Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries XPEL Reports First Quarter Results By: XPEL, Inc. via Business Wire May 02, 2024 at 07:39 AM EDT XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the first quarter and year ended March 31, 2024. First Quarter 2024 Overview: Revenue increased 5.0% to $90.1 million compared to the first quarter of 2023. Gross margin of 42.0% for the quarter. Net income decreased 41.7% to $6.7 million, or $0.24 per basic and diluted share, versus net income of $11.4 million, or $0.41 per basic and diluted share in the first quarter of 2023. These results include approximately $1.6 million in costs related to the Company’s annual dealer conference. The 2024 dealer conference was held in the first quarter, while the 2023 conference took place in the second quarter. Normalizing for these costs, net income would have decreased 30.7% and EPS would have been $0.29 per share. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 31.5% to $11.7 million, or 13.0% of revenue compared to $17.1 million, or 19.9% of revenue in the first quarter of 2023. Normalizing for the annual dealer conference, EBITDA would have declined 22.1% and EBITDA margin would have been 14.8%.2 Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Clearly, the first quarter was a challenging quarter for the Company, particularly in the US, where we saw a continued trend of a slowing aftermarket especially compared to the strength of the first half of 2023. Additionally, port delays reduced sales of two popular vehicle brands for our products which further impacted our US results. We did see some momentum return in our April numbers and we are optimistic that momentum will continue as we progress throughout the year.” Financial Highlights for the First Quarter 2024: Summary consolidated financial information for the three months ended March 31, 2024 and 2023 (unaudited, dollars in thousands): Three Months Ended March 31, % Change 2024 % of Total Revenue 2023 % of Total Revenue 2024 vs. 2023 Total revenue $ 90,104 100.0 % $ 85,842 100.0 % 5.0 % Gross margin 37,876 42.0 % 35,960 41.9 % 5.3 % Operating Expenses 28,647 31.8 % 21,029 24.5 % 36.2 % Operating income 9,229 10.2 % 14,931 17.4 % (38.2 )% Net income 6,666 7.4 % 11,433 13.3 % (41.7 )% EBITDA2 11,700 13.0 % 17,073 19.9 % (31.5 )% Net cash (used in) provided by operating activities $ (4,959 ) n/a $ 695 n/a n/a Geographical Revenue Summary Three Months Ended March 31, % % of Total Revenue 2024 2023 Inc (Dec) 2024 2023 United States $ 52,048 $ 51,077 1.9 % 57.8 % 59.5 % China 1,450 6,647 (78.2 )% 1.6 % 7.7 % Canada 11,080 8,592 29.0 % 12.3 % 10.0 % Continental Europe 10,216 7,960 28.3 % 11.3 % 9.3 % United Kingdom 3,486 3,091 12.8 % 3.9 % 3.6 % Middle East/Africa 5,143 3,496 47.1 % 5.7 % 4.1 % Asia Pacific 3,750 2,645 41.8 % 4.2 % 3.1 % Latin America 2,931 2,173 34.9 % 3.2 % 2.5 % Other — 161 (100.0 )% 0.0 % 0.2 % Total $ 90,104 $ 85,842 5.0 % 100.0 % 100.0 % Overall Revenue Total revenue grew 5.0% year-over-year ("YoY"). US revenue grew 1.9% YoY to $52.0 million. China revenue declined 78.2% YoY to $1.5 million. Rest of World revenue (excluding US and China) grew 30.2% YoY. Product and Service Revenue Total product revenue decreased 0.7% YoY. This decrease was due to lower demand in the U.S., primarily in the after-market channel, and lower sales to XPEL's China distributor. China revenue was the highest in our history in the fourth quarter 2023. Consequently, Q1 2024 China sales were negatively impacted as our distributor sold through the inventory purchased in Q4 last year. Total window film decreased 2.9% YoY and represented 16.1% of total revenue. This decline was due mainly to lower revenues into China. Excluding China, total window film revenue grew 10.3%. Architectural window film revenue increased 33.1% to $1.8 million. Total service revenue increased 25.5% YoY. The increase was due mainly to increases in the Company's dealership services business resulting from increased car counts, increased content per vehicle and from our OEM business, which increased 57.6% YoY to $4.6 million. Total installation revenue (labor and product combined) grew 34.7% YoY and represented 22.1% of total revenue. This increase was due primarily to increased demand in XPEL's dealership services and OEM businesses. Adjusted product revenue (combining cutbank credits revenue and product revenue) decreased 0.7% YoY. Other