XPEL Reports Record Revenue of $109.9 million in Second Quarter 2024

SAN ANTONIO--(BUSINESS WIRE)-- XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the second quarter of 2024.

Second Quarter 2024 Overview:

• Revenue increased 7.5% to $109.9 million in the second quarter of 2024.
• Gross margin of 43.5% in the second quarter of 2024.
• Net income of $15.0 million, or $0.54 per basic and diluted share, versus net income of $15.7 million, or $0.57 per basic and diluted share in the second quarter of 2023.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $21.8 million, or 19.9% of revenue, compared to $22.4 million, or 21.9% of revenue in the second quarter of 2023. 2

First Six Months 2024 Overview:

• Revenue increased 6.4% to $200.0 million in the first six months of 2024.
• Gross margin of 42.9% in the first six months of 2024.
• Net income of $21.7 million, or $0.79 per basic and diluted share, versus net income of $27.2 million, or $0.98 per basic and diluted share in the first six months of 2023.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $33.5 million, or 16.8% of revenue, compared to $39.5 million, or 21.0% of revenue in the first six months of 2023.2

Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We saw record revenue, record operating cash flow and solid gross margin performance in the second quarter. We are off to a great start in Q3 and we remain well positioned to capitalize on growth opportunities wherever they may exist."

Financial Highlights for the Second Quarter 2024:

Summary consolidated financial information for the three months ended June 30, 2024 and 2023 (unaudited, dollars in thousands):

Geographical Revenue Summary

Overall Revenue

• Total revenue grew 7.5% compared to second quarter 2023 ("YoY") and 22.0% over the first quarter 2024 ("QoQ"). Excluding China, total revenue grew 12.1% YoY.
• US revenue grew 9.7% YoY and 24.8% QoQ.
• All other revenue (excluding US and China) grew 16.1% YoY and 11.0% QoQ.

Product and Service Revenue

• Total product revenue increased 2.8% YoY and 24.5% QoQ. This increase was due to growth in most geographical regions, offset by a decline in sales to our distributor in China. Excluding China, total product revenue increased 8.2% YoY.
• Total window film increased 8.4% YoY and 51.3% QoQ and represented 20.0% of total revenue. Excluding China, total window film revenue grew 18.6% YoY.
• Total service revenue increased 25.2% YoY and 14.9% QoQ. The increase was mainly due to increases in the Company's dealership services and OEM businesses.
• Total installation revenue (labor and product combined) grew 33.9% YoY and 16.5% QoQ and represented 21.1% 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) increased 2.8% YoY and 24.1% QoQ. Excluding China, adjusted product revenue increased 7.8% YoY.

Other Financial Information

• Gross margin percentage was 43.5% and 43.0% in the second quarter, 2024 and 2023, respectively.
• Total operating expenses grew 20.5% YoY and essentially flat QoQ.
• Sales and marketing expenses grew 26.2% YoY and declined 1.1% QoQ and represented 9.4% of revenue.
• General and administrative expenses grew 17.5% YoY and 0.8% QoQ and represented 16.7% of revenue.
• Net income declined 4.5% YoY and increased 125.5% QoQ.
• EBITDA declined 2.7% YoY2 and increased 86.5% QoQ.
• Cash flows provided by operations increased $0.2 million YoY and $31.9 million QoQ to a record $26.9 million in the second quarter 2024.

2024 Outlook

• Annual revenue growth projection remains 8-10%.

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, August 8, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s second 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 September 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 second 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 second 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 August 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. 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."

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)

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Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: xpel@imsinvestorrelations.com

Source: XPEL, Inc.