XPEL Reports Record Revenue of $70.1 Million in Fourth Quarter 2021; Fourth Quarter Revenue Increase of 44.3%; Full Year Revenue Increase of 63.1%

Rhea-AI Summary

XPEL, Inc. reported significant growth for Q4 and the full year 2021. Q4 revenue rose 44.3% to $70.1 million, with organic growth at 27%. EBITDA increased 23.7% to $10 million, though margins were impacted by higher labor costs and one-time expenses. For the full year, revenue surged 63.1% to $259.3 million, with net income up 72.7% to $31.6 million. Gross margin improved to 35.7%. The company integrated seven acquisitions, positioning itself for success in 2022 as new car inventories rebuild.

Positive

• Q4 revenue increased 44.3% to $70.1 million.
• Full year revenue rose 63.1% to $259.3 million.
• Net income for the year was up 72.7% to $31.6 million.
• EBITDA for the year increased 74.5% to $44.1 million.
• Gross margin improved to 35.7% for the full year.

Negative

• Q4 EBITDA margin decreased to 14.2% from 16.6% a year earlier.
• Higher labor costs resulted in a negative operating margin impact of $1.8 million.

SAN ANTONIO--(BUSINESS WIRE)-- 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, 2021.

Fourth Quarter 2021 Highlights:

• Revenue increased 44.3% to $70.1 million compared to fourth quarter 2020. Organic revenue growth was 27.0%.

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew 23.7% to $10.0 million, or 14.2% of revenue compared to $8.1 million, or 16.6% of revenue in fourth quarter 2020.¹

Year End 2021 Highlights:

• Revenue increased 63.1% to $259.3 million as compared to $158.9 million in the prior year. Organic revenue growth was 52.9%.

• Net income increased by 72.7% to $31.6 million, or $1.14 per basic and diluted share, compared to $18.3 million, or $0.66 per basic and diluted share, in 2020.

• EBITDA grew 74.5% to $44.1 million, or 17.0% of revenue, as compared to $25.3 million, or 15.9% in the prior year.¹

In the quarter, the Company incurred negative operating margin impacts of $1.8 million in higher labor costs in its acquired Dealership Services division due to low new car inventory and $0.8 million in one-time costs resulting from inventory availability pursuant to a facility move which will reverse in 2022. Normalizing for these items, EBITDA would have been $12.6 million or 18% of revenue and gross margin as a percent of revenue would have been 38.9%.

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We are really proud of what has been an amazing year for the entire XPEL team. In addition to achieving record growth, we closed and integrated seven acquisitions that will set us up for success in 2022 particularly as new car inventory rebuilds through the year.”

For the Quarter Ended December 31, 2021:

Revenue. Revenue increased approximately $21.5 million, or 44.3%, to $70.1 million as compared to $48.6 million in the fourth quarter of the prior year.

Gross Margin. Gross margin was 35.2% compared to 32.8% in the fourth quarter of 2020.

Expenses. Operating expenses increased to $16.2 million, or 23.0% of revenue, compared to $8.6 million, or 17.7% of revenue in the prior year period.

Net income. Net income was $6.2 million, or $0.22 per basic and diluted share, versus net income of $6.1 million, or $0.22 per basic and diluted share in the fourth quarter of 2020.

EBITDA. EBITDA was $10.0 million, or 14.2% of revenue, compared to $8.1 million, or 16.6% of revenue in the fourth quarter of the prior year.¹

For the Year Ended December 31, 2021:

Revenue. Revenue increased approximately $100.3 million, or 63.1%, to $259.3 million as compared to $158.9 million in the prior year.

Gross Margin. Gross margin was 35.7% compared to 34.0% for full year 2020.

Expenses. Operating expenses increased to $52.6 million, or 20.3% of revenue, compared to $30.7 million, or 19.3%, of revenue in full year 2020.

Net income. Net income was $31.6 million, or $1.14 per basic and diluted share, versus net income of $18.3 million, or $0.66 per basic and diluted share in full year 2020.

EBITDA. EBITDA was $44.1 million, or 17.0% of revenue, compared to $25.3 million, or 15.9% of revenue in the prior year.¹

Conference Call Information

The Company will host a conference call and webcast today, February 28, 2022 at 11:00 a.m. Eastern Time to discuss the Company’s fourth quarter and year end 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 888-506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use access code: 930015.

A replay of the teleconference will be available until March 30, 2022 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 44592.

