Business Context and Reporting Period
This Form 8-K, dated November 4, 2013, is filed by Andina Acquisition Corporation ("Andina") regarding its proposed merger with Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows (collectively, "Tecnoglass"). The filing announces shareholder presentations and discloses updated financial projections for Tecnoglass. The financial data presented covers the fiscal year 2013 and projections through 2017.
Key Financial Metrics and Projections
The filing provides unaudited financial projections for Tecnoglass in thousands of USD. These figures represent management's estimates and are not GAAP-compliant.
| Metric (USD 000s) | 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|---|
| Revenue | $219,158 | $245,065 | $257,750 | $270,612 | $284,683 |
| Gross Profit | $57,304 | $63,656 | $66,925 | $73,440 | $79,982 |
| Net Income | $12,415 | $13,506 | $15,914 | $20,148 | $24,362 |
| Adjusted EBITDA | $35,001 | $37,631 | $40,531 | $45,922 | $51,237 |
| Interest Expense | $6,765 | $7,255 | $5,987 | $4,428 | $2,888 |
The filing does not provide current cash flow statements, liquidity ratios, or specific debt balances for the reporting period, noting that financial data was prepared when Tecnoglass was a private company and does not conform to SEC Regulation S-X.
Material Changes and Transaction Details
This report updates the financial projections previously disclosed in an October 31, 2013 filing. The primary material change is the issuance of new revenue and profitability forecasts for the years 2013 through 2017. The filing also details the engagement of investment bankers EarlyBirdCapital, Inc. (EBC) and Morgan Joseph Triartisan (MJTA) to assist with the merger solicitation, with fees of $1,610,000 and $500,000, respectively.
Guidance, Outlook, and Risks
Guidance and Outlook: Tecnoglass explicitly states that the provided financial projections are not to be considered "guidance." Management has not warranted the accuracy or completeness of these figures and undertakes no obligation to update them. Andina will not reference these forecasts in future periodic reports.
Risks and Contingencies: The filing includes extensive forward-looking statement disclaimers. Key risks include:
- Failure to obtain required shareholder approvals for the merger.
- Failure to satisfy closing conditions.
- Business conditions, weather, natural disasters, and geopolitical events.
- Changes in government regulations or interpretations of GAAP.
- Fluctuations in customer demand and competitive intensity.
Unusual Items: The financial data includes non-GAAP measures (Adjusted EBITDA) which will be adjusted in the definitive proxy statement. The data is unaudited and prepared under private company standards.
Investor Verification Checklist
- Verify the definitive proxy statement for adjusted financial data conforming to SEC Regulation S-X.
- Confirm the status of shareholder approval for the merger at the Extraordinary General Meeting.
- Review the final prospectus and Form 10-K for security holdings of Andina officers, directors, and investment bankers (EBC and MJTA).
- Assess the assumptions underlying the non-GAAP Adjusted EBITDA projections, as these are not warranted by management.
- Monitor for any updates regarding the satisfaction of closing conditions for the merger.