false000176725800017672582024-08-082024-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
August 8, 2024
Date of Report (date of earliest event reported)
XPEL, INC.
(Exact name of registrant as specified in its charter)
Nevada001-3885820-1117381
(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification No.)
711 Broadway, Suite 320
78215
San AntonioTexas
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (210) 678-3700
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareXPELThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02 Results of Operations and Financial Condition
 
On August 8, 2024, XPEL, Inc. (“XPEL”) announced its consolidated financial results for the three and six months ended June 30, 2024. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K, and the information set forth therein is incorporated herein by reference and constitutes a part of this report.

The information contained in Item 2.02 of this report and Exhibit 99.1 to this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by XPEL under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

  Item 9.01. Financial Statements and Exhibits
 
    (d) Exhibits

The following exhibit is to be filed as part of this Form 8-K:

EXHIBIT NO.IDENTIFICATION OF EXHIBIT
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL Document)
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
XPEL, Inc.
Dated: August 8, 2024By: /s/ Barry R. Wood
Barry R. Wood
Senior Vice President and Chief Financial Officer


Ex. 99.1
XPEL Reports Record Revenue of $109.9 million in Second Quarter 2024


San Antonio, TX – August 8, 2024 – XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the second quarter of 2024.

Second Quarter 2024 Overview:

•Revenue increased 7.5% to $109.9 million in the second quarter of 2024.

•Gross margin of 43.5% in the second quarter of 2024.

•Net income of $15.0 million, or $0.54 per basic and diluted share, versus net income of $15.7 million, or $0.57 per basic and diluted share in the second quarter of 2023.

•EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $21.8 million, or 19.9% of revenue, compared to $22.4 million, or 21.9% of revenue in the second quarter of 2023. 2

First Six Months 2024 Overview:

•Revenue increased 6.4% to $200.0 million in the first six months of 2024.

•Gross margin of 42.9% in the first six months of 2024.

•Net income of $21.7 million, or $0.79 per basic and diluted share, versus net income of $27.2 million, or $0.98 per basic and diluted share in the first six months of 2023.

•EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $33.5 million, or 16.8% of revenue, compared to $39.5 million, or 21.0% of revenue in the first six months of 2023.2

Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We saw record revenue, record operating cash flow and solid gross margin performance in the second quarter. We are off to a great start in Q3 and we remain well positioned to capitalize on growth opportunities wherever they may exist."
























Financial Highlights for the Second Quarter 2024:

Summary consolidated financial information for the three months ended June 30, 2024 and 2023 (unaudited, dollars in thousands):

Three Months Ended June 30,% Change
2024%
of Total Revenue		2023%
of Total Revenue		2024 vs. 2023
Total revenue$109,917 100.0 %$102,237 100.0 %7.5 %
Gross margin47,865 43.5 %43,994 43.0 %8.8 %
Operating Expenses28,679 26.1 %23,803 23.3 %20.5 %
Operating income19,186 17.5 %20,191 19.7 %(5.0)%
Net income15,033 13.7 %15,741 15.4 %(4.5)%
EBITDA2
21,824 19.9 %22,428 21.9 %(2.7)%
Net cash provided by operating activities$26,896 n/a$26,680 n/an/a

Geographical Revenue Summary

Three Months Ended
June 30,		% Change% of Total Revenue
20242023Inc (Dec)20242023
United States$64,902 $59,149 9.7 %59.0 %57.9 %
China4,401 8,103 (45.7)%4.0 %7.9 %
Canada13,274 11,851 12.0 %12.1 %11.6 %
Continental Europe11,355 9,689 17.2 %10.3 %9.5 %
United Kingdom3,689 3,630 1.6 %3.4 %3.6 %
Middle East/Africa4,803 4,109 16.9 %4.4 %4.0 %
Asia Pacific4,334 3,314 30.8 %3.9 %3.2 %
Latin America3,159 2,119 49.1 %2.9 %2.1 %
Other— 273 (100.0)%0.0 %0.2 %
Total$109,917 $102,237 7.5 %100.0 %100.0 %

Overall Revenue
•Total revenue grew 7.5% compared to second quarter 2023 ("YoY") and 22.0% over the first quarter 2024 ("QoQ"). Excluding China, total revenue grew 12.1% YoY.
•US revenue grew 9.7% YoY and 24.8% QoQ.
•All other revenue (excluding US and China) grew 16.1% YoY and 11.0% QoQ.

