XPEL, Inc. (Nasdaq: XPEL) a global provider of protective films
and coatings, today announced results for the quarter ended
September 30, 2023.
Third Quarter 2023 Highlights:
- Revenues increased 14.4% to $102.7 million in the third
quarter.
- Gross margin percentage improved to 40.4% in the third
quarter.
- Net income grew 2.5% to $13.7 million, or $0.49 per share,
compared to $13.3 million, or $0.48 per share, in the same quarter
of 2022.
- EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) grew 4.1% to $19.7 million, or 19.2% of revenues,
compared to $18.9 million in third quarter 2022.1
First Nine Months Highlights:
- Revenues increased 18.4% to $290.8 million in the first nine
months of 2023.
- Gross margin percentage improved to 41.8% in the first nine
months of 2023.
- Net income grew 23.6% to $40.8 million, or $1.48 per share,
compared to $33.0 million, or $1.20 per share, in the first nine
months of 2022.
- EBITDA grew 23.4% to $59.2 million, or 20.4% of revenues
compared to $48.0 million in the first nine months of 2022.1
For comparative performance purposes, during the third quarter,
the Company incurred approximately $1.0 million in inventory
write-offs which negatively impacted gross margin. The Company’s
selling, general and administrative expenses were negatively
impacted by approximately $0.3 million in executive relocation
costs, $0.3 million in acquisition-related legal costs and $0.5
million in R & D related costs. The Company also incurred
approximately $0.3 million in negative foreign exchange impact.
Normalizing for these items, Adjusted EBITDA would have grown
approximately 16.7% with Adjusted EBITDA margin of approximately
21.5% and Adjusted EPS would have been approximately $0.56 per
share.1
Ryan Pape, President and Chief Executive Officer of XPEL,
commented, “It was a busy and solid quarter for the Company. We
continue to see strong demand for our products and services and our
unique channel strategy positions us to be wherever that demand
takes us.”
For the Quarter Ended September 30, 2023:
Revenues. Revenues increased approximately $12.9 million, or
14.4%, to $102.7 million as compared to $89.8 million in the third
quarter of the prior year.
Gross Margin. Gross margin was 40.4% compared to 39.8% in the
third quarter of 2022.
Expenses. Operating expenses increased to $23.9 million, or
23.3% of sales, compared to $18.5 million, or 20.6% of sales in the
prior year period.
Net income. Net income was $13.7 million, or $0.49 per basic and
diluted share, versus net income of $13.3 million, or $0.48 per
basic and diluted share in the third quarter of 2022.
EBITDA. EBITDA was $19.7 million, or 19.2% of sales, as compared
to $18.9 million, or 21.1% of sales in the prior year.1
For the Nine Months Ended September 30, 2023:
Revenues. Revenues increased approximately $45.2 million, or
18.4%, to $290.8 million as compared to $245.5 million in the first
nine months of the prior year.
Gross Margin. Gross margin was 41.8% compared to 39.3% in the
first nine months of 2022.
Expenses. Operating expenses increased to $68.7 million, or
23.6% of sales, compared to $53.4 million, or 21.7% of sales in the
prior year period.
Net income. Net income was $40.8 million, or $1.48 per basic and
diluted share, versus net income of $33.0 million, or $1.20 per
basic and diluted share in the first nine months of 2022.
EBITDA. EBITDA was $59.2 million, or 20.4% of sales, as compared
to $48.0 million, or 19.5% of sales in the prior year.1
1See reconciliation of non-GAAP financial measures below.
Conference Call Information
The Company will host a conference call and webcast today,
November 8, 2023 at 11:00 a.m. Eastern Time to discuss the
Company’s third quarter 2023 results and conditions, including our
fourth quarter outlook.
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: 565846
A replay of the teleconference will be available until December
8, 2023 and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
conference ID: 49265.