Financial Information Gross margin percentage was 42.0% and 41.9% in the three months ended March 31, 2024 and 2023, respectively. Total operating expenses grew 36.2% YoY. Normalizing for annual dealer conference expenses, total operating expenses grew 28.6% YoY. Sequentially, after normalizing for annual dealer conference costs, total operating expenses increased 1.3%. Sales and marketing expenses grew 55.7% YoY and represented 11.5% of revenue. Normalizing for annual dealer conference expenses, sales and marketing expenses would have grown 31.7% YoY. General and administrative expenses grew 27.2% YoY and represented 20.3% of revenue. Net income declined 41.7% YoY. EBITDA declined 31.5% YoY2. Operating Cash Flows Cash flows used in operations was $5.0 million in the first quarter 2024. While overall inventory increased during the quarter, raw materials and work-in-progress inventory declined substantially as expected as the Company continues to manage days on hand downward throughout the rest of the year. 2024 Outlook Annual revenue growth projection is revised downward to 8-10% from 15%. Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2024 Outlook. Conference Call Information The Company will host a conference call and webcast today, May 2, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s first quarter 2024 results. To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/events-presentations. 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: 871439. A replay of the teleconference will be available until June 1, 2024 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 50361. 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 The results summarized above for 2024 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the first quarter of 2024, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full first quarter 2024 financial information will be included in the filing of the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission which is anticipated on or prior to May 9, 2024. 2 See "Non-GAAP Financial Measure" and "Reconciliation of Non-GAAP Financial Measure" below. Forward-looking Statements This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) 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, execution of the company's growth strategy and outlook. 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 and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents filed from time to time with the SEC by XPEL and available on XPEL's website at www.xpel.com. 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. Non-GAAP Financial Measure To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation 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 XPEL's financial performance under GAAP and should not be considered as an alternative 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 title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled "Reconciliation of Non-GAAP Financial Measure." XPEL, Inc. Consolidated Statements of Income (In thousands except per share data) Three Months Ended March 31, 2024 2023 Revenue Product revenue $ 66,852 $ 67,308 Service revenue 23,252 18,534 Total revenue 90,104 85,842 Cost of Sales Cost of product sales 42,135 42,180 Cost of service 10,093 7,702 Total cost of sales 52,228 49,882 Gross Margin 37,876 35,960 Operating Expenses Sales and marketing 10,391 6,675 General and administrative 18,256 14,354 Total operating expenses 28,647 21,029 Operating Income 9,229 14,931 Interest expense 473 523 Foreign currency exchange loss (gain) 272 (9 ) Income before income taxes 8,484 14,417 Income tax expense 1,818 2,984 Net income $ 6,666 $ 11,433 Earnings per share Basic $ 0.24 $ 0.41 Diluted $ 0.24 $ 0.41 Weighted Average Number of Common Shares Basic 27,630 27,616 Diluted 27,637 27,626 XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) (Audited) March 31, 2024 December 31, 2023 Assets Current Cash and cash equivalents $ 8,614 $ 11,609 Accounts receivable, net 28,569 24,111 Inventory, net 110,171 106,509 Prepaid expenses and other current assets 5,578 3,529 Income tax receivable — 696 Total current assets 152,932 146,454 Property and equipment, net 17,624 16,980 Right-of-use lease assets 15,471 15,459 Intangible assets, net 33,938 34,905 Other non-current assets 863 782 Goodwill 37,664 37,461 Total assets $ 258,492 $ 252,041 Liabilities Current Current portion of notes payable $ 63 $ 62 Current portion lease liabilities 3,946 3,966 Accounts payable and accrued liabilities 27,611 32,444 Income tax payable 201 — Total current liabilities 31,821 36,472 Deferred tax liability, net 2,459 2,658 Other long-term liabilities 682 890 Borrowings on line of credit 24,000 19,000 Non-current portion of lease liabilities 12,814 12,715 Non-current portion of notes payable 293 317 Total liabilities 72,069 72,052 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; 27,631,097 and $27,630,025 issued and outstanding, respectively 28 28 Additional paid-in-capital 13,176 12,546 Accumulated other comprehensive loss (2,071 ) (1,209 ) Retained earnings 175,290 168,624 Total stockholders’ equity 186,423 179,989 Total liabilities and stockholders’ equity $ 258,492 $ 252,041 XPEL, Inc. Consolidated Statements of Cash Flows (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities Net income $ 6,666 $ 11,433 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation of property, plant and equipment 1,333 972 Amortization of intangible assets 1,410 1,161 Gain on sale of property and equipment (18 ) (9 ) Stock compensation 630 303 Provision for credit losses 89 74 Deferred income tax (157 ) (115 ) Changes in assets and liabilities: Accounts receivable (4,763 ) (6,606 ) Inventory, net (3,878 ) (3,886 ) Prepaid expenses and other current assets (2,325 ) (2,512 ) Income taxes receivable and payable 904 2,360 Accounts payable and accrued liabilities (4,850 ) (2,480 ) Net cash (used in) provided by operating activities (4,959 ) 695 Cash flows used in investing activities Purchase of property, plant and equipment (2,017 ) (2,055 ) Proceeds from sale of property and equipment — 12 Acquisition of a business, net of cash acquired (757 ) — Development of intangible assets (340 ) (321 ) Net cash used in investing activities (3,114 ) (2,364 ) Cash flows from financing activities Net borrowings on revolving credit agreement 5,000 2,000 Repayments of notes payable (15 ) (77 ) Net cash provided by financing activities 4,985 1,923 Net change in cash and cash equivalents (3,088 ) 254 Foreign exchange impact on cash and cash equivalents 93 20 (Decrease)/Increase in cash and cash equivalents during the period (2,995 ) 274 Cash and cash equivalents at beginning of period 11,609 8,056 Cash and cash equivalents at end of period $ 8,614 $ 8,330 Supplemental schedule of non-cash activities Non-cash lease financing $ 952 $ 1,237 Issuance of common stock for vested restricted stock units 57 — Supplemental cash flow information Cash paid for income taxes $ 1,152 $ 748 Cash paid for interest $ 430 $ 517 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 March 31, 2024 2023 Net Income $ 6,666 $ 11,433 Interest 473 523 Taxes 1,818 2,984 Depreciation 1,333 972 Amortization 1,410 1,161 EBITDA $ 11,700 $ 17,073 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501310931/en/Contacts For more information: Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: xpel@imsinvestorrelations.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
XPEL Reports First Quarter Results By: XPEL, Inc. via Business Wire May 02, 2024 at 07:39 AM EDT XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the first quarter and year ended March 31, 2024. First Quarter 2024 Overview: Revenue increased 5.0% to $90.1 million compared to the first quarter of 2023. Gross margin of 42.0% for the quarter. Net income decreased 41.7% to $6.7 million, or $0.24 per basic and diluted share, versus net income of $11.4 million, or $0.41 per basic and diluted share in the first quarter of 2023. These results include approximately $1.6 million in costs related to the Company’s annual dealer conference. The 2024 dealer conference was held in the first quarter, while the 2023 conference took place in the second quarter. Normalizing for these costs, net income would have decreased 30.7% and EPS would have been $0.29 per share. