Tecnoglass Inc. (TGLS)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The
following discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s
consolidated financial statements and notes to those statements included in this Form 10-K. This discussion contains forward-looking
statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Introduction”
in this Form 10-K.

Overview

We
are experienced and highly skilled in the vertical integration of architectural glass manufacturing, distribution, and professional fitting.
Our expertise extends to the production of top-quality windows, as well as the supply of aluminum, vinyl, and other components. Our dedicated
and knowledgeable team serves a diverse range of commercial and residential construction projects worldwide, guaranteeing outstanding
products and seamless installation services. With a focus on innovation, combined with providing highly specified products with the highest
quality standards at competitive prices, we have earned #1 spot in the Forbe’s list of America’s 100 most successful small-cap
companies for 2024, and developed a leadership position in each of our core markets. In the United States, which is our largest market,
we were ranked among the four largest glass fabricators serving the United States in 2023 by Glass Magazine. In addition, we believe
we are the leading glass transformation company in Colombia. Our customers, which include developers, general contractors or installers
for hotels, office buildings, shopping centers, airports, universities, hospitals and multi-family and residential buildings, look to
us as a value-added partner based on our product development capabilities, our high-quality products and our unwavering commitment to
exceptional service.

With
over 40 years of experience in architectural glass and aluminum assembly, we specialize in transforming various glass products. Our offerings
include tempered safety glass, double thermo-acoustic glass, and laminated glass. Our wide range of finished glass products are utilized
in diverse buildings for floating facades, curtain walls, windows, doors, handrails, as well as interior and bathroom spatial dividers.
In addition to glass, we manufacture aluminum and vinyl products such as profiles, rods, bars, plates, and other hardware specifically
designed for window manufacturing.

40

Our
products are manufactured in a 5.8 million square foot, state-of-the-art manufacturing complex in Barranquilla, Colombia that provides
easy access to North, Central and South America, the Caribbean and the Pacific. Our products can be found on some of the most distinctive
buildings in these regions, including the Aston Martin Residences (Miami), Miami World Tower (Miami), 3ELEVEN (New York), Raffles Hotel
(Boston), Norwegian Cruise Line Terminal B (Miami), One Thousand Museum (Miami), Paramount Miami Worldcenter (Miami), Salesforce Tower
(San Francisco) and AE’O Tower (Honolulu).. Our track record of successfully delivering high profile projects has earned us an
increasing number of opportunities across the United States, evidenced by our expanding backlog and overall revenue growth.

Our
structural competitive advantage is underpinned by our low-cost manufacturing footprint, vertically integrated business model and geographic
location. Our integrated facilities in Colombia and distribution and services operations in Florida provide us with a significant cost
advantage in both manufacturing and distribution, and we continue to invest in these operations to expand our operational capabilities.
Our lower cost manufacturing footprint allows us to offer competitive prices for our customers, while also providing innovative, high
quality and high value-added products, together with consistent and reliable service. We have historically generated high margin organic
growth based on our position as a value-added solutions provider for our customers.

We
have a strong presence in the Florida market, which represents a substantial portion of our revenue stream and backlog. Our success in
Florida has primarily been achieved through sustained organic growth, with further penetration now taking place into other highly populated
areas of the United States. As part of our strategy to become a fully vertically integrated company, we have supplemented our organic
growth with some acquisitions that have allowed us added control over our supply chain allowed for further vertical integration of our
business and will act as a platform for our future expansion in the United States. In 2016, we completed the acquisition of ESW, which
gave us control over the distribution of products into the United States from our manufacturing facilities in Colombia. In March 2017,
we completed the acquisition of GM&P, a consulting and glazing installation business that was previously our largest installation
customer.

In
2019 we consummated the joint venture agreement with Saint-Gobain, acquiring a 25.8% minority ownership interest in Vidrio Andino, a
Colombia-based subsidiary of Saint-Gobain, solidifying our vertical integration strategy by acquiring an interest in the first stage
of our production chain, while securing ample glass supply for our expected production needs. Additionally, in April 2019, we acquired
a 70% equity interest in ESMetals, which has been consolidated in our financial statements since. In November 2023, we acquired the remaining
30% equity interest in ESMetals. ESMetals is a Colombian entity that serves as a metalwork contractor to supply us with steel accessories
used in the assembly of certain architectural systems as part of our vertical integration strategy.

The
continued diversification of the group’s presence and product portfolio is a core component of our strategy. In particular, we
are actively seeking to expand our presence in United States outside of Florida. We also launched a residential window offering which,
we believe, will help us expand our presence in the United States and generate additional organic growth. We believe that the quality
of our products, coupled with our ability to price competitively given our structural advantages on cost, will allow us to generate further
growth in the future.

We
have focused on working with The Power of Quality, always making sure that our vision of sustainability is immersed into every
aspect of our business, including social, environmental, economic and governance variables, that help us make decisions and create value
for our stakeholders. We carry out a series of initiatives based on our global sustainability strategy, which is supported on three fundamental
pillars: promoting an ethical and responsible continuous growth, leading eco-efficiency and innovation, and empowering our environment.
As part of this strategy we have voluntarily adhered to UN Global Compact Principles since 2017 and in pursuit of our cooperation with
the attainment of the SDGs joined in 2021 a program to dynamize, strengthen and make visible the management of greenhouse gas emissions
as a carbon neutral strategy set out by the Colombian government for 2050.

How
We Generate Revenue

We
are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential and commercial construction
industries, operating through our direct and indirect subsidiaries. Headquartered in Barranquilla, Colombia, we operate out of a 5.8
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.

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Our
glass products include tempered glass, laminated glass, thermo-acoustic glass, curved glass, silk-screened glass, and digital print glass
as well as mill finished, anodized, painted aluminum and vinyl profiles, and produces rods, tubes, bars and plates. Window production
lines are defined depending on the different types of windows: normal, impact resistant, hurricane-proof, safety, soundproof and thermal.
We produce fixed body, sliding windows, projecting windows, guillotine windows, sliding doors and swinging doors. ES produces facade
products which include: floating facades, automatic doors, bathroom dividers and commercial display windows. In late 2023, we entered
into the vinyl window market, expanding our product portfolio to more than double our addressable market, and offering customers a wider
selection of solutions to meet their project needs. We intend to capitalize on our existing distribution base for our aluminum products
to obtain significant synergies given the number of dealers and distributors that already sell both aluminum and vinyl windows.

We
sell to over 1,000 customers using several sales teams based out of Colombia and the United States to specifically target regional markets
in South, Central and North America. The United States accounted for 96%, and 95% of our combined revenues in 2024 and 2023, respectively,
while Colombia accounted for approximately 2.8% and 3.0%, and other Latin-American destinations accounted for approximately 1.7% during
both years.

We
sell our products through our main offices/sales teams based out of Florida and different regions in the US, which is our largest sales
group and has strong relationships with glazing contractors, general contractors, real estate developers and specialty window dealers
in the region. In late 2022, we launched two showrooms, one in New York City and one in Charleston, SC, to serve primarily single-family
residential markets in their regions. New showrooms have been completed in Houston, TX, and Bonita Springs, FL. Additionally, showrooms
in Phoenix, AZ and Los Angeles, CA are in the lease negotiating stages and are expected to open in 2025. We also have sales forces located
in Colombia and Panama with long-standing business relationships in the region to serve Latin American markets. We have two types of
sales operations: contract sales, which are the high-dollar, customer tailored projects, and standard form sales, which reflect lower-value
orders that are of short duration.

We
expect to benefit from growth in our largest markets in the United States by gaining market share, broadening our geographic footprint.
Favorable demographics in states such as South Carolina, Florida, Texas, and North Carolina, where we have a strong presence, contribute
to continued growth. According to the U.S Census Bureau, average residential construction spending increased 6.2% in 2024, from $875
billion in 2023, to $930 billion in 2024. Addittionally, single family housing stars increased 6.5% in 2024. According to the FMI’s
2025 north American engineering and contruction overview, single family residential construction in the U.S is expected to increase at
a compound aunual growth rate of 6% until 2028, highly driven by interest rates buydowns. Remodeling and reparing activity, Is also expected
to trend up over the next years as new home prices remain at all-time high levels. On the other hand, the latest Nonresidential Construction
Index (NRCI) score of 56.9, 20% above the previous quarter, reflects improving economic conditions and expanding industry opportunities
from the commercial construction market for 2025. These stable to positive macro trends in our core markets and geographies combined
with a lean cost structure, leave us well positioned to maintain industry leading margins and further diversify our presence into the
U.S.

Liquidity

As
of December 31, 2024, and December 31, 2023, we had cash and cash equivalents of approximately $134.9 million and $129.5 million, respectively.
During the year ended December 31, 2024, the main source of cash was operating activities, which generated $170.5 million.

42

As
of December 31, 2024, our liquidity position was comprised of $175.0 million available under committed lines of credit, in addition to
a cash balance of $134.9 million. We anticipate that working capital will continue to be a net benefit to cash flow in the near future,
which in addition to our current liquidity position, provides ample flexibility to service our obligations through the next twelve months.

Capital
Resources

We
transform glass and aluminum into high specification architectural glass and custom-made aluminum profiles which require significant
investments in state-of-the-art technology. During the years ended December 31, 2024, and 2023, we made investments primarily in building
and construction, and machinery and equipment in the amounts of $88.9 million, and $87.3 million, respectively. We believe our investments
in technology within recent years have positioned us well for continued growth given the flexibility afforded by our current installed
capacity, improved profitability and enhanced cash generation in the years ahead. Recent examples of our high return investments within
the last three years include:

In
2019 we entered into a joint venture agreement with Saint-Gobain, a world leader in the production of float glass, a key component of
our manufacturing process, whereby we acquired a 25.8% minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of Saint-Gobain.
Income from this investment is recorded using the equity method and is presented within the Consolidated Statement of Operations as a
component of non-operating income as the Company is not subject to income tax over this investment. The joint venture agreement includes
plans to build a new plant that will be located approximately 20 miles from our primary manufacturing facility in Barranquilla Colombia,
in which we will also have a 25.8% interest. The new plant will be funded with proceeds from the original cash contribution made by us,
operating cash flows from the Bogota plant, debt incurred at the joint venture level that will not be consolidated into our company.

43

Results
of Operations (Amounts in thousands)

Comparison
of years ended December 31, 2024 and December 31, 2023

Our
operating revenue increased $56.9 million, or 6.8%, from $833.3 million in the year ended December 31, 2023, to $890.2 million in the
year ended December 31, 2024. Strong sales during 2024 were driven by U.S. commercial and single-family residential market activity.
U.S. sales increased $54.8 million, or 6.9%, from $795.1 million in 2023 to $849.9 million in 2024. U.S. Commercial market sales increased
$18.1 million, or 3.9%, from $459.7 million in 2023 to $477.8 million in 2024 as we continue to execute on our growing backlog. U.S.
single family residential market sales increased $36.7 million, or 10.9%, from $335.4 million in 2023 to $372.1 million in 2024 and accounted
for 41.8% of total sales in the year ended December 31, 2024. Sales to Latin-American markets increased $2.1 million, or 5.4%, from $38.2
million in 2023 to $40.3 million in 2024.

Gross
profit during the year ended December 31, 2024, was $380.0 million, a decrease of $10.9 million, or 2.8%, from $390.9 million during
the year ended December 31, 2023. The gross profit margin during the year ended December 31, 2024, decreased to 42.7% from 46.9% during
the year ended December 31, 2023, primarily related to a 5.9% appreciation of the Colombian Peso impacting our costs denominated in Colombian
Pesos against our predominantly US Dollar revenue stream. Additionally, the year over year comparison was also impacted by our mix of
revenue, with sales from installation projects, wich bears lower margins, now accounting for 18.2% of our total revenues for the year
ended December 31, 2024, compared to 15.4% for the year ended December 31, 2023, as well as higher salaries which were adjusted by the
government at the beginning of the year and higher headcount to adjust for ongoing growth, which accounted for 210 basis points of our
gross margin deterioration. Despite the year over year reduction of gross profit margin, gross margin sequentially increased during the
year ended December 31, 2024.