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. Without limitation,
the risks and uncertainties affecting XPEL are described in XPEL’s
most recent Form 10-K (including Item 1A Risk Factors) filed with
the SEC, which is available on our website at http://www.xpel.com
and at http://www.sec.gov. 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,
2023
2022
2023
2022
Revenue
Product revenue
$
81,125
$
72,616
$
229,339
$
197,753
Service revenue
21,552
17,142
61,416
47,759
Total revenue
102,677
89,758
290,755
245,512
Expenses
Cost of product sales
51,876
47,225
143,613
129,646
Cost of service sales
9,272
6,767
25,660
19,400
Total cost of sales
61,148
53,992
169,273
149,046
Gross Margin
41,529
35,766
121,482
96,466
Operating Expenses
Sales and marketing
7,730
6,297
22,554
18,515
General and administrative
16,170
12,162
46,180
34,859
Total operating expenses
23,900
18,459
68,734
53,374
Operating Income
17,629
17,307
52,748
43,092
Interest expense
85
391
946
933
Foreign exchange (loss) gain
398
372
419
833
Income before income taxes
17,146
16,544
51,383
41,326
Income tax expense
3,490
3,226
10,553
8,302
Net income
$
13,656
$
13,318
$
40,830
$
33,024
Earnings per share
Basic
$
0.49
$
0.48
$
1.48
$
1.20
Diluted
$
0.49
$
0.48
$
1.48
$
1.20
Weighted Average Number of Common
Shares
Basic
27,623
27,616
27,620
27,614
Diluted
27,644
27,620
27,634
27,615
XPEL Inc.
Condensed Consolidated Balance
Sheets
(In thousands except per share
data)
(Unaudited)
(Audited)
September 30, 2023
December 31, 2022
Assets
Current
Cash and cash equivalents
$
10,374
$
8,056
Accounts receivable, net
24,115
14,726
Inventories
92,458
80,575
Prepaid expenses and other current
assets
11,091
3,464
Total current assets
138,038
106,821
Property and equipment, net
15,690
14,203
Right-of-use lease assets
14,014
15,309
Intangible assets, net
29,461
29,294
Other non-current assets
971
972
Goodwill
28,602
26,763
Total assets
$
226,776
$
193,362
Liabilities
Current
Current portion of notes payable
$
—
$
76.60
Current portion of lease liabilities
3,650
3,885
Accounts payable and accrued
liabilities
42,059
22,970
Income tax payable
836
470
Total current liabilities
46,545
27,402
Deferred tax liability, net
1,205
2,049
Other long-term liabilities
950
1,070
Borrowings on line of credit
0
26,000
Non-current portion of lease
liabilities
11,523
12,119
Total liabilities
60,223
68,640
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; 27,628,953 and 27,616,064 issued and
outstanding, respectively
28
28
Additional paid-in-capital
12,050
11,073
Accumulated other comprehensive loss
(2,179
)
(2,203
)
Retained earnings
156,654
115,824
Total stockholders’ equity
166,553
124,722
Total liabilities and stockholders’
equity
$
226,776
$
193,362
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,
2023
2022
2023
2022
Net Income
$
13,656
$
13,318
$
40,830
$
33,024
Interest
85
391
946
933
Taxes
3,490
3,226
10,553
8,302
Depreciation
1,199
890
3,229
2,486
Amortization
1,288
1,117
3,660
3,248
EBITDA
$
19,718
$
18,942
$
59,218
$
47,993
Adjusted EBITDA
Reconciliation
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2023
EBITDA
$
19,718
Inventory write-offs
1,012
Relocation costs
341
Acquisition-related legal costs
250
Research and development
500
Foreign exchange
293
Adjusted EBITDA
$
22,114
Adjusted EPS
Reconciliation
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2023
Net income
$
13,656
Inventory write-offs
806
Relocation costs
272
Acquisition-related legal costs
199
Research and development
398
Foreign exchange
233
Adjusted net income
$
15,564
Adjusted earnings per share
Basic
0.56
Diluted
0.56
Weighted average number of common
shares
Basic
27,623
Diluted
27,644
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108965811/en/
Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor
Relations Phone: (203) 972-9200 Email:
xpel@imsinvestorrelations.com
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