Good morning and welcome to the Technoglass Holdings Inc. 3rd Quarter 2026 Earnings Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 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 you for joining us for Technoglass' third quarter 2026 conference call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of the Technoglass 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 Technoglass's 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 Technoglass's business. These risks, uncertainties, and contingencies are indicated from time to time in Technoglass's filings with the Securities and Exchange Commission. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Technoglass's financial results in any particular period may not be indicative of future results. Technoglass 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 number four.

Thank you, Brad. And thank you everyone for participating on today's call. We delivered record revenue in the third quarter and both of our businesses grew as we successfully executed our strategy. which continues to allow for significant market share gains. More important than any single quarter is the direction of this business. A decade ago, we were primarily a commercial glass business concentrated in Florida. Today, we serve customers across the United States. in single-family residential as well as multifamily and commercial, in aluminum and in vinyl, through seven showrooms and a dealer network that keeps expanding. Our backlog has grown in every quarter since 2021. Demand for our products is healthy, and we continue to take share and expand geographically. That transformation is why I am confident about where we are heading. Single family residential was not a business for us a decade ago, and today it grows well above its end market. Minel has more than doubled the market we can serve. Thank you for joining us. The Colombian peso strengthened to levels we have not seen in years, and new tariffs took effect on our products. I have not seen all three move against us in the same year. Several of those pressures are now turning. We have secured aluminum at better levels into 2027. Our mid-year pricing is reaching revenue, and our automation program has reduced headcount while shipments continue to grow. An estimated $8.4 million of the unfavorable FX impact was a non-cash accounting effect that we believe is temporary given recent FX trends. We expect the third quarter to be the low point for our margins this year. We are also building a more efficient company for the years ahead. Automation is structurally lowering our cost base. The land we purchased this quarter preserves the option to add capacity in the United States if the returns are there. Our vertically integrated platform lets us respond to cost and trade changes faster than most companies in our industry. That model generates the durable cash flow that supports our ability to return capital to shareholders. And we remain as confident as ever in our ability to build long-term value. I will now turn the call over to Chris to provide additional operating highlights.

Thank you, Jose Manuel. Moving to slide numbers five and six. Backlog ended the quarter at another record of $1.43 billion, up 13.2% year over year. We have grown backlog sequentially in every quarter since 2021. and a book to bill ratio of 1.2 times marks 24 straight quarters above 1.0 times. Multifamily and Commercial Revenues reached a record $192.4 million up 31% year over year as we executed on our backlog and a number of projects progressed into later stages. Three factors underpin the quality of this backlog. First, cancellations are virtually non-existent. Since our windows typically go into buildings that are already far along in construction. Second, our project mix now leans toward larger, high-end developments like luxury condominiums and upscale hotels, which have proven less sensitive to interest rates. Third, we continue to diversify geographically, opening up new markets for the business. Florida accounted for roughly three quarters of backlog at the end of the third quarter, compared with over 85% a year earlier. Importantly, our Florida market remains strong, booking several recent projects, and in October, we signed our largest project to date. Moving to slide number seven. Single-family residential revenues were $118.1 million, up 4% from the prior year. Excluding orders pulled into the second quarter ahead of our May pricing actions, single-family revenues increased 17%. Market share gains from geographic expansion, a growing vinyl contribution, and higher pricing drove that growth. Roughly 65% to 70% of our single-family revenues come from repair and remodel activity, which tends to hold up better through the cycle and is less tied to mortgage rates. We continue to see several avenues to keep gaining share. Our dealer base outside Florida has grown by more than 25% over the past year drawn by the quality of our products and our short lead times. In addition, our showroom expansion is paying off. Combining commercial projects and single-family residential, year-to-date revenues generated through our showrooms in newer geographies outside of Florida are already approaching $60 million. The Los Angeles showroom we opened in October is our fifth outside of Florida and seventh overall, and it introduces our legacy line of aluminum windows to West Coast customers. Vinyl, which has more than doubled our addressable market, continues to ramp as we scale it across our footprint. Turning to slide number eight. Our single-family revenues have grown 7% year-to-date, adding to our record of compounding growth since entering this market in 2018. We have consistently outperformed, even in today's muted environment, where residential improvement spending is expected to grow 2% this year according to the leading indicator of remodeling activity. Our footprint is concentrated in the South Atlantic, Mid-Atlantic, and West-South Central regions, which are expected to rank among the strongest for residential construction spending in 2026. That alignment, together with our expanding dealer base and the ongoing vinyl ramp, supports our confidence in total revenue growing double digits this year, which is solidly above what our end markets are expected to deliver. I will now turn the call over to Santiago to discuss our financial results and full year outlook.

