XPEL Announces Q2 2017 Results
XPEL Reports Second Quarter Revenue Growth of 25%
San Antonio, TX – August 29, 2017 — XPEL Technologies Corp. (TSXV: DAP.U), a leading supplier of automotive paint protection and window films, announced results for the second quarter and six months ended June 30, 2017.
Mr. Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Our second quarter revenue was the highest revenue quarter by far in the Company’s history as we continued to execute on our core ‘Get Close to the Customer’ strategy. Customer demand was strong throughout our markets, particularly in Canada, and we saw strong growth across all of our product lines.
“Gross margins for the quarter remained relatively steady versus the prior year and we continue to invest in infrastructure, sales, marketing and product development to drive growth and scale the business.”
Mr. Pape concluded, “Our strategy positions us well to effectively leverage our distribution channels and our brand to drive solid top and bottom line growth.”
For the Quarter Ended June 30, 2017:
Revenue: Revenue in the second quarter of fiscal 2017 was $17.0 million, a 25% increase compared to prior year. On a constant currency basis, revenues increased 26.3% to $17.3 million. The revenue increase is primarily related to increased sales of XPEL’s core products of automotive protection film and window film.
Gross Margin: Gross profit as a percentage of sales was 27.1% as compared to 27.5% in the second quarter last year. Direct costs include the costs of our physical goods, the costs related to our Design Access Program software, and the costs of labor directly associated with the production of product.
Expenses: Selling, general and administrative expenses increased to $3.4 million or 19.8% of revenue as compared to $2.4 million or 17.8% of revenue in the second quarter of 2016. The expense increase in the quarter was primarily due to increased personnel costs, increased occupancy, information technology and travel related costs to support the growth of the business. These costs were partially offset by a reduction in professional fees. Additionally, the Company changed its depreciation method from double declining balance to straight line, resulting in additional depreciation expense of approximately $.09 million as compared to the prior year quarter.
EBITDA: Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA) increased to $1.7 million, or 6.23% as compared to EBITDA of $1.6 million in the same prior year quarter. On a constant currency basis, EBITDA increased 6.29%.
Net Income: Net income for the fiscal 2017 second quarter was $0.75 million or $0.027 per basic and diluted share, compared with net income of $0.76 million or $0.030 per basic and diluted share, in the corresponding prior year period.
For the Six Months Ended June 30, 2017:
Revenue: Revenue in the first six months of fiscal 2017 was $29.7 million, a 19% increase compared to revenue of $25.0 million in the same prior year period. The revenue increase is primarily related to increased sales of XPEL’s core products of automotive protection film and window film.
Gross Margin: Gross profit as a percentage of sales was 26.8% as compared to 28.2% in the first six months of last year. Gross profit in the first half of 2017 was impacted by higher warranty costs in the first quarter related to film quality issues from products sold late last year and early in the first quarter of the current year. Direct costs include the costs of our physical goods, the costs related to our Design Access Program software, and the costs of labor directly associated with the production of product.
Expenses: Selling, general and administrative expenses increased to $6.7 million or 22.6% of revenue as compared to $4.8 million or 19.2% of revenue in the first six months of 2017. The expense increase in the quarter was primarily due to increased personnel costs to support the growth of the business; marketing related costs associated with our dealer conference in the first quarter; and increased legal fees resulting from litigation which was settled in the first quarter. Additionally, the Company changed its depreciation method from double declining balance to straight line, resulting in additional depreciation expense of approximately $0.18 million as compared to the prior year period.
EBITDA: Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA) decreased to $2.1 million in the first half of 2017 as compared to EBITDA of $2.8 million in the same prior year period.
Net Income: Net income for the first six months of fiscal 2017 was $0.69 million or $0.025 per basic and diluted share, compared with net income of $1.5 million or $0.057 per basic and diluted share, in the corresponding prior year period.
Conference Call Information
The Company will host a conference call to discuss the second quarter results today, August 29, 2017, at 11:00 a.m. Eastern Time.
To access the live webcast, log onto the XPEL Technologies website at: www.xpel.com/investor
To participate in the call by phone, dial (877) 407-8033 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8033.
A replay of the teleconference will be available until September 29, 2017 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 19931.
About XPEL Technologies Corp.
XPEL leads the industry in designing, manufacturing and distributing high-performance automotive paint and headlamp protection film technologies. Using XPEL’s proprietary software and materials, our professional design team develops products that deliver the ultimate in vehicle protection, meeting the demands of a broad range of makes and models. With more than 70,000 vehicle-specific applications and a global network of trained installers, XPEL is dedicated to exceeding customer expectations in providing high-quality products, customer service and technical support. XPEL Technologies Corp. (TSXV: DAP.U) is publicly traded on the TSXV Exchange. Visit www.xpel.com for more information.
Safe harbor statement
This release includes forward-looking statements regarding XPEL Technologies Corp. and its business, which may include, but is not limited to, anticipated use of proceeds from capital transactions, expansion into new markets, and execution of the company’s growth strategy. 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 of the management of XPEL. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, performance and acceptance of the company’s products, economic factors, competition, the equity markets generally and many other factors beyond the control of
XPEL. 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information, contact:
John Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)
Phone: (203) 972-9200
Full Financial Information available at: XPEL Q2 2017 Financials