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XPEL Reports Revenue of $68.5 Million in Third Quarter 2021; Net Income of $8.3 Million

Published On 11/9/2021

XPEL Reports Revenue of $68.5 Million in Third Quarter 2021; Net Income of $8.3 Million

San Antonio, TX – November 9, 2021 – XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the third quarter and first nine months ended September 30, 2021.

Third Quarter 2021 Highlights:

  • Revenues increased 48.6% to $68.5 million compared to third quarter 2020. Organic revenue growth was 38.4%
  • Net income grew 26.1% to $8.3 million, or $0.30 per basic and diluted share, compared to $6.6 million, or $0.24 per basic and diluted share, in the same quarter of 2020. Excluding acquisition integration and other one-time costs, net income increased 35.0% to $8.9 million or $0.32 per basic and diluted share.
  • EBITDA grew 27.1% to $11.4 million, or 16.6% of revenues compared to $9.0 million, or 19.5% of sales in third quarter 2020.1 Excluding acquisition integration and other one-time costs, EBITDA grew 35.1% to $12.1 million, or 17.7% of revenue.

First Nine Months Highlights:

  • Revenues increased 71.4% to $189.1 million as compared to $110.3 million in the prior year period
  • Net income increased by 108.0% to $25.4 million, or $0.92 per basic and diluted share, compared to $12.2 million, or $0.44 per basic and diluted share, in the same period of 2020
  • EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew 98.4% to $34.1 million, or 18.1% of revenues, as compared to $17.2 million, or 15.6% in the same prior year period1

 

For the Quarter Ended September 30, 2021:

Revenues. Revenues increased approximately $22.4 million, or 48.6%, to $68.5 million as compared to $46.1 million in the prior year. 

Gross Margin. Gross margin was 35.7% compared to 34.8% in the third quarter of 2020. 

Expenses. Operating expenses increased to $14.1 million, or 20.6% of sales, compared to $7.6 million, or 16.5% of sales in the prior year period.

Net income. Net income was $8.3 million, or $0.30 per basic and diluted share, versus net income of $6.6 million, or $0.24 per basic and diluted share in the third quarter of 2020.

EBITDA. EBITDA was $11.4 million, or 16.6% of sales, compared to $9.0 million, or 19.5% of sales in the prior year1.

For the Nine Months Ended September 30, 2021:

Revenues. Revenues increased approximately $78.8 million, or 71.4%, to $189.1 million as compared to $110.3 million in the same period of the prior year. 

Gross Margin. Gross margin was 35.9% compared to 34.5% in the first nine months of 2020. 

Expenses. Operating expenses increased to $36.4 million, or 19.2% of sales, compared to $22.0 million, or 20.0%, of sales in the same prior year period.

Net income. Net income was $25.4 million, or $0.92 per basic and diluted share, versus net income of $12.2 million, or $0.44 per basic and diluted share in the first nine months of 2020.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $34.1 million, or 18.1% of sales, compared to $17.2 million, or 15.6% of sales in the same prior year period1.

Conference Call Information

The Company will host a conference call and webcast today, November 9, 2021 at 11:00 a.m. Eastern Time to discuss the Company’s third quarter 2021 results.

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

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: 191451

A replay of the teleconference will be available until December 9, 2021 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 43286. 

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”.

1 See reconciliation of non-GAAP financial measures below

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: jnesbett@institutionalms.com

 

XPEL, Inc.

Condensed Consolidated Statements of Income (Unaudited)

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenue

       

Product revenue....................................................................................................

$

56,996,265 

  

$

39,528,383 

  

$

160,594,932 

  

$

94,240,296 

 

Service revenue....................................................................................................

11,532,658 

  

6,594,413 

  

28,536,076 

  

16,076,821 

 

Total revenue..................................................................................................

68,528,923 

  

46,122,796 

  

189,131,008 

  

110,317,117 

 
        

Cost of Sales

       

Cost of product sales....................................................................................................

39,700,627 

  

28,369,882 

  

111,839,485 

  

67,687,991 

 

Cost of service....................................................................................................

4,373,741 

  

1,723,082 

  

9,303,309 

  

4,563,329 

 

Total cost of sales..................................................................................................

44,074,368 

  

30,092,964 

  

121,142,794 

  

72,251,320 

 

Gross Margin.......................................................................................................

24,454,555 

  

16,029,832 

 

.

67,988,214 

  

38,065,797 

 
        

Operating Expenses

       

Sales and marketing....................................................................................................

4,903,846 

  

2,326,900 

  

12,978,369 

  

6,989,678 

 

General and administrative....................................................................................................

9,183,440 

  

5,289,277 

  

23,423,144 

  

15,038,140 

 

Total operating expenses...........................................................................................

14,087,286 

  

7,616,177 

  

36,401,513 

  

22,027,818 

 
        

Operating Income.......................................................................................................

10,367,269 

  

8,413,655 

 

.