Operating
expenses increased $21.8 million, or 16.6%, from $131.2 million to $153.0 million for the year ended December 31, 2023 and 2024, respectively.
The increase was mainly driven by personnel expense, up $9.4 million from $35.7 million during the year ended December 31, 2023, to $45.1
million during the year ended December 31, 2024, due to administrative salary adjustments, and operating headcount increase to support
our growing operation, resulting in 74 basis points deterioration of our operating margin; and by a negative effect in COP denominated
amounts related to a 5.9% appreciation of the Colombian Peso against US Dollar over the period.

During
the year ended December 31, 2024 and 2023, the Company recorded non-operating income of $5.9 and $5.1 million, respectively. Non-operating
income for the period is comprised primarily of interest income from short-term investments, income from rental properties and gains
on sale of scrap materials as well as non-operating expenses related to certain charitable contributions outside of the Company’s
direct sphere of influence.

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Interest
expense and deferred cost of financing decreased $1.7 million, or 19.0%, to $7.4 million during the year ended December 31, 2024, from
$9.2 million during the year ended December 31, 2023, as the Company voluntarily prepaid $62.0 million to reduce its debt balance and
benefited from having a favorable interest rate hedge in place for 100% of its outstanding debt.

During
the year ended December 31, 2024, the Company recorded a non-operating net loss of $5.7 million associated with foreign currency transactions,
compared to a net gain of $0.7 million during the year ended December 31, 2023.

The
effective income tax rate of 28.4% and 29.8% for the years ended December 31, 2024 and 2023, respectively, are below the average statutory
rates of 31.3% and 30.4% during each of those periods, respectively, as the proportion of our taxable income shifted jurisdictions resulting
from new developments of our product designs, trademarks and other intellectual property rights as well as from growing profit in US
subsidiaries.

As
a result of the foregoing, the Company recorded a net income for the year ended December 31, 2024 of $161.3 million compared to $183.5
million for the year ended December 31, 2023.

Comparison
of years ended December 31, 2023 and December 31, 2022

Our
operating revenue increased $116.7 million, or 16.3%, from $716.6 million in the year ended December 31, 2022 to $833.3 million in the
year ended December 31, 2023. Strong sales during 2023 were driven by U.S. commercial and single-family residential market activity.
U.S. sales increased $106.7 million, or 15.5%, from $688.4 million in 2022 to $795.1 million in 2023. U.S. Commercial market sales increased
$77.7 million, or 20.3%, from $382.0 million in 2022 to $459.7 million in 2023 as we continue to execute on our growing backlog. U.S.
single family residential market sales increased $29.0 million, or 9.5%, from $306.4 million in 2022 to $335.4 million in 2023 and accounted
for 40.3% of total sales in the year ended December 31, 2023. Sales to Latin-American markets increased $10.0 million, or 35.6%, from
$28.2 million in 2022 to $38.2 million in 2023.

Gross
profit increased $41.5 million, or 11.9%, to $391.0 million during the year ended December 31, 2023, compared with $349.5 million during
the year ended December 31, 2022. This resulted in gross profit margin reaching 46.9% during the year ended December 31, 2023, down from
48.8% during the year ended December 31, 2022. The 190-basis point decrease in gross margin can be mainly attributable to our revenue
mix which included more installation and stand-alone product sales during the current period. Installation and stand-alone product revenues
were up 21.4% and 9.5% respectively year over year, weighting down overall gross margin. Additionally, unfavorable currency exchange
dynamics impacted our costs denominated in the Colombian Peso against our predominantly US Dollar revenue stream.

Operating
expenses increased $8.1 million, or 6.6%, from $123.1 million for the year ended December 31, 2022, to $131.2 million for the year ended
December 31, 2023. Administrative and selling Personnel expense increased 27%, from $28.1 million in 2022 to $35.7 in 2023, related to
a larger operation and ongoing geographical expansion. Additionally, provision for accounts receivable increased $2.2 million, from $0.6
million in 2022 to $2.8 million in 2023. However, as a result of our continued effort to enhance our lean administrative structure and
tight cost controls, our operating expenses as a percentage of sales improved from 17.2% in 2022 to 15.7% in 2023.

During
the years ended December 31, 2023, and 2022, the Company recorded a net non-operating income of $5.1 million and $4.2 million, respectively.
Non-operating income is comprised primarily of interest income from short term investments and deposits, rental properties and gains
on sale of scrap materials and charges to customers on credit card payments, as well as non-operating expenses related to certain charitable
contributions outside of the Company’s direct sphere of influence.

45

Interest
expense and deferred cost of financing increased $1.0 million, or 12.5%, to $9.2 million during the year ended December 31, 2023, from
$8.2 million during the year ended December 31, 2022, reflecting an increase in floating interest rates while our debt balance remained
stable.

During
the year ended December 31, 2023, the Company recorded a non-operating gain of $0.7 million associated with foreign currency transactions.
Comparatively, the Company recorded a net gain of $2.0 million during the year ended December 31, 2022, within the statement of operations
as the Colombian peso appreciated 20.5% during the period.

During
the years ended December 31, 2023 and 2022, the Company recorded an income tax provision of $77.9 million and $74.8 million, respectively,
reflecting an effective income tax rate of 30.4% and 33.3%, respectively.

As
a result of the foregoing, the Company recorded net income for the year ended December 31, 2023 of $183.5 million compared to $156.4
million in the year ended December 31, 2022.

Cash
Flow from Operations, Investing and Financing Activities

During
the years ended December 31, 2024 and 2023, operating activities generated approximately $170.5 million and $138.8 million, respectively.
The strong cashflow from operations during the year ended December 31, 2024, was mainly associatedwith our industry leading profitability,
and enhanced working capital efforts.

The
main sources of operating cash during the year ended December 31, 2024, were driven by trade accounts payable, and contract assets and
liabilities. Trade accounts payable generated $14.7 million during the year ended December 31, 2024, mainly as a result of our growing
operation, while our days payable outstanding increased only slightly, compared with $17.4 million used during the year ended December
31, 2023. In addition, contract assets and liabilities generated $14.3 million during the year ended December 31, 2024, mostly due to
an increase in billings in excess of costs, as main projects are being executed, and large projects from our backlog are starting operations;
compared to $13.9 million generated during the year ended December 31, 2023, as we executed on our growing backlog. The largest use of
cash in operating activities was trade accounts receivable, which used $44.4 million in the year ended December 31, 2024, compared with
a use of $0.8 million during the prior year period, driven by an increase in pace of large commercial installation jobs during the third
and fourth quarter of 2024, which entail longer cash cycles. Additionally, taxes payable used $3.5 million during the year ended December
31, 2024, resulted from taxes being paid during the period, as the Colombian subsidiaries fully paid their 2023 income tax during the
second quarter of 2024.

We
used $77.3 million and $76.0 million in investing activities during the years ended December 31, 2024, and 2023, respectively. The main
use of cash in investing activities during the year ended December 31, 2024 was related to scheduled payments on previous investments
to increase capacity and efficiency as well as new investments in land and equipment. During the year ended December 31, 2024, we paid
$79.6 million to acquire property plant and equipment, which in combination with $6.4 million acquired under credit or debt, amount to
total capital expenditures of $86.0 million. During the year ended December 31, 2023, we used $78.0 million for the acquisition of property
and equipment. Including assets acquired with debt or supplier credit, total capital expenditures during the period were $87.3 million.

Financing
activities used $84.5 million and $42.8 million during the year ended December 31, 2024, and 2023, respectively. On April 10, 2024, we
paid $2,500 to Incantesimo SAS, related to the acquisition of the remaining 31% equity interest of ES Metals. We paid $19.7 million and
$16.4 million of dividends to holders of our ordinary shares during the years ended December 31, 2024 and 2023, respectively. Additionally,
during the year ended December 31, 2024, we used $64.5 million to repay debt from our Senior Secured Line of Credit and other smaller
facilities.

46

Off-Balance
Sheet Arrangements

We
did not have any material off-balance sheet arrangements as of December 31, 2024 or 2023.

Critical
Accounting Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that
affect the assets, liabilities, revenues and expenses, and other related amounts during the periods covered by the financial statements.
Management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables
and assumptions affecting the future resolution of the uncertainties increases, these judgments become more subjective and complex. We
have identified the following accounting policies as the most important to the presentation and disclosure of our financial condition
and results of operations.

Revenue
Recognition

For
supply and installation contracts, the performance obligations are satisfied over time and control is deemed to be transferred when the
contract is accepted by our customers. Revenues from supply and installation contracts are recognized using the cost-to-cost method,
measured by the percentage of costs incurred to date to total estimated costs for each contract. Contract modifications routinely occur
to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that
are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration
for submitted contract modifications or claims when the Company believes it has an enforceable right to the modification or claim, the
amount can be reliably estimated, and its realization is reasonably assured. Amounts representing modifications accounted for as part
of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The
following discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s
consolidated financial statements and notes to those statements included in this Form 10-K. This discussion contains forward-looking
statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Introduction”
in this Form 10-K.

Overview

We
are experienced and highly skilled in the vertical integration of architectural glass manufacturing, distribution, and professional fitting.
Our expertise extends to the production of top-quality windows, as well as the supply of aluminum, vinyl, and other components. Our dedicated
and knowledgeable team serves a diverse range of commercial and residential construction projects worldwide, guaranteeing outstanding
products and seamless installation services. With a focus on innovation, combined with providing highly specified products with the highest
quality standards at competitive prices, we have earned #1 spot in the Forbe’s list of America’s 100 most successful small-cap
companies for 2024, and developed a leadership position in each of our core markets. In the United States, which is our largest market,
we were ranked as the third largest glass fabricator serving the United States in 2023 by Glass Magazine. In addition, we believe we
are the leading glass transformation company in Colombia. Our customers, which include developers, general contractors or installers
for hotels, office buildings, shopping centers, airports, universities, hospitals and multi-family and residential buildings, look to
us as a value-added partner based on our product development capabilities, our high-quality products and our unwavering commitment to
exceptional service.

With
over 40 years of experience in architectural glass and aluminum assembly, we specialize in transforming various glass products. Our offerings
include tempered safety glass, double thermo-acoustic glass, and laminated glass. Our wide range of finished glass products are utilized
in diverse buildings for floating facades, curtain walls, windows, doors, handrails, as well as interior and bathroom spatial dividers.
In addition to glass, we manufacture aluminum and vinyl products such as profiles, rods, bars, plates, and other hardware specifically
designed for window manufacturing.

Our
products are manufactured in a 5.6 million square foot, state-of-the-art manufacturing complex in Barranquilla, Colombia that provides
easy access to North, Central and South America, the Caribbean and the Pacific. Our products can be found on some of the most distinctive
buildings in these regions, including 100 Hood Park Drive (Boston), 601 West 29th St (New York). Norwegian Cruise Line Terminal
B (Miami), Paramount Miami Worldcenter (Miami), Via 57 West (New York), One65 Main (Cambridge), AE’O Tower (Honolulu), Salesforce
Tower (San Francisco), and One Thousand Museum (Miami). Our track record of successfully delivering high profile projects has earned
us an increasing number of opportunities across the United States, evidenced by our expanding backlog and overall revenue growth.

