XPEL Reports Revenue Growth of 19.0%, Net Income growth of 32.1% in Second Quarter 2020

SAN ANTONIO, Texas--()--XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the second quarter and first six months ended June 30, 2020.

Second Quarter 2020 Highlights:

  • Revenues increased 19.0% to $35.8 million compared to second quarter 2019
  • Net income grew 32.1% to $4.0 million, or $0.14 per basic and diluted share, compared to $3.0 million, or $0.11 per basic and diluted share, in the same quarter of 2019
  • EBITDA grew 29.2% to $5.7 million, or 15.8% of revenues compared to $4.4 million in second quarter 20191

First Six Months Highlights

  • Revenues increased 17.1% to $64.2 million compared to the prior year period
  • Net income increased 14.7% to $5.6 million, or $0.20 per basic and diluted share, compared to $4.9 million, or $0.18 per basic and diluted share, in the same period of 2019
  • EBITDA grew 14.0% to $8.2 million, or 12.8% of revenues, as compared to $7.2 million in the same prior year period1

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We're very pleased to have achieved strong second quarter results even as the world continued to contend with the impact of the COVID-19 pandemic. As we moved through the quarter, following early lockdown-related declines, we saw incredible top line resilience, led by the United States and China, which culminated in an all-time record revenue month in June. Early in the quarter, our team took swift action to manage through the crisis. These actions, along with this top line recovery, drove substantial net income growth and record operating cash flow while avoiding any layoffs or furloughs. While the economy continues to face uncertainty related to future COVID-19 impacts, we are cautiously optimistic that our second quarter momentum will continue as we move through the rest of the year.”

For the Quarter Ended June 30, 2020:

Revenues. Revenues increased approximately $5.7 million or 19% to $35.8 million as compared to $30.1 million in the prior year.

Gross Margin. Gross margin was 32.8% compared to 35.3% in the second quarter of 2019.

Expenses. Operating expenses decreased slightly to $6.6 million, or 18.4% of sales, compared to $6.7 million or 22.1% of sales in the prior year period.

Net income. Net income was $4.0 million, or $0.14 per basic and diluted share versus net income of $3.0 million, or $0.11 per basic and diluted share in the second quarter of 2019.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $5.7 million, or 15.8% of sales, as compared to $4.4 million in the prior year1.

For the Six Months Ended June 30, 2020:

Revenues. Revenues increased approximately $9.4 million or 17.1% to $64.2 million as compared to $54.8 million in the same period of the prior year.

Gross Margin. Gross margin was largely consistent at 34.3% compared to the first six months of 2019.

Expenses. Operating expenses increased to $14.4 million, and remained consistent at 22.5% of sales, compared to $12.3 million in the same prior year period.

Foreign Currency Exchange. Foreign Currency Exchange loss increased to $0.4 million in the six month period compared to $0.02 million in the same prior period.

Net income. Net income was $5.6 million, or $0.20 per basic and diluted share versus net income of $4.9 million, or $0.18 per basic and diluted share in the first half of 2019.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $8.2 million, or 12.8% of sales, as compared to $7.2 million in the same prior year period1.

1 See reconciliation of non-GAAP financial measures below

As of June 30, 2020, XPEL had cash and cash equivalents of $25.8 million compared to $11.5 million at December 31, 2019.

Conference Call Information

The Company will host a conference call and webcast today, Wednesday, August 12, 2020 at 11:00 a.m. Eastern Time to discuss the Company’s results for the second quarter of 2020.

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 September 11, 2020 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 35824.

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.

XPEL Inc.

Condensed Consolidated Statements of Income (Unaudited)

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2020

 

2019

 

2020

 

2019

Revenue

 

 

 

 

 

 

 

Product revenue

$

30,961,996

 

 

$

25,425,489

 

 

$

54,711,913

 

 

$

46,480,212

 

Service revenue

4,843,862

 

 

4,668,665

 

 

9,482,408

 

 

8,339,388

 

Total revenue

35,805,858

 

 

30,094,154

 

 

64,194,321

 

 

54,819,600

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

22,556,696

 

 

18,551,030

 

 

39,318,109

 

 

34,239,063

 

Cost of service

1,510,085

 

 

917,111

 

 

2,840,247

 

 

1,804,444

 

Total cost of sales

24,066,781

 

 

19,468,141

 

 

42,158,356

 

 

36,043,507

 

Gross Margin

11,739,077

 

 

