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Related Parties
 6 Months Ended
Jun. 30, 2016
Related Party Transactions [Abstract]  
Related Parties

Note 13. Related Parties

 

The Company’s major related party entities are: ES Windows LLC (“ESW LLC”), a Florida limited liability company partially owned by the Company’s Chief Executive Officer and Chief Operating Officer, Ventanas Solar S.A. (“VS”), an importer and installer based in Panama owned by related party family members, and Union Temporal ESW (“UT ESW”), a temporary contractual joint venture under Colombian law with Ventanar S. A. managed by related parties that expires at the end of its applicable contracts.

 

The following is a summary of assets, liabilities, and income and expense transactions with all related parties, shareholders, directors and managers:

 

    Three months ended June 30,     Six months ended June 30,  
    2016     2015     2016     2015  
Revenues                                
Sales to ESW LLC   $ 12,645     $ 11,027     $ 24,314     $ 22,898  
Sales to VS     1,257       1,553       3,946       2,599  
Sales to other related parties     203       (357 )     485       669  
      14,105       12,223       28,745       26,166  
                                 
Expenses                                
Fees paid to directors and officers   $ 477     $ 388     $ 836     $ 777  
Payments to other related parties     720       396       1,433       865  

 

    June 30, 2016     December 31, 2015  
Current Assets                
Due from ESW LLC   $ 24,778     $ 17,887  
Due from VS     8,913       6,895  
Due from other related parties     3,262       3,291  
    $ 36,953     $ 28,073  
                 
Long term payment agreement from VS   $ 1,688     $ 2,536  
                 
Liabilities                
Due to related parties   $ 1,991     $ 1,283  

 

Due from other related parties as of June 30, 2016 includes $568 due from Daesmo, and $503 from Consorcio Ventanar ESW - Boca Grande. Also included within due from other related parties is a loan to Finsocial, a company that makes loans to public school system teachers with balances of $276 and $256 as of June 30, 2016 and December 31, 2015, respectively. Related party receivables continue to be paid as per the contractual agreements currently in place.

 

Payments to other related parties during the six-month period ended June 30, 2016 include charitable contributions to the Company’s foundation for $696 and sales commissions for $416.

 

During 2015 and 2014, the Company and VS executed a short-term payment agreement and a three-year payment agreement that were mainly created to fund working capital to VS due the timing difference between the collections from VS’s customers. The interest rate of these payment agreements are Libor + 4.7% paid semiannually and Libor +6.5% paid monthly for the short-term agreement and the three-year agreement, respectively. The Company and VS subsequently normalized the short term agreement to pay the totality of the obligation by December of 2016.

 

In December 2014, ESW LLC, a related party, guaranteed a mortgage loan for $3,920 for the acquisition of real properties in Miami-Dade County, Florida by Tecnoglass RE LLC, a wholly owned subsidiary of the Company.

 

Analysis of Variable Interest Entities

 

The Company conducted an evaluation as a reporting entity of its involvement with certain significant related party business entities as of June 30, 2016 in order to determine whether these entities were variable interest entities requiring consolidation or disclosures in the financial statements of the Company. The Company evaluated the purpose for which these entities were created and the nature of the risks in the entities as required by the guidance under ASC 810-10-25 - Consolidation and related Subsections.

 

From all the entities analyzed, only two entities, ESW LLC and VS, resulted in having variable interests. However, as of the date of the initial evaluation and for the six months ended June 30, 2016, the Company concluded that both entities are not deemed VIEs and as such these entities should not be consolidated within the Company’s condensed consolidated financial statements.