false000176725800017672582024-11-072024-11-07

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
November 7, 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 November 7, 2024, XPEL, Inc. (“XPEL”) announced its consolidated financial results for the three and nine months ended September 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: November 7, 2024By: /s/ Barry R. Wood
Barry R. Wood
Senior Vice President and Chief Financial Officer


Ex. 99.1
XPEL Reports Record Revenue of $112.9 million in Third Quarter 2024


San Antonio, TX – November 7, 2024 – XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the third quarter of 2024.

Third Quarter 2024 Overview:

•Revenue increased 9.9% to $112.9 million in the third quarter of 2024.

•Gross margin of 42.5% in the third quarter of 2024.

•Net income grew 9.1% to $14.9 million, or $0.54 per basic and diluted share, versus net income of $13.7 million, or $0.49 per basic and diluted share in the third quarter of 2023.

•EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew 10.0% to $21.7 million, or 19.2% of revenue, compared to $19.7 million, or 19.2% of revenue in the third quarter of 2023. 2

First Nine Months 2024 Overview:

•Revenue increased 7.6% to $312.9 million in the first nine months of 2024.

•Gross margin of 42.7% in the first nine months of 2024.

•Net income of $36.6 million, or $1.32 per basic and diluted share, versus net income of $40.8 million, or $1.48 per basic and diluted share in the first nine months of 2023.

•EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $55.2 million, or 17.6% of revenue, compared to $59.2 million, or 20.4% of revenue in the first nine months of 2023.2

Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We saw good performance in the third quarter with solid top and bottom line growth, particularly in the US region where we had record revenue. We look forward to capitalizing on this momentum to close out the year."


























Financial Highlights for the Third Quarter 2024:

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

Three Months Ended September 30,% Change
2024%
of Total Revenue		2023%
of Total Revenue		2024 vs. 2023
Total revenue$112,852 100.0 %$102,677 100.0 %9.9 %
Gross margin47,916 42.5 %41,529 40.4 %15.4 %
Operating Expenses29,529 26.2 %23,900 23.3 %23.6 %
Operating income18,387 16.3 %17,629 17.2 %4.3 %
Net income14,892 13.2 %13,656 13.3 %9.1 %
EBITDA2
21,698 19.2 %19,718 19.2 %10.0 %
Net cash provided by operating activities$19,559 n/a$11,128 n/an/a

Geographical Revenue Summary

Three Months Ended
September 30,		% Change% of Total Revenue
20242023Inc (Dec)20242023
United States$64,565 $59,002 9.4 %57.2 %57.5 %
Canada14,415 11,471 25.7 %12.8 %11.2 %
China9,058 10,242 (11.6)%8.0 %10.0 %
Continental Europe9,058 8,705 4.1 %8.0 %8.5 %
United Kingdom3,548 3,499 1.4 %3.2 %3.4 %
Middle East/Africa5,286 3,909 35.2 %4.7 %3.8 %
Asia Pacific4,095 3,233 26.7 %3.6 %3.1 %
Latin America2,827 2,325 21.6 %2.5 %2.3 %
Other— 291 (100.0)%0.0 %0.2 %
Total$112,852 $102,677 9.9 %100.0 %100.0 %

Overall Revenue
•Total revenue grew 9.9% compared to third quarter 2023 ("YoY") and 2.7% over the second quarter 2024 ("QoQ"). Excluding China, total revenue increased 12.3% YoY and declined 1.6% QoQ.
•US revenue grew 9.4%YoY and was flat QoQ.
•All other revenue (excluding US and China) grew 17.3% YoY and declined 3.4% QoQ.

Product and Service Revenue
•Total product revenue increased 7.2% YoY and 4.5% QoQ. This increase was due to growth in most geographical regions, offset by a decline in sales to our China distributor. Excluding China, total product revenue increased 9.9% YoY.
•Total window film increased 20.6% YoY and increased 2.8% QoQ and represented 20.1% of total revenue.
•Total service revenue increased 20.2% YoY and declined 3.1% 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 27.4% YoY and declined 2.7% QoQ and represented 20.0% of total revenue. Organic installation revenue grew 11.3% YoY.
•Adjusted product revenue (combining cutbank credits revenue and product revenue) increased 6.8% YoY and 3.9% QoQ. Excluding China, adjusted product revenue grew 9.3% YoY.

Other Financial Information
•Gross margin percentage was 42.5% and 40.4% in the third quarter, 2024 and 2023, respectively.
•Total operating expenses increased 23.6% YoY and increased 3.0% QoQ.
•Sales and marketing expenses increased 37.6% YoY and increased 3.5% QoQ and represented 9.4% of revenue. This increase was driven primarily by enhanced marketing efforts to support our increased dealership focus and international expansion.
•General and administrative expenses increased 16.8% YoY and increased 2.7% QoQ and represented 16.7% of revenue.
•Net income increased 9.1% YoY and was flat QoQ.
•EBITDA increased 10.0% YoY2 and was flat QoQ.
•Cash flows provided by operations increased $8.4 million YoY and declined $7.3 million QoQ to $19.6 million in the third quarter 2024.

Fourth Quarter 2024 Outlook

•Fourth quarter revenue is estimated at $105 - $107 million. This assumes Q4 YoY US growth of approximately 10% partially offset by Q4 YoY decline in China sales.

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, November 7, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s third 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: 861781.

A replay of the teleconference will be available until December 7, 2024 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 51306.

