XPEL Reports Record Revenue in Third Quarter 2020; Revenue Increases 29.5%

XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the third quarter and first nine months ended September 30, 2020.

Third Quarter 2020 Highlights:

• Revenues increased 29.5% to $46.1 million compared to third quarter 2019
• Net income grew 46.5% to $6.6 million, or $0.24 per basic and diluted share, compared to $4.5 million, or $0.16 per basic and diluted share, in the same quarter of 2019
• EBITDA grew 50.5% to $9.0 million, or 19.5% of revenues compared to $6.0 million in third quarter 20191

Nine Months Highlights

• Revenues increased 22.0% to $110.3 million compared to the prior year period
• Net income increased 30.0% to $12.2 million, or $0.44 per basic and diluted share, compared to $9.4 million, or $0.34 per basic and diluted share, in the same period of 2019
• EBITDA grew 30.5% to $17.2 million, or 15.6% of revenues, as compared to $13.2 million in the same prior year period1

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We saw solid top and bottom line performance in the third quarter with almost all of our regions experiencing record revenue. Third quarter auto sales were relatively strong in most of the regions in which we operate and there seems to be an increasing trend toward more vehicle ownership which creates opportunity for our business. Our third quarter results demonstrate that we are taking advantage of this opportunity and we are well positioned to continue to do so in the coming months.”

For the Quarter Ended September 30, 2020:

Revenues. Revenues increased approximately $10.5 million or 29.5% to $46.1 million as compared to $35.6 million in the prior year.

Gross Margin. Gross margin was 34.8% compared to 34.5% in the third quarter of 2019.

Expenses. Operating expenses increased slightly to $7.6 million, but decreased as a percentage of sales to 16.5%, compared to $6.6 million or 18.5% of sales in the prior year period.

Net income. Net income was $6.6 million, or $0.24 per basic and diluted share versus net income of $4.5 million, or $0.16 per basic and diluted share in the third quarter of 2019.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $9.0 million, or 19.5% of sales, as compared to $6.0 million in the prior year1.

For the Nine Months Ended September 30, 2020:

Revenues. Revenues increased approximately $19.9 million or 22.0% to $110.3 million as compared to $90.4 million in the same period of the prior year.

Gross Margin. Gross margin improved slightly to 34.5% compared 34.3% in the first nine months of 2019.

Expenses. Operating expenses increased to $22.0 million, and decreased slightly to 20.0% of sales, compared to $18.9 million or 20.9% of sales in the same prior year period.

Foreign Currency Exchange. Foreign Currency Exchange loss increased to $0.4 million in the nine month period compared to $0.2 million in the same prior period.

Net income. Net income was $12.2 million, or $0.44 per basic and diluted share versus net income of $9.4 million, or $0.34 per basic and diluted share in the first nine months of 2019.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $17.2 million, or 15.6% of sales, as compared to $13.2 million in the same prior year period1.

As of September 30, 2020, XPEL had cash and cash equivalents of $27.2 million compared to $11.5 million at December 31, 2019.

1 See reconciliation of non-GAAP financial measures below

Conference Call Information

The Company will host a conference call and webcast on Wednesday, November 11, 2020, at 11:00 a.m. Eastern Time to discuss the Company’s results for the third 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 [phone] approximately five minutes prior to the scheduled start time. International callers please dial [phone].

A replay of the teleconference will be available until December 11, 2020, and may be accessed by dialing [phone]. International callers may dial [phone]. 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 architectural 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 September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

Revenue

 

 

 

 

 

 

 

Product revenue

$

39,528,383

 

 

$

30,815,251

 

 

$

94,240,296

 

 

$

77,295,463

 

Service revenue

6,594,413

 

 

4,802,747

 

 

16,076,821

 

 

13,142,135

 

Total revenue

46,122,796

 

 

35,617,998

 

 

110,317,117

 

 

90,437,598

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

28,369,882

 

 

22,283,771

 

 

67,687,991

 

 

56,522,834

 

Cost of service

1,723,082

 

 

1,061,197

 

 

4,563,329

 

 

2,865,641

 

Total cost of sales

30,092,964

 

 

23,344,968

 

 

