XPEL Reports Third Quarter Revenue Growth of 21.9%; Record Third Quarter Revenue of $35.6 million

SAN ANTONIO--()--XPEL, Inc. (Nasdaq: XPEL), a global provider of protective films and coatings, announced results for the third quarter and nine months ended September 30, 2019.

Third Quarter Highlights:

  • Revenues increased 21.9% to $35.6 million compared to third quarter 2018, the highest revenue quarter in the history of XPEL; Sequential revenue growth of 18.4% compared to second quarter of 2019
  • Gross margin improved to 34.5% compared to 30.3% in third quarter 2018
  • Earnings per share of $0.16 compared to $0.08 per share in third quarter 2018

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We’re pleased to have delivered continued strong growth in the third quarter, with record revenues, improved gross margins and enhanced profitability. We saw continued revenue growth across all of our geographic regions including a return to growth in China, where revenues increased 16.5% in the third quarter. We’re excited by the interest we’re receiving for our portfolio of products and installation services and as we move through the fourth quarter, we believe we are well positioned to drive continued growth and profitability as we close out 2019.”

For the Quarter Ended September 30, 2019:

Revenues. Revenues increased approximately $6.4 million or 22% to $35.6 million as compared to $29.2 million in the prior year.

Gross Margin. Gross margin was 34.5% versus 30.3% in the third quarter of 2018. The increase was related to an improved sales mix, lower product costs and improvements in other cost of goods sold related operating leverage.

Expenses. Selling, general and administrative expenses increased to $6.6 million but declined as a percentage of sales to 18.5% as compared to $5.9 million or 20.1% of sales in the prior year period. This increase was due mainly to increases in personnel, occupancy, information technology and research and development costs to support the ongoing growth of the business.

Net income. Net income increased to $4.5 million, or $0.16 per basic and diluted share versus net income of $2.2 million, or $0.08 per basic and diluted share in the third quarter of 2018.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $6.0 million, or 16.8% of sales, as compared to $3.3 million in the prior year1.

For the Nine Months Ended September 30, 2019:

Revenues. Revenues increased approximately $7.3 million or 8.8% to $90.4 million as compared to $83.1 million in the first nine months of the prior year.

Gross Margin. Gross margin was 34.3% versus 30.1% in the first nine months of 2018.

Expenses. Selling, general and administrative expenses increased to $18.9 million or 20.9% of sales as compared to $15.8 million or 19.0% of sales in the prior year period.

Net income. Net income increased to $9.4 million, or $0.34 per basic and diluted share versus net income of $6.8 million, or $0.25 per basic and diluted share for the first nine months of 2018.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $13.2 million, or 14.6% of sales, as compared to $10.1 million in the prior year2.

Conference Call Information

The Company will host a conference call and webcast today, Monday, November 11, 2019 at 11:00 a.m. Eastern Time to discuss the Company’s results for the third quarter of 2019.

To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/investor.

To participate in the call by phone, dial (877) 407-8033 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8033.

A replay of the teleconference will be available until December 11, 2019 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 55922.

About XPEL, Inc.

XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and commercial/residential window films, and ceramic coatings. With a global footprint, a network of trained installers and proprietary DAP software, XPEL is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support and world-class training. XPEL, Inc. is publicly traded on Nasdaq under the symbol “XPEL”.

Safe harbor statement

This release includes forward-looking statements regarding XPEL, Inc. and its business, which may include, but is not limited to, anticipated use of proceeds from capital transactions, expansion into new markets, and execution of the company's growth strategy. Often, but not always, forward-looking statements can be identified by the use of words such as "plans," "is expected," "expects," "scheduled," "intends," "contemplates," "anticipates," "believes," "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of XPEL. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, performance and acceptance of the company's products, economic factors, competition, the equity markets generally and many other factors beyond the control of XPEL. Although XPEL has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and XPEL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

1e reconciliation of non-GAAP financial measures below.
2e reconciliation of non-GAAP financial measures below.

 

XPEL Inc.