Thank you, Christian. Turning to our financial results on slide numbers 10 to 12. Total revenues for the third quarter increased 19.2% year-over-year to a record $310.6 million. Growth came from continued execution on a record multifamily and commercial backlog and ongoing market share gains in single-family residential. Looking at the profit drivers. Adjusted EBITDA for the third quarter of 2026 was $47.7 million compared to $79.1 million in the prior year quarter. Excluding a non-cash inventory revaluation I will cover in a moment, adjusted EBITDA for the quarter would have been approximately $8.4 million higher. was 23.8% of total revenues compared to 18.2% in the prior year quarter. Section 232 tariffs on finished aluminum windows accounted for approximately $15.5 million of the increase in the first full quarter with the 10% tariff in place. The rest came from higher transportation and commission expenses tied to revenue growth, along with higher personnel costs from annual salary adjustments and a stronger peso.

Sequentially, SG&A was essentially flat on 5% higher revenue, which improved SG&A as a percentage of revenues by approximately 100 basis points versus the second quarter.

The decline was driven primarily by the Colombian peso, which appreciated approximately 20% year-over-year and accounted for roughly 580 basis points of the change. That breaks into two pieces. Approximately 330 basis points came from our exposure on our peso-denominated costs and a stronger peso. The other 250 basis points came from an $8.4 million non-cash revaluation of inventory. We bought that product about 100 days earlier when the peso was approximately 12% weaker. and carried it on our books at that older rate. So when we sold it in the third quarter, it ran through at a higher cost when expressed in U.S. dollars. The effect is non-cash since we bought and sold in U.S. dollars. At approximately $3,100 to the dollar, the peso is at its strongest level since September 2018. and stronger than our prior outlook assumed. We will keep adding currency hedges where we can, and our automation-related headcount reductions are lowering our peso-denominated expenses. On aluminum, the average all-in U.S. price, which combines the LME benchmark and the Midwest premium, rose approximately 52% year over year. and those costs reached us on a lag as earlier purchases flowed through inventory. Prices have since come off this year's peak and we have secured aluminum at lower levels for the rest of 2026 and into the first quarter of 2027. Two other factors weighed on gross margin in the quarter. Labor costs rose following the 23% minimum wage increase in Colombia at the start of the year. And mix was unfavorable, with more installation revenue as commercial projects reached more advanced stages. These pressures were partially offset by operating leverage on higher volume, the initial benefit of our May pricing actions and efficiencies from our automation initiatives. Our mid-year pricing actions now represent a higher share of invoicing on smaller projects and will continue to flow into revenue as we invoice larger projects into next year. As a result, we expect fourth quarter gross margin to improve sequentially. as better pricing, lower aluminum costs, and a smaller inventory revaluation effect more than offset a peso that remains strong. Now, moving to our cash flow and balance sheet on slide numbers 13 and 14. Cash provided by operating activities improved to approximately $21.5 million in the third quarter. reflecting working capital contributions from trade receivables and inventories and the seasonal impact of lower income tax payments and no significant inventory pre-purchases during the quarter. Capital expenditures were $66.1 million in the quarter, including the land purchase for the potential U.S. facility, scheduled payments on previously announced capacity and automation investments, and certain prepayments on ongoing investments, which we funded in part with our credit facilities. Our balance sheet remains solid. Total liquidity at quarter end was approximately $380 million, and we have no significant debt maturities before the end of 2030. At 0.9 times net leverage, we maintain a conservative profile that provides significant financial flexibility to continue investing in growth and returning capital to shareholders. Our investments in operational excellence and in our vertically integrated platform have consistently produced returns above the broader industry, supported by our profitability and working capital management. We expect those strengths to keep generating the cash flow behind our balanced, high return approach to capital deployment. Now, moving to our outlook on slide 16. Based on our first nine months and the visibility in our order book, We are raising our full-year 2026 revenue outlook to $1.1 billion to $1.14 billion as demand trends remain encouraging and we continue to grow well above industry rates. We are revising our adjusted EBITDA outlook to $210 million to $220 million. The change mainly reflects the temporary non-cash $8.4 million accounting effect of inventory revaluation during the third quarter and accounts for higher than expected revenues which are helping offset elevated raw material costs and a stronger local currency. Excluding this effect, Our adjusted EBITDA outlook would have been approximately $8.4 million higher. While margins were pressured during the quarter, we consumed the peak-priced aluminum during the period and absorbed the sharpest peso appreciation of the year, indicating that improved margins should be expected going forward as we also account for better pricing through year end. Our automation program continues to advance. Following the 10% headcount reduction completed in June, additional automation comes online by year end, bringing further efficiencies while preserving the capacity to serve a strong order book. The result is a more efficient cost structure and a stronger competitive position for years to come. With a full year of pricing and incremental automation savings, we remain committed to fully offsetting the tariff impact in 2027. In closing, we delivered record revenue and adjusted EBITDA excluding the temporary non-cash impact was ahead of our internal expectations. We also continue to gain share in new and existing geographies. and have actions in place to address the cost pressures that weighed on the quarter. Our growing national presence in single-family residential and our solid balance sheet give us confidence in our ability to deliver on our objectives and outperform the market for years to come. With that, we will be happy to answer your questions. Operator, please open the lines for questions.