39

Our
structural competitive advantage is underpinned by our low-cost manufacturing footprint, vertically integrated business model and geographic
location. Our integrated facilities in Colombia and distribution and services operations in Florida provide us with a significant cost
advantage in both manufacturing and distribution, and we continue to invest in these operations to expand our operational capabilities.
Our lower cost manufacturing footprint allows us to offer competitive prices for our customers, while also providing innovative, high
quality and high value-added products, together with consistent and reliable service. We have historically generated high margin organic
growth based on our position as a value-added solutions provider for our customers.

We
have a strong presence in the Florida market, which represents a substantial portion of our revenue stream and backlog. Our success in
Florida has primarily been achieved through sustained organic growth, with further penetration now taking place into other highly populated
areas of the United States. As part of our strategy to become a fully vertically integrated company, we have supplemented our organic
growth with some acquisitions that have allowed us added control over our supply chain allowed for further vertical integration of our
business and will act as a platform for our future expansion in the United States. In 2016, we completed the acquisition of ESW, which
gave us control over the distribution of products into the United States from our manufacturing facilities in Colombia. In March 2017,
we completed the acquisition of GM&P, a consulting and glazing installation business that was previously our largest installation
customer.

On
May 3, 2019, we consummated the joint venture agreement with Saint-Gobain, acquiring a 25.8% minority ownership interest in Vidrio Andino,
a Colombia-based subsidiary of Saint-Gobain, solidifying our vertical integration strategy by acquiring an interest in the first stage
of our production chain, while securing ample glass supply for our expected production needs. Additionally, in April 2019, we acquired
a 70% equity interest in ESMetals, which has been consolidated in our financial statements since. In November 2023, we acquired the remaining
30% equity interest in ESMetals. ESMetals is a Colombian entity that serves as a metalwork contractor to supply us with steel accessories
used in the assembly of certain architectural systems as part of our vertical integration strategy.

The
continued diversification of the group’s presence and product portfolio is a core component of our strategy. In particular, we
are actively seeking to expand our presence in United States outside of Florida. We also launched a residential window offering which,
we believe, will help us expand our presence in the United States and generate additional organic growth. We believe that the quality
of our products, coupled with our ability to price competitively given our structural advantages on cost, will allow us to generate further
growth in the future.

We
have focused on working with The Power of Quality, always making sure that our vision of sustainability is immersed into every
aspect of our business, including social, environmental, economic and governance variables, that help us make decisions and create value
for our stakeholders. We carry out a series of initiatives based on our global sustainability strategy, which is supported on three fundamental
pillars: promoting an ethical and responsible continuous growth, leading eco-efficiency and innovation, and empowering our environment.
As part of this strategy we have voluntarily adhered to UN Global Compact Principles since 2017 and in pursuit of our cooperation with
the attainment of the SDGs joined in 2021 a program to dynamize, strengthen and make visible the management of greenhouse gas emissions
as a carbon neutral strategy set out by the Colombian government for 2050.

How
We Generate Revenue

We
are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential and commercial construction
industries, operating through our direct and indirect subsidiaries. Headquartered in Barranquilla, Colombia, we operate out of a 5.6
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.

Our
glass products include tempered glass, laminated glass, thermo-acoustic glass, curved glass, silk-screened glass, and digital print glass
as well as mill finished, anodized, painted aluminum and vinyl profiles, and produces rods, tubes, bars and plates. Window production
lines are defined depending on the different types of windows: normal, impact resistant, hurricane-proof, safety, soundproof and thermal.
We produce fixed body, sliding windows, projecting windows, guillotine windows, sliding doors and swinging doors. ES produces facade
products which include: floating facades, automatic doors, bathroom dividers and commercial display windows. In late 2023, we entered
into the vinyl window market, expanding our product portfolio to more than double our addressable market, and offering customers a wider
selection of solutions to meet their project needs. We intend to capitalize on our existing distribution base for our aluminum products
to obtain significant synergies given the number of dealers and distributors that already sell both aluminum and vinyl windows.

We
sell to over 1,000 customers using several sales teams based out of Colombia and the United States to specifically target regional markets
in South, Central and North America. The United States accounted for 95%, and 96% of our combined revenues in 2023 and 2022, respectively,
while Colombia accounted for approximately 3% and 2%, and other Latin-American destinations accounted for approximately 2% during both
years.

We
sell our products through our main offices/sales teams based out of Florida and different regions in the US, which is our largest sales
group and has strong relationships with glazing contractors, general contractors, real estate developers and specialty window dealers
in the region. In late 2022, we launched two new showrooms, one in New York City and one in Charleston, SC, to serve primarily single-family
residential markets in their regions. New showrooms have been completed in Houston, TX, and Bonita Springs, FL, and are expected to be
fully operational early in 2024. We also have sales forces located in Colombia and Panama with long-standing business relationships in
the region to serve Latin American markets. We have two types of sales operations: contract sales, which are the high-dollar, customer
tailored projects, and standard form sales, which reflect lower-value orders that are of short duration.

40

We
expect to benefit from growth in our largest markets in the United States by gaining market share, broadening our geographic
footprint. Favorable demographics in states such as South Carolina, Florida, Texas, and North Carolina, where we have a strong
presence, contribute to continued growth. Despite the overall decline of housing permits in U.S. south region, down 9% year over
year, from a very strong 2022; permits in key cities in Florida, where we maintain a strong presence, increased by 3%. Additionally,
according to Key Media Research (“KMR”) data, U.S. nonresidential building construction put in place is expected to
continue expanding through 2024, at an annualized rate of 4.6% to $800 billion, and projected to remain at similar levels through
2026. Residential construction put in place in the U.S. is expected to increase 1.3% during 2024, after a 5.6% decrease presented in 2023. Borrowing costs are expected to decrease during 2024,
as interest rates start to stabilize and probably decline. In late October 2023, 30
year-fixed mortgage rates reached a 23 year high of 7.8% and decreased to 6.7% as of February 2024. These stable to positive macro trends in our core
markets and geographies combined with a lean cost structure, leave us well positioned maintain industry leading margins and further
diversify our presence into the U.S.

Liquidity

As
of December 31, 2023 and 2022, we had cash and cash equivalents of approximately $129.5 million and $103.7 million, respectively. During
the year ended December 31, 2023, the main source of cash was operating activities, which generated $138.8 million.

As
of December 31, 2023, our liquidity position was comprised of $170 million available under committed lines of credit, in addition to
a cash balance of $129.5 million. We anticipate that working capital will continue to be a net benefit to cash flow in the near future,
which in addition to our current liquidity position, provides ample flexibility to service our obligations through the next twelve months.

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Capital
Resources

We
transform glass and aluminum into high specification architectural glass and custom-made aluminum profiles which require significant
investments in state-of-the-art technology. During the years ended December 31, 2023, and 2022, we made investments primarily in building
and construction, and machinery and equipment in the amounts of $87.3 million, and $83.1 million, respectively. We believe our investments
in technology within recent years have positioned us well for continued growth given the flexibility afforded by our current installed
capacity, improved profitability and enhanced cash generation in the years ahead. Recent examples of our high return investments within
the last two years include:

On
May 3, 2019, we consummated a joint venture agreement with Saint-Gobain, a world leader in the production of float glass, a key component
of our manufacturing process, whereby we acquired a 25.8% minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of
Saint-Gobain. The purchase price for our interest in Vidrio Andino was $45 million, of which $34.1 million was paid in cash and $10.9
million paid through the contribution of land on December 9, 2020. On October 28, 2020, we acquired said land from a related party in
exchange for an aggregate of 1,557,142 ordinary shares of the Company, valued at $7.00 per share, which represented an approximate 33%
premium based on the closing stock price as of October 27, 2020.

The
land will serve the purpose of developing a second float glass plant nearby our existing manufacturing facilities which we expect will
carry significant efficiencies for us once it becomes operative, in which we will also have a 25.8% interest. The new plant will be funded
with proceeds from the original cash contribution made by the Company, operating cash flows from the Bogota plant, debt incurred at the
joint venture level that will not consolidate into the Company and an additional contribution by us of approximately $12.5 million if
needed (based on debt availability).

42

Results
of Operations (Amounts in thousands)

Comparison
of years ended December 31, 2023 and December 31, 2022

Our
operating revenue increased $116.7 million, or 16.3%, from $716.6 million in the year ended December 31, 2022 to $833.3 million in the
year ended December 31, 2023. Strong sales during 2023 were driven by U.S. commercial and single-family residential market activity.
U.S. sales increased $106.7 million, or 15.5%, from $688.4 million in 2022 to $795.1 million in 2023. U.S. Commercial market sales increased
$77.7 million, or 20.3%, from $382.0 million in 2022 to $459.7 million in 2023 as we continue to execute on our growing backlog. U.S.
single family residential market sales increased $29.0 million, or 9.5%, from $306.4 million in 2022 to $335.4 million in 2023 and accounted
for 40.3% of total sales in the year ended December 31, 2023. Sales to Latin-American markets increased $10.0 million, or 35.6%, from
$28.2 million in 2022 to $38.2 million in 2023.

Gross
profit increased $41.5 million, or 11.9%, to $391.0 million during the year ended December 31, 2023, compared with $349.5 million during
the year ended December 31, 2022. This resulted in gross profit margin reaching 46.9% during the year ended December 31, 2023, down from
48.8% during the year ended December 31, 2022. The 190-basis point decrease in gross margin can be mainly attributable to our revenue
mix which included more installation and stand-alone product sales during the current period. Installation and stand-alone product revenues
were up 21.4% and 9.5% respectively year over year, weighting down overall gross margin. Additionally, unfavorable currency exchange
dynamics impacted our costs denominated in the Colombian Peso against our predominantly US Dollar revenue stream.

Operating
expenses increased $8.1 million, or 6.6%, from $123.1 million for the year ended December 31, 2022, to $131.2 million for the year ended
December 31, 2023. Administrative and selling Personnel expense increased 27%, from $28.1 million in 2022 to $35.7 in 2023, related to
a larger operation and ongoing geographical expansion. Additionally, provision for accounts receivable increased $2.2 million, from $0.6
million in 2022 to $2.8 million in 2023. However, as a result of our continued effort to enhance our lean administrative structure and
tight cost controls, our operating expenses as a percentage of sales improved from 17.2% in 2022 to 15.7% in 2023.

During
the years ended December 31, 2023 and 2022, the Company recorded a net non-operating income of $5.1 million and $4.2 million, respectively.
Non-operating income is comprised primarily of interest income from short term investments and deposits, rental properties and gains
on sale of scrap materials and charges to customers on credit card payments, as well as non-operating expenses related to certain charitable
contributions outside of the Company’s direct sphere of influence.

43

Interest
expense and deferred cost of financing increased $1.0 million, or 12.5%, to $9.2 million during the year ended December 31, 2023, from
$8.2 million during the year ended December 31, 2022, reflecting an increase in floating interest rates while our debt balance remained
stable.

During
the year ended December 31, 2023, the Company recorded a non-operating gain of $0.7 million associated with foreign currency transactions.
Comparatively, the Company recorded a net gain of $2.0 million during the year ended December 31, 2022, within the statement of operations
as the Colombian peso appreciated 20.5% during the period.

During
the years ended December 31, 2023 and 2022, the Company recorded an income tax provision of $77.9 million and $74.8 million, respectively,
reflecting an effective income tax rate of 30.4% and 33.3%, respectively.

As
a result of the foregoing, the Company recorded net income for the year ended December 31, 2023 of $183.5 million compared to $156.4
million in the year ended December 31, 2022.

Comparison
of years ended December 31, 2022 and December 31, 2021

Our
operating revenue increased $219.8 million, or 44.2%, from $496.8 million in the year ended December 31, 2021 to $716.6 million in the
year ended December 31, 2022.

