XPEL Reports Quarterly Results
XPEL REPORTS QUARTERLY RESULTS
– Achieved Positive Net Cash Flows for the Quarter –
– Completed Acquisition of Canadian Entity –
– Annualized Revenues Exceeding US$8 Million –
– Substantially Improved Balance Sheet –
SAN ANTONIO, TEXAS, August 30, 2007…XPEL Technologies Corp. (TSXV: DAP.U) announces results for the three and six months ended June 30, 2007, as compared to the three and six months ended June 30, 2006.
XPEL’s Chief Executive Officer, Steven J. McAuley, stated, “The second quarter of 2007 was a breakout quarter for us. We achieved cash flow profitability for the first time since becoming a public company in late 2004. Additionally, we completed the Canadian acquisition of approximately US$3.5 million in annualized revenues on June 27, 2007, of which only three days of income are included in the 2Q numbers we reported. During the period, we substantially improved XPEL’s balance sheet by growing total assets 268%, expanded shareholder equity by over 1600%, and significantly improved working capital by over US$1.5 million in the first six months of 2007.”
Mr. McAuley further added, “We further improved our core patented technology and continue to evolve as a company with many exciting new products coming to market for the vehicle protection industry. Our top line revenue will continue to grow, and we expect to achieve positive cash flow on a full year basis.”
Three and Six Months Ended June 30, 2007 compared to the Three and Six Months Ended June 30, 2006
Revenues. Revenues, inclusive of three days of revenues from Canadian operations, increased from US$925,328 to US$1,067,760, or 15% between quarters and from US$1,722,273 to US$1,918,251, or 11% between the six month periods.
Cost of Sales. Cost of sales decreased both in pure dollars and as a percentage of revenues from US$371,559 to US$332,079, or 40% to 31% respectively between quarters. For the six months ended June 30, 2007, cost of sales decreased from US$679,598 to US$588,317 or from 39% to 31% respectively, when compared to the six months ended June 30, 2006.
Expenses. Total expenses increased US$61,872 from US$886,770 to US$948,642, or approximately 7% between quarters and increased US$241,249 from US$1,635,904 to US$1,877,153, or approximately 15% between the six month periods. The increased expenses were primarily a result of increased general and administrative expenses and increased amortization expense offset by a decline in research and development expenses.
General and administrative expenses increased from US$686,472 to US$809,144, or 18% between quarters and from US$1,302,061 to US$1,635,255, or 26% between the six month periods.
Research and developments expenses decreased from US$54,649 to $0 during the quarters and from US$110,444 to $0 during the six months ended, as the Company determined that the costs related to its design function should be expensed over a twenty four-month period. In previous periods, the Company expensed its design costs as incurred.
Net earnings (loss). The Company had a net loss of US$212,961 for the quarter ended June 30, 2007 as compared to a net loss of US$333,001 for the quarter ended June 30, 2006. When adjusted for non-cash expenses, XPEL recorded net income of US$23,439 for the quarter ended June 30, 2007 as compared to an adjusted net loss of US$228,989 for the quarter ended June 30, 2006. This represents the first quarter of cash flow profitability since the Company went public in late 2004. The Company had a net loss of US$547,219 for the six months ended June 30, 2007 as compared to a net loss of US$593,229 for the six months ended June 30, 2006. When adjusted for non-cash expenses, the net loss decreased to US$74,122 for the six months ended June 30, 2007 as compared to an adjusted net loss of US$384,224 for the six months ended June 30, 2006.
This press release should be read in conjunction with the Interim Financials, Notes and Management Discussion and Analysis filed on www.sedar.com.
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 a 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 such as: “Our top line revenue will continue to grow, and we expect to achieve positive cash flow on a full year basis” are considered “forward-looking statements.” These types of 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 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)