72,251,320

 

 

59,388,475

 

Gross Margin

16,029,832

 

 

12,273,030

 

 

38,065,797

 

 

31,049,123

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

2,326,900

 

 

1,805,038

 

 

6,989,678

 

 

5,468,980

 

General and administrative

5,289,277

 

 

4,798,833

 

 

15,038,140

 

 

13,466,690

 

Total operating expenses

7,616,177

 

 

6,603,871

 

 

22,027,818

 

 

18,935,670

 

 

 

 

 

 

 

 

 

Operating Income

8,413,655

 

 

5,669,159

 

 

16,037,979

 

 

12,113,453

 

 

 

 

 

 

 

 

 

Interest expense

68,368

 

 

23,851

 

 

173,480

 

 

81,631

 

Foreign currency exchange loss

709

 

 

136,951

 

 

420,427

 

 

151,859

 

 

 

 

 

 

 

 

 

Income before income taxes

8,344,578

 

 

5,508,357

 

 

15,444,072

 

 

11,879,963

 

Income tax expense

1,736,330

 

 

999,072

 

 

3,250,780

 

 

2,503,365

 

Net income

6,608,248

 

 

4,509,285

 

 

12,193,292

 

 

9,376,598

 

Income attributed to non-controlling interest

—

 

 

6,602

 

 

—

 

 

9,311

 

Net income attributable to stockholders of the Company

$

6,608,248

 

 

$

4,502,683

 

 

$

12,193,292

 

 

$

9,367,287

 

 

 

 

 

 

 

 

 

Earnings per share attributable to stockholders of the Company

 

 

 

 

 

 

 

Basic and diluted

$

0.24

 

 

$

0.16

 

 

$

0.44

 

 

$

0.34

 

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)

 

September 30, 2020

 

December 31, 2019

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

27,224,471

 

 

$

11,500,973

 

Accounts receivable, net

8,967,710

 

 

7,154,084

 

Inventory, net

18,961,093

 

 

15,141,153

 

Prepaid expenses and other current assets

2,803,733

 

 

2,391,340

 

Income tax receivable

—

 

 

93,150

 

Total current assets

57,957,007

 

 

36,280,700

 

Property and equipment, net

4,591,787

 

 

4,014,653

 

Right-of-Use lease assets

5,100,499

 

 

5,079,110

 

Intangible assets, net

4,510,161

 

 

3,820,460

 

Other assets

478,291

 

 

—

 

Goodwill

3,559,614

 

 

2,406,512

 

Total assets

$

76,197,359

 

 

$

51,601,435

 

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

$

2,554,529

 

 

$

462,226

 

Current portion lease liabilities

1,326,466

 

 

1,126,701

 

Accounts payable and accrued liabilities

16,692,018

 

 

10,197,353

 

Income tax payable

326,590

 

 

—

 

Total current liabilities

20,899,603

 

 

11,786,280

 

Deferred tax liability, net

851,329

 

 

604,715

 

Non-current portion of lease liabilities

3,826,003

 

 

4,009,949

 

Non-current portion of notes payable

4,193,436

 

 

307,281

 

Total liabilities

29,770,371

 

 

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

(801,266

)

 

(908,764

)

Retained earnings

36,788,170

 

 

24,594,878

46,426,988

 

 

35,061,890

 

Non-controlling interest

—

 

 

(168,680

)

Total stockholders’ equity

46,426,988

 

 

34,893,210

 

Total liabilities and stockholders’ equity

$

76,197,359

 

 

$

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 September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

Net Income

$

6,608,248

 

 

$

4,509,285

 

 

$

12,193,292

 

 

$

9,376,598

 

Interest

68,368

 

 

23,851

 

 

173,480

 

 

81,631

 

Taxes

1,736,330

 

 

999,072

 

 

3,250,780

 

 

2,503,365

 

Depreciation

325,643

 

 

234,297

 

 

889,820

 

 

655,385

 

Amortization

239,571

 

 

199,582

 

 

705,692

 

 

570,954

 

EBITDA

$

8,978,160

 

 

$

5,966,087

 

 

$

17,213,064

 

 

$

13,187,933

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005227/en/

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