31,586,701 

  

16,037,979 

 
        

Interest expense....................................................................................................

46,433 

  

68,368 

  

143,092 

  

173,480 

 

Foreign currency exchange loss....................................................................................................

148,825 

  

709 

  

121,531 

  

420,427 

 
        

Income before income taxes.......................................................................................................

10,172,011 

  

8,344,578 

 

.

31,322,078 

  

15,444,072 

 

Income tax expense....................................................................................................

1,841,250 

  

1,736,330 

  

5,958,709 

  

3,250,780 

 

Net income.......................................................................................................

8,330,761 

  

6,608,248 

 

.

25,363,369 

  

12,193,292 

 
        

Earnings per share

       

Basic....................................................................................................

$

0.30 

  

$

0.24 

  

$

0.92 

  

$

0.44 

 

Diluted....................................................................................................

$

0.30 

  

$

0.24 

  

$

0.92 

  

$

0.44 

 

Weighted Average Number of Common Shares

       

Basic....................................................................................................

27,612,597 

  

27,612,597 

  

27,612,597 

  

27,612,597 

 

Diluted....................................................................................................

27,613,124 

  

27,612,597 

  

27,612,773 

  

27,612,597 

 

XPEL, Inc.

Condensed Consolidated Balance Sheets

 

(Unaudited)

 

(Audited)

 

September 30, 2021

 

December 31, 2020

Assets

   

Current

   

Cash and cash equivalents.....................................................................................................................................................

$

7,816,332 

  

$

29,027,124 

 

Accounts receivable, net.....................................................................................................................................................

14,324,671 

  

9,944,213 

 

Inventory, net.....................................................................................................................................................

39,554,300 

  

22,364,126 

 

Prepaid expenses and other current assets.....................................................................................................................................................

3,459,643 

  

1,441,749 

 

Income tax receivable.....................................................................................................................................................

839,305 

  

— 

 

Total current assets...................................................................................................................................................

65,994,251 

  

62,777,212 

 

Property and equipment, net.........................................................................................................................................................

8,662,924 

  

4,706,248 

 

Right-of-Use lease assets.........................................................................................................................................................

11,785,675 

  

5,973,702 

 

Intangible assets, net.........................................................................................................................................................

21,575,724 

  

5,423,980 

 

Other non-current assets.........................................................................................................................................................

637,662 

  

486,472 

 

Goodwill.........................................................................................................................................................

15,747,077 

  

4,472,217 

 

Total assets...................................................................................................................................................

$

124,403,313 

  

$

83,839,831 

 

Liabilities

   

Current

   

Current portion of notes payable.....................................................................................................................................................

$

424,610 

  

$

2,568,172 

 

Current portion lease liabilities.....................................................................................................................................................

2,908,492 

  

1,650,749 

 

Accounts payable and accrued liabilities.....................................................................................................................................................

31,654,155 

  

16,797,462 

 

Income tax payable.....................................................................................................................................................

— 

  

183,961 

 

Total current liabilities...................................................................................................................................................

34,987,257 

  

21,200,344 

 

Deferred tax liability, net.........................................................................................................................................................

1,049,433 

  

627,806 

 

Other long-term liabilities.........................................................................................................................................................

720,777 

  

729,408 

 

Non-current portion of lease liabilities.........................................................................................................................................................

9,084,258 

  

4,331,214 

 

Non-current portion of notes payable.........................................................................................................................................................

154,763 

  

3,568,191 

 

Total liabilities...................................................................................................................................................

45,996,488 

  

30,456,963 

 

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.........................................................................................................................................................

27,613 

  

27,613 

 

Additional paid-in-capital.........................................................................................................................................................

10,489,295 

  

10,412,471 

 

Accumulated other comprehensive (loss) income.........................................................................................................................................................

(350,021)

  

66,215 

 

Retained earnings.........................................................................................................................................................

68,239,938 

  

42,876,569 

 

Total stockholders’ equity...................................................................................................................................................

78,406,825 

  

53,382,868 

 

Total liabilities and stockholders’ equity...................................................................................................................................................

$

124,403,313 

  

$

83,839,831 

 

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

 

(Unaudited)

 

(Unaudited)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Net Income.....................................................................................................

$

8,330,761 

  

$

6,608,248 

  

$

25,363,369 

  

$

12,193,292 

 

Interest.....................................................................................................

46,433 

  

68,368 

  

143,092 

  

173,480 

 

Taxes.....................................................................................................

1,841,250 

  

1,736,330 

  

5,958,709 

  

3,250,780 

 

Depreciation.....................................................................................................

455,792 

  

325,643 

  

1,258,489 

  

889,820 

 

Amortization.....................................................................................................

734,963 

  

239,571 

  

1,420,347 

  

705,692 

 

EBITDA.....................................................................................................

$

11,409,199 

  

$

8,978,160 

  

$

34,144,006 

  

$

17,213,064