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
	(Unaudited) Three Months Ended December 31,									Year Ended December 31,
		2021			2020			2019			2021			2020			2019
Revenue
Product revenue	$	56,687,599		$	42,021,771		$	34,909,276		$	217,282,531		$	136,262,067		$	112,204,739
Service revenue		13,444,470			6,585,560			4,586,007			41,980,546			22,662,381			17,728,142
Total revenue		70,132,069			48,607,331			39,495,283			259,263,077			158,924,448			129,932,881
Cost of Sales
Cost of product sales		39,446,147			30,814,288			25,785,422			151,285,632			98,502,279			82,308,256
Cost of service		5,997,149			1,833,831			1,252,725			15,300,458			6,397,160			4,118,366
Total cost of sales		45,443,296			32,648,119			27,038,147			166,586,090			104,899,439			86,426,622
Gross Margin		24,688,773			15,959,212			12,457,136			92,676,987			54,025,009			43,506,259
Operating Expenses
Sales and marketing		5,294,828			2,758,614			2,115,397			18,273,197			9,748,292			7,584,377
General and administrative		10,865,027			5,868,645			5,367,845			34,288,171			20,906,785			18,834,535
Total operating expenses		16,159,855			8,627,259			7,483,242			52,561,368			30,655,077			26,418,912
Operating Income		8,528,918			7,331,953			4,973,894			40,115,619			23,369,932			17,087,347
Interest expense		159,582			76,000			15,015			302,674			249,480			96,646
Foreign currency exchange loss (gain)		251,443			(104,334)			(111,586)			372,974			316,093			40,273
Income before income taxes		8,117,893			7,360,287			5,070,465			39,439,971			22,804,359			16,950,428
Income tax expense		1,914,400			1,271,888			451,991			7,873,109			4,522,668			2,955,356
Net income		6,203,493			6,088,399			4,618,474			31,566,862			18,281,691			13,995,072
Income attributed to non-controlling interest		—			—			8,136			—			—			17,447
Net income attributable to stockholders of the Company	$	6,203,493		$	6,088,399		$	4,610,338		$	31,566,862		$	18,281,691		$	13,977,625
Earnings per share attributable stockholders of the Company
Basic	$	0.22		$	0.22		$	0.17		$	1.14		$	0.66		$	0.51
Diluted	$	0.22		$	0.22		$	0.17		$	1.14		$	0.66		$	0.51
Weighted Average Number of Common Shares
Basic		27,612,597			27,612,597			27,612,597			27,612,597			27,612,597			27,612,597
Diluted		27,612,597			27,612,597			27,612,597			27,612,729			27,612,597			27,612,597

XPEL, Inc.
Consolidated Balance Sheets
	December 31, 2021			December 31, 2020
Assets
Current
Cash and cash equivalents	$	9,644,248		$	29,027,124
Accounts receivable, net		13,159,036			9,944,213
Inventory, net		51,936,164			22,364,126
Prepaid expenses and other current assets		3,671,657			1,441,749
Income tax receivable		617,141			—
Total current assets		79,028,246			62,777,212
Property and equipment, net		9,898,126			4,706,248
Right-of-use lease assets		12,909,607			5,973,702
Intangible assets, net		32,732,771			5,423,980
Other non-current assets		790,339			486,472
Goodwill		25,655,428			4,472,217
Total assets	$	161,014,517		$	83,839,831
Liabilities
Current
Current portion of notes payable	$	375,413		$	2,568,172
Current portion of lease liabilities		2,977,794			1,650,749
Accounts payable and accrued liabilities		32,914,615			16,797,462
Income tax payable		—			183,961
Total current liabilities		36,267,822			21,200,344
Deferred tax liability, net		2,748,283			627,806
Other long-term liabilities		2,630,486			729,408
Borrowings on line of credit		25,000,000			—
Non-current portion of lease liabilities		9,830,128			4,331,214
Non-current portion of notes payable		75,717			3,568,191
Total liabilities		76,552,436			30,456,963
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; 27,612,597 issued and outstanding		27,613			27,613
Additional paid-in-capital		10,581,483			10,412,471
Accumulated other comprehensive (loss) income		(590,446)			66,215
Retained earnings		74,443,431			42,876,569
Total stockholders’ equity		84,462,081			53,382,868
Total liabilities and stockholders’ equity	$	161,014,517		$	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) Three Months Ended December 31,									Year Ended December 31,
		2021			2020			2019			2021			2020			2019
Net Income	$	6,203,493		$	6,088,399		$	4,618,474		$	31,566,862		$	18,281,691		$	13,995,072
Interest		159,582			76,000			15,015			302,674			249,480			96,646
Taxes		1,914,400			1,271,888			451,991			7,873,109			4,522,668			2,955,356
Depreciation		628,559			384,275			260,533			1,887,048			1,274,095			915,918
Amortization		1,080,273			250,245			210,151			2,500,620			955,937			781,105
EBITDA	$	9,986,307		$	8,070,807		$	5,556,164		$	44,130,313		$	25,283,871		$	18,744,097

 

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Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

Phone: (203) 972-9200

Email: jnesbett@institutionalms.com

Source: XPEL, Inc.

FAQ

What were XPEL's Q4 2021 revenue results?

XPEL's Q4 2021 revenue was $70.1 million, a 44.3% increase from Q4 2020.

How much did XPEL's net income increase in 2021?

XPEL's net income increased by 72.7% to $31.6 million for the year ended December 31, 2021.

What is XPEL's EBITDA for the full year 2021?

XPEL reported an EBITDA of $44.1 million for the full year 2021.

What challenges did XPEL face in Q4 2021?

XPEL faced negative operating margin impacts of $1.8 million from higher labor costs and $0.8 million in one-time expenses.

How did XPEL's gross margin change in 2021?

XPEL's gross margin improved to 35.7% for the full year 2021.