Coast?

The new line is seeing growth throughout the East Coast, but the majority of it is concentrated in West Texas, Arizona, Nevada, California, Utah, and even Hawaii. Last year, we recorded sales in Hawaii, and we expect to invoice between $6 million and $10 million this year, with hopes of reaching $20 million to $30 million next year.

I appreciate the preliminary revenue expectation for '26 and understand we'll get more color to come on the puts and takes there. Any preliminary thoughts on how we should think about capital allocation? I know you have the automated plant in Florida that you're currently weighing. Just trying to think about how you're thinking about capital expenditures and your recently upped share repurchase. And how would you have us think about that?

On CapEx, as we have mentioned before, it's trending down, and we're talking about core growth CapEx, not talking about the potential to do the U.S. plant, which is still early in the process. So the CapEx is going to trend down. Utilized capacity still allows us to grow well into double digits for the next couple of years. You saw what we did in terms of buybacks last quarter and in terms of the Board's action to increase that program. So I think that's definitely a good use of capital going forward as we continue to generate free cash flow. The dividend continues to be there. So that's another way to return capital to shareholders, obviously. And we have very little debt. We continue to expect to be in a net cash position for the foreseeable future. So I think it will be finding opportunities to continue reinvesting in the business. If the backlog continues growing or as Jose mentioned, the opportunities on single-family residential materialize and we grow significantly over the next year, then at some point, we'll have to reinvest in growth. But immediately, I think doing something on the buyback front makes sense, as you saw from the Board's actions, and we'll be willing to see what happens with the general conditions of the market.

Very helpful there. And then on single-family, I know we talked about vinyl and we talked about showrooms, but I wanted to get a progress update on Multimax, how that's doing at the moment. And a lot of the homebuilders have been rather pessimistic expressing that the near-term rebound isn't likely in the near term. I would be curious to how you're thinking about that product line and the outlook at the moment.

Well, Multimax is doing much better this year, even though the new housing has dropped a little bit for every builder because we gained a couple of very nice accounts. We now are selling to 3 more homebuilders, and we expect to take 1 or 2 more within the next 6 months. So that line is doing well. But most of the growth next year is particularly going to come from the new lines that we are launching complete by the end of the year to the other markets to Texas, California, Arizona, Nevada, Utah. I mean those lines, even though they're not complete, we are already selling in those states with people really enthusiastic. They can't wait to buy a lot more. So we're really excited about those lines.

This concludes our question-and-answer session. I would like to turn the conference back over to Jose Manuel Daes for closing remarks.

Thanks, everyone, for participating on today's call. We hope to keep growing double digits. Please keep time for better news.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.