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 third 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 third 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 November 8, 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, damage to 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
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue
Product revenue$86,950 $81,125 $237,002 $229,339 
Service revenue25,902 21,552 75,871 61,416 
Total revenue112,852 102,677 312,873 290,755 
Cost of Sales
Cost of product sales53,967 51,876 147,376 143,613 
Cost of service10,969 9,272 31,840 25,660 
Total cost of sales64,936 61,148 179,216 169,273 
Gross Margin47,916 41,529 133,657 121,482 
Operating Expenses
Sales and marketing10,637 7,730 31,308 22,554 
General and administrative18,892 16,170 55,547 46,180 
Total operating expenses29,529 23,900 86,855 68,734 
Operating Income18,387 17,629 46,802 52,748 
Interest expense97 85 962 946 
Foreign currency exchange (gain)/loss(332)398 216 419 
Income before income taxes18,622 17,146 45,624 51,383 
Income tax expense3,730 3,490 9,033 10,553 
Net income$14,892 $13,656 $36,591 $40,830 
Earnings per share
Basic$0.54 $0.49 $1.32 $1.48 
Diluted$0.54 $0.49 $1.32 $1.48 
Weighted Average Number of Common Shares
Basic27,642 27,623 27,636 27,620 
Diluted27,644 27,644 27,639 27,634 


















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

(Unaudited)(Audited)
September 30, 2024December 31, 2023
Assets
Current
Cash and cash equivalents$20,986 $11,609 
Accounts receivable, net29,583 24,111 
Inventory, net101,592 106,509 
Prepaid expenses and other current assets6,296 3,529 
Income tax receivable264 696 
Total current assets158,721 146,454 
Property and equipment, net17,851 16,980 
Right-of-use lease assets18,380 15,459 
Intangible assets, net33,601 34,905 
Other non-current assets1,141 782 
Goodwill43,347 37,461 
Total assets$273,041 $252,041 
Liabilities
Current
Current portion of notes payable$66 $62 
Current portion lease liabilities4,820 3,966 
Accounts payable and accrued liabilities31,634 32,444 
Total current liabilities36,520 36,472 
Deferred tax liability, net1,252 2,658 
Other long-term liabilities1,077 890 
Borrowings on line of credit— 19,000 
Non-current portion of lease liabilities15,205 12,715 
Non-current portion of notes payable 260 317 
Total liabilities54,314 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; 27,647,223 and 27,630,025 issued and outstanding, respectively28 28 
Additional paid-in-capital14,700 12,546 
Accumulated other comprehensive loss(1,216)(1,209)
Retained earnings205,215 168,624 
Total stockholders’ equity218,727 179,989 
Total liabilities and stockholders’ equity$273,041 $252,041 













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

Three Months Ended
September 30,		Nine Months Ended September 30,
2024202320242023
Cash flows from operating activities
Net income$14,892 $13,656 $36,591 $40,830 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment1,504 1,199 4,308 3,229 
Amortization of intangible assets1,476 1,288 4,327 3,660 
Gain on sale of property and equipment(6)(1)(35)(11)
Stock compensation862 486 2,329 1,144 
Provision for credit losses91 60 279 216 
Deferred income tax(553)(250)(1,414)(844)
Changes in assets and liabilities:
Accounts receivable, net279 (462)(5,475)(9,483)
Inventory, net(3,592)(10,000)5,174 (11,583)
Prepaid expenses and other current assets(1,477)(6,313)(2,785)(7,288)
Income taxes receivable and payable957 457 370 320 
Accounts payable and accrued liabilities5,127 11,008 (2,172)18,311 
Net cash provided by operating activities19,559 11,128 41,497 38,501 
Cash flows used in investing activities
Purchase of property, plant and equipment(1,257)(1,434)(5,085)(4,741)
Proceeds from sale of property and equipment40 (4)40 20 
Acquisition of businesses, net of cash acquired(592)(240)(6,520)(4,697)
Development of intangible assets(580)(281)(1,421)(798)
Net cash used in investing activities(2,389)(1,959)(12,986)(10,216)
Cash flows from financing activities
Net payments on revolving line of credit(11,000)(13,000)(19,000)(26,000)
RSUs withheld in lieu of payroll taxes(88)(138)(175)(167)
Repayments of notes payable(13)— (44)(77)
Net cash used in financing activities(11,101)(13,138)(19,219)(26,244)
Net change in cash and cash equivalents6,069 (3,969)9,292 2,041 
Foreign exchange impact on cash and cash equivalents(67)45 85 277 
Increase/(Decrease) in cash and cash equivalents during the period6,002 (3,924)9,377 2,318 
Cash and cash equivalents at beginning of period14,984 14,298 11,609 8,056 
Cash and cash equivalents at end of period$20,986 $10,374 $20,986 $10,374 
Supplemental schedule of non-cash activities
Non-cash lease financing$1,172 $36 $6,210 $1,847 
Issuance of common stock for vested restricted stock units438 740 900 874 
Supplemental cash flow information
Cash paid for income taxes$3,458 $3,334 $10,256 $11,144 
Cash paid for interest$151 $111 $995 $1,000 


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,
2024202320242023
Net Income$14,892 $13,656 $36,591 $40,830 
Interest97 85 962 946 
Taxes3,730 3,490 9,033 10,553 
Depreciation1,504 1,199 4,308 3,229 
Amortization1,475 1,288 4,327 3,660 
EBITDA$21,698 $19,718 $55,221 $59,218 

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Document Period End Date Nov. 07, 2024
Entity Registrant Name XPEL, INC.
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Entity Address, State or Province TX
Entity Address, City or Town San Antonio
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