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 31.5% to $11.7 million, or 13.0% of revenue compared to $17.1 million, or 19.9% of revenue in the first quarter of 2023. Normalizing for the annual dealer conference, EBITDA would have declined 22.1% and EBITDA margin would have been 14.8%.2 Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Clearly, the first quarter was a challenging quarter for the Company, particularly in the US, where we saw a continued trend of a slowing aftermarket especially compared to the strength of the first half of 2023. Additionally, port delays reduced sales of two popular vehicle brands for our products which further impacted our US results. We did see some momentum return in our April numbers and we are optimistic that momentum will continue as we progress throughout the year.” Financial Highlights for the First Quarter 2024: Summary consolidated financial information for the three months ended March 31, 2024 and 2023 (unaudited, dollars in thousands): Three Months Ended March 31, % Change 2024 % of Total Revenue 2023 % of Total Revenue 2024 vs. 2023 Total revenue $ 90,104 100.0 % $ 85,842 100.0 % 5.0 % Gross margin 37,876 42.0 % 35,960 41.9 % 5.3 % Operating Expenses 28,647 31.8 % 21,029 24.5 % 36.2 % Operating income 9,229 10.2 % 14,931 17.4 % (38.2 )% Net income 6,666 7.4 % 11,433 13.3 % (41.7 )% EBITDA2 11,700 13.0 % 17,073 19.9 % (31.5 )% Net cash (used in) provided by operating activities $ (4,959 ) n/a $ 695 n/a n/a Geographical Revenue Summary Three Months Ended March 31, % % of Total Revenue 2024 2023 Inc (Dec) 2024 2023 United States $ 52,048 $ 51,077 1.9 % 57.8 % 59.5 % China 1,450 6,647 (78.2 )% 1.6 % 7.7 % Canada 11,080 8,592 29.0 % 12.3 % 10.0 % Continental Europe 10,216 7,960 28.3 % 11.3 % 9.3 % United Kingdom 3,486 3,091 12.8 % 3.9 % 3.6 % Middle East/Africa 5,143 3,496 47.1 % 5.7 % 4.1 % Asia Pacific 3,750 2,645 41.8 % 4.2 % 3.1 % Latin America 2,931 2,173 34.9 % 3.2 % 2.5 % Other — 161 (100.0 )% 0.0 % 0.2 % Total $ 90,104 $ 85,842 5.0 % 100.0 % 100.0 % Overall Revenue Total revenue grew 5.0% year-over-year ("YoY"). US revenue grew 1.9% YoY to $52.0 million. China revenue declined 78.2% YoY to $1.5 million. Rest of World revenue (excluding US and China) grew 30.2% YoY. Product and Service Revenue Total product revenue decreased 0.7% YoY. This decrease was due to lower demand in the U.S., primarily in the after-market channel, and lower sales to XPEL's China distributor. China revenue was the highest in our history in the fourth quarter 2023. Consequently, Q1 2024 China sales were negatively impacted as our distributor sold through the inventory purchased in Q4 last year. Total window film decreased 2.9% YoY and represented 16.1% of total revenue. This decline was due mainly to lower revenues into China. Excluding China, total window film revenue grew 10.3%. Architectural window film revenue increased 33.1% to $1.8 million. Total service revenue increased 25.5% YoY. The increase was due mainly to increases in the Company's dealership services business resulting from increased car counts, increased content per vehicle and from our OEM business, which increased 57.6% YoY to $4.6 million. Total installation revenue (labor and product combined) grew 34.7% YoY and represented 22.1% of total revenue. This increase was due primarily to increased demand in XPEL's dealership services and OEM businesses. Adjusted product revenue (combining cutbank credits revenue and product revenue) decreased 0.7% YoY. Other Financial Information Gross margin percentage was 42.0% and 41.9% in the three months ended March 31, 2024 and 2023, respectively. Total operating expenses grew 36.2% YoY. Normalizing for annual dealer conference expenses, total operating expenses grew 28.6% YoY. Sequentially, after normalizing for annual dealer conference costs, total operating expenses increased 1.3%. Sales and marketing expenses grew 55.7% YoY and represented 11.5% of revenue. Normalizing for annual dealer conference expenses, sales and marketing expenses would have grown 31.7% YoY. General and administrative expenses grew 27.2% YoY and represented 20.3% of revenue. Net income declined 41.7% YoY. EBITDA declined 31.5% YoY2. Operating Cash Flows Cash flows used in operations was $5.0 million in the first quarter 2024. While overall inventory increased during the quarter, raw materials and work-in-progress inventory declined substantially as expected as the Company continues to manage days on hand downward throughout the rest of the year. 2024 Outlook Annual revenue growth projection is revised downward to 8-10% from 15%. Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2024 Outlook. Conference Call Information The Company will host a conference call and webcast today, May 2, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s first quarter 2024 results. To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/events-presentations. 