XPEL Reports Record Revenue of $68.7 Million in Second Quarter 2021; Net Income of $10.2 Million

XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the second quarter and first six months ended June 30, 2021.

Second Quarter 2021 Highlights:

  • Revenues increased 92.0% to $68.7 million compared to second quarter 2020 and increased 32.5% sequentially compared to first quarter 2021
  • Net income grew 156.3% to $10.2 million, or $0.37 per basic and diluted share, compared to $4.0 million, or $0.14 per basic and diluted share, in the same quarter of 2020
  • EBITDA grew 139.8% to $13.6 million, or 19.8% of revenues compared to $5.7 million, or 15.8% of sales in second quarter 20201

First Six Months Highlights:

  • Revenues increased 87.9% to $120.6 million as compared to $64.2 million in the prior year period
  • Net income increased by more than 200% to $17.0 million, or $0.62 per basic and diluted share, compared to $5.6 million, or $0.20 per basic and diluted share, in the same period of 2020
  • EBITDA grew 176.1% to $22.7 million, or 18.9% of revenues, as compared to $8.2 million, or 12.8% in the same prior year period1

For the Quarter Ended June 30, 2021:

Revenues. Revenues increased approximately $32.9 million, or 92%, to $68.7 million as compared to $35.8 million in the prior year.

Gross Margin. Gross margin was 36.7% compared to 32.8% in the second quarter of 2020.

Expenses. Operating expenses increased to $12.6 million, or 18.3% of sales, compared to $6.6 million, or 18.4% of sales in the prior year period.

Net income. Net income was $10.2 million, or $0.37 per basic and diluted share, versus net income of $4.0 million, or $0.14 per basic and diluted share in the second quarter of 2020.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $13.6 million, or 19.8% of sales, compared to $5.7 million, or 15.8% of sales in the prior year1.

1 See reconciliation of non-GAAP financial measures below

For the Six Months Ended June 30, 2021:

Revenues. Revenues increased approximately $56.4 million, or 87.9%, to $120.6 million as compared to $64.2 million in the same period of the prior year.

Gross Margin. Gross margin was 36.1% compared to 34.3% in the first six months of 2020.

Expenses. Operating expenses increased to $22.3 million, or 18.5% of sales, compared to $14.4 million, or 22.5%, of sales in the same prior year period.

Net income. Net income was $17.0 million, or $0.62 per basic and diluted share, versus net income of $5.6 million, or $0.20 per basic and diluted share in the first half of 2020.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $22.7 million, or 18.9% of sales, compared to $8.2 million, or 12.8% of sales in the same prior year period1.

Conference Call Information

The Company will host a conference call and webcast today, August 9, 2021 at 11:00 a.m. Eastern Time to discuss the Company’s second 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 (844) 407-9500 approximately five minutes prior to the scheduled start time. International callers please dial (862) 298-0850.

A replay of the teleconference will be available until September 9, 2021 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 42329.

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.

 

XPEL Inc.

Condensed Consolidated Statements of Income (Unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Revenue

 

 

 

 

 

 

 

Product revenue

$

58,667,314

 

 

$

30,961,996

 

 

$

103,598,668

 

 

$

54,711,913

 

Service revenue

10,068,657

 

 

4,843,862

 

 

17,003,417

 

 

9,482,408

 

Total revenue

68,735,971

 

 

35,805,858

 

 

120,602,085

 

 

64,194,321

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

 

 

 

 

Cost of product sales

40,592,311

 

 

22,556,696

 

 

72,138,858

 

 

39,318,109

 

Cost of service

2,896,432

 

 

1,510,085

 

 

4,929,568

 

 

2,840,247

 

Total cost of sales

43,488,743

 

 

24,066,781

 

 

77,068,426

 

 

42,158,356

 

Gross Margin

25,247,228

 

 

11,739,077

 

.

