XPEL XPEL Inc

XPEL, Inc. (Nasdaq: XPEL) a global provider of protective films and coatings, today announced results for the quarter ended June 30, 2023.

Second Quarter 2023 Highlights:

• Revenues increased 21.9% to $102.2 million in the second quarter.

• Gross margin percentage improved to 43.0% in the second quarter, a new high for the Company.

• Net income grew 32.3% to $15.7 million, or $0.57 per share, compared to $11.9 million, or $0.43 per share, in the same quarter of 2022.

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 30.5% to $22.4 million, or 21.9% of revenues compared to $17.2 million in second quarter 2022.1

First Six Months Highlights:

• Revenues increased 20.8% to $188.1 million in the first six months of 2023.

• Gross margin percentage improved to 42.5% in the first six months of 2023.

• Net income grew 37.9% to $27.2 million, or $0.98 per share, compared to $19.7 million, or $0.71 per share, in the first six months of 2022.

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 36.0% to $39.5 million, or 21.0% of revenues compared to $29.1 million in first six months of 2022.1

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We had another solid quarter and reached a significant milestone with quarterly revenue exceeding $100 million for the first time in the Company’s history. Consumer recognition for the long-term value of protective films is increasingly moving beyond the enthusiast market and we’re focused on continuing to introduce the XPEL brand to a broader segment of automotive dealerships and auto buyers.”

For the Quarter Ended June 30, 2023:

Revenues. Revenues increased approximately $18.3 million or 21.9% to $102.2 million as compared to $83.9 million in the second quarter of the prior year.

Gross Margin. Gross margin was 43.0% compared to 39.3% in the second quarter of 2022.

Expenses. Operating expenses increased to $23.8 million, or 23.3% of sales, compared to $17.2 million, or 20.5% of sales in the prior year period.

Net income. Net income was $15.7 million, or $0.57 per basic and diluted share, versus net income of $11.9 million, or $0.43 per basic and diluted share in the second quarter of 2022.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $22.4 million, or 21.9% of sales, as compared to $17.2 million, or 20.5% of sales in the prior year.1

For the Six Months Ended June 30, 2023:

Revenues. Revenues increased approximately $32.3 million or 20.8% to $188.1 million as compared to $155.8 million in the first half of the prior year.

Gross Margin. Gross margin was 42.5% compared to 39.0% in the first half of 2022.

Expenses. Operating expenses increased to $44.8 million, or 23.8% of sales, compared to $34.9 million, or 22.4% of sales in the prior year period.

Net income. Net income was $27.2 million, or $0.98 per basic and diluted share, versus net income of $19.7 million, or $0.71 per basic and diluted share in the first half of 2022.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $39.5 million, or 21.0% of sales, as compared to $29.1 million, or 18.7% 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, August 9, 2023 at 11:00 a.m. Eastern Time to discuss the Company’s second quarter 2023 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: 695070

A replay of the teleconference will be available until September 8, 2023 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 48731.

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”.

1See reconciliation of non-GAAP financial measures below.

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. 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,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Revenue

 

 

 

 

 

 

 

Product revenue

$

80,906

 

$

67,040

 

$

148,214

 

$

125,137

Service revenue

 

21,331

 

 

16,850

 

 

39,864

 

 

30,617

Total revenue

 

102,237

 

 

83,890

 

 

188,078

 

 

155,754

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

 

49,557

 

 

44,227

 

 

91,737

 

 

82,421

Cost of service

 

8,686

 

 

6,680

 

 

16,388

 

 

12,633

Total cost of sales

 

58,243

 

 

50,907

 

 

108,125

 

 

95,054

Gross Margin

 

43,994

 

 

32,983

 

 

79,953

 

 

60,700

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

 

8,147

 

 

5,906

 

 

14,824

 

 

12,218

General and administrative

 

15,656

 

 

11,328

 

 

30,010

 

 

22,696

Total operating expenses

 

23,803

 

 

17,234

 

 

44,834

 

 

34,914

 

 

 

 

 

 

 

 

Operating Income

 

20,191

 

 

15,749

 

 

35,119

 

 

25,786

 

 

 

 

 

 

 

 

Interest expense

 

338

 

 

322

 

 

860

 

 

542

Foreign currency exchange loss

 

32

 

 

457

 

 

21

 

 

462

 

 

 

 

 

 

 

 

Income before income taxes

 

19,821

 

 

14,970

 

 

34,238

 

 

24,782

Income tax expense

 

4,080

 

 

3,068

 

 

7,064

 

 

5,076

Net income

$

15,741

 

$

11,902

 

$

27,174

 

$

19,706

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

$

0.57

 

$

0.43

 

$

0.98

 

$

0.71

Diluted

$

0.57

 

$

0.43

 

$

0.98

 

$

0.71

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

Basic

 

27,619

 

 

27,613

 

 

27,617

 

 

27,613

Diluted

 

27,631

 

 

27,613

 

 

27,629

 

 

27,613

 

XPEL Inc.

Condensed Consolidated Balance Sheets

(In thousands except per share data)

 

 

(Unaudited)

 

(Audited)

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

14,298

 

$

8,056

Accounts receivable, net

 

23,983

 

 

14,726

Inventories

 

82,714

 

 

80,575

Prepaid expenses and other current assets

 

4,660

 

 

3,464

Total current assets

 

125,655

 

 

106,821

Property and equipment, net

 

15,523

 

 

14,203

Right-of-use lease assets

 

15,161

 

 

15,309

Intangible assets, net

 

30,590

 

 

29,294

Other non-current assets

 

1,138

 

 

972

Goodwill

 

28,594

 

 

26,763

Total assets

$

216,661

 

$

193,362

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

$

—

 

 

77

Current portion of lease liabilities

 

3,871

 

 

3,885

Accounts payable and accrued liabilities

 

31,194

 

 

22,970

Income tax payable

 

331

 

 

470

Total current liabilities

 

35,396

 

 

27,402

Deferred tax liability, net

 

1,481

 

 

2,049

Other long-term liabilities

 

1,176

 

 

1,070

Borrowings on line of credit

 

13,000

 

 

26,000

Non-current portion of lease liabilities

 

12,300

 

 

12,119

Total liabilities

 

63,353

 

 

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; 27,620,027 and 27,616,064 issued and outstanding and outstanding, respectively

 

28

 

 

28

Additional paid-in-capital

 

11,730

 

 

11,073

Accumulated other comprehensive loss

 

(1,448)

 

 

(2,203)

Retained earnings

 

142,998

 

 

115,824

Total stockholders’ equity

 

153,308

 

 

124,722

Total liabilities and stockholders’ equity

$

216,661

 

$

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 June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Net Income

15,741

 

11,902

 

27,174

 

19,706

Interest

338

 

322

 

860

 

542

Taxes

4,080

 

3,068

 

7,064

 

5,076

Depreciation

1,058

 

839

 

2,030

 

1,596

Amortization

1,211

 

1,054

 

2,372

 

2,131

EBITDA

22,428

 

17,185

 

39,500

 

29,051

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230809890981/en/

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