XPEL Technologies Corp. Reports First Quarter 2007 Results

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XPEL TECHNOLOGIES CORP. REPORTS FIRST QUARTER 2007 RESULTS

– 32% Growth in Design Access Program Revenues –
– DAP Revenues Expand to 57% of Total Operating Revenues –
– Gross Profit Margins Reach 70% –

SAN ANTONIO, TEXAS, May 30, 2007…XPEL Technologies Corp. (TSXV: DAP.U) announced today results for the three months ended March 31, 2007, as compared to the three months ended March 31, 2006.

XPEL’s Chief Executive Officer, Steven J. McAuley, commented, “I am pleased with the significant improvements we were able to achieve during the first quarter. An increase in our revenues and declining cost of sales led to our lowest cash losses since becoming a public entity during the 4th quarter of 2004. After adjustment for non-cash expenses and non-recurring legal fees, XPEL’s cash loss for the quarter was approximately US$30,000. We believe this is just the start for continued improvement in our financial metrics throughout this fiscal year. For example, XPEL achieved cash flow profitability for the month of April, which was a first-ever milestone for the Company. We are committed to this positive trend by diligently focusing on the growth of our model, maximum utilization of our assets, and by containing our expenses.”

Three Months Ended March 31, 2007 compared to the Three Months Ended March 31, 2006

Revenues. Revenues increased from US$796,945 to US$850,491, or 7% between periods. The increase in revenues is a result of a significant increase in our Design Access Program (“DAP”) fees. DAP revenues increased US$118,574 or 32% between years. As XPEL continues to drive growth in the DAP revenue stream, margins generated by the DAP fees can be significantly higher than those generated by our other revenue streams.

Cost of Sales. Cost of sales decreased both in pure dollars and as a percentage of revenues from US$308,039 to US$256,238, from 39% to 30%, period to period. As the DAP revenues, which are higher margin revenues, continue to grow and the mix of revenues continues to evolve, management believes cost of sales, as a percentage of revenues will continue to improve as well.

Expenses. Total expenses increased US$179,377 from US$749,134 to US$928,511, or approximately 24% between periods. The increased expenses were primarily a result of increased general and administrative expenses.

General and administrative expenses increased from US$615,589 to US$826,111, or 34% between periods. This increase was due primarily to increased personnel costs and increased facility costs. The increased personnel costs resulted from both the expensing of stock options granted to the Company’s employees and directors through the end of the quarter and an increase in the number of full and part-time employees from 23 to 26 between periods, including the hiring of XPEL’s new Chief Executive Officer, Steven J. McAuley, on January 15, 2007.

Net earnings (loss). The Company had a net loss of US$334,258 for the quarter ended March 31, 2007 as compared to a net loss of US$260,228 for the quarter ended March 31, 2006. When adjusted for non-cash expenses the net loss decreases to US$103,789 for the quarter ended March 31, 2007 as compared to US$155,235 for the quarter ended March 31, 2006. When further adjusted for non-recurring legal fees, the cash loss for the quarter decreases to approximately US$30,000. As the Company continues to grow DAP revenues and explores additional revenue opportunities, along with eliminating necessary but non-recurring legal and professional fees, this will likely lead to profitable operations.

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 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 (“We believe this is just the start for continued improvement in our financial metrics throughout this fiscal year.” and “As the DAP revenues, which are higher margin revenues, continue to grow and the mix of revenues continues to evolve, management believes cost of sales, as a percentage of revenues will continue to improve as well.” and “As the Company continues to grow DAP revenues and explores additional revenue opportunities, along with eliminating necessary but non-recurring legal and professional fees, this will likely lead to profitable operations.”) 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.

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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]