Strong
sales during 2022 were driven by U.S. single family residential and commercial market activity. U.S. sales increased $232.0 million,
or 50.8%, from $456.3 million in 2021 to $688.4 million in 2022. U.S. single family residential market sales increased $129.1 million,
or 72.8%, from $177.4 million in 2021 to $306.4 million in 2022 and accounted for 42.8% of total sales in the year ended December 31,
2022. U.S. commercial market sales increased $102.9 million, or 36.9%, from $279.0 million in 2021 to $382.0 million in 2022 as we continued
to execute on our growing backlog. Sales to Latin-American markets decreased $12.2 million, or 30.3%, from $40.5 million in 2021 to $28.2
million in 2022 as we focused our efforts on more attractive U.S. markets.

Gross
profit increased $146.9 million, or 72.5%, to $349.5 million during the year ended December 31, 2022, compared with $202.6 million during
the year ended December 31, 2021. This resulted in gross profit margin reaching 48.8% during the year ended December 31, 2022, up from
40.8% during the year ended December 31, 2021. The 800-basis point improvement in gross margin was mainly attributable to operating leverage
on higher sales, favorable product pricing dynamics, ongoing efficiency efforts, and favorable foreign exchange rates resulting from
a depreciation of the Colombian peso.

Operating
expenses increased $37.5 million, or 43.8%, from $85.6 million for the year ended December 31, 2021 to $123.1 million for the year ended
December 31, 2022. The increase was driven by $16.2 million, or 70.4%, increase in shipping expense resulting from sales increasing 44.2%
along with some increases in shipping rates and a higher mix of sales going into the more atomized US residential market, a $3.4 million
in non-recurring professional fees, and by a $4.6 million one-time settlement payment associated with a dispute related to a project.

44

During
the years ended December 31, 2022 and 2021, the Company recorded net non-operating income of $4.2 million and $0.6 million, respectively.
Non-operating income was comprised primarily of income from rental properties and gains on sale of scrap materials and charges to customers
on credit card payments, as well as non-operating expenses related to certain charitable contributions outside of the Company’s
direct sphere of influence.

Interest
expense and deferred cost of financing decreased $1.7 million, or 17.2%, to $8.2 million during the year ended December 31, 2022, from
$9.9 million during the year ended December 31, 2021, despite increases in floating interest rates as a result of a reduction of our
debt balance.

During
the year ended December 31, 2022, the Company recorded a non-operating gain of $2.0 million associated with foreign currency transactions.
Comparatively, the Company recorded a net loss of $4.3 million during the year ended December 31, 2021, within the statement of operations
as the Colombian peso depreciated 20.8% during the period.

During
the years ended December 31, 2022 and 2021, the Company recorded an income tax provision of $74.8 million and $28.5 million, respectively,
reflecting an effective income tax rate of 33.3% and 30.7%, respectively. The effective income tax rates for both years approximate the
statutory rate of 33.8% and 29.6% for the fiscal years 2022 and 2021, respectively.

As
a result of the foregoing, the Company recorded a net income for the year ended December 31, 2022 of $156.4 million compared to $68.4
million in the year ended December 31, 2021.

Cash
Flow from Operations, Investing and Financing Activities

During
the year ended December 31, 2023 and 2022, operating activities generated approximately $138.8 million and $141.9 million, respectively.
The positive cashflow from operations during the year ended December 31, 2023, has been related to our industry leading profitability,
and enhanced working capital efforts.

The
main source of operating cash during the year ended December 31, 2023, were contract assets and liabilities, which generated $13.9 million,
resulting from a combination of a decrease in retainage as several jobs in the US were finalized, a reduction of unbilled receivables
tied to our advance on projects currently in execution, and increased advances received from customers. Comparatively, contract assets
and liabilities generated $16.2 million during the year ended December 31, 2022. The largest use of cash in operating activities were
other assets, comprised primarily of prepaid taxes, which used $27.5 million during the year ended December 31, 2023, related to the
aggregate of $107.2 million related to income taxes paid during the period, most of which was paid by the Colombian subsidiaries during
the second quarter of 2023. Comparatively, other assets used $0.5 million during the year ended December 31, 2022, related to the return
of prepaid value added taxes of Colombian subsidiaries offsetting income tax payments during 2022. Cash provided by operating activities
during the year ended December 31, 2023, was negatively impacted by $25.8 million non-cash unrealized foreign currency transaction losses
compared to a net gain of $15.4 million, during the year ended December 2022, as a result of a 20.5% appreciation of the Colombian Peso
against the US Dollar, during 2023.

We
used $76.0 million and $72.6 million in investing activities during the year ended December 31, 2023 and 2022, respectively. The main
use of cash in investing activities during 2023, was related to the automation of our architectural system assembly processes and incremental
land purchases as further described above in the Capital Resources section. During the year ended December 31, 2023, we paid $78.0 million
to acquire property, plant and equipment, which in combination with $9.3 million acquired under credit, amount to total capital expenditures
of $87.3 million. During 2022, we used $71.3 million for the acquisition or property and equipment. Including assets acquired with debt
or supplier credit, total capital expenditures during the period were $83.2 million. We also received dividends from our investment in
Vidrio Andino for $2.3 million during 2023.

Financing
activities used $42.8 million and $44.8 million during the years ended December 31, 2023 and 2022, respectively. We paid $16.4 million
and $12.9 million of dividends to holders of our ordinary shares during the years ended December 2023 and 2022, respectively. During
the year ended December 31, 2023, we used $23.5 million to repurchase shares under the $50 million buyback program authorized by our
Board of Directors. Additionally, the Company paid $3.0 million to buy out the non-controlling interest in ESMetals.

45

Off-Balance
Sheet Arrangements

We
did not have any material off-balance sheet arrangements as of December 31, 2023 or 2022.

Critical
Accounting Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that
affect the assets, liabilities, revenues and expenses, and other related amounts during the periods covered by the financial statements.
Management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables
and assumptions affecting the future resolution of the uncertainties increases, these judgments become more subjective and complex. We
have identified the following accounting policies as the most important to the presentation and disclosure of our financial condition
and results of operations.

Revenue
Recognition

For
supply and installation contracts, the performance obligations are satisfied over time and control is deemed to be transferred when the
contract is accepted by our customers. Revenues from supply and installation contracts are recognized using the cost-to-cost method,
measured by the percentage of costs incurred to date to total estimated costs for each contract. Contract modifications routinely occur
to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that
are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration
for submitted contract modifications or claims when the Company believes it has an enforceable right to the modification or claim, the
amount can be reliably estimated, and its realization is reasonably assured. Amounts representing modifications accounted for as part
of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis.

Trade
Accounts Receivable

Trade
accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts and sales returns. The Company’s
policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts
receivable. The Company periodically reviews its accounts receivable to determine whether an allowance for doubtful accounts is necessary
based on an analysis of past due accounts and other factors that may indicate that the collectability of an account may be in doubt.
Other factors that the Company considers include its existing contractual obligations, historical payment patterns of its customers and
individual customer circumstances, and a review of the local economic environment and its potential impact on the collectability of accounts
receivable. Account balances are deemed to be uncollectible and are charged off within 90 days of having recorded an allowance and all
means of collection have been exhausted and the potential for recovery is considered remote.

Inventories

Inventories
of raw materials, which consist primarily of purchased and processed glass, aluminum, vinyl, parts and supplies held for use in the ordinary
course of business, are valued at the lower of cost or net realizable value. Cost is determined using a weighted-average method. Inventory
consisting of certain job specific materials not yet installed (work in process) are valued using the specific identification method.
Cost for finished product inventory are recorded and maintained at the lower of cost or market. Cost includes raw materials and direct
and applicable indirect manufacturing overheads. Also, inventories related to contracts in progress are included within work in process
and finished goods and are stated at using the specific identification method and lower of cost or market, respectively, and are expected
to turn over in less than one year.

Reserves
for excess or slow-moving raw materials inventories are updated based on historical experience of a variety of factors including sales
volume and levels of inventories at the end of the period. The Company does not maintain allowances for the lower of cost or market for
inventories of finished products as its products are manufactured based on firm orders rather than built-to-stock.

46

Income
taxes

The
Company is subject to income taxes in some jurisdictions. Significant judgment is required when determining the worldwide provision for
income taxes. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under
this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities
are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in
deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets
and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. For each tax jurisdiction in which the
Company operates, deferred tax assets and liabilities are offset and are presented as a single noncurrent amount within the consolidated
balance sheets.

There
are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and
liabilities in the period in which such determination is made.

The
Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical
merits, that the position will be sustained upon examination. The Company accrues for other tax contingencies when it is probable that
a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated. Interest accrued related
to unrecognized tax and income tax related penalties are included in the provision for income taxes. The uncertain income taxes positions
are recorded in “Taxes payable” in the consolidated balance sheets.

Long
Lived Assets

The
Company periodically reviews the carrying values of its long-lived assets when events or changes in circumstances would indicate that
it is more likely than not that their carrying values may exceed their realizable values, and record impairment charges when considered
necessary.

When
circumstances indicate that an impairment may have occurred, the Company tests such assets for recoverability by comparing the estimated
undiscounted future cash flows expected to result from the use of such assets and their eventual disposition to their carrying amounts.
If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss, measured as the excess of the
carrying value of the asset over its estimated fair value, is recognized. Fair value is determined through various valuation techniques,
including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Property,
plant and equipment are recorded at cost less accumulated depreciation. Significant improvements and renewals that extend the useful
life of the asset are capitalized. Interest incurred while acquired property is under construction and installation are capitalized.
When property is retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any
related gains or losses are included in income as a reduction to or increase in selling, general and administrative expenses. Depreciation
is computed on a straight-line basis, based on the following estimated useful lives:

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The
following discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s
consolidated financial statements and notes to those statements included in this Form 10-K. This discussion contains forward-looking
statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Introduction”
in this Form 10-K.

Overview

We
are a vertically integrated manufacturer, supplier and installer of architectural glass, windows and associated aluminum products for
the global commercial and residential construction markets. With a focus on innovation, combined with providing highly specified products
with the highest quality standards at competitive prices, we have developed a leadership position in each of our core markets. In the
United States, which is our largest market, we were ranked as the third largest glass fabricator in 2022 by Glass Magazine. In addition, we believe we are the leading glass transformation
company in Colombia. Our customers, which include developers, general contractors or installers for hotels, office buildings, shopping
centers, airports, universities, hospitals and multi-family and residential buildings, look to us as a value-added partner based on our
product development capabilities, our high-quality products and our unwavering commitment to exceptional service.

We
have almost 40 years of experience in architectural glass and aluminum profile structure assembly. We transform a variety of glass products,
including tempered safety, double thermo-acoustic and laminated glass. Our finished glass products are installed in a wide variety of
buildings across a number of different applications, including floating facades, curtain walls, windows, doors, handrails, and interior
and bathroom spatial dividers. We also produce aluminum products such as profiles, rods, bars, plates and other hardware used in the
manufacturing of windows.

Our
products are manufactured in a 4.1 million square foot, state-of-the-art manufacturing complex in Barranquilla, Colombia that provides
easy access to North, Central and South America, the Caribbean and the Pacific. Our products can be found on some of the most distinctive
buildings in these regions, including One Thousand Museum (Miami), Paramount Miami Worldcenter (Miami), Hub50House (Boston), Via 57 West
(New York), AE’O Tower (Honolulu), Salesforce Tower (San Francisco), Trump Plaza (Panama), and Departmental Legislative Assembly
(Bolivia). Our track record of successfully delivering high profile projects has earned us an increasing number of opportunities across
the United States, evidenced by our expanding backlog and overall revenue growth.

