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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191111005089/en/
Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor
Relations Phone: (203) 972-9200 Email: jnesbett@institutionalms.com
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