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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
May 10, 2021
Date of Report (date of earliest event reported)
XPEL, INC.
(Exact name of registrant as specified in its charter)
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| Nevada | 001-38858 | 20-1117381 |
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| | | |
| 618 W. Sunset Road | 78216 |
| San Antonio | Texas | | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code: (210) 678-3700
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | XPEL | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 2.02 Results of Operations and Financial Condition
On May 10, 2021, XPEL, Inc. (XPEL) announced its consolidated financial results for the three months ended March 31, 2021. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K, and the information set forth therein is incorporated herein by reference and constitutes a part of this report.
The information contained in Item 2.02 of this report and Exhibit 99.1 to this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by XPEL under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibit is to be filed as part of this Form 8-K:
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| EXHIBIT NO. | | IDENTIFICATION OF EXHIBIT |
| 99.1 | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| XPEL, Inc. |
| |
| Dated: May 10, 2021 | By: /s/ Barry R. Wood |
| Barry R. Wood |
| Senior Vice President and Chief Financial Officer |
XPEL Reports Record Revenue in First Quarter 2021 of $51.9 million; First Quarter Revenue Increase of 82.7%
San Antonio, TX – May 10, 2021 – XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the first quarter ended March 31, 2021.
First Quarter 2021 Highlights:
•Revenues increased 82.7% to $51.9 million compared to first quarter 2020 and increased 6.7% sequentially as compared to fourth quarter 2020.
•Net income grew 324.9% to $6.8 million, or $0.25 per basic and diluted share, compared to $1.6 million, or $0.06 per basic and diluted share, in the same quarter of 2020.
•EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew 256.0% to $9.2 million, or 17.7% of revenues compared to $2.6 million, or 9.1% in first quarter 2020.1
Ryan Pape, President and Chief Executive Officer of XPEL, commented, “The momentum we saw at the end of last year carried over into 2021 resulting in record top and bottom line performance for the Company. We saw strong growth across all of our regions, particularly in China where we first experienced COVID-19 impact during the first quarter of last year.”
For the Quarter Ended March 31, 2021:
Revenues. Revenues increased approximately $23.5 million or 82.7% to $51.9 million as compared to $28.4 million in the first quarter of the prior year.
Gross Margin. Gross margin was 35.3% compared to 36.3% in the first quarter of 2020.
Expenses. Operating expenses increased to $9.7 million, or 18.8% of sales, compared to $7.8 million or 27.5% of sales in the prior year period.
Net income. Net income was $6.8 million, or $0.25 per basic and diluted share versus net income of $1.6 million, or $0.06 per basic and diluted share in the first quarter of 2020.
EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $9.2 million, or 17.7% of sales, as compared to $2.6 million in the prior year1.
1 See reconciliation of non-GAAP financial measures below
Conference Call Information
The Company will host a conference call and webcast on Monday, May 10, 2021 at 11:00 a.m. Eastern Time to discuss the Company’s first quarter 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 (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 June 9, 2021 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 41202.
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”.
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.
This press release is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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For more information, contact: |
Investor Relations: John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 |
XPEL, Inc.
Consolidated Statements of Income
| | | | | | | | | | | | | | |
| | | | (Unaudited) |
| | Three Months Ended
March 31, |
| | | | 2021 | | 2020 |
| Revenue | | | | | | |
| Product revenue | | | | $ | 44,931,353 | | | $ | 23,749,917 | |
| Service revenue | | | | 6,934,761 | | | 4,638,546 | |
| Total revenue | | | | 51,866,114 | | | 28,388,463 | |
| | | | | | |
| Cost of Sales | | | | | | |
| Cost of product sales | | | | 31,546,547 | | | 16,761,413 | |
| Cost of service | | | | 2,033,136 | | | 1,330,162 | |
| Total cost of sales | | | | 33,579,683 | | | 18,091,575 | |
| Gross Margin | | | | 18,286,431 | | | 10,296,888 | |
| | | | | | |
| Operating Expenses | | | | | | |
| Sales and marketing | | | | 3,387,830 | | | 2,743,249 | |
| General and administrative | | | | 6,351,491 | | | 5,069,771 | |
| Total operating expenses | | | | 9,739,321 | | | 7,813,020 | |
| | | | | | |
| Operating Income | | | | 8,547,110 | | | 2,483,868 | |
| | | | | | |
| Interest expense | | | | 52,719 | | | 30,558 | |
| Foreign currency exchange loss | | | | 35,612 | | | 415,577 | |
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| Income before income taxes | | | | 8,458,779 | | | 2,037,733 | |
| Income tax expense | | | | 1,611,720 | | | 426,379 | |
| Net income | | | | 6,847,059 | | | 1,611,354 | |
| | | | | | |
| Earnings per share | | | | | | |
| Basic and diluted | | | | $ | 0.25 | | | $ | 0.06 | |
| Weighted Average Number of Common Shares | | | | | | |
| Basic and diluted | | | | 27,612,597 | | | 27,612,597 | |
XPEL, Inc.
Consolidated Balance Sheets
| | | | | | | | | | | |
| (Unaudited) | | (Audited) |
| March 31, 2021 | | December 31, 2020 |
| Assets | | | |
| Current | | | |
| Cash and cash equivalents | $ | 35,615,477 | | | $ | 29,027,124 | |
| Accounts receivable, net | 9,903,238 | | | 9,944,213 | |
| Inventory, net | 24,909,271 | | | 22,364,126 | |
| Prepaid expenses and other current assets | 2,121,327 | | | 1,441,749 | |
| Total current assets | 72,549,313 | | | 62,777,212 | |
| Property and equipment, net | 5,711,937 | | | 4,706,248 | |
| Right-of-Use lease assets | 6,792,636 | | | 5,973,702 | |
| Intangible assets, net | 5,287,809 | | | 5,423,980 | |
| Other non-current assets | 487,983 | | | 486,472 | |
| Goodwill | 4,509,419 | | | 4,472,217 | |
| Total assets | $ | 95,339,097 | | | $ | 83,839,831 | |
| Liabilities | | | |
| Current | | | |
| Current portion of notes payable | $ | 2,514,391 | | | $ | 2,568,172 | |
| Current portion lease liabilities | 1,792,164 | | | 1,650,749 | |
| Accounts payable and accrued liabilities | 21,358,360 | | | 16,797,462 | |
| Income tax payable | 444,437 | | | 183,961 | |
| Total current liabilities | 26,109,352 | | | 21,200,344 | |
| Other long-term liabilities | 676,940 | | | 729,408 | |
| Deferred tax liability, net | 657,210 | | | 627,806 | |
| Non-current portion of lease liabilities | 4,958,742 | | | 4,331,214 | |
| Non-current portion of notes payable | 2,917,061 | | | 3,568,191 | |
| Total liabilities | 35,319,305 | | | 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 (loss) income | (143,920) | | | 66,215 | |
| Retained earnings | 49,723,628 | | | 42,876,569 | |
| Total stockholders’ equity | 60,019,792 | | | 53,382,868 | |
| Total liabilities and stockholders’ equity | $ | 95,339,097 | | | $ | 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 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.
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| EBITDA Reconciliation (Unaudited) |
| Three Months Ended
March 31, |
| 2021 | | 2020 |
| Net Income | $ | 6,847,059 | | | $ | 1,611,354 | |
| Interest | 52,719 | | | 30,558 | |
| Taxes | 1,611,720 | | | 426,379 | |
| Depreciation | 383,090 | | | 270,317 | |
| Amortization | 262,606 | | | 233,896 | |
| EBITDA | $ | 9,157,194 | | | $ | 2,572,504 | |