39

Our
structural competitive advantage is underpinned by our low-cost manufacturing footprint, vertically integrated business model and geographic
location. Our integrated facilities in Colombia and distribution and services operations in Florida provide us with a significant cost
advantage in both manufacturing and distribution, and we continue to invest in these operations to expand our operational capabilities.
Our lower cost manufacturing footprint allows us to offer competitive prices for our customers, while also providing innovative, high
quality and high value-added products, together with consistent and reliable service. We have historically generated high margin organic
growth based on our position as a value-added solutions provider for our customers.

We
have a strong presence in the Florida market, which represents a substantial portion of our revenue stream and backlog. Our success in
Florida has primarily been achieved through sustained organic growth, with further penetration now taking place into other highly populated
areas of the United States. As part of our strategy to become a fully vertically integrated company, we have supplemented our organic
growth with some acquisitions that have allowed us added control over our supply chain allowed for further vertical integration of our
business and will act as a platform for our future expansion in the United States. In 2016, we completed the acquisition of ESW, which
gave us control over the distribution of products into the United States from our manufacturing facilities in Colombia. In March 2017,
we completed the acquisition of GM&P, a consulting and glazing installation business that was previously our largest installation
customer.

On
May 3, 2019, we consummated the joint venture agreement with Saint-Gobain, acquiring a 25.8% minority ownership interest in Vidrio Andino,
a Colombia-based subsidiary of Saint-Gobain, solidifying our vertical integration strategy by acquiring an interest in the first stage
of our production chain, while securing ample glass supply for our expected production needs. Additionally, in April 2019, the Company
acquired 70% equity interest in ESMetals, which has been consolidated in our financial statements since.  ESMetals is a Colombian
entity that serves as a metalwork contractor to supply the Company with steel accessories used in the assembly of certain architectural
systems as part of our vertical integration strategy.

The
continued diversification of the group’s presence and product portfolio is a core component of our strategy. In particular, we
are actively seeking to expand our presence in United States outside of Florida. We also launched a residential windows offering which,
we believe, will help us expand our presence in the United States and generate additional organic growth. We believe that the quality
of our products, coupled with our ability to price competitively given our structural advantages on cost, will allow us to generate further
growth in the future.

Our
company has focused on working with The Power of Quality, always making sure that our vision of sustainability is immersed into
every aspect of our business, including social, environmental, economic and governance variables, that help us make decisions and create
value for our stakeholders. We carry out a series of initiatives based on our global sustainability strategy, which is supported on three
fundamental pillars: promoting an ethical and responsible continuous growth, leading eco-efficiency and innovation, and empowering our
environment. As part of this strategy the Company has voluntarily adhered to UN Global Compact Principles since 2017 and in pursuit of
our cooperation with the attainment of the Sustainable Development Goals (“SDGs”)  joined in 2021 a program to dynamize,
strengthen and make visible the management of greenhouse gas emissions as a carbon neutral strategy set out by the Colombian government
for 2050.

How
We Generate Revenue

We
are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential and commercial construction
industries, operating through our direct and indirect subsidiaries. Headquartered in Barranquilla, Colombia, we operate out of a 4.1
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.

Our
glass products include tempered glass, laminated glass, thermo-acoustic glass, curved glass, silk-screened glass, and digital print glass
as well as mill finished, anodized, painted aluminum profiles, and produces rods, tubes, bars and plates. Window production lines are
defined depending on the different types of windows: normal, impact resistant, hurricane-proof, safety, soundproof and thermal. We produce
fixed body, sliding windows, projecting windows, guillotine windows, sliding doors and swinging doors. ES produces facade products which
include: floating facades, automatic doors, bathroom dividers and commercial display windows.

We
sell to over 1,000 customers using several sales teams based out of Colombia and the United States to specifically target regional markets
in South, Central and North America. The United States accounted for 96%, and 92% of our combined revenues in 2022 and 2021, respectively,
while Colombia accounted for approximately 2% and 5%, and other Latin-American destinations accounted for approximately 2% and 3% in
those years, respectively.

We
sell our products through our main offices/sales teams based out of Florida and different regions in the US, which is our largest sales
group and has strong relationships with glazing contractors, general contractors, real estate developers and specialty window dealers
in the region. In late 2022, we launched two new showrooms, one in New York City and one in Charleston, SC, to serve primarily single
family residential markets in their regions, and have plan to open additional showrooms in new geographies across the southern United
States as part of our geographic expansion strategy. We also have sales forces located in Colombia and Panama with long-standing business
relationships in the region to serve Latin American markets. We have two types of sales operations: Contract sales, which are the high-dollar,
customer tailored projects, and standard form sales. Standard form sales reflect lower-value orders that are of short duration.

40

We
expect to benefit from growth in our largest markets in the United States by gaining market share, broadening our geographic footprint
within the U.S. and demographic factors favoring demand in the geographies served by us. According to FMI´s 2023 Engineering and
Construction Industry overview, construction put in place in the multifamily residential construction sector, which accounted for 64%
of our backlog in 2022, is expected to increase 8.5% year over year in 2023, and U.S. nonresidential building construction put
in place is expected to continue expanding through 2023, at an annualized rate of 7.9% to $637 billion in and projected to remain at
similar levels through 2026. According to Key Media & Research (“KMR”) data, the volume of architectural glass
used in nonresidential construction will expand for a second-straight year, albeit at a slower pace, by 4.7% in 2023 to 178.1 million
square feet, following a 6.7% uptick the year before. These stable to positive macro trends combined with a lean cost structure, leave
us well positioned maintain industry leading margins and further diversify our presence into the U.S.

Liquidity

As
of December 31, 2022, and 2021, we had cash and cash equivalents of approximately $103.7 million and $85.0 million, respectively. During
the year ended December 31, 2022, the main source of cash was operating activities, which generated $141.9 million.

In
October 2020, the Company entered a $300 million five-year term Senior Secured Credit Facility consisting of a $250 million delayed draw
term loan and a $50 million committed revolving credit facility which bore interest at a rate of LIBOR, with a 0.75% floor, plus a spread
of between 2.50% and 3.50%, based on the Company’s net leverage ratio. In December 2020, we used $23.1 million proceeds of the
long-term debt facility to repay several credit facilities. Subsequently, in January 2021 we redeemed the Company’s existing $210
million unsecured senior notes, which had an interest rate of 8.2% and matured in January 2022 using proceeds from this new facility
and incurred an extinguishment cost of $10.9 million including $8.6 of call premium to exercise the call option.

In
November 2021, the Company amended its Senior Secured Credit Facility to (i) increase the borrowing capacity under its committed Line
of credit from $50 million to $150 million, (ii) reduce its borrowing costs by an approximate 130 basis points, and (iii) extend the
initial maturity date by one year to the end of 2026. The modification also included a re-sizing of the term loan to $200 million for
a total facility size of up to $350  million including the revolving credit facility. Borrowings under the credit facility will
now bear interest at a rate of LIBOR with no floor plus a spread of 1.75%, based on the Company’s net leverage ratio, compared
to a prior rate of LIBOR with a floor of 0.75% plus a spread of 2.50%. The facility was led by PNC Bank N.A as Administrative Agent;
with Citizens Bank N.A, BBVA USA, CIT Bank and Wells Fargo Bank N.A serving as Joint Lead Arrangers. The effective interest rate for
this credit facility including deferred issuance costs is 2.81%. We recorded total costs and fees of $1.5 million related to this transaction,
of which $1.4 million of fees paid to banks were capitalized as deferred cost of financing, and $0.2 million paid to third parties recorded
as an operating expense on the consolidated statements of operations for the year 2021. This transaction was accounted for as a debt
modification.

In
March 2022, we voluntarily prepaid $15 million of capital to this credit facility which has decreased our net leverage ratio and triggered
a step down in the applicable interest rate spread to 1.5%. Additionally, on September 30, 2022, we voluntarily prepaid $10.0 million
of the term loan and $6.7 million under the revolving line of credit, which is fully unused as of December 31, 2022. We thereby reduced
our financing cost, despite global increases in interest rates.

41

As
of December 31, 2022, we had a strong liquidity position, comprised of $170 million available under committed lines of credit, in addition
to a cash balance of $103.7 million. We anticipate that working capital will continue to be a net benefit to cash flow in the near future,
which in addition to our current liquidity position, provides ample flexibility to service our obligations through the next twelve months.

Capital
Resources

We
transform glass and aluminum into high specification architectural glass and custom-made aluminum profiles which require significant
investments in state-of-the-art technology. During the years ended December 31, 2022, and 2021, we made investments primarily in building
and construction, and machinery and equipment in the amounts of $83.2 million, and $53.4 million, respectively. We believe our investments
in technology within recent years have positioned us well for continued growth given the flexibility afforded by our current installed
capacity, improved profitability and enhanced cash generation in the years ahead. Recent examples of our high return investments within
the last two years include:

On
May 3, 2019, we consummated a joint venture agreement with Saint-Gobain, a world leader in the production of float glass, a key component
of our manufacturing process, whereby we acquired a 25.8% minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of
Saint-Gobain. The purchase price for our interest in Vidrio Andino was $45 million, of which $34.1 million was paid in cash and $10.9
million paid through the contribution of land on December 9, 2020. On October 28, 2020 we acquired said land from a related party and
paid for it with the issuance of an aggregate of 1,557,142 ordinary shares of the Company, valued at $7.00 per share, which represented
an approximate 33% premium based on the closing stock price as of October 27, 2020.

The
land will serve the purpose of developing a second float glass plant nearby our existing manufacturing facilities which we expect will
carry significant efficiencies for us once it becomes operative, in which we will also have a 25.8% interest. The new plant will be funded
with proceeds from the original cash contribution made by the Company, operating cash flows from the Bogota plant, debt incurred
at the joint venture level that will not consolidate into the Company and an additional contribution by us of approximately $12.5 million
if needed (based on debt availability).

42

Results
of Operations (Amounts in thousands)

Comparison
of years ended December 31, 2022, and December 31, 2021

Our
operating revenue increased $219.8 million, or 44.2%, from $496.8 million in the year ended December 31, 2021, to $716.6 million in the
year ended December 31, 2022.

Strong
sales during 2022 were driven by U.S. single family residential and commercial market activity. U.S. sales increased $232.0 million,
or 50.8%, from $456.3 million in 2021 to $688.4 million in 2022. U.S. Single family residential market sales increased $129.1 million,
or 72.8%, from $177.4 million in 2021 to $306.4 million in 2022 and accounted for 42.8% of total sales in the year ended December 31,
2022. U.S. Commercial market sales increased $102.9 million, or 36.9%, from $279.0 million to $382.0 million as we continue to execute
on our growing backlog. Sales to Latin-American markets decreased $12.2 million, or 30.3%, from $40.5 million to $28.2 million in 2022
as we focus our efforts on more attractive U.S. markets.

Gross
profit increased $146.9 million, or 72.5%, to $349.5 million during the year ended December 31, 2022, compared with $202.6 million during
the same period of 2021. This resulted in gross profit margin reaching 48.8% during the year ended December 31, 2022, up from 40.8% during
the year ended December 31, 2021. The 800-basis point improvement in gross margin can be mainly attributable to operating leverage on
higher sales, favorable product pricing dynamics, ongoing efficiency efforts, and favorable foreign exchange rates resulting from a depreciation
of the Colombian peso.

Operating
expenses increased $37.5 million, or 43.8%, from $85.6 million to $123.1 million for the year ended December 31, 2021, and 2022, respectively.
The increase was driven by $16.2 million, or 70.4%, increase in shipping expense resulting from sales increasing 44.2% along with some
increases in shipping rates and a higher mix of sales going into the more atomized US residential market, a $3.4 million in non-recurring
professional fees, and by a $4.6 million one-time settlement payment associated with a dispute related to a project.