Condensed Consolidated Statements of Income

(Unaudited)

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

 

2019

 

 

2018

 

 

2019

 

 

2018

Revenue

Product revenue

$

30,815,251

$

25,415,749

$

77,295,463

$

72,498,871

Service revenue

 

4,802,747

 

3,799,576

 

13,142,135

 

10,628,864

Total revenue

 

35,617,998

 

29,215,325

 

90,437,598

 

83,127,735

 

Cost of Sales

Cost of product sales

 

22,283,771

 

19,622,006

 

56,522,834

 

56,032,162

Cost of service

 

1,061,197

 

742,779

 

2,865,641

 

2,075,049

Total cost of sales

 

23,344,968

 

20,364,785

 

59,388,475

 

58,107,211

Gross Margin

 

12,273,030

 

8,850,540

 

31,049,123

 

25,020,524

 

Operating Expenses

Sales and marketing

 

1,805,038

 

1,898,586

 

5,468,980

 

4,935,194

General and administrative

 

4,798,833

 

3,962,674

 

13,466,690

 

10,857,814

Total operating expenses

 

6,603,871

 

5,861,260

 

18,935,670

 

15,793,008

 

Operating Income

 

5,669,159

 

2,989,280

 

12,113,453

 

9,227,516

 

Interest expense

 

23,851

 

31,301

 

81,631

 

135,385

Foreign currency exchange loss

 

136,951

 

85,551

 

151,859

 

108,675

 

Income before income taxes

 

5,508,357

 

2,872,428

 

11,879,963

 

8,983,456

Income tax expense

 

999,072

 

690,523

 

2,503,365

 

2,159,596

Net income

 

4,509,285

 

2,181,905

 

9,376,598

 

6,823,860

Income attributed to non-controlling interest

 

6,602

 

15,713

 

9,311

 

5,200

Net income attributable to stockholders of
the Company

$

4,502,683

$

2,166,192

$

9,367,287

$

6,818,660

 

Earnings per share attributable
stockholders of the Company

Basic and diluted

$

0.16

$

0.08

$

0.34

$

0.25

Weighted Average Number of Common Shares

Basic and diluted

 

27,612,597

 

 

27,612,597

 

 

27,612,597

 

 

27,229,720

XPEL Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Audited)

September 30,
2019

December 31,
2018

Assets

Current

Cash and cash equivalents

$

7,295,906

 

$

3,971,226

 

Accounts receivable, net

 

7,285,327

 

 

5,554,313

 

Inventory, net

 

16,428,406

 

 

10,799,611

 

Prepaid expenses and other current assets

 

2,071,833

 

 

706,718

 

Total current assets

 

33,081,472

 

 

21,031,868

 

Property and equipment, net

 

3,666,166

 

 

3,384,206

 

Right-of-Use lease assets

 

4,515,591

 

Intangible assets, net

 

3,778,794

 

 

3,804,026

 

Other assets

 

29,385

 

Goodwill

 

2,334,505

 

 

2,322,788

 

Total assets

$

47,405,913

 

$

30,542,888

 

Liabilities

Current

Current portion of notes payable

$

586,154

 

$

853,150

 

Current portion lease liabilities

 

1,062,176

 

Accounts payable and accrued liabilities

 

10,585,352

 

 

6,292,093

 

Income tax payable

 

540,846

 

 

1,337,599

 

Total current liabilities

 

12,774,528

 

 

8,482,842

 

Deferred tax liability, net

 

629,397

 

 

478,864

 

Non-current portion of lease liabilities

 

3,544,207

 

Non-current portion of notes payable

 

399,209

 

 

968,237

 

Total liabilities

 

17,347,341

 

 

9,929,943

 

Stockholders’ equity

Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding

Common stock, $0.001 par value; 100,000,000 shares authorized;
27,612,597 issued and outstanding

 

27,613

 

 

27,613

 

Additional paid-in-capital

 

11,348,163

 

 

11,348,163

 

Accumulated other comprehensive loss

 

(1,113,240

)

 

(1,190,055

)

Retained earnings

 

19,984,540

 

 

10,617,253

 

 

30,247,076

 

 

20,802,974

 

Non-controlling interest

 

(188,504

)

 

(190,029

)

Total stockholders’ equity

 

30,058,572

 

 

20,612,945

 

Total liabilities and stockholders’ equity

$

47,405,913

 

$

30,542,888

 

Reconciliation of Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of our financial performance under GAAP and should not be considered as alternatives to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP.

EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations and other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

EBITDA Reconciliation

 

(Unaudited)

(Unaudited)

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

2019

2018

2019

2018

Net Income

$4,509,285

$2,181,905

$9,376,598

$6,823,860

Interest

23,851

31,301

81,631

135,385

Taxes

999,072

690,523

2,503,365

2,159,596

Depreciation

234,297

200,512

655,385

539,379

Amortization

199,582

160,506

570,954

472,675

EBITDA

$5,966,087

$3,264,747

$13,187,933

$10,130,895

 

Contacts

Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: jnesbett@institutionalms.com

Contacts

Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: jnesbett@institutionalms.com