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

Published On 11/11/2019

San Antonio, TX – November 11, 2019 – 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 year[1].

 

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 year[2].

 

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.

 

 

 

 

For more information, contact: 

 

 

Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

Phone: (203) 972-9200

Email: jnesbett@institutionalms.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 


[1] See reconciliation of non-GAAP financial measures below.

[2] See reconciliation of non-GAAP financial measures below.