XPEL, Inc. (Nasdaq: XPEL), a global provider of protective films
and coatings, announced results for the second quarter and six
months ended June 30, 2019.
Second Quarter Highlights:
- Revenues increased 4.5% to $30.1 million compared to second
quarter 2018, the highest revenue quarter in the history of XPEL;
Sequential revenue growth of 21.7% compared to first quarter of
2019
- Gross margin improved to 35.3% compared to 29.7% in second
quarter 2018
- Earnings per share of $0.11 compared to $0.09 per share in
second quarter 2018
Ryan Pape, President and Chief Executive Officer of XPEL,
commented, “We continued to see strong revenue growth in the second
quarter in most of our regions led by the US which posted 55.5%
growth. As expected, this growth was partially offset by continued
declines in China due to the timing of China sales acceleration in
the first half of 2018, but we expect that impact to moderate in
the third quarter. While overall revenue growth was moderate in the
second quarter, we drove substantially improved gross margin
through increased sales to our higher margin customers and due to
our continued focus on gross margins. We are energized by the
opportunities we’re seeing across the majority of our geographic
markets, and believe we are well positioned for continued growth as
we move through the balance of 2019.”
For the Quarter Ended June 30, 2019:
Revenues. Revenues increased approximately $1.3 million or 4.5%
to $30.1 million as compared to $28.8 million in the prior
year.
Gross Margin. Gross margin was 35.3% versus 29.7% in the second
quarter of 2018. The increase was related to an improved mix of
increased sales to higher margin customers and continued
improvements in per unit costs.
Expenses. Selling, general and administrative expenses increased
to $6.7 million or 22.1% of sales as compared to $5.1 million or
17.7% 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 and increased professional fees due to ancillary costs
related to the Company’s U.S. regulatory filings. Additionally, in
the second quarter of 2019 the Company incurred costs associated
with its annual dealer conference which was held in the first
quarter of 2018 and in the second quarter of 2019.
EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation,
and Amortization) increased to $4.4 million, or 16.4%, as compared
to $3.8 million in the prior year1.
Net income. Net income increased to $3.0 million, or $0.11 per
basic and diluted share versus net income of $2.6 million, or $0.09
per basic and diluted share in the second quarter of 2018.
For the Six Months Ended June 30, 2019:
Revenues. Revenues increased approximately $0.9 million or 1.7%
to $54.8 million as compared to $53.9 million in the first half of
the prior year.
Gross Margin. Gross margin was 34.3% versus 30.0% in the first
six months of 2018. The increase was related to an improved mix of
increased sales to higher margin customers and continued
improvements in per unit costs.
Expenses. Selling, general and administrative expenses increased
to $12.3 million or 22.5% of sales as compared to $9.9 million or
18.4% 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 and increased professional fees due to ancillary costs
related to the Company’s U.S. regulatory filings.
EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation,
and Amortization) increased to $7.2 million, or 5.2%, as compared
to $6.9 million in the prior year2.
Net income. Net income increased to $4.9 million, or $0.18 per
basic and diluted share versus net income of $4.7 million, or $0.17
per basic and diluted share for the first half of 2018.
Conference Call Information
The Company will host a conference call and webcast today,
Wednesday, August 21, 2019 at 11:00 a.m. Eastern Time to discuss
the Company’s results for the second 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 September
21, 2019 and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
conference ID: 52951.
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. . (Nasdaq: XPEL; TSXV: XPEL.U) is publicly
traded on Nasdaq and the TSX Venture Exchange.
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.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release
1see reconciliation of non-GAAP financial measures below.
2see reconciliation of non-GAAP financial measures below.
XPEL, Inc.
Condensed Consolidated
Statements of Income
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Revenue
Product revenue
$
25,425,489
$
24,988,880
$
46,480,212
$
47,083,121
Service revenue
4,668,665
3,802,011
8,339,388
6,829,289
Total revenue
30,094,154
28,790,891
54,819,600
53,912,410
Cost of Sales
Cost of product sales
18,551,030
19,560,320
34,239,063
36,410,156
Cost of service
917,111
665,731
1,804,444
1,332,270
Total cost of sales
19,468,141
20,226,051
36,043,507
37,742,426
Gross Margin
10,626,013
8,564,840
18,776,093
16,169,984
Operating Expenses
Sales and marketing
2,064,836
1,479,510
3,663,942
3,036,608
General and administrative
4,589,906
3,620,542
8,667,857
6,895,140
Total operating expenses
6,654,742
5,100,052
12,331,799
9,931,748
Operating Income
3,971,271
3,464,788
6,444,294
6,238,236
Interest expense
29,074
47,130
57,780
104,084
Foreign currency exchange loss (gain)
(3,518)
56,505
14,908
23,124
Income before income taxes
3,945,715
3,361,153
6,371,606
6,111,028
Income tax expense
938,405
808,011
1,504,293
1,469,073
Net income
3,007,310
2,553,142
4,867,313
4,641,955
Income (loss) attributed to
non-controlling interest
1,293
(1,968)
2,709
(10,513)
Net income attributable to stockholders
of the Company
$
3,006,017
$
2,555,110
$
4,864,604
$
4,652,468
Earnings per share attributable to
stockholders of the Company
Basic and diluted
$
0.11
$
0.09
$
0.18
$
0.17
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)
June 30,
December 31,
2019
2018
Assets
Current
Cash and cash equivalents
$
5,473,964
$
3,971,226
Accounts receivable, net
7,549,789
5,554,313
Inventory, net
15,304,778
10,799,611
Prepaid expenses and other current
assets
1,312,016
706,718
Total current assets
29,640,547
21,031,868
Property and equipment, net
3,711,031
3,384,206
Right-of-Use lease assets
4,016,516
-
Intangible assets, net
3,595,785
3,804,026
Other non-current assets
35,999
-
Goodwill
2,349,501
2,322,788
Total assets
$
43,349,379
$
30,542,888
Liabilities
Current
Current portion of notes payable
$
670,516
$
853,150
Current portion lease liabilities
976,339
-
Accounts payable and accrued
liabilities
11,255,718
6,292,093
Income tax payable
565,350
1,337,599
Total current liabilities
13,467,923
8,482,842
Deferred tax liability, net
549,257
478,864
Non-current portion of lease
liabilities
3,137,297
-
Non-current portion notes payable
502,080
968,237
Total liabilities
17,656,557
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 and 27, 612,597 issued
and outstanding, respectively
27,613
27,613
Additional paid-in-capital
11,348,163
11,348,163
Accumulated other comprehensive loss
(976,292
)
(1,190,055
)
Retained Earnings
15,481,857
10,617,253
25,881,341
20,802,974
Non-controlling interest
(188,519
)
(190,029
)
Total stockholders‘ equity
25,692,822
20,612,945
Total liabilities and stockholders‘
equity
$
43,349,379
$
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
(loss), 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
Three Months Ended June 30,
2019
Three Months Ended June 30,
2018
Six Months Ended June 30,
2019
Six Months Ended June 30,
2018
Net income
$3,007,310
$2,553,142
$4,867,313
$4,641,955
Interest
29,074
47,130
57,780
104,084
Taxes
938,405
808,011
1,504,293
1,469,073
Depreciation
220,270
179,549
421,088
338,867
Amortization
186,824
175,532
371,372
312,169
EBITDA
$4,381,883
$3,763,364
$7,221,846
$6,866,148
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version on businesswire.com: https://www.businesswire.com/news/home/20190821005144/en/
Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor
Relations Phone: (203) 972-9200 Email: jnesbett@institutionalms.com
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