During
the year ended December 31, 2022, and 2021, the Company recorded a net non-operating income of $4.2 million and non-operating income
of $0.6 million, respectively. Non-operating income is comprised primarily of income from rental properties and gains on sale of scrap
materials and charges to customers on credit card payments, as well as non-operating expenses related to certain charitable contributions
outside of the Company’s direct sphere of influence.

43

Interest
expense and deferred cost of financing decreased $1.7 million, or 17.2%, to $8.2 million during the year ended December 31, 2022, from
$9.9 million during the year ended December 31, 2021, despite increases in floating interest rates as a result of a reduction of our
debt balance.

During
the year ended December 31, 2022, the Company recorded a non-operating gain of $2.0 million associated with foreign currency transactions.
Comparatively, the Company recorded a net loss of $4.3 million during the year ended December 31, 2021, within the statement of operations
as the Colombian peso depreciated 20.8% during the period.

During
the year ended December 31, 2022, and 2021, the Company recorded an income tax provision of $74.8 million and $28.5 million, respectively,
reflecting an effective income tax rate of 32.3% and 29.4%, respectively. The effective income tax rates for both years approximate the
statutory rate of 33.8% and 29.6% for the fiscal years 2022 and 2021, respectively.

As
a result of the foregoing, the Company recorded a net income for the year ended December 31, 2022, of $156.4 million compared to $68.4
million in the year ended December 31, 2021.

Comparison
of years ended December 31, 2021, and December 31, 2020

Our
operating revenue increased $120.2 million, or 31.9%, from $376.6 million in the year ended December 31, 2020, to $496.8 million in the
year ended December 31, 2021. In early 2020, initial COVID-19 lockdowns and other preventive measures slowed down our business, especially
in Latin America as several customers halted activities and we shut down our manufacturing facilities in Colombia between March 24, 2020,
and April 13, 2020 during the nationwide shelter-in-place order.

Strong
sales during 2021 were driven by U.S. single family residential and commercial market activity. U.S. sales increased $115.9 million,
or 34.0%, from $340.4 million in 2020 to $456.3 million in 2021. Single family residential market sales increased $106.7 million, or
151.1%, from $70.6 million in 2020 to $177.3 million in 2021, and accounted for 35.7% of total sales in the year ended December 31, 2021.

Sales
to Latin-American markets, including Colombia increased $4.3 million, or 11.9%, as our customers continue to return to activities after
lockdowns in slowly recovering markets.

Gross
profit increased $63.1 million, or 45.3%, to $202.6 million during the year ended December 31, 2021, compared with $139.4 million during
the same period of 2020. This resulted in gross profit margin reaching 40.8% during the year ended December 31, 2021, up from 37.0% during
the year ended December 31, 2020. The 380-basis point improvement in gross margin mainly reflected a higher mix of revenue from manufacturing
versus installation activity as we continue to grow into single family residential, greater operating efficiencies from prior automation
initiatives and operating leverage on higher revenues.

Operating
expenses increased $11.9 million, or 16.1%, from $73.7 million to $85.6 million for the year ended December 31, 2020, and 2021, respectively.
The increase was driven by $7.0 million, or 43.5% increase in shipping expense resulting from sales increasing 31.9% along with
some increases in shipping rates and more shipping into the U.S., a $2.6 million, or 31.6% increase in sales commissions, $1.6
million or 9.9% increase in personnel expense partially offset by a reduction in certain taxes and other expenses. Operating expenses
as a percentage of sales improved from 19.6% in 2020 to 17.2% in 2021, as a result of operating leverage from higher sales and our continued
effort to enhance our lean administrative structure and tight cost controls.

44

During
the year ended December 31, 2021, and 2020, the Company recorded a net non-operating income of $0.6 million and non-operating income
of $0.1 million, respectively. Non-operating income is comprised primarily of income from rental properties and gains on sale of scrap
materials as well as non-operating expenses related to certain charitable contributions outside of the Company’s direct sphere
of influence.

Interest
expense and deferred cost of financing decreased $11.8 million, or 54.5%, to $9.9 million during the year ended December 31, 2021 from
$21.7 million during the year ended December 31, 2020 as a result of our new financing arrangement further described above in the liquidity
section. The current period does not fully capture the effect of the decrease in interest rates associated to the new syndicated facility
given that the senior notes were taken out on January 30, 2021.

During
the year ended December 31, 2021, the Company recorded a non-operating loss of $4.3 million associated with a foreign currency transaction,
which excludes a non-cash $8.5 million foreign currency transaction loss from remeasurement of certain intercompany loans reclassified
to other comprehensive income. Comparatively, the Company recorded a net loss of $8.6 million during the year ended December 31, 2020,
within the statement of operations as the Colombian peso depreciated 16.0% during the period.

During
the year ended December 31, 2021, and 2020, the Company recorded an income tax provision of $28.5 million and $13.0 million, respectively,
reflecting an effective income tax rate of 29.4% and 35.3%, respectively. The effective income tax rate of 29.4%, during the year ended
December 31, 2021, approximates the statutory rate. The effective income tax rate for the year ended December 31, 2020, of 35.3%
reflects the impact of unrealized foreign currency transaction losses related to the remeasurement of long-term liabilities of our Colombian
subsidiaries which were expected to be realized at a later year in which a lower income tax rate was expected to apply per tax regulation
at the time.

As
a result of the foregoing, the Company recorded a net income for the year ended December 31, 2021, of $68.4 million compared to $23.8
million in the year ended December 31, 2020.

Cash
Flow from Operations, Investing and Financing Activities

During
the year ended December 31, 2022, and 2021, operating activities generated approximately $141.9 million and $117.3 million, respectively.
The positive cashflow from operations during the year ended December 31, 2022 has been related to a much higher profitability year over
year, enhanced working capital efforts, reduced interest expense and a higher share of our revenue mix coming from the single-family
residential space, which has a shorter cash cycle.

The
main source of operating cash during the year ended December 31, 2022, were taxes payable, which generated $45.3 million related to
higher income tax provision as a result of increased profitability, compared with $16.1 million during the year ended December 31,
2022. Contract assets and liabilities which generated $16.2 million, resulting from a combination of a decrease in retainage as
several jobs in the US were finalized, a reduction of unbilled receivables tied to our advance on projects currently in execution,
and increased advances received from customers. Comparatively, contract assets and liabilities generated $28.6 million during the
year ended December 31, 2021. Additionally, trade accounts payable generated $7.2 million and $38.0 million during full years ended
December 31, 2022 and 2021, respectively. Cash provided by trade accounts payable is related to increasing purchases to support our
growing material needs commensurate with our increased output. The largest use of cash in operating activities was inventories,
which used $63.9 million during the year ended December 31, 2022, compared with $16.7 million used during the year ended December
31, 2021, as we procure materials to support our ongoing growth. In addition, trade accounts receivable used $54.2 million as a
result of our record sales during the year ended December 31, 2022, while days sales outstanding stood at 80 days as of both December
31, 2022, and 2021 (which include transit times into the US and other places). Trade accounts receivable used $38.5 million during
the year ended December 31, 2021.

We
used $72.6 million and $50.8 million in investing activities during the year ended December 31, 2022, and 2021, respectively. The main
use of cash in investing activities during 2022, was related to the automation of our architectural system assembly processes and incremental
land purchases as further described above in the Capital Resources section. During the year ended December 31, 2022, we paid $71.3 million
to acquire property, plant and equipment, which in combination with $11.8 million acquired under credit, amount to total capital expenditures
of $83.2 million. During 2021, we used $51.5 million for the acquisition or property and equipment. Including assets acquired with debt
or supplier credit, total capital expenditures during the period were $53.4 million.

Financing
activities used $44.8 million and $43.8 million during the year ended December 31, 2022, and 2021, respectively. During the first quarter
of 2022 we voluntarily prepaid $15 million of capital to this credit facility which has decreased our net leverage ratio and triggered
a step down in the applicable interest rate spread to 1.5% and later prepaid an additional $6.7 million under our revolving line of credit
and $10 million under our term loan on September 30, 2022, with cash on hand. Outflows during the year ended December 31, 2021, include
the full redemption of the $210 million unsecured senior notes, which bore interest at a rate of 8.2% and matured in 2022, following
a step down in redemption price at the end of January 2021, along with $8.6 million for the corresponding call premium. These payments
were made with proceeds of the new Senior Secured Credit Facility for up to $300 million, of which we received proceeds of $220 million
during the twelve-month period.

45

Off-Balance
Sheet Arrangements

We
did not have any material off-balance sheet arrangements as of December 31, 2022, or 2021.

Critical
Accounting Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that
affect the assets, liabilities, revenues and expenses, and other related amounts during the periods covered by the financial statements.
Management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables
and assumptions affecting the future resolution of the uncertainties increases, these judgments become more subjective and complex. We
have identified the following accounting policies as the most important to the presentation and disclosure of our financial condition
and results of operations.

Revenue
Recognition

For
supply and installation contracts, the performance obligations are satisfied over time and control is deemed to be transferred when the
contract is accepted by our customers. Revenues from supply and installation contracts are recognized using the cost-to-cost method,
measured by the percentage of costs incurred to date to total estimated costs for each contract. Contract modifications routinely occur
to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that
are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration
for submitted contract modifications or claims when the Company believes it has an enforceable right to the modification or claim, the
amount can be reliably estimated and its realization is reasonably assured. Amounts representing modifications accounted for as part
of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis.

Trade
Accounts Receivable

Trade
accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts and sales returns. The Company’s
policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts
receivable. The Company periodically reviews its accounts receivable to determine whether an allowance for doubtful accounts is necessary
based on an analysis of past due accounts and other factors that may indicate that the collectability of an account may be in doubt.
Other factors that the Company considers include its existing contractual obligations, historical payment patterns of its customers and
individual customer circumstances, and a review of the local economic environment and its potential impact on the collectability of accounts
receivable. Account balances are deemed to be uncollectible and are charged off within 90 days of having recorded an allowance and all
means of collection have been exhausted and the potential for recovery is considered remote.

Inventories

Inventories
of raw materials, which consist primarily of purchased and processed glass, aluminum, parts and supplies held for use in the ordinary
course of business, are valued at the lower of cost or   net realizable value. Cost is determined using a weighted-average
method. Inventory consisting of certain job specific materials not yet installed (work in process) are valued using the specific identification
method. Cost for finished product inventory are recorded and maintained at the lower of cost or market. Cost includes raw materials and
direct and applicable indirect manufacturing overheads. Also, inventories related to contracts in progress are included within work in
process and finished goods, and are stated at using the specific identification method and lower of cost or market, respectively, and
are expected to turn over in less than one year.

Reserves
for excess or slow-moving raw materials inventories are updated based on historical experience of a variety of factors including sales
volume and levels of inventories at the end of the period. The Company does not maintain allowances for the lower of cost or market for
inventories of finished products as its products are manufactured based on firm orders rather than built-to-stock.

46

Income
taxes

The
Company is subject to income taxes in some jurisdictions. Significant judgment is required when determining the worldwide provision for
income taxes. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under
this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities
are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in
deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets
and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. For each tax jurisdiction in which the
Company operates, deferred tax assets and liabilities are offset and are presented as a single noncurrent amount within the consolidated
balance sheets.

There
are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and
liabilities in the period in which such determination is made.

The
Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical
merits, that the position will be sustained upon examination. The Company accrues for other tax contingencies when it is probable that
a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated. Interest accrued related
to unrecognized tax and income tax related penalties are included in the provision for income taxes. The uncertain income taxes positions
are recorded in “Taxes payable” in the consolidated balance sheets.