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. The first question comes from Tim Voyes with Baird. Please go ahead.

Hey, guys. Good morning. Nice to see the revenue. Good morning. Hey, could you maybe just kind of talk about what you're seeing on the demand side, particularly in Florida and maybe some of the residential businesses outside of Florida? I mean, it seems like and Jose Manuel Daes.

and the startups are still going and we're moving a lot also to Tampa and Jacksonville where we didn't have a presence before and the panhandle on the commercial side I believe that we have work for the next five years for sure now on the residential we keep penetrating Even though our competition keeps lowering the prices, what we offer the clients is not only pricing but the quality of the window, the on-time deliveries, the service. That's why they keep choosing ES windows over all our competitors.

and that's helpful and Santiago I guess just two questions for me so first if if I kind of sort through you know some of the numbers on the fourth quarter I mean it seems like you should be doing kind of like a 38 39 kind of gross profit margin I just kind of want to verify that it seems like that should continue into 27 and then second just as you've kind of gone through everything um How is everything tracking in terms of price, automation, those types of things to give you the visibility and the confidence that you'll be able to kind of offset all of these headwinds you've seen in 26 into 27? Thanks.

Yes. On the first question, you're right. That's how we are modeling. And if you look at what we did in Q2, that was approximately the same gross margin. Q3 was an outlier based on that inventory revaluation that we had. because of the peso appreciation by 12% in less than 90 days. So that's just a pure accounting effect. But as the peso stabilizes, that reverses, right? So we're expecting that, number one. Number two, we're expecting more of the new orders with the better pricing that started flowing in Q3, but you'll have more of that in Q4. Number three, you'll have more automation. So the headcount reduction starts taking shape and increasing. So that gives us confidence that margins get back up there. Obviously, 27 without having given guidance for that, we were expecting that to be better. Obviously, we still have some variables like FX. The peso is slowly kind of depreciating back, so that's nice to see. We'll see what happens with aluminum prices. So there's a few variables, but the thought is that gross margins pick up back up sequentially when we don't have this outlier on the inventory evaluation. And in 27, with better pricing for essentially the whole portfolio for the full year and the automation in place, it should be even better than Q4. Okay.

Awesome. Helpful. Thanks, guys.

The next question comes from Will Gilday with CJS Securities. Please go ahead.

Hey, good morning. Thanks for taking our questions. Can you hear me?

Hello? You can go ahead.

Okay. So, yeah, first question, just can you give us an update on the final ramp and as we look into Are there any gating factors on growing it significantly? I'm thinking of things like product development, certifications in different geographies, or having a dealer network built out.

Sorry, we seem to have the management line disconnected. Please stay with us while we await their joining in.