10,626,013

 

 

22,035,965

 

 

18,776,093

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

1,919,529

 

 

2,064,836

 

 

4,662,778

 

 

3,663,942

 

General and administrative

4,679,092

 

 

4,589,906

 

 

9,748,863

 

 

8,667,857

 

Total operating expenses

6,598,621

 

 

6,654,742

 

 

14,411,641

 

 

12,331,799

 

 

 

 

 

 

 

 

 

Operating Income

5,140,456

 

 

3,971,271

 

 

7,624,324

 

 

6,444,294

 

 

 

 

 

 

 

 

 

Interest expense

74,554

 

 

29,074

 

 

105,112

 

 

57,780

 

Foreign currency exchange loss (gain)

4,141

 

 

(3,518)

 

 

419,718

 

 

14,908

 

 

 

 

 

 

 

 

 

Income before income taxes

5,061,761

 

 

3,945,715

 

 

7,099,494

 

 

6,371,606

 

Income tax expense

1,088,071

 

 

938,405

 

 

1,514,450

 

 

1,504,293

 

Net income

3,973,690

 

 

3,007,310

 

 

5,585,044

 

 

4,867,313

 

Income attributed to non-controlling interest

 

 

1,293

 

 

 

 

2,709

 

Net income attributable to stockholders of the Company

$

3,973,690

 

 

$

3,006,017

 

 

$

5,585,044

 

 

$

4,864,604

 

 

 

 

 

 

 

 

 

Earnings per share attributable stockholders of the Company

 

 

 

 

 

 

 

Basic and diluted

$

0.14

 

 

$

0.11

 

 

$

0.20

 

 

$

0.18

 

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

Basic and diluted

27,612,597

 

 

27,612,597

 

 

27,612,597

 

 

27,612,597

 

XPEL Inc.

Condensed Consolidated Balance Sheets

 

(Unaudited)

 

(Audited)

 

June 30, 2020

 

December 31, 2019

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

25,795,909

 

 

$

11,500,973

 

Accounts receivable, net

7,215,230

 

 

7,154,084

 

Inventory, net

14,706,582

 

 

15,141,153

 

Prepaid expenses and other current assets

2,103,656

 

 

2,391,340

 

Income tax receivable

 

 

93,150

 

Total current assets

49,821,377

 

 

36,280,700

 

Property and equipment, net

4,549,533

 

 

4,014,653

 

Right-of-Use lease assets

5,260,732

 

 

5,079,110

 

Intangible assets, net

4,586,343

 

 

3,820,460

 

Other assets

457,020

 

 

 

Goodwill

3,497,883

 

 

2,406,512

 

Total assets

$

68,172,888

 

 

$

51,601,435

 

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

$

2,543,301

 

 

$

462,226

 

Current portion lease liabilities

1,321,116

 

 

1,126,701

 

Accounts payable and accrued liabilities

13,787,059

 

 

10,197,353

 

Income tax payable

1,456,136

 

 

 

Total current liabilities

19,107,612

 

 

11,786,280

 

Deferred tax liability, net

844,928

 

 

604,715

 

Non-current portion of lease liabilities

4,001,669

 

 

4,009,949

 

Non-current portion of notes payable

4,819,237

 

 

307,281

 

Total liabilities

28,773,446

 

 

16,708,225

 

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

10,412,471

 

 

11,348,163

 

Accumulated other comprehensive loss

(1,220,564)

 

 

(908,764)

 

Retained earnings

30,179,922

 

 

24,594,878

 

39,399,442

 

 

35,061,890

 

Non-controlling interest

 

 

(168,680)

 

Total stockholders’ equity

39,399,442

 

 

34,893,210

 

Total liabilities and stockholders’ equity

$

68,172,888

 

 

$

51,601,435

 

 

 

 

 

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)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Net Income

$

3,973,690

 

 

$

3,007,310

 

 

$

5,585,044

 

 

$

4,867,313

 

Interest

74,554

 

 

29,074

 

 

105,112

 

 

57,780

 

Taxes

1,088,071

 

 

938,405

 

 

1,514,450

 

 

1,504,293

 

Depreciation

293,860

 

 

220,270

 

 

564,177

 

 

421,088

 

Amortization

232,225

 

 

186,824

 

 

466,121

 

 

371,372

 

EBITDA

$

5,662,400

 

 

$

4,381,883

 

 

$

8,234,904

 

 

$

7,221,846

 

 

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