SAN ANTONIO--(BUSINESS WIRE)-- 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			1,898,586			5,468,980			4,935,194
General and administrative		4,798,833			3,962,674			13,466,690			10,857,814
Total operating expenses		6,603,871			5,861,260			18,935,670			15,793,008
Operating Income		5,669,159			2,989,280			12,113,453			9,227,516
Interest expense		23,851			31,301			81,631			135,385
Foreign currency exchange loss		136,951			85,551			151,859			108,675
Income before income taxes		5,508,357			2,872,428			11,879,963			8,983,456
Income tax expense		999,072			690,523			2,503,365			2,159,596
Net income		4,509,285			2,181,905			9,376,598			6,823,860
Income attributed to non-controlling interest		6,602			15,713			9,311			5,200
Net income attributable to stockholders of the Company	$	4,502,683		$	2,166,192		$	9,367,287		$	6,818,660
Earnings per share attributable stockholders of the Company
Basic and diluted	$	0.16		$	0.08		$	0.34		$	0.25
Weighted Average Number of Common Shares
Basic and diluted		27,612,597			27,612,597			27,612,597			27,229,720

XPEL Inc. Condensed Consolidated Balance Sheets
	(Unaudited)				(Audited)
	September 30, 2019				December 31, 2018
Assets
Current
Cash and cash equivalents	$	7,295,906			$	3,971,226
Accounts receivable, net		7,285,327				5,554,313
Inventory, net		16,428,406				10,799,611
Prepaid expenses and other current assets		2,071,833				706,718
Total current assets		33,081,472				21,031,868
Property and equipment, net		3,666,166				3,384,206
Right-of-Use lease assets		4,515,591			—
Intangible assets, net		3,778,794				3,804,026
Other assets		29,385			—
Goodwill		2,334,505				2,322,788
Total assets	$	47,405,913			$	30,542,888
Liabilities
Current
Current portion of notes payable	$	586,154			$	853,150
Current portion lease liabilities		1,062,176			—
Accounts payable and accrued liabilities		10,585,352				6,292,093
Income tax payable		540,846				1,337,599
Total current liabilities		12,774,528				8,482,842
Deferred tax liability, net		629,397				478,864
Non-current portion of lease liabilities		3,544,207			—
Non-current portion of notes payable		399,209				968,237
Total liabilities		17,347,341				9,929,943
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		11,348,163				11,348,163
Accumulated other comprehensive loss		(1,113,240	)			(1,190,055	)
Retained earnings		19,984,540				10,617,253
		30,247,076				20,802,974
Non-controlling interest		(188,504	)			(190,029	)
Total stockholders’ equity		30,058,572				20,612,945
Total liabilities and stockholders’ equity	$	47,405,913			$	30,542,888

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, 2019				Nine Months Ended September 30, 2019
	2019		2018		2019		2018
Net Income	$4,509,285		$2,181,905		$9,376,598		$6,823,860
Interest	23,851		31,301		81,631		135,385
Taxes	999,072		690,523		2,503,365		2,159,596
Depreciation	234,297		200,512		655,385		539,379
Amortization	199,582		160,506		570,954		472,675
EBITDA	$5,966,087		$3,264,747		$13,187,933		$10,130,895

View source version on businesswire.com: https://www.businesswire.com/news/home/20191111005089/en/

Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

Phone: (203) 972-9200

Email: [email protected]

Source: XPEL, Inc.

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