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XPEL Reports Third Quarter 2022 Results

Published On 11/9/2022

San Antonio, TX – November 9, 2022– XPEL, Inc. (Nasdaq: XPEL) a global provider of protective films and coatings, today announced results for the third quarter and nine months ended September 30, 2022.

Third Quarter 2022 Highlights:

  • Revenues increased 31.0% to a record $89.8 million in the third quarter.
  • Gross margin percentage improved to 39.8% in the third quarter, a new high for the Company.
  • Net income grew 59.9% to $13.3 million, or $0.48 per share, compared to $8.3 million, or $0.30 per share, in the same quarter of 2021.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 66.0% to $18.9 million, or 21.1% of revenues compared to $11.4 million in third quarter 2021.1

First Nine Months Highlights:

  • Revenues increased 29.8% to $245.5 million in the first nine months of 2022.
  • Gross margin percentage improved to 39.3% in the first nine months of 2022.
  • Net income grew 30.2% to $33.0 million, or $1.20 per share, compared to $25.4 million, or $0.92 per share, in the first nine months of 2021.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 40.6% to $48.0 million, or 19.5% of revenues compared to $34.1 million in the first nine months of 20211.

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Our strong third quarter results reflect on-going momentum in the business even in the face of economic uncertainty. We saw solid performance across most of our regions and we look forward to continuing to build on this momentum as we close out the year.”

For the Quarter Ended September 30, 2022:

Revenues. Revenues increased approximately $21.2 million or 31.0% to $89.8 million as compared to $68.5 million in the third quarter of the prior year.

Gross Margin. Gross margin was 39.8% compared to 35.7% in the third quarter of 2021.

Expenses. Operating expenses increased to $18.5 million, or 20.6% of sales, compared to $14.1 million, or 20.6% of sales in the prior year period.

Net income. Net income was $13.3 million, or $0.48 per basic and diluted share, versus net income of $8.3 million, or $0.30 per basic and diluted share in the third quarter of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $18.9 million, or 21.1% of sales, as compared to $11.4 million, or 16.6% of sales in the prior year1.

For the Nine Months Ended September 30, 2022:

Revenues. Revenues increased approximately $56.4 million or 29.8% to $245.5 million as compared to $189.1 million in the first nine months of the prior year.

Gross Margin. Gross margin was 39.3% compared to 35.9% in the first nine months of 2021.

Expenses. Operating expenses increased to $53.4 million, or 21.7% of sales, compared to $36.4 million or 19.2% of sales in the prior year period.

Net income. Net income was $33.0 million, or $1.20 per basic and diluted share versus net income of $25.4 million, or $0.92 per basic and diluted share in the first nine months of 2021.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $48.0 million, or 19.5% of sales, as compared to $34.1 million, or 18.0% of sales in the prior year1.

1 See reconciliation of non-GAAP financial measures below

Conference Call Information

The Company will host a conference call and webcast today, November 9, 2022 at 11:00 a.m. Eastern Time to discuss the Company’s third quarter 2022 results.

To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/earnings.

To participate in the call by phone, dial 888-506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use access code: 868222

A replay of the teleconference will be available until December 9, 2022 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 46864.

About XPEL, Inc.

XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and architectural window films, and ceramic coatings. With a global footprint, a network of trained installers and proprietary DAP software, XPEL is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support and world-class training. XPEL, Inc. is publicly traded on Nasdaq under the symbol “XPEL”.

Safe harbor statement

This release includes forward-looking statements regarding XPEL, Inc. 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.

For more information contact:
Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: xpel@imsinvestorrelations.com


XPEL Inc.
Condensed Consolidated Statements of Income (Unaudited)
(In thousands except per share data)

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022

2021

2022

2021

Revenue
 Product revenue $    72,616 $    56,996 $    197,753 $    160,595
 Service revenue      17,142      11,533      47,759      28,536
    Total revenue      89,758      68,529      245,512      189,131
 
Cost of Sales
 Cost of product sales      47,225      39,701      129,646      111,839
 Cost of service      6,767      4,374      19,400      9,303
     Total cost of sales      53,992      44,075      149,046      121,142
Gross Margin      35,766      24,454      96,466      67,989
 
Operating Expenses
 Sales and marketing      6,297      4,904      18,515      12,978
 General and administrative      12,162      9,183      34,859      23,423
     Total operating expenses      18,459      14,087      53,374      36,401
 
Operating Income      17,307      10,367      43,092      31,588
 
 Interest expense      391      46      933      143
 Foreign currency exchange (gain) loss      372      149      833      122
 
Income before income taxes      16,544      10,172      41,326      31,323
 Income tax expense      3,226      1,841      8,302      5,959
Net income $    13,318 $    8,331 $    33,024 $    25,364
 
Earnings per share
 Basic $        0.48 $        0.30 $        1.20 $        0.92
 Diluted $        0.48 $        0.30 $        1.20 $        0.92
Weighted Average Number of Common Shares
 Basic $     27,616 $     27,613 $     27,614 $     27,613
 Diluted $     27,620 $     27,613 $     27,615 $     27,613


XPEL Inc.
Condensed Consolidated Balance Sheets
(In thousands except per share data)

 

(Unaudited)
September 30, 2022

(Audited)
December 31, 2021

Assets
Current
 Cash and cash equivalents $       10,245 $       9,644
 Accounts receivable, net      17,944      13,159
 Inventory, net      69,388      51,936
 Prepaid expenses and other current assets      7,065      3,672
 Income tax receivable      —      617
     Total current assets      104,642      79,028
Property and equipment, net      12,658      9,898
Right-of-use lease assets      15,194      12,910
Intangible assets, net      29,426      32,733
Other non-current assets      921      791
Goodwill      25,417      25,655
     Total assets $   188,258 $   161,015
Liabilities
Current
 Current portion of notes payable      140      375
 Current portion lease liabilities      3,155      2,978
 Accounts payable and accrued liabilities      28,048      32,915
 Income tax payable      472      —
     Total current liabilities      31,815      36,268
Deferred tax liability, net      2,502      2,748
Other long-term liabilities      899      2,631
Borrowings on line of credit      26,000      25,000
Non-current portion of lease liabilities      12,089      9,830
Non-current portion of notes payable      —      76
     Total liabilities      73,305      76,553
Commitments and Contingencies (Note 11)
Stockholders' equity
Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding      —      —
Common stock, $0.001 par value; 100,000,000 shares authorized; 27,612,597 issued and outstanding      28      28
Additional paid-in-capital      10,869      10,581
Accumulated other comprehensive loss      (3,411)      (590)
Retained earnings      107,467      74,443
  Total stockholders' equity      114,953      84,462
  Total liabilities and stockholders' equity $     188,258 $     161,015

Reconciliation of Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of our financial performance under GAAP and should not be considered as alternatives to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP.

EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations and other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

EBITDA Reconciliation
(In thousands)

 

(Unaudited)
Three Months Ended September 30,

(Unaudited)
Nine Months Ended September 30,

2022

2021

2022

2021

Net Income $     13,318 $     8,331 $     33,024 $     25,364
Interest      391      46      933      143
Taxes      3,226      1,841      8,302      5,959
Depreciation      890      456      2,486      1,258
Amortization      1,117      735      3,248      1,420
EBITDA $     18,942 $     11,409 $     47,993 $     34,144