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: 871439. A replay of the teleconference will be available until June 1, 2024 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 50361. 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 The results summarized above for 2024 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the first quarter of 2024, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full first quarter 2024 financial information will be included in the filing of the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission which is anticipated on or prior to May 9, 2024. 2 See "Non-GAAP Financial Measure" and "Reconciliation of Non-GAAP Financial Measure" below. Forward-looking Statements This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) 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, execution of the company's growth strategy and outlook. 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 and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents filed from time to time with the SEC by XPEL and available on XPEL's website at www.xpel.com. 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. Non-GAAP Financial Measure To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation 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 XPEL's financial performance under GAAP and should not be considered as an alternative 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 title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled "Reconciliation of Non-GAAP Financial Measure." XPEL, Inc. Consolidated Statements of Income (In thousands except per share data) Three Months Ended March 31, 2024 2023 Revenue Product revenue $ 66,852 $ 67,308 Service revenue 23,252 18,534 Total revenue 90,104 85,842 Cost of Sales Cost of product sales 42,135 42,180 Cost of service 10,093 7,702 Total cost of sales 52,228 49,882 Gross Margin 37,876 35,960 Operating Expenses Sales and marketing 10,391 6,675 General and administrative 18,256 14,354 Total operating expenses 28,647 21,029 Operating Income 9,229 14,931 Interest expense 473 523 Foreign currency exchange loss (gain) 272 (9 ) Income before income taxes 8,484 14,417 Income tax expense 1,818 2,984 Net income $ 6,666 $ 11,433 Earnings per share Basic $ 0.24 $ 0.41 Diluted $ 0.24 $ 0.41 Weighted Average Number of Common Shares Basic 27,630 27,616 Diluted 27,637 27,626 XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) (Audited) March 31, 2024 December 31, 2023 Assets Current Cash and cash equivalents $ 8,614 $ 11,609 Accounts receivable, net 28,569 24,111 Inventory, net 110,171 106,509 Prepaid expenses and other current assets 5,578 3,529 Income tax receivable — 696 Total current assets 152,932 146,454 Property and equipment, net 17,624 16,980 Right-of-use lease assets 15,471 15,459 Intangible assets, net 33,938 34,905 Other non-current assets 863 782 Goodwill 37,664 37,461 Total assets $ 258,492 $ 252,041 Liabilities Current Current portion of notes payable $ 63 $ 62 Current portion lease liabilities 3,946 3,966 Accounts payable and accrued liabilities 27,611 32,444 Income tax payable 201 — Total current liabilities 31,821 36,472 Deferred tax liability, net 2,459 2,658 Other long-term liabilities 682 890 Borrowings on line of credit 24,000 19,000 Non-current portion of lease liabilities 12,814 12,715 Non-current portion of notes payable 293 317 Total liabilities 72,069 72,052 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; 27,631,097 and $27,630,025 issued and outstanding, respectively 28 28 Additional paid-in-capital 13,176 12,546 Accumulated other comprehensive loss (2,071 ) (1,209 ) Retained earnings 175,290 168,624 Total stockholders’ equity 186,423 179,989 Total liabilities and stockholders’ equity $ 258,492 $ 252,041 XPEL, Inc. Consolidated Statements of Cash Flows (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities Net income $ 6,666 $ 11,433 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation of property, plant and equipment 1,333 972 Amortization of intangible assets 1,410 1,161 Gain on sale of property and equipment (18 ) (9 ) Stock compensation 630 303 Provision for credit losses 89 74 Deferred income tax (157 ) (115 ) Changes in assets and liabilities: Accounts receivable (4,763 ) (6,606 ) Inventory, net (3,878 ) (3,886 ) Prepaid expenses and other current assets (2,325 ) (2,512 ) Income taxes receivable and payable 904 2,360 Accounts