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XPEL Reports Record Revenue of $83.9 Million in Second Quarter 2022; Revenue Growth 22.0%; Gross Margin 39.3%; EBITDA Margin 20.5%

XPEL, Inc. (Nasdaq: XPEL) a global provider of protective films and coatings, today announced results for the second quarter and six months ended June 30, 2022.

Second Quarter 2022 Highlights:

  • Revenues increased 22.0% to a record $83.9 million in the second quarter.
  • Gross margin percentage improved to 39.3% in the first quarter, a new high for the Company.
  • Net income grew 16.8% to $11.9 million, or $0.43 per share, compared to $10.2 million, or $0.37 per share, in the same quarter of 2021.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 26.6% to $17.2 million, or 20.5% of revenues compared to $13.6 million in second quarter 2021.1

First Six Months Highlights:

  • Revenues increased 29.1% to $155.8 million in the first six months of 2022.
  • Gross margin percentage improved to 39.0% in the first half of 2022.
  • Net income grew 15.7% to $19.7 million, or $0.71 per share, compared to $17.0 million, or $0.62 per share, in the first six months of 2021.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 27.8% to $29.1 million, or 18.7% of revenues compared to $22.7 million in the first half of 2021.1

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We’re pleased to have delivered strong second quarter results, especially in the face of continuing headwinds related to on-going tight new car inventory, COVID-related impacts in China and the strengthening U.S. Dollar. We continued to see robust demand for our products and services across most of our regions. We remain confident in our ability to drive continued strong performance in the second half of 2022.”

For the Quarter Ended June 30, 2022:

Revenues. Revenues increased approximately $15.2 million or 22.0% to $83.9 million as compared to $68.7 million in the second quarter of the prior year.

Gross Margin. Gross margin was 39.3% compared to 36.7% in the second quarter of 2021.

Expenses. Operating expenses increased to $17.2 million, or 20.5% of sales, compared to $12.6 million, or 18.3% of sales in the prior year period.

Net income. Net income was $11.9 million, or $0.43 per basic and diluted share, versus net income of $10.2 million, or $0.37 per basic and diluted share in the second quarter of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $17.2 million, or 20.5% of sales, as compared to $13.6 million, or 19.7% of sales in the prior year1.

For the Six Months Ended June 30, 2022:

Revenues. Revenues increased approximately $35.2 million or 29.1% to $155.8 million as compared to $120.6 million in the first six months of the prior year.

Gross Margin. Gross margin was 39.0% compared to 36.1% in the first half of 2021.

Expenses. Operating expenses increased to $34.9 million, or 22.4% of sales, compared to $22.3 million or 18.5% of sales in the prior year period.

Net income. Net income was $19.7 million, or $0.71 per basic and diluted share versus net income of $17.0 million, or $0.62 per basic and diluted share in the first six months of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $29.1 million, or 18.7% of sales, as compared to $22.7 million, or 18.9% of sales in the prior year1.

1 See reconciliation of non-GAAP financial measures below

Conference Call Information

The Company will host a conference call and webcast today, August 9, 2022 at 11:00 a.m. Eastern Time to discuss the Company’s second quarter 2022 results.

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) 545-0320 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0002. Callers should use access code: 929753.

A replay of the teleconference will be available until September 8, 2022 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 46173.

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)

(In thousands except per share data)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

Product revenue

$

67,040

 

$

58,667

 

$

125,137

 

$

103,599

 

Service revenue

 

16,850

 

 

10,069

 

 

30,617

 

 

17,003

 

Total revenue

 

83,890

 

 

68,736

 

 

155,754

 

 

120,602

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

 

44,227

 

 

40,593

 

 

82,421

 

 

72,139

 

Cost of service

 

6,680

 

 

2,896

 

 

12,633

 

 

4,929

 

Total cost of sales

 

50,907

 

 

43,489

 

 

95,054

 

 

77,068

 

Gross Margin

 

32,983

 

 

25,247

 

 

60,700

 

 

43,534

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

 

5,906

 

 

4,687

 

 

12,218

 

 

8,075

 

General and administrative

 

11,328

 

 

7,888

 

 

22,696

 

 

14,240

 

Total operating expenses

 

17,234

 

 

12,575

 

 

34,914

 

 

22,315

 

 

 

 

 

 

 

 

 

Operating Income

 

15,749

 

 

12,672

 

 

25,786

 

 

21,219

 

 

 

 

 

 

 

 

 

Interest expense

 

322

 

 

44

 

 

542

 

 

97

 

Foreign currency exchange (gain) loss

 

457

 

 

(63

)

.