Product and Service Revenue
•Total product revenue increased 2.8% YoY and 24.5% QoQ. This increase was due to growth in most geographical regions, offset by a decline in sales to our distributor in China. Excluding China, total product revenue increased 8.2% YoY.
•Total window film increased 8.4% YoY and 51.3% QoQ and represented 20.0% of total revenue. Excluding China, total window film revenue grew 18.6% YoY.
•Total service revenue increased 25.2% YoY and 14.9% QoQ. The increase was mainly due to increases in the Company's dealership services and OEM businesses.
•Total installation revenue (labor and product combined) grew 33.9% YoY and 16.5% QoQ and represented 21.1% of total revenue. This increase was due primarily to increased demand in XPEL's dealership services and OEM businesses.


•Adjusted product revenue (combining cutbank credits revenue and product revenue) increased 2.8% YoY and 24.1% QoQ. Excluding China, adjusted product revenue increased 7.8% YoY.

Other Financial Information
•Gross margin percentage was 43.5% and 43.0% in the second quarter, 2024 and 2023, respectively.
•Total operating expenses grew 20.5% YoY and essentially flat QoQ.
•Sales and marketing expenses grew 26.2% YoY and declined 1.1% QoQ and represented 9.4% of revenue.
•General and administrative expenses grew 17.5% YoY and 0.8% QoQ and represented 16.7% of revenue.
•Net income declined 4.5% YoY and increased 125.5% QoQ.
•EBITDA declined 2.7% YoY2 and increased 86.5% QoQ.
•Cash flows provided by operations increased $0.2 million YoY and $31.9 million QoQ to a record $26.9 million in the second quarter 2024.

2024 Outlook

•Annual revenue growth projection remains 8-10%.

Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2024 Outlook.

Conference Call Information

The Company will host a conference call and webcast today, August 8, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s second quarter 2024 results.

To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/events-presentations.

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: 871439.

A replay of the teleconference will be available until September 1, 2024 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 50361.

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”.

1 The results summarized above for 2024 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the second quarter of 2024, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full second quarter 2024 financial information will be included in the filing of the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission which is anticipated on or prior to August 9, 2024.

2 See "Non-GAAP Financial Measure" and "Reconciliation of Non-GAAP Financial Measure" below.

Forward-looking Statements

This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) 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, execution of the company's growth strategy and outlook. 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 and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K. 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.

Non-GAAP Financial Measure

To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation 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 XPEL's financial performance under GAAP and should not be considered as an alternative 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 title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled "Reconciliation of Non-GAAP Financial Measure."

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


XPEL, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands except per share data)

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenue
Product revenue$83,200 $80,906 $150,052 $148,214 
Service revenue26,717 21,331 49,969 39,864 
Total revenue109,917 102,237 200,021 188,078 
Cost of Sales
Cost of product sales51,274 49,557 93,409 91,737 
Cost of service10,778 8,686 20,871 16,388 
Total cost of sales62,052 58,243 114,280 108,125 
Gross Margin47,865 43,994 85,741 79,953 
Operating Expenses
Sales and marketing10,280 8,147 20,671 14,824 
General and administrative18,399 15,656 36,655 30,010 
Total operating expenses28,679 23,803 57,326 44,834 
Operating Income19,186 20,191 28,415 35,119 
Interest expense392 338 865 860 
Foreign currency exchange loss275 32 548 21 
Income before income taxes18,519 19,821 27,002 34,238 
Income tax expense3,486 4,080 5,303 7,064 
Net income$15,033 $15,741 $21,699 $27,174 
Earnings per share
Basic$0.54 $0.57 $0.79 $0.98 
Diluted$0.54 $0.57 $0.79 $0.98 
Weighted Average Number of Common Shares
Basic27,635 27,619 27,633 27,617 
Diluted27,637 27,631 27,637 27,629 


















XPEL, Inc.
Consolidated Balance Sheets
(In thousands except share and per share data)

