XPEL Announces 2007 Financial Results
XPEL ANNOUNCES 2007 FINANCIAL RESULTS
– 73% Increase in Total Revenues –
– Annualized Revenues of Approximately $10 Million –
XPEL Technologies Corp. (TSXV: DAP.U) announced today results for the year ended December 31, 2007, as compared to the year ended December 31, 2006.
XPEL’s CEO, Steven J. McAuley, commented, “2007 was certainly a year of great change at XPEL and with that change came significant improvements in our operating results. We are pleased with the improvements in our operating cash flow and the successful acquisitions of Shadow Tinting Ltd., Paintshield Ltd., and ArmoufendCAD Inc. during the year. These acquisitions represent an important step towards establishing ourselves as the industry leader in automotive paint and headlight protection. During 2008, we are focused on building XPEL brand awareness with our industry partners, consumers and dealerships throughout our network. We will continue to integrate our recent acquisitions, control costs, grow revenues and identify additional acquisition opportunities in the automotive protection and appearance market, as part of our plan to broaden the overall business model.”
Year Ended December 31, 2007 compared to the Year Ended December 31, 2006
Revenues. Revenues increased from $3,392,677 to $5,856,704, or 73% between periods. This increase was primarily due to the acquisition of Shadow Tinting, Ltd., and its strong installation and wholesale Paint Protection Film and Tint film business in June of 2007 and the continued growth in Design Access Program fees of $366,897 or 21% between years. Annualized revenues for XPEL post-acquisitions is approximately $10 million.
Cost of Sales. Cost of sales increased from $1,356,512 to $2,451,895, and increased slightly as a percentage of revenues from 40% to 42%, year to year. Our cost of sales is primarily related to the re-selling of bulk paint and headlight film and third-party enabling equipment such as plotters, which are used by the Company’s DAP Dealers for the production of products using the DAP software utility.
Expenses. General and administrative expenses increased 28% to $3,478,635 from $2,708,236 in 2006. The increased general and administrative expenses were primarily a result of the acquisition of Shadow Tinting, Ltd., in June 2007. In June and August 2006, respectively, the Company moved into its new corporate offices and its new training and design facility which increased rent from that incurred in previous years.
Net earnings (loss). The normalized cash loss for 2007 was $294,224 as compared to a normalized cash loss of $853,160 for 2006 when adjusted for non-cash expenses such as depreciation and amortization expense and the expensing of stock options. The Company had a net loss of $822,524 for the year ended December 31, 2007 as compared to a net loss of $1,450,731 for the year ended December 31, 2006. Revenues increased at a greater rate than expenses moving the Company closer to net income profitability. While the Company may continue to incur a net loss early in 2008, it is imperative that the Company continue to expand the sales of its own paint protection film (PPF) and increase its DAP revenues which will lead to a profitable operation overall.
XPEL Technologies Corp. is the worldwide leader in the electronic delivery of automotive aftermarket products, utilizing the Internet as an integral component for its design, manufacturing, distribution and customer relationship strategies. The Company’s DAP software utility offers Dealers the industry’s most efficient and productive tool set to better serve customers with “best-in-class” solutions in real-time. XPEL has clear advantages over the competition through its expansive proprietary library of installation-friendly paint and headlight protection and window tint products, coupled with a unique web-based remote manufacturing and distribution software, superior installation training curriculum and world-class facilities, with established and growing sales channels.
Certain statements contained herein (“These acquisitions represent an important step towards establishing ourselves as the industry leader in automotive paint and headlight protection,” “we will continue to integrate our recent acquisitions, control costs, grow revenues and identify additional acquisition opportunities in the automotive protection and appearance market” and “it is imperative that the Company continue to expand the sales of its own paint protection film (PPF) and increase its DAP revenues which will lead to a profitable operation overall”) are considered “forward-looking statements.” These statements are based upon the belief of the Company’s management, as well as assumptions made beyond information currently available to the Company’s management. Because “forward-looking statements” are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, price competition, the inability to obtain additional capital, loss of key personnel, unavailability of leased facilities, technological changes, service interruptions, equipment failures, customer attrition, general economic conditions, relationships with vendors, government supervision and regulation, changes in industry practices, the inability to settle legal disputes, and other factors.
The TSXV has not reviewed and does not accept responsibility for the adequacy and accuracy of this information.
Chief Executive Officer
John Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)