 

462

 

 

(28

)

 

 

 

 

 

 

 

 

Income before income taxes

 

14,970

 

 

12,691

 

 

24,782

 

 

21,150

 

Income tax expense

 

3,068

 

 

2,505

 

 

5,076

 

 

4,117

 

Net income

$

11,902

 

$

10,186

 

$

19,706

 

$

17,033

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

$

0.43

 

$

0.37

 

$

0.71

 

$

0.62

 

Diluted

$

0.43

 

$

0.37

 

$

0.71

 

$

0.62

 

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

Basic

 

27,613

 

 

27,613

 

 

27,613

 

 

27,613

 

Diluted

 

27,613

 

 

27,613

 

 

27,613

 

 

27,613

 

XPEL Inc.

Condensed Consolidated Balance Sheets

(In thousands except per share data)

 

 

(Unaudited)

 

(Audited)

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

9,321

 

 

$

9,644

 

Accounts receivable, net

 

19,119

 

 

 

13,159

 

Inventory, net

 

74,142

 

 

 

51,936

 

Prepaid expenses and other current assets

 

4,434

 

 

 

3,672

 

Income tax receivable

 

550

 

 

 

617

 

Total current assets

 

107,566

 

 

 

79,028

 

Property and equipment, net

 

12,169

 

 

 

9,898

 

Right-of-use lease assets

 

13,580

 

 

 

12,910

 

Intangible assets, net

 

29,777

 

 

 

32,733

 

Other non-current assets

 

893

 

 

 

791

 

Goodwill

 

25,071

 

 

 

25,655

 

Total assets

$

189,056

 

 

$

161,015

 

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

 

159

 

 

 

375

 

Current portion lease liabilities

 

3,673

 

 

 

2,978

 

Accounts payable and accrued liabilities

 

36,587

 

 

 

32,915

 

Total current liabilities

 

40,419

 

 

 

36,268

 

Deferred tax liability, net

 

2,412

 

 

 

2,748

 

Other long-term liabilities

 

1,140

 

 

 

2,631

 

Borrowings on line of credit

 

32,000

 

 

 

25,000

 

Non-current portion of lease liabilities

 

10,008

 

 

 

9,830

 

Non-current portion of notes payable

 

 

 

 

76

 

Total liabilities

 

85,979

 

 

 

76,553

 

Commitments and Contingencies (Note 11)

 

 

 

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

 

28

 

 

 

28

 

Additional paid-in-capital

 

10,760

 

 

 

10,581

 

Accumulated other comprehensive loss

 

(1,860

)

 

 

(590

)

Retained earnings

 

94,149

 

 

 

74,443

 

Total stockholders’ equity

 

103,077

 

 

 

84,462

 

Total liabilities and stockholders’ equity

$

189,056

 

 

$

161,015

 

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

(In thousands)

 

 

(Unaudited)

 

(Unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net Income

$

11,902

 

$

10,186

 

$

19,706

 

$

17,033

Interest

 

322

 

 

44

 

 

542

 

 

97

Taxes

 

3,068

 

 

2,505

 

 

5,076

 

 

4,117

Depreciation

 

839

 

 

420

 

 

1,596

 

 

803

Amortization

 

1,054

 

 

423

 

 

2,131

 

 

685

EBITDA

$

17,185

 

$

13,578

 

$

29,051

 

$

22,735

 

Contacts

For more information: 

Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

Phone: (203) 972-9200

Email: xpel@imsinvestorrelations.com

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