payable and accrued liabilities (4,850 ) (2,480 ) Net cash (used in) provided by operating activities (4,959 ) 695 Cash flows used in investing activities Purchase of property, plant and equipment (2,017 ) (2,055 ) Proceeds from sale of property and equipment — 12 Acquisition of a business, net of cash acquired (757 ) — Development of intangible assets (340 ) (321 ) Net cash used in investing activities (3,114 ) (2,364 ) Cash flows from financing activities Net borrowings on revolving credit agreement 5,000 2,000 Repayments of notes payable (15 ) (77 ) Net cash provided by financing activities 4,985 1,923 Net change in cash and cash equivalents (3,088 ) 254 Foreign exchange impact on cash and cash equivalents 93 20 (Decrease)/Increase in cash and cash equivalents during the period (2,995 ) 274 Cash and cash equivalents at beginning of period 11,609 8,056 Cash and cash equivalents at end of period $ 8,614 $ 8,330 Supplemental schedule of non-cash activities Non-cash lease financing $ 952 $ 1,237 Issuance of common stock for vested restricted stock units 57 — Supplemental cash flow information Cash paid for income taxes $ 1,152 $ 748 Cash paid for interest $ 430 $ 517 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 March 31, 2024 2023 Net Income $ 6,666 $ 11,433 Interest 473 523 Taxes 1,818 2,984 Depreciation 1,333 972 Amortization 1,410 1,161 EBITDA $ 11,700 $ 17,073 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501310931/en/Contacts For more information: Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: xpel@imsinvestorrelations.com
XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the first quarter and year ended March 31, 2024. First Quarter 2024 Overview: Revenue increased 5.0% to $90.1 million compared to the first quarter of 2023. Gross margin of 42.0% for the quarter. Net income decreased 41.7% to $6.7 million, or $0.24 per basic and diluted share, versus net income of $11.4 million, or $0.41 per basic and diluted share in the first quarter of 2023. These results include approximately $1.6 million in costs related to the Company’s annual dealer conference. The 2024 dealer conference was held in the first quarter, while the 2023 conference took place in the second quarter. Normalizing for these costs, net income would have decreased 30.7% and EPS would have been $0.29 per share. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 31.5% to $11.7 million, or 13.0% of revenue compared to $17.1 million, or 19.9% of revenue in the first quarter of 2023. Normalizing for the annual dealer conference, EBITDA would have declined 22.1% and EBITDA margin would have been 14.8%.2 Ryan Pape, President and Chief Executive Officer of XPEL, commented, “Clearly, the first quarter was a challenging quarter for the Company, particularly in the US, where we saw a continued trend of a slowing aftermarket especially compared to the strength of the first half of 2023. Additionally, port delays reduced sales of two popular vehicle brands for our products which further impacted our US results. We did see some momentum return in our April numbers and we are optimistic that momentum will continue as we progress throughout the year.” Financial Highlights for the First Quarter 2024: Summary consolidated financial information for the three months ended March 31, 2024 and 2023 (unaudited, dollars in thousands): Three Months Ended March 31, % Change 2024 % of Total Revenue 2023 % of Total Revenue 2024 vs. 2023 Total revenue $ 90,104 100.0 % $ 85,842 100.0 % 5.0 % Gross margin 37,876 42.0 % 35,960 41.9 % 5.3 % Operating Expenses 28,647 31.8 % 21,029 24.5 % 36.2 % Operating income 9,229 10.2 % 14,931 17.4 % (38.2 )% Net income 6,666 7.4 % 11,433 13.3 % (41.7 )% EBITDA2 11,700 13.0 % 17,073 19.9 % (31.5 )% Net cash (used in) provided by operating activities $ (4,959 ) n/a $ 695 n/a n/a Geographical Revenue Summary Three Months Ended March 31, % % of Total Revenue 2024 2023 Inc (Dec) 2024 2023 United States $ 52,048 $ 51,077 1.9 % 57.8 % 59.5 % China 1,450 6,647 (78.2 )% 1.6 % 7.7 % Canada 11,080 8,592 29.0 % 12.3 % 10.0 % Continental Europe 10,216 7,960 28.3 % 11.3 % 9.3 % United Kingdom 3,486 3,091 12.8 % 3.9 % 3.6 % Middle East/Africa 5,143 3,496 47.1 % 5.7 % 4.1 % Asia Pacific 3,750 2,645 41.8 % 4.2 % 3.1 % Latin America 2,931 2,173 34.9 % 3.2 % 2.5 % Other — 161 (100.0 )% 0.0 % 0.2 % Total $ 90,104 $ 85,842 5.0 % 100.0 % 100.0 % Overall Revenue Total revenue grew 