Long
Lived Assets

The
Company periodically reviews the carrying values of its long-lived assets when
events or changes in circumstances would indicate that it is more likely than not that their carrying values may exceed their realizable
values, and record impairment charges when considered necessary.

When
circumstances indicate that an impairment may have occurred, the Company tests such assets for recoverability by comparing the estimated
undiscounted future cash flows expected to result from the use of such assets and their eventual disposition to their carrying amounts.
If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss, measured as the excess of the
carrying value of the asset over its estimated fair value, is recognized. Fair value is determined through various valuation techniques,
including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Property,
plant and equipment are recorded at cost less accumulated depreciation.   Significant improvements and renewals that extend
the useful life of the asset are capitalized. Interest incurred while acquired property is under construction and installation are capitalized.
When property is retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any
related gains or losses are included in income as a reduction to or increase in selling, general and administrative expenses. Depreciation
is computed on a straight-line basis, based on the following estimated useful lives:

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The
following discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s
consolidated financial statements and notes to those statements included in this Form 10-K. This discussion contains forward-looking
statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Introduction”
in this Form 10-K.

Overview

We
are a vertically-integrated manufacturer, supplier and installer of architectural glass, windows and associated aluminum products for
the global commercial and residential construction markets. With a focus on innovation, combined with providing highly specified products
with the highest quality standards at competitive prices, we have developed a leadership position in each of our core markets. In the
United States, which is our largest market, we were ranked as the second largest glass fabricator as well as the second largest metal
company serving the United States in 2021 by Glass Magazine. In addition, we believe we are the leading glass transformation company
in Colombia. Our customers, which include developers, general contractors or installers for hotels, office buildings, shopping centers,
airports, universities, hospitals and multi-family and residential buildings, look to us as a value-added partner based on our product
development capabilities, our high-quality products and our unwavering commitment to exceptional service.

We
have more than 35 years of experience in architectural glass and aluminum profile structure assembly. We transform a variety of glass
products, including tempered safety, double thermo-acoustic and laminated glass. Our finished glass products are installed in a wide
variety of buildings across a number of different applications, including floating facades, curtain walls, windows, doors, handrails,
and interior and bathroom spatial dividers. We also produce aluminum products such as profiles, rods, bars, plates and other hardware
used in the manufacturing of windows.

Our
products are manufactured in a 3.5 million square foot, state-of-the-art manufacturing complex in Barranquilla, Colombia that provides
easy access to North, Central and South America, the Caribbean and the Pacific. Our products can be found on some of the most distinctive
buildings in these regions, including One Thousand Museum (Miami), Paramount Miami Worldcenter (Miami), Hub50House (Boston), Via 57 West
(New York), AE’O Tower (Honolulu), Salesforce Tower (San Francisco), Trump Plaza (Panama), and Departmental Legislative Assembly
(Bolivia). Our track record of successfully delivering high profile projects has earned us an increasing number of opportunities across
the United States, evidenced by our expanding backlog and overall revenue growth.

37

Our
structural competitive advantage is underpinned by our low-cost manufacturing footprint, vertically integrated business model and geographic
location. Our integrated facilities in Colombia and distribution and services operations in Florida provide us with a significant cost
advantage in both manufacturing and distribution, and we continue to invest in these operations to expand our operational capabilities.
Our lower cost manufacturing footprint allows us to offer competitive prices for our customers, while also providing innovative, high
quality and high value-added products, together with consistent and reliable service. We have historically generated high margin organic
growth based on our position as a value-added solutions provider for our customers.

We
have a strong presence in the Florida market, which represents a substantial portion of our revenue stream and backlog. Our success in
Florida has primarily been achieved through sustained organic growth, with further penetration now taking place into other highly populated
areas of the United States. As part of our strategy to become a fully vertically integrated company, we have supplemented our organic
growth with some acquisitions that have allowed us added control over our supply chain allowed for further vertical integration of our
business and will act as a platform for our future expansion in the United States. In 2016, we completed the acquisition of ESW, which
gave us control over the distribution of products into the United States from our manufacturing facilities in Colombia. In March 2017,
we completed the acquisition of GM&P, a consulting and glazing installation business that was previously our largest installation
customer.

On
May 3, 2019, we consummated the joint venture agreement with Saint-Gobain, acquiring a 25.8% minority ownership interest in Vidrio Andino,
a Colombia-based subsidiary of Saint-Gobain, solidifying our vertical integration strategy by acquiring an interest in the first stage
of our production chain, while securing ample glass supply for our expected production needs. Additionally, in April 2019, ESMetals,
a Colombian entity in which the Company has 70% equity interest and has been consolidated in our financial statements since. ESMetals
serves as a metalwork contractor to supply the Company with steel accessories used in the assembly of certain architectural systems as
part of our vertical integration strategy.

The
continued diversification of the group’s presence and product portfolio is a core component of our strategy. In particular, we
are actively seeking to expand our presence in United States outside of Florida. We also launched a residential windows offering which,
we believe, will help us expand our presence in the United States and generate additional organic growth. We believe that the quality
of our products, coupled with our ability to price competitively given our structural advantages on cost, will allow us to generate further
growth in the future.

Our
company has focused on working with The Power of Quality, always making sure that our vision of sustainability is immersed into
every aspect of our business, including social, environmental, economic and governance variables, that help us make decisions and create
value for our stakeholders. We carry out a series of initiatives based on our global sustainability strategy, which is supported on three
fundamental pillars: promoting an ethical and responsible continuous growth, leading eco-efficiency and innovation, and empowering our
environment. As part of this strategy the Company has voluntarily adhered to UN Global Compact Principles since 2017 and in pursuit of
our cooperation with the attainment of the Sustainable Development Goals (SDGs) joined in 2021 a program to dynamize, strengthen and
make visible the management of greenhouse gas emissions as a carbon neutral strategy set out by the Colombian government for 2050.

How
We Generate Revenue

We
are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential and commercial construction
industries, operating through our direct and indirect subsidiaries. Headquartered in Barranquilla, Colombia, we operate out of a 3.5
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.

Our
glass products include tempered glass, laminated glass, thermo-acoustic glass, curved glass, silk-screened glass, and digital print glass
as well as mill finished, anodized, painted aluminum profiles and produces rods, tubes, bars and plates. Window production lines are
defined depending on the different types of windows: normal, impact resistant, hurricane-proof, safety, soundproof and thermal. We produce
fixed body, sliding windows, projecting windows, guillotine windows, sliding doors and swinging doors. ES produces facade products which
include: floating facades, automatic doors, bathroom dividers and commercial display windows.

We
sell to over 1,000 customers using several sales teams based out of Colombia and the United States to specifically target regional markets
in South, Central and North America. The United States accounted for 92%, and 91% of our combined revenues in 2021 and 2020, respectively,
while Colombia accounted for approximately 5% and 6%, and Panama accounted for approximately 1% and less than 1% in those years, respectively.

We
sell our products through our main offices/sales teams based out of Colombia and the United States. The Colombia and Latin America sales
team is our largest sales group, which has deep contacts throughout the construction industry. The Colombia and Latin America sales team
markets both our products as well as our installation services. In the United States, we sell out of subsidiaries established in Florida,
which have an expanding customer base and provide installation service in addition to our products. Sales forces in Panama are not via
subsidiaries but under agreements with sales representatives. We have two types of sales operations: Contract sales, which are the high-dollar,
customer tailored projects, and standard form sales. Standard form sales reflect low-value installations that are of short duration.

38

We
expect to benefit from growth in our largest markets in the United States. One indicator of the non-residential construction outlook
in the United States, the Architectural Billing Index, has increased to 52.0 for the month of December 2021 mostly related to a strong
rebound from the 2020 downturn. Despite a variety of concerns in the industry, firm billings increased every month of the year except
for January. Inquiries into new projects and the value of new design contracts both remaining strong, and backlog remaining near the
highest levels ever reported since the AIA started collecting this data. Since 2018 Tecnoglass is actively seeking business in the U.S.
residential market. US housing starts increased 1.4% month-over-month to an adjusted annual rate of 1,702 thousand units in December
of 2021, led by Single-family construction, up 2.3% to 1,172. An estimated 1,595 thousand housing units were started in 2021, 15.6% above
the 2020 figure of 1,380. The current housing boom is directly driven by the intense demand and low mortgage rates.

Liquidity

As
of December 31, 2021, and 2020, we had cash and cash equivalents of approximately $85.0 million and $67.7 million, respectively. During
the year ended December 31, 2021 the main source of cash was operating activities, which generated $117.3 million.

In
October 2020, the Company entered into a $300 million five-year term Senior Secured Credit Facility consisting of a $250 million delayed
draw term loan and a $50 million committed revolving credit facility which bore interest at a rate of LIBOR, with a 0.75% floor, plus
a spread of between 2.50% and 3.50%, based on the Company’s net leverage ratio. In December 2020, we used $23.1 million proceeds
of the long-term debt facility to repay several credit facilities. Subsequently, in January 2021 we redeemed the Company’s existing
$210 million unsecured senior notes, which had an interest rate of 8.2% and matured in January 2022 using proceeds from this new facility
and incurred in an extinguishment cost of $10.9 million including $8.6 of call premium to exercise the call option.

In
November 2021, the Company amended its Senior Secured Credit Facility to (i) increase the borrowing capacity under its committed Line
of credit from $50 million to $150 million, (ii) reduce its borrowing costs by an approximate 130 basis points, and (iii) extend the
initial maturity date by one year to the end of 2026. The modification also included a re-sizing of the term loan to $200 million for
a total facility size of up to $350 including the revolving credit facility. Borrowings under the credit facility will now bear interest
at a rate of LIBOR with no floor plus a spread of 1.75%, based on the Company’s net leverage ratio, compared to a prior rate of
LIBOR with a floor of 0.75% plus a spread of 2.50%. The facility was led by PNC Bank N.A as Administrative Agent; with Citizens Bank
N.A, BBVA USA, CIT Bank and Wells Fargo Bank N.A serving as Joint Lead Arrangers. The effective interest rate for this credit facility
including deferred issuance costs is 2.81%. We recorded total costs and fees of $1.5 million related to this transaction, of which
$1.4 million of fees paid to banks were capitalized as deferred cost of financing, and $0.2 million paid to third parties
recorded as an operating expense on the consolidated statements of operations for the year 2021. This transaction was accounted for as
a debt modification.

We
anticipate that working capital will continue to be a net benefit to cash flow in the near future, which in addition to our current liquidity
position, provides ample flexibility to service our obligations through the next twelve months.

Capital
Resources

We
transform glass and aluminum into high specification architectural glass and custom-made aluminum profiles which require significant
investments in state-of-the-art technology. During the years ended December 31, 2021 and 2020, we made investments primarily in building
and construction, and machinery and equipment in the amounts of $53.3 million, and $20.6 million, respectively. We believe our investments
in technology within recent years have positioned us well for continued growth given the flexibility afforded by our current installed
capacity, improved profitability and enhanced cash generation in the years ahead. Recent examples of our high return investments within
the last two years include:

On
May 3, 2019, we consummated a joint venture agreement with Saint-Gobain, a world leader in the production of float glass, a key component
of our manufacturing process, whereby we acquired a 25.8% minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of
Saint-Gobain. The purchase price for our interest in Vidrio Andino was $45 million, of which $34.1 million was paid in cash and $10.9
million paid through the contribution of land on December 9, 2020. On October 28, 2020 we acquired said land from a related party and
paid for it with the issuance of an aggregate of 1,557,142 ordinary shares of the Company, valued at $7.00 per share, which represented
an approximate 33% premium based on the closing stock price as of October 27, 2020.

