XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of
protective films and coatings, announced results for the fourth
quarter and year ended December 31, 2022.
Fourth Quarter 2022 Highlights:
- Revenue increased 11.9% to $78.5 million compared to fourth
quarter 2021.
- Net income increased 34.7% to $8.4 million, or $0.30 per basic
and diluted share, versus net income of $6.2 million, or $0.22 per
basic and diluted share in the fourth quarter of 2021.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and
Amortization) grew 32.4% to $13.2 million, or 16.8% of revenue
compared to $10.0 million, or 14.2% of revenue in fourth quarter
2021.1
Year End 2022 Highlights:
- Revenue increased 25.0% to $324.0 million as compared to $259.3
million in the prior year.
- Net income increased by 31.1% to $41.4 million, or $1.50 per
basic and diluted share, compared to $31.6 million, or $1.14 per
basic and diluted share, in 2021.
- EBITDA grew 38.7% to $61.2 million, or 18.9% of revenue, as
compared to $44.1 million, or 17.0% in the prior year.1
In the quarter, the Company’s revenue was negatively impacted by
approximately $3.5 million resulting from the cancellation of some
China orders due to uncertainty created by the change in COVID
policies and China’s reopening.
The Company also incurred approximately $0.4 million in
inventory write-offs which negatively impacted gross margin. The
Company’s selling, general and administrative expenses were
negatively impacted by approximately $0.3 million in
severance-related costs and $0.4 million in compensation expense
tangential to a previous acquisition.
Normalizing for these items, revenue would have grown
approximately 17%, EBITDA margin would have been approximately 18%
and EPS would have been approximately $0.36 per share.
Ryan Pape, President and Chief Executive Officer of XPEL,
commented, “Despite some headwinds in the fourth quarter, there is
a lot to be positive about as we look to 2023. We continue to have
tremendous momentum in almost all of our regions, particularly the
US which grew 31.6% in the quarter. Automakers seem cautiously
optimistic about 2023 and new car inventories continue to improve.
This momentum has continued and we are off to a great start in
2023.”
For the Quarter Ended December 31, 2022:
Revenue. Revenue increased approximately $8.3 million, or 11.9%,
to $78.5 million as compared to $70.1 million in the fourth quarter
of the prior year.
Gross Margin. Gross margin was 39.6% compared to 35.2% in the
fourth quarter of 2021.
Expenses. Operating expenses increased to $20.2 million, or
25.7% of revenue, compared to $16.2 million, or 23.0% of revenue in
the prior year period.
Net income. Net income was $8.4 million, or $0.30 per basic and
diluted share, versus net income of $6.2 million, or $0.22 per
basic and diluted share in the fourth quarter of 2021.
EBITDA. EBITDA was $13.2 million, or 16.8% of revenue, compared
to $10.0 million, or 14.2% of revenue in the fourth quarter of the
prior year.1
For the Year Ended December 31, 2022:
Revenue. Revenue increased approximately $64.7 million, or
25.0%, to $324.0 million as compared to $259.3 million in the prior
year.
Gross Margin. Gross margin was 39.4% compared to 35.7% for full
year 2021.
Expenses. Operating expenses increased to $73.6 million, or
22.7% of revenue, compared to $52.6 million, or 20.3%, of revenue
in full year 2021.
Net income. Net income was $41.4 million, or $1.50 per basic and
diluted share, versus net income of $31.6 million, or $1.14 per
basic and diluted share in full year 2021.
EBITDA. EBITDA was $61.2 million, or 18.9% of revenue, compared
to $44.1 million, or 17.0% of revenue in the prior year.1
Conference Call Information
The Company will host a conference call and webcast today,
February 28, 2023 at 11:00 a.m. Eastern Time to discuss the
Company’s fourth quarter and year end 2022 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: 264934.
A replay of the teleconference will be available until March 30,
2023 and may be accessed by dialing (877) 481-4010. International
callers may dial (919) 882-2331. Callers should use conference ID:
47536.
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.
Consolidated Statements of
Income
(In thousands except per share
data)
(Unaudited) Three
Months Ended December 31,
Year Ended December
31,
2022
2021
2022
2021
Revenue
Product revenue
$
60,421
$
56,688
$
258,174
$
217,283
Service revenue
18,060
13,444
65,819
41,980
Total revenue
78,481
70,132
323,993
259,263
Cost of Sales
Cost of product sales
40,259
39,446
169,905
151,286
Cost of service
7,176
5,997
26,576
15,300
Total cost of sales
47,435
45,443
196,481
166,586
Gross Margin
31,046
24,689
127,512
92,677
Operating Expenses
Sales and marketing
6,852
5,295
25,367
18,273
General and administrative
13,349
10,865
48,208
34,288
Total operating expenses
20,201
16,160
73,575
52,561
Operating Income
10,845
8,529
53,937
40,116
Interest expense
477
160
1,410
303
Foreign currency exchange (gain) loss
(272)
251
562
373
Income before income taxes
10,640
8,118
51,965
39,440
Income tax expense
2,282
1,914
10,584
7,873
Net income
$
8,358
$
6,204
$
41,381
$
31,567
Earnings per share
Basic
$
0.30
$
0.22
$
1.50
$
1.14
Diluted
$
0.30
$
0.22
$
1.50
$
1.14
Weighted Average Number of Common
Shares
Basic
27,616
27,613
27,614
27,613
Diluted
27,618
27,613
27,616
27,613
XPEL, Inc.
Consolidated Balance
Sheets
(In thousands except share and
per share data)
December 31, 2022
December 31, 2021
Assets
Current
Cash and cash equivalents
$
8,056
$
9,644
Accounts receivable, net
14,726
13,159
Inventory, net
80,575
51,936
Prepaid expenses and other current
assets
3,464
3,672
Income tax receivable
—
617
Total current assets
106,821
79,028
Property and equipment, net
14,203
9,898
Right-of-use lease assets
15,309
12,910
Intangible assets, net
29,294
32,733
Other non-current assets
972
791
Goodwill
26,763
25,655
Total assets
$
193,362
$
161,015
Liabilities
Current
Current portion of notes payable
$
77
$
375
Current portion of lease liabilities
3,885
2,978
Accounts payable and accrued
liabilities
22,970
32,915
Income tax payable
470
—
Total current liabilities
27,402
36,268
Deferred tax liability, net
2,049
2,748
Other long-term liabilities
1,070
2,631
Borrowings on line of credit
26,000
25,000
Non-current portion of lease
liabilities
12,119
9,830
Non-current portion of notes payable
—
76
Total liabilities
68,640
76,553
Commitments and Contingencies (Note
15)
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; 27,616,064 issued and
outstanding
28
28
Additional paid-in-capital
11,073
10,581
Accumulated other comprehensive loss
(2,203)
(590)
Retained earnings
115,824
74,443
Total stockholders’ equity
124,722
84,462
Total liabilities and stockholders’
equity
$
193,362
$
161,015
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) Three
Months Ended December 31,
Year Ended December
31,
2022
2021
2022
2021
Net Income
$
8,358
$
6,204
$
41,381
$
31,567
Interest
477
160
1,410
303
Taxes
2,282
1,914
10,584
7,873
Depreciation
947
629
3,433
1,887
Amortization
1,153
1,080
4,401
2,501
EBITDA
$
13,217
$
9,987
$
61,209
$
44,131
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version on businesswire.com: https://www.businesswire.com/news/home/20230228005656/en/
Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor
Relations Phone: (203) 972-9200 Email:
jnesbett@institutionalms.com
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