5.0% year-over-year ("YoY"). US revenue grew 1.9% YoY to $52.0 million. China revenue declined 78.2% YoY to $1.5 million. Rest of World revenue (excluding US and China) grew 30.2% YoY. Product and Service Revenue Total product revenue decreased 0.7% YoY. This decrease was due to lower demand in the U.S., primarily in the after-market channel, and lower sales to XPEL's China distributor. China revenue was the highest in our history in the fourth quarter 2023. Consequently, Q1 2024 China sales were negatively impacted as our distributor sold through the inventory purchased in Q4 last year. Total window film decreased 2.9% YoY and represented 16.1% of total revenue. This decline was due mainly to lower revenues into China. Excluding China, total window film revenue grew 10.3%. Architectural window film revenue increased 33.1% to $1.8 million. Total service revenue increased 25.5% YoY. The increase was due mainly to increases in the Company's dealership services business resulting from increased car counts, increased content per vehicle and from our OEM business, which increased 57.6% YoY to $4.6 million. Total installation revenue (labor and product combined) grew 34.7% YoY and represented 22.1% of total revenue. This increase was due primarily to increased demand in XPEL's dealership services and OEM businesses. Adjusted product revenue (combining cutbank credits revenue and product revenue) decreased 0.7% YoY. Other Financial Information Gross margin percentage was 42.0% and 41.9% in the three months ended March 31, 2024 and 2023, respectively. Total operating expenses grew 36.2% YoY. Normalizing for annual dealer conference expenses, total operating expenses grew 28.6% YoY. Sequentially, after normalizing for annual dealer conference costs, total operating expenses increased 1.3%. Sales and marketing expenses grew 55.7% YoY and represented 11.5% of revenue. Normalizing for annual dealer conference expenses, sales and marketing expenses would have grown 31.7% YoY. General and administrative expenses grew 27.2% YoY and represented 20.3% of revenue. Net income declined 41.7% YoY. EBITDA declined 31.5% YoY2. Operating Cash Flows Cash flows used in operations was $5.0 million in the first quarter 2024. While overall inventory increased during the quarter, raw materials and work-in-progress inventory declined substantially as expected as the Company continues to manage days on hand downward throughout the rest of the year. 2024 Outlook Annual revenue growth projection is revised downward to 8-10% from 15%. Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2024 Outlook. Conference Call Information The Company will host a conference call and webcast today, May 2, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s first quarter 2024 results. To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/events-presentations. 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: 871439. A replay of the teleconference will be available until June 1, 2024 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 50361. 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 The results summarized above for 2024 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the first quarter of 2024, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full first quarter 2024 financial information will be included in the filing of the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission which is anticipated on or prior to May 9, 2024. 2 See "Non-GAAP Financial Measure" and "Reconciliation of Non-GAAP Financial Measure" below. Forward-looking Statements This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) 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, execution of the company's growth strategy and outlook. 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 and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents filed from time to time with the SEC by XPEL and available on XPEL's website at www.xpel.com. 