The
land will serve the purpose of developing a second float glass plant nearby our existing manufacturing facilities which we expect will
carry significant efficiencies for us once it becomes operative, in which we will also have a 25.8% interest. The new plant will be funded
with proceeds from the original cash contribution made by the Company, operating cashflows from the Bogota plant, debt incurred at the
joint venture level that will not consolidate into the Company and an additional contribution by us of approximately $12.5 million if
needed (based on debt availability).

39

Results
of Operations (Amounts in thousands)

Comparison
of years ended December 31, 2021 and December 31, 2020

Our
operating revenue increased $120.2 million, or 31.9%, from $376.6 million in the year ended December 31, 2020 to $496.8 million in the
year ended December 31, 2021. In early 2020, initial COVID-19 lockdowns and other preventive measures slowed down our business, especially
in Latin America as several customers halted activities and we shut down our manufacturing facilities in Colombia between March 24, 2020
and April 13, 2020 during the nationwide shelter-in-place order.

Strong
sales during 2021 were driven by U.S. single family residential and commercial market activity. U.S. sales increased $115.9 million,
or 34.0%, from $340.4 million in 2020 to $456.3 million in 2021. Single family residential market sales increased $106.7 million, or
151.1%, from $70.6 million in 2020 to $177.3 million in 2021, and accounted for 35.7% of total sales in the year ended December 31, 2021.

Sales
to Latin-American markets, including Colombia increased $4.3 million, or 11.9%, as our customers continue to return to activities after
lockdowns in slowly recovering markets.

Gross
profit increased $63.1 million, or 45.3%, to $202.6 million during the year ended December 31, 2021, compared with $139.4 million during
the same period of 2020. This resulted in gross profit margin reaching 40.8% during the year ended December 31, 2021, up from 37.0% during
the year ended December 31, 2020. The 380-basis point improvement in gross margin mainly reflected a higher mix of revenue from manufacturing
versus installation activity as we continue to grow into single family residential, greater operating efficiencies from prior automation
initiatives and operating leverage on higher revenues.

Operating
expenses increased $11.9 million, or 16.1%, from $73.7 million to $85.6 million for the year ended December 31, 2020 and 2021, respectively.
The increase was driven by $7.0 million, or 43.5% increase in shipping expense resulting from sale increasing 31.9% along with some increases
in shipping rates and more shipping into the US, a $2.6 million, or 31.6% increase in sales commissions, $1.6 million or 9.9% increase
in personnel expense partially offset by a reduction in certain taxes and other expenses. Operating expenses as a percentage of sales
improved from 19.6% in 2020 to 17.2% in 2021, as a result of operating leverage from higher sales and our continued effort to enhance
our lean administrative structure and tight cost controls.

During
the year ended December 31, 2021 and 2020, the Company recorded a net non-operating income of $0.6 million and non-operating income of
$0.1 million, respectively. Non-operating income is comprised primarily of income from rental properties and gains on sale of scrap materials
as well as non-operating expenses related to certain charitable contributions outside of the Company’s direct sphere of influence.

40

Interest
expense and deferred cost of financing decreased $11.8 million, or 54.5%, to $9.9 million during the year ended December 31, 2021 from
$21.7 million during the year ended December 31, 2020 as a result of our new financing arrangement further described above in the liquidity
section. The current period does not fully capture the effect of the decrease in interest rates associated to the new syndicated facility
given that the senior notes were taken out on January 30, 2021.

During
the year ended December 31, 2021, the Company recorded a non operating loss of $4.3 million associated with a foreign currency transactions,
which excludes a non-cash $8.5 million foreign currency transaction loss from remeasurement of certain intercompany loans reclassified
to other comprehensive income. Comparatively, the Company recorded a net loss of $8.6 million during the year ended December 31, 2020
within the statement of operations as the Colombian peso depreciated 16.0% during the period.

During
the year ended December 31, 2021 and 2020, the Company recorded an income tax provision of $28.5 million and $13.0 million, respectively,
reflecting an effective income tax rate of 29.4% and 35.3%, respectively. The effective income tax rate of 29.4% as of December 31, 2021,
approximates the statutory rate. The effective income tax rate for the year ended December 31, 2020, of 35.3% reflects the impact of
unrealized foreign currency transaction losses related to the remeasurement of long-term liabilities of our Colombian subsidiaries which
were expected to be realized at a later year in which a lower income tax rate was expected to apply per tax regulation at the time.

As
a result of the foregoing, the Company recorded a net income for the year ended December 31, 2021 of $68.4 million compared to $23.8
million in the year ended December 31, 2020.

Cash
Flow From Operations, Investing and Financing Activities

During
the year ended December 31, 2021 and 2020, operating activities generated approximately $117.3 million and $71.7 million, respectively.
The main source of operating cash during the year ended December 31, 2021 was trade accounts payables, which generated $38.0 million
in contrast with a use of $20.8 during the same period of 2020. The increase in trade accounts payables as of December is related to
increasing purchases to support ongoing growth and to obtaining better payable terms as the Company has gained scale and improved terms.
Additionally, contract assets and liabilities which generated $28.6 million, resulting from a combination of a decrease in retainage
as several jobs in the US were finalized, a reduction of unbilled receivables tied to our advance on projects currently in execution,
and increase advances received from customers. Comparatively, contract assets and liabilities generated $22.8 million during the year
ended December 31, 2020. The largest use of cash in operating activities was trade accounts receivable, which used $38.5 million as a
result of our record sales during the year 2021 while days sales outstanding decreased to 80 days as December 31, 2021 compared with
85 days as of December 31, 2020 (which include transit times into the US and other places) as a larger portion of our sales now comes
from residential sales which have a shorter collection cycle.

We
used $50.8 million and $18.1 million in investing activities during the year ended December 31, 2021 and 2020, respectively. The main
use of cash in investing activities during the year ended December 31, 2021 was related to the automation of our architectural system
assembly processes and several other growth initiatives to increase the plant´s operational capacity. During the year 2021, we
paid $51.5 million to acquire property plant and equipment, which in combination with $1.8 million acquired under credit, amount to total
capital expenditures of $53.3 million. During 2020, we used $18.3 million for the acquisition or property and equipment. Including assets
acquired with debt or supplier credit, total capital expenditures during the period were $20.6 million. Based on current installed capacity,
it is expected that overall capital expenditures will take a step down in the short term.

Financing
activities used $43.8 million and $33.5 million during the year ended December 31, 2021 and 2020, respectively. Outflows during the year
2021 include the full redemption of the $210 million unsecured senior notes, which bore interest at a rate of 8.2% and were to mature
in 2022, following a step down in redemption price at the end of January 2021, along with $8.6 million for the corresponding call premium.
These payments were made with proceeds of the new Senior Secured Credit Facility for up to $300 million, of which we received proceeds
of $220 million during the first quarter of 2021. Additionally, we used $30 million of our available cash balance to voluntarily prepay
a portion of the senior secured credit facility during the third quarter of 2021.

41

Off-Balance
Sheet Arrangements

We
did not have any material off-balance sheet arrangements as of December 31, 2021 or 2020.

Critical
Accounting Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that
affect the assets, liabilities, revenues and expenses, and other related amounts during the periods covered by the financial statements.
Management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables
and assumptions affecting the future resolution of the uncertainties increases, these judgments become more subjective and complex. We
have identified the following accounting policies as the most important to the presentation and disclosure of our financial condition
and results of operations.

Revenue
Recognition

For
supply and installation contracts, the performance obligations are satisfied over time and control is deemed to be transferred when the
contract is accepted by our customers. Revenues from supply and installation contracts are recognized using the cost-to-cost method,
measured by the percentage of costs incurred to date to total estimated costs for each contract. Contract modifications routinely occur
to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that
are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration
for submitted contract modifications or claims when the Company believes it has an enforceable right to the modification or claim, the
amount can be reliably estimated and its realization is reasonably assured. Amounts representing modifications accounted for as part
of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis.

Trade
Accounts Receivable

Trade
accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts and sales returns. The Company’s
policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts
receivable. The Company periodically reviews its accounts receivable to determine whether an allowance for doubtful accounts is necessary
based on an analysis of past due accounts and other factors that may indicate that the collectability of an account may be in doubt.
Other factors that the Company considers include its existing contractual obligations, historical payment patterns of its customers and
individual customer circumstances, and a review of the local economic environment and its potential impact on the collectability of accounts
receivable. Account balances are deemed to be uncollectible and are charged off within 90 days of having recorded an allowance and all
means of collection have been exhausted and the potential for recovery is considered remote.

Inventories

Inventories
of raw materials, which consist primarily of purchased and processed glass, aluminum, parts and supplies held for use in the ordinary
course of business, are valued at the lower of cost or market. Cost is determined using a weighted-average method. Inventory consisting
of certain job specific materials not yet installed (work in process) are valued using the specific identification method. Cost for finished
product inventory are recorded and maintained at the lower of cost or market. Cost includes raw materials and direct and applicable indirect
manufacturing overheads. Also, inventories related to contracts in progress are included within work in process and finished goods, and
are stated at using the specific identification method and lower of cost or market, respectively, and are expected to turn over in less
than one year.

Reserves
for excess or slow-moving raw materials inventories are updated based on historical experience of a variety of factors including sales
volume and levels of inventories at the end of the period. The Company does not maintain allowances for the lower of cost or market for
inventories of finished products as its products are manufactured based on firm orders rather than built-to-stock.

42

Income
taxes

The
Company is subject to income taxes in some jurisdictions. Significant judgment is required when determining the worldwide provision for
income taxes. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under
this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities
are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in
deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets
and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. For each tax jurisdiction in which the
Company operates, deferred tax assets and liabilities are offset and are presented as a single noncurrent amount within the consolidated
balance sheets.

There
are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and
liabilities in the period in which such determination is made.

The
Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical
merits, that the position will be sustained upon examination. The Company accrues for other tax contingencies when it is probable that
a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated. Interest accrued related
to unrecognized tax and income tax related penalties are included in the provision for income taxes. The uncertain income taxes positions
are recorded in “Taxes payable” in the consolidated balance sheets.

Long
Lived Assets

The
Company periodically reviews the carrying values of its long-lived assets when events or changes in circumstances would indicate that
it is more likely than not that their carrying values may exceed their realizable values, and record impairment charges when considered
necessary.

When
circumstances indicate that an impairment may have occurred, the Company tests such assets for recoverability by comparing the estimated
undiscounted future cash flows expected to result from the use of such assets and their eventual disposition to their carrying amounts.
If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss, measured as the excess of the
carrying value of the asset over its estimated fair value, is recognized. Fair value is determined through various valuation techniques,
including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Property,
plant and equipment are recorded at cost. Significant improvements and renewals that extend the useful life of the asset are capitalized.
Interest incurred while acquired property is under construction and installation are capitalized. When property is retired or otherwise
disposed of, the cost and related accumulated depreciation are removed from the accounts and any related gains or losses are included
in income as a reduction to or increase in selling, general and administrative expenses. Depreciation is computed on a straight-line
basis, based on the following estimated useful lives:

Based
on our analysis as of December 31, 2021 we concluded that no impairment needs to be recorded to our goodwill using the market approach
as the market capitalization of our company, which has a single reporting unit, exceeds the book value of shareholders equity.

Based
on our analysis as of December 31, 2021 we concluded that no impairment needs to be recorded to our long-lived assets as their carrying
value are below their realizable values based on projected future cashflows estimated with assumptions deemed reasonable by management
based on information currently available. The Company continuously monitors for events and circumstances that could negatively impact
the key assumptions in determining fair value, including long-term revenue growth projections, profitability, discount rates, recent
market valuations from transactions by comparable companies, volatility in the Company’s market capitalization, and general industry,
market and macro-economic conditions.