43,533,659

 

 

22,035,965

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Sales and marketing

4,686,693

 

 

1,919,529

 

 

8,074,523

 

 

4,662,778

 

General and administrative

7,888,213

 

 

4,679,092

 

 

14,239,704

 

 

9,748,863

 

Total operating expenses

12,574,906

 

 

6,598,621

 

 

22,314,227

 

 

14,411,641

 

 

 

 

 

 

 

 

 

Operating Income

12,672,322

 

 

5,140,456

 

.

21,219,432

 

 

7,624,324

 

 

 

 

 

 

 

 

 

Interest expense

43,940

 

 

74,554

 

 

96,659

 

 

105,112

 

Foreign currency exchange (gain) loss

(62,906)

 

 

4,141

 

 

(27,294)

 

 

419,718

 

 

 

 

 

 

 

 

 

Income before income taxes

12,691,288

 

 

5,061,761

 

.

21,150,067

 

 

7,099,494

 

Income tax expense

2,505,739

 

 

1,088,071

 

 

4,117,459

 

 

1,514,450

 

Net income

$

10,185,549

 

 

$

3,973,690

 

.

$

17,032,608

 

 

$

5,585,044

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic and diluted

$

0.37

 

 

$

0.14

 

 

$

0.62

 

 

$

0.20

 

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

Basic and diluted

27,612,597

 

 

27,612,597

 

 

27,612,597

 

 

27,612,597

 

 

XPEL Inc.

Condensed Consolidated Balance Sheets

 

 

(Unaudited)

 

(Audited)

 

June 30, 2021

 

December 31, 2020

Assets

 

 

 

Current

 

 

 

Cash and cash equivalents

$

8,733,902

 

 

$

29,027,124

 

Accounts receivable, net

12,625,703

 

 

9,944,213

 

Inventory, net

25,728,267

 

 

22,364,126

 

Prepaid expenses and other current assets

3,207,502

 

 

1,441,749

 

Total current assets

50,295,374

 

 

62,777,212

 

Property and equipment, net

7,556,788

 

 

4,706,248

 

Right-of-use lease assets

9,314,337

 

 

5,973,702

 

Intangible assets, net

21,902,077

 

 

5,423,980

 

Other non-current assets

477,920

 

 

486,472

 

Goodwill

15,826,655

 

 

4,472,217

 

Total assets

$

105,373,151

 

 

$

83,839,831

 

Liabilities

 

 

 

Current

 

 

 

Current portion of notes payable

$

513,891

 

 

$

2,568,172

 

Current portion lease liabilities

1,145,724

 

 

1,650,749

 

Accounts payable and accrued liabilities

21,957,708

 

 

16,797,462

 

Income tax payable

1,382,177

 

 

183,961

 

Total current liabilities

24,999,500

 

 

21,200,344

 

Deferred tax liability, net

646,921

 

 

627,806

 

Other long-term liabilities

865,066

 

 

729,408

 

Non-current portion of lease liabilities

8,190,262

 

 

4,331,214

 

Non-current portion of notes payable

239,055

 

 

3,568,191

 

Total liabilities

34,940,804

 

 

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

10,412,471

 

 

10,412,471

 

Accumulated other comprehensive income (loss)

83,086

 

 

66,215

 

Retained earnings

59,909,177

 

 

42,876,569

 

Total stockholders’ equity

70,432,347

 

 

53,382,868

 

Total liabilities and stockholders’ equity

$

105,373,151

 

 

$

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 June 30,

 

Six Months Ended June 30, 2021

 

2021

 

2020

 

2021

 

2020

Net Income

$

10,185,549

 

 

$

3,973,690

 

 

$

17,032,608

 

 

$

5,585,044

 

Interest

43,940

 

 

74,554

 

 

96,659

 

 

105,112

 

Taxes

2,505,739

 

 

1,088,071

 

 

4,117,459

 

 

1,514,450

 

Depreciation

419,607

 

 

293,860

 

 

802,697

 

 

564,177

 

Amortization

422,778

 

 

232,225

 

 

685,384

 

 

466,121

 

EBITDA

$

13,577,613

 

 

$

5,662,400

 

 

$

22,734,807

 

 

$

8,234,904

 

 

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