XPEL Announces Q4 2017 Results
XPEL Reports Fourth Quarter Revenue Growth of 52.7%
San Antonio, TX – March 28, 2018 — XPEL Technologies Corp. (TSXV: DAP.U), a leading supplier of automotive paint protection and window films, announced results for the fourth quarter and year ended December 31, 2017.
Fourth Quarter Highlights:
- Revenues increased 52.7% to $20.2 million compared to fourth quarter 2016; Sequential revenue growth of 13.5% compared to third quarter of 2017
- Selling, general and administrative expenses decreased to 21.1% as a percentage of revenue
- Finalized Product Consolidation, Facility Consolidation and Sales and Operations Reorganization; Seeing Positive Impact In Q1 2018
Revenues for the quarter grew 52.7% to $20.2 million. Gross profit as a percentage of sales was 22.6% as compared to 23.9% in the prior quarter. Selling, general and administrative expenses increased to $4.3 million, or 21.1% of revenue, as compared to $3.4 million, or 25.6% of revenue, in the prior year quarter. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased $0.9 million to $1.0 million compared to $0.1 million in the prior year quarter. Net income was $.004 million compared to a net loss of ($.09) million in the prior year quarter.
The Company generated $7.5 million in operating cash flow for the quarter which was used to fund ongoing working capital needs and to reduce its line of credit borrowings by $4.0 million.
The Company incurred certain one-time costs totaling $0.6 million during the quarter related to the consolidation of its product lines, the consolidation of its three existing warehouse facilities into a single facility in San Antonio and the restructuring of its sales and operations. Adjusting for these non-recurring costs, fourth quarter gross profit as a percentage of revenue would have been 24.9%, selling, general and administrative expenses as a percentage of sales would have decreased to 20.3%, EBITDA would have been $1.6 million and Net Income would have been $0.45 million.
Mr. Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We are seeing the positive impact we anticipated from our consolidation and reorganization initiatives and we expect continued strong growth in revenue and significant improvement in bottom line results in 2018. The consolidation of some of our legacy paint protection film lines allows us to enhance our product efficiency by removing our lowest margin products and the working capital requirements associated with them.
Mr. Pape continued, “During fiscal 2017 we delivered strong growth driven by robust demand for our paint protection and window film and we completed three acquisitions in key strategic areas. We remain focused on leveraging the strength of our brand and our unique service model.”
For the Quarter Ended December 31, 2017:
Revenues. Revenues increased approximately $6.99 million to $20.2 million, or 52.7% over the prior year period. On a constant currency basis, revenues grew 51.2% to $20.10 million.
Gross Margin. Gross margin for the quarter grew 44.4% vs prior year quarter and decreased as a percentage of sales from 23.9% to 22.6%.
Expenses. Selling, general and administrative expenses increased $0.9 million or 26.2% vs. prior year period and decreased as a percentage of sales to 21.1% of sales from 25.6% of sales in the prior year. This increase was due mainly to increases in personnel, occupancy, sales and marketing and travel related costs to support the ongoing growth of the business as well as increases in intercompany shipping expense related to the transfer of inventory to our various warehouses to support the needs of our customers. Additionally, the company changed its depreciation method from double declining balance to straight line resulting in additional depreciation expense of approximately $0.09 million vs. prior year quarter.
EBITDA. EBITDA increased $0.925 million to $1.02 million vs prior year quarter.
Net income. Net income for the quarter decreased to $0.004 million.
For the Year Ended December 31, 2017:
Revenues. Revenues increased approximately $15.99 million to $67.75 million, or 30.9% over the prior year. On a constant currency basis, revenues grew 30.6% to $67.6 million.
Gross Margin. Gross margin for the year grew 19.7% vs the prior year and decreased as a percentage of sales from 27.1% to 24.8%.
Expenses. Selling, general and administrative expenses increased $3.7 million or 35.1% vs. prior year period and increased as a percentage of sales to 21.5% of sales from 20.8% of sales in the prior year. This increase was due mainly to increases in personnel, occupancy, sales and marketing and travel related costs to support the ongoing growth of the business as well as increases in intercompany shipping expense related to the transfer of inventory to our various warehouses to support the needs of our customers. Additionally, the company changed its depreciation method from double declining balance to straight line resulting in additional depreciation expense of approximately $0.36 million vs. prior year.
EBITDA. EBITDA decreased $0.13 million to $4.27 million vs prior year.
Net income. Net income for the year decreased to $1.13 million vs $2.16 million in the prior year.
Conference Call Information
The Company will host a conference call to discuss the fourth quarter and year and results today, March 28, 2018, at 11:00 a.m. Eastern Time.
To access the live webcast, please visit 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 April 28, 2018 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 26998.
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 Statement Available: XPEL Financial Statement