XPEL XPEL Inc

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

Third Quarter 2022 Highlights:

• Revenues increased 31.0% to a record $89.8 million in the third quarter.
• Gross margin percentage improved to 39.8% in the third quarter, a new high for the Company.
• Net income grew 59.9% to $13.3 million, or $0.48 per share, compared to $8.3 million, or $0.30 per share, in the same quarter of 2021.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 66.0% to $18.9 million, or 21.1% of revenues compared to $11.4 million in third quarter 2021.1

First Nine Months Highlights:

• Revenues increased 29.8% to $245.5 million in the first nine months of 2022.
• Gross margin percentage improved to 39.3% in the first nine months of 2022.
• Net income grew 30.2% to $33.0 million, or $1.20 per share, compared to $25.4 million, or $0.92 per share, in the first nine months of 2021.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 40.6% to $48.0 million, or 19.5% of revenues compared to $34.1 million in the first nine months of 2021.1

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Our strong third quarter results reflect on-going momentum in the business even in the face of economic uncertainty. We saw solid performance across most of our regions and we look forward to continuing to build on this momentum as we close out the year.”

For the Quarter Ended September 30, 2022:

Revenues. Revenues increased approximately $21.2 million or 31.0% to $89.8 million as compared to $68.5 million in the third quarter of the prior year.

Gross Margin. Gross margin was 39.8% compared to 35.7% in the third quarter of 2021.

Expenses. Operating expenses increased to $18.5 million, or 20.6% of sales, compared to $14.1 million, or 20.6% of sales in the prior year period.

Net income. Net income was $13.3 million, or $0.48 per basic and diluted share, versus net income of $8.3 million, or $0.30 per basic and diluted share in the third quarter of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $18.9 million, or 21.1% of sales, as compared to $11.4 million, or 16.6% of sales in the prior year1.

For the Nine Months Ended September 30, 2022:

Revenues. Revenues increased approximately $56.4 million or 29.8% to $245.5 million as compared to $189.1 million in the first nine months of the prior year.

Gross Margin. Gross margin was 39.3% compared to 35.9% in the first nine months of 2021.

Expenses. Operating expenses increased to $53.4 million, or 21.7% of sales, compared to $36.4 million or 19.2% of sales in the prior year period.

Net income. Net income was $33.0 million, or $1.20 per basic and diluted share versus net income of $25.4 million, or $0.92 per basic and diluted share in the first nine months of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $48.0 million, or 19.5% of sales, as compared to $34.1 million, or 18.0% 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, November 9, 2022 at 11:00 a.m. Eastern Time to discuss the Company’s third 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 888-506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use access code: 868222

A replay of the teleconference will be available until December 9, 2022 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 46864.

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

September 30,

 

Nine Months Ended

September 30,

 

2022

 

2021

 

2022

 

2021

Revenue

 

 

 

 

 

 

 

Product revenue

$

72,616

 

$

56,996

.

$

197,753

 

$

160,595

Service revenue

 

17,142

 

 

11,533

.

 

47,759

 

 

28,536

Total revenue

 

89,758

 

 

68,529

.

 

245,512

 

 

189,131

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

 

47,225

 

 

39,701

.

 

129,646

 

 

111,839

Cost of service

 

6,767

 

 

4,374

.

 

19,400

 

 

9,303

Total cost of sales

 

53,992

 

 

44,075

.

 

149,046

 

 

121,142

Gross Margin

 

35,766

 

 

24,454

.

 

96,466

 

 

67,989

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

 

6,297

 

 

4,904

.

 

18,515

 

 

12,978

General and administrative

 

12,162

 

 

9,183

.

 

34,859

 

 

23,423

Total operating expenses

 

18,459

 

 

14,087

.

 

53,374

 

 

36,401

 

 

 

 

 

 

 

 

Operating Income

 

17,307

 

 

10,367

.

 

43,092

 

 

31,588

 

 

 

 

 

 

 

 

Interest expense

 

391

 

 

46

.

 

933

 

 

143

Foreign currency exchange loss

 

372

 

 

149

.

 

833

 

 

122

 

 

 

 

 

 

 

 

Income before income taxes

 

16,544

 

 

10,172

.

 

41,326

 

 

31,323

Income tax expense

 

3,226

 

 

1,841

.

 

8,302

 

 

5,959

Net income

$

13,318

 

$

8,331

.

$

33,024

 

$

25,364

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

$

0.48

 

$

0.30

.

$

1.20

 

$

0.92

Diluted

$

0.48

 

$

0.30

.

$

1.20

 

$

0.92

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

Basic

 

27,616

 

 

27,613

.

 

27,614

 

 

27,613

Diluted

 

27,620

 

 

27,613

.

 

27,615

 

 

27,613

XPEL Inc.

Condensed Consolidated Balance Sheets

(In thousands except per share data)

 

 

(Unaudited)

 

(Audited)

 

September 30, 2022

 

December 31, 2021

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

10,245

 

 

$

9,644

 

Accounts receivable, net

 

17,944

 

 

 

13,159

 

Inventory, net

 

69,388

 

 

 

51,936

 

Prepaid expenses and other current assets

 

7,065

 

 

 

3,672

 

Income tax receivable

 

—

 

 

 

617

 

Total current assets

 

104,642

 

 

 

79,028

 

Property and equipment, net

 

12,658

 

 

 

9,898

 

Right-of-use lease assets

 

15,194

 

 

 

12,910

 

Intangible assets, net

 

29,426

 

 

 

32,733

 

Other non-current assets

 

921

 

 

 

791

 

Goodwill

 

25,417

 

 

 

25,655

 

Total assets

$

188,258

 

 

$

161,015

 

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

 

140

 

 

 

375

 

Current portion lease liabilities

 

3,155

 

 

 

2,978

 

Accounts payable and accrued liabilities

 

28,048

 

 

 

32,915

 

Income tax payable

 

472

 

 

 

—

 

Total current liabilities

 

31,815

 

 

 

36,268

 

Deferred tax liability, net

 

2,502

 

 

 

2,748

 

Other long-term liabilities

 

899

 

 

 

2,631

 

Borrowings on line of credit

 

26,000

 

 

 

25,000

 

Non-current portion of lease liabilities

 

12,089

 

 

 

9,830

 

Non-current portion of notes payable

 

—

 

 

 

76

 

Total liabilities

 

73,305

 

 

 

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; 27,616,064 issued and outstanding

 

28

 

 

 

28

 

Additional paid-in-capital

 

10,869

 

 

 

10,581

 

Accumulated other comprehensive loss

 

(3,411

)

 

 

(590

)

Retained earnings

 

107,467

 

 

 

74,443

 

Total stockholders’ equity

 

114,953

 

 

 

84,462

 

Total liabilities and stockholders’ equity

$

188,258

 

 

$

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 September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

Net Income

13,318

 

8,331

 

33,024

 

25,364

Interest

391

 

46

 

933

 

143

Taxes

3,226

 

1,841

 

8,302

 

5,959

Depreciation

890

 

456

 

2,486

 

1,258

Amortization

1,117

 

735

 

3,248

 

1,420

EBITDA

18,942

 

11,409

 

47,993

 

34,144

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005226/en/

For more information, contact:

Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: xpel@imsinvestorrelations.com