(Unaudited)(Audited)
June 30, 2024December 31, 2023
Assets
Current
Cash and cash equivalents$14,984 $11,609 
Accounts receivable, net29,466 24,111 
Inventory, net97,591 106,509 
Prepaid expenses and other current assets4,641 3,529 
Income tax receivable1,224 696 
Total current assets147,906 146,454 
Property and equipment, net17,998 16,980 
Right-of-use lease assets18,464 15,459 
Intangible assets, net33,241 34,905 
Other non-current assets1,127 782 
Goodwill43,094 37,461 
Total assets$261,830 $252,041 
Liabilities
Current
Current portion of notes payable$64 $62 
Current portion lease liabilities4,723 3,966 
Accounts payable and accrued liabilities26,244 32,444 
Total current liabilities31,031 36,472 
Deferred tax liability, net1,742 2,658 
Other long-term liabilities515 890 
Borrowings on line of credit11,000 19,000 
Non-current portion of lease liabilities15,359 12,715 
Non-current portion of notes payable 272 317 
Total liabilities59,919 72,052 
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; 27,638,219 and 27,630,025 issued and outstanding, respectively28 28 
Additional paid-in-capital13,926 12,546 
Accumulated other comprehensive loss(2,366)(1,209)
Retained earnings190,323 168,624 
Total stockholders’ equity201,911 179,989 
Total liabilities and stockholders’ equity$261,830 $252,041 













XPEL, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cash flows from operating activities
Net income$15,033 $15,741 $21,699 $27,174 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment1,471 1,058 2,804 2,030 
Amortization of intangible assets1,442 1,211 2,852 2,372 
Gain on sale of property and equipment(10)(1)(28)(10)
Stock compensation837 355 1,467 657 
Provision for credit losses100 82 189 156 
Deferred income tax(705)(479)(862)(594)
Changes in assets and liabilities:
Accounts receivable, net
(991)(2,415)(5,754)(9,021)
Inventory, net12,644 2,304 8,766 (1,583)
Prepaid expenses and other current assets1,016 1,537 (1,309)(975)
Income taxes receivable and payable(1,491)(2,496)(587)(136)
Accounts payable and accrued liabilities(2,450)9,783 (7,299)7,303 
Net cash provided by operating activities26,896 26,680 21,938 27,373 
Cash flows used in investing activities
Purchase of property, plant and equipment(1,811)(1,251)(3,828)(3,306)
Proceeds from sale of property and equipment— 12 — 24 
Acquisition of a businesses, net of cash acquired
(5,171)(4,457)(5,928)(4,457)
Development of intangible assets(501)(196)(841)(517)
Net cash used in investing activities(7,483)(5,892)(10,597)(8,256)
Cash flows from financing activities
Net payments on revolving line of credit
(13,000)(15,000)(8,000)(13,000)
RSUs withheld in lieu of payroll taxes(87)(29)(87)(28)
Repayments of notes payable - acquisitions(16)— (31)(77)
Net cash used by financing activities
(13,103)(15,029)(8,118)(13,105)
Net change in cash and cash equivalents6,310 5,759 3,223 6,012 
Foreign exchange impact on cash and cash equivalents60 210 152 230 
Increase in cash and cash equivalents during the period6,370 5,969 3,375 6,242 
Cash and cash equivalents at beginning of period8,614 8,329 11,609 8,056 
Cash and cash equivalents at end of period$14,984 $14,298 $14,984 $14,298 
Supplemental schedule of non-cash activities
Non-cash lease financing$4,086 $573 $5,038 $1,810 
Issuance of common stock for vested restricted stock units405 134 462 134 
Supplemental cash flow information
Cash paid for income taxes$5,646 $7,062 $6,798 $7,810 
Cash paid for interest$414 $372 $844 $889 


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,
2024202320242023
Net Income$15,033 $15,741 $21,699 $27,174 
Interest392 338 865 860 
Taxes3,486 4,080 5,303 7,064 
Depreciation1,471 1,058 2,804 2,030 
Amortization1,442 1,211 2,852 2,372 
EBITDA$21,824 $22,428 $33,523 $39,500 

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Entity Address, State or Province TX
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