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XPEL Reports Third Quarter Revenue Growth of 21.9%; Record Third Quarter Revenue of $35.6 million

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XPEL, Inc. (NASDAQ:XPEL), a global provider of protective films and coatings, announced results for the third quarter and nine months ended September 30, 2019.

Third Quarter Highlights:

  • Revenues increased 21.9% to $35.6 million compared to third quarter 2018, the highest revenue quarter in the history of XPEL; Sequential revenue growth of 18.4% compared to second quarter of 2019
  • Gross margin improved to 34.5% compared to 30.3% in third quarter 2018
  • Earnings per share of $0.16 compared to $0.08 per share in third quarter 2018

Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We're pleased to have delivered continued strong growth in the third quarter, with record revenues, improved gross margins and enhanced profitability. We saw continued revenue growth across all of our geographic regions including a return to growth in China, where revenues increased 16.5% in the third quarter. We're excited by the interest we're receiving for our portfolio of products and installation services and as we move through the fourth quarter, we believe we are well positioned to drive continued growth and profitability as we close out 2019."

For the Quarter Ended September 30, 2019:

Revenues. Revenues increased approximately $6.4 million or 22% to $35.6 million as compared to $29.2 million in the prior year.

Gross Margin. Gross margin was 34.5% versus 30.3% in the third quarter of 2018. The increase was related to an improved sales mix, lower product costs and improvements in other cost of goods sold related operating leverage.

Expenses. Selling, general and administrative expenses increased to $6.6 million but declined as a percentage of sales to 18.5% as compared to $5.9 million or 20.1% of sales in the prior year period. This increase was due mainly to increases in personnel, occupancy, information technology and research and development costs to support the ongoing growth of the business.

Net income. Net income increased to $4.5 million, or $0.16 per basic and diluted share versus net income of $2.2 million, or $0.08 per basic and diluted share in the third quarter of 2018.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $6.0 million, or 16.8% of sales, as compared to $3.3 million in the prior year1.

For the Nine Months Ended September 30, 2019:

Revenues. Revenues increased approximately $7.3 million or 8.8% to $90.4 million as compared to $83.1 million in the first nine months of the prior year.

Gross Margin. Gross margin was 34.3% versus 30.1% in the first nine months of 2018.

Expenses. Selling, general and administrative expenses increased to $18.9 million or 20.9% of sales as compared to $15.8 million or 19.0% of sales in the prior year period.

Net income. Net income increased to $9.4 million, or $0.34 per basic and diluted share versus net income of $6.8 million, or $0.25 per basic and diluted share for the first nine months of 2018.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $13.2 million, or 14.6% of sales, as compared to $10.1 million in the prior year2.

Conference Call Information

The Company will host a conference call and webcast today, Monday, November 11, 2019 at 11:00 a.m. Eastern Time to discuss the Company's results for the third quarter of 2019.

To access the live webcast, please visit the XPEL, Inc. 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 December 11, 2019 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 55922.

About XPEL, Inc.

XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and commercial/residential 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.

1e reconciliation of non-GAAP financial measures below.

2e reconciliation of non-GAAP financial measures below.

 

XPEL Inc.

Condensed Consolidated Statements of Income

(Unaudited)

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2019

 

 

2018

 

 

2019

 

 

2018

Revenue

Product revenue

$

30,815,251

$

25,415,749

$

77,295,463

$

72,498,871

Service revenue

 

4,802,747

 

3,799,576

 

13,142,135

 

10,628,864

Total revenue

 

35,617,998

 

29,215,325

 

90,437,598

 

83,127,735

 

Cost of Sales

Cost of product sales

 

22,283,771

 

19,622,006

 

56,522,834

 

56,032,162

Cost of service

 

1,061,197

 

742,779

 

2,865,641

 

2,075,049

Total cost of sales

 

23,344,968

 

20,364,785

 

59,388,475

 

58,107,211

Gross Margin

 

12,273,030

 

8,850,540

 

31,049,123

 

25,020,524

 

Operating Expenses

Sales and marketing

 

1,805,038

 

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