XPEL Technologies Corp. Reports 2005 Annual Results
XPEL TECHNOLOGIES CORP. REPORTS 2005 ANNUAL RESULTS
– 55% Growth in Design Access Program Revenues –
– 45% Increase in Training and Plotter Sales Revenues –
– Overall Gross Margins Improve to 58% –
– Decreased Cost of Sales –
SAN ANTONIO, TEXAS, April 28, 2006…XPEL Technologies Corp. (TSXV: DAP.U) announced today results for the year ended December 31, 2005, as compared to the year ended December 31, 2004.
XPEL’s Chairman and CEO, W. Rege Brunner, commented, “We are extremely pleased with our fiscal 2005 results. The growth in our Design Access Program revenues continued at a significant rate, which is at the core of our value model, and is the main driver toward profitability.” Mr. Brunner further added, “XPEL’s recently announced relationship with UnitedAuto Group, along with our aggressive sales and product awareness efforts, will continue to drive our growth. The XPEL Team remains highly committed to improving shareholder value through strong corporate performance.”
Year ended December 31, 2005 Compared to the Year ended December 31, 2004
Revenues continued to grow, increasing to US$3,043,885 from US$2,594,935, or approximately 17% between years. XPEL experienced a significant increase in Design Access Program (“DAP”) revenues, which increased from US$774,639 to US$1,202,369, or approximately 55% between years. Other revenues, which consist of installation training fees and third-party enabling equipment such as plotter cutters, increased approximately 45% between years. The shift towards these targeted revenue streams led to a 7% decline in the Company’s Kit and material sales between years. Management believes it will continue to see increased DAP revenues as a result of its direct sales and marketing initiatives.
Cost of sales decreased from US$1,302,681 to US$1,278,728, and decreased as a percentage of revenues from 50.2% to 42%, year-to-year. The decrease in the cost of sales, as a percentage of revenues, was a result of the continued evolution in XPEL’s revenue mix and focus toward the DAP and associated revenues. The DAP revenue streams produce higher margins than the sale of bulk film and pre-cut paint and headlight kits.
Total expenses increased approximately US$560,522 from US$1,947,497 to $2,508,019, or approximately 28.8% between the years. General and administrative expenses accounted for a majority of the increase from US$1,418,403 to US$1,954,208, and was due mainly to increased personnel costs, which resulted from an increase in the number of full-time employees from 15 in December 2004 to 22 in December 2005, along with increased legal and professional fees. During calendar year 2005, the Company filed a lawsuit against a former employee and a former distributor in order to protect its intellectual property from infringement. Increased professional fees were incurred during the latter portion of the year in conjunction with the Company’s move to the TSX Venture Exchange, which was completed during the first quarter of 2006.
The Company incurred a net loss of US$742,862 for the year ended December 31, 2005, as compared to a net loss of US$655,243 for the year ended December 31, 2004. When adjusted for non-cash expenses, the net loss for the year-ended December 31, 2005 was US$462,344. Management believes it will be able to significantly reduce its non-recurring legal and professional fees on a going-forward basis, accelerating its ability to achieve profitability.
XPEL Technologies Corp. (www.xpel.com), publicly traded on the TSXV 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 (“The growth in our Design Access Program revenues continued at a significant rate, which is at the core of our value model, is the main driver toward profitability,” and “XPEL’s recently announced relationship with UnitedAuto Group, along with our aggressive sales and product awareness efforts, will continue to drive our growth,” and “Management believes it will be able to significantly reduce its non-recurring legal and professional fees on a going-forward basis, accelerating its ability to achieve profitability.”) 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)