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. Non-GAAP Financial Measure To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation 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 XPEL's financial performance under GAAP and should not be considered as an alternative 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 title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled "Reconciliation of Non-GAAP Financial Measure." XPEL, Inc. Consolidated Statements of Income (In thousands except per share data) Three Months Ended March 31, 2024 2023 Revenue Product revenue $ 66,852 $ 67,308 Service revenue 23,252 18,534 Total revenue 90,104 85,842 Cost of Sales Cost of product sales 42,135 42,180 Cost of service 10,093 7,702 Total cost of sales 52,228 49,882 Gross Margin 37,876 35,960 Operating Expenses Sales and marketing 10,391 6,675 General and administrative 18,256 14,354 Total operating expenses 28,647 21,029 Operating Income 9,229 14,931 Interest expense 473 523 Foreign currency exchange loss (gain) 272 (9 ) Income before income taxes 8,484 14,417 Income tax expense 1,818 2,984 Net income $ 6,666 $ 11,433 Earnings per share Basic $ 0.24 $ 0.41 Diluted $ 0.24 $ 0.41 Weighted Average Number of Common Shares Basic 27,630 27,616 Diluted 27,637 27,626 XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) (Audited) March 31, 2024 December 31, 2023 Assets Current Cash and cash equivalents $ 8,614 $ 11,609 Accounts receivable, net 28,569 24,111 Inventory, net 110,171 106,509 Prepaid expenses and other current assets 5,578 3,529 Income tax receivable — 696 Total current assets 152,932 146,454 Property and equipment, net 17,624 16,980 Right-of-use lease assets 15,471 15,459 Intangible assets, net 33,938 34,905 Other non-current assets 863 782 Goodwill 37,664 37,461 Total assets $ 258,492 $ 252,041 Liabilities Current Current portion of notes payable $ 63 $ 62 Current portion lease liabilities 3,946 3,966 Accounts payable and accrued liabilities 27,611 32,444 Income tax payable 201 — Total current liabilities 31,821 36,472 Deferred tax liability, net 2,459 2,658 Other long-term liabilities 682 890 Borrowings on line of credit 24,000 19,000 Non-current portion of lease liabilities 12,814 12,715 Non-current portion of notes payable 293 317 Total liabilities 72,069 72,052 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; 27,631,097 and $27,630,025 issued and outstanding, respectively 28 28 Additional paid-in-capital 13,176 12,546 Accumulated other comprehensive loss (2,071 ) (1,209 ) Retained earnings 175,290 168,624 Total stockholders’ equity 186,423 179,989 Total liabilities and stockholders’ equity $ 258,492 $ 252,041 XPEL, Inc. Consolidated Statements of Cash Flows (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities Net income $ 6,666 $ 11,433 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation of property, plant and equipment 1,333 972 Amortization of intangible assets 1,410 1,161 Gain on sale of property and equipment (18 ) (9 ) Stock compensation 630 303 Provision for credit losses 89 74 Deferred income tax (157 ) (115 ) Changes in assets and liabilities: Accounts receivable (4,763 ) (6,606 ) Inventory, net (3,878 ) (3,886 ) Prepaid expenses and other current assets (2,325 ) (2,512 ) Income taxes receivable and payable 904 2,360 Accounts payable and accrued liabilities (4,850 ) (2,480 ) Net cash (used in) provided by operating activities (4,959 ) 695 Cash flows used in investing activities Purchase of property, plant and equipment (2,017 ) (2,055 ) Proceeds from sale of property and equipment — 12 Acquisition of a business, net of cash acquired (757 ) — Development of intangible assets (340 ) (321 ) Net cash used in investing activities (3,114 ) (2,364 ) Cash flows from financing activities Net borrowings on revolving credit agreement 5,000 2,000 Repayments of notes payable (15 ) (77 ) Net cash provided by financing activities 4,985 1,923 Net change in cash and cash equivalents (3,088 ) 254 Foreign exchange impact on cash and cash equivalents 93 20 (Decrease)/Increase in cash and cash equivalents during the period (2,995 ) 274 Cash and cash equivalents at beginning of period 11,609 8,056 Cash and cash equivalents at end of period $ 8,614 $ 8,330 Supplemental schedule of non-cash activities Non-cash lease financing $ 952 $ 1,237 Issuance of common stock for vested restricted stock units 57 — Supplemental cash flow information Cash paid for income taxes $ 1,152 $ 748 Cash paid for interest $ 430 $ 517 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 March 31, 2024 2023 Net Income $ 6,666 $ 11,433 Interest 473 523 Taxes 1,818 2,984 Depreciation 1,333 972 Amortization 1,410 1,161 EBITDA $ 11,700 $ 17,073 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501310931/en/
For more information: Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: xpel@imsinvestorrelations.com