XPEL Reports Record-breaking Revenues For Second Quarter 2005

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XPEL REPORTS RECORD-BREAKING REVENUES FOR SECOND QUARTER 2005

– 31% Quarter-to-Quarter Improvement in Overall Revenues –
– 33% Growth in Design Access Program Revenues –
– 41% Increase in Training and Plotter Sales Revenues –

SAN ANTONIO, TEXAS, August 29, 2005…Nevada-based XPEL Technologies Corp. (CNQ: XPEL.U) announced financial results today for the three and six months ended June 30, 2005. Detailed financials and historical comparisons between the three and six month periods ended June 30, 2005 and June 30, 2004 can be found in XPEL’s filings with SEDAR located at www.sedar.com.

XPEL’s Chairman and CEO W. Rege Brunner, stated, “The excitement we felt when generating record-breaking revenues during the first quarter of this year has carried over into the second quarter. We experienced growth in every facet of our business, with the most important growth indicator being our Design Access Program (DAP) revenues. This has us looking forward with great anticipation toward the latter half of 2005 and beyond.” Mr. Brunner further added, “Our second quarter results have again affirmed the soundness of our growth strategies. Based on the existing business development activities currently underway, we believe with certainty that our momentum is sustainable, moving us closer to profitability and improved shareholder value.”

Revenues for the three months ended June 30, 2005 were US$824,398 as compared to US$631,344 for the first quarter of 2005. The approximate 31% increase quarter to quarter was a result of a 33% increase in Design Access Program (DAP) fees, a 41% increase in Other income, consisting of training revenues and third-party enabling equipment such as plotters and a 25% growth in Kit and material sales. The record-breaking second quarter revenues contributed to six-month revenues of approximately US$1.455 million.

Cost of sales increased from US$300,579 to US$388,524 from the first quarter to the second quarter, but remained relatively flat at 47% as a percentage of revenues. As the DAP fees continue to grow, and the mix of XPEL’s revenues continue to evolve, management believes its cost of sales, as a percentage of revenues will improve.

Total expenses increased US$82,655 from US$537,476 to US$620,231, or approximately 15% between the quarters. The increase in total expenses resulted primarily from increased general and administrative expenses resulting from increased legal fees and increased personnel costs. As disclosed in our filings, the Company has initiated lawsuits against both a former employee and former XPEL dealer. While the outcome of said lawsuits is unknown, it is likely XPEL will incur additional legal fees in the latter half of 2005.

XPEL incurred a net loss of US$184,357 for the quarter ended June 30, 2005 and has incurred a net loss for the six months ended June 30, 2005 of US$391,067. When adjusted for non-cash expenses the net loss for the quarter was US$121,531. When further adjusted for the legal expenses incurred to date related to the ongoing lawsuit our net loss for the quarter was approximately US$99,500. It is likely that XPEL will continue to incur net losses during the last half of 2005 though management is optimistic that the trend of growing revenues and declining cash losses will continue and the Company will achieve profitability in the near future.

XPEL Technologies Corp. (www.xpel.com), publicly traded on the Canadian Trading and Quotation System Exchange, is the worldwide leader in the electronic delivery of top 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 for better serving customers with “best of breed” solutions in real-time. XPEL has clear advantages over the competition through its proprietary corporate framework consisting of an expansive library of installation-friendly window tint, paint and headlight protection products, coupled with a unique web-based remote manufacturing and distribution software, superior installation training curriculum and facilities, and established and growing sales distribution channels.

Certain statements contained herein “Our second quarter results have again affirmed the soundness of our growth strategies. Based on the existing business development activities currently underway, we believe with certainty that our momentum is sustainable, moving us closer to profitability and improved shareholder value.” 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, and other factors.

The CNQ has not reviewed and does not accept responsibility for the adequacy and accuracy of this information.

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Company Contact:

Ryan Pape
Chief Executive Officer
210-678-3700

Investor Relations:

John Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)
(203) 972-9200
[email protected]