XPEL, Inc. (NASDAQ:XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the fourth quarter and year end 2024.
Fourth Quarter 2024 Overview:
- Revenue increased 1.9% to $107.5 million in the fourth quarter of 2024. Excluding China impacts, revenue increased 10.5% in the fourth quarter 2024.
- Gross margin of 40.6% in the fourth quarter of 2024.
- Foreign exchange loss ("FX Loss") of $1.2 million incurred in the fourth quarter 2024 due to the strengthening of the US dollar.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 19.3% to $14.3 million, or 13.3% of revenue, compared to $17.7 million, or 16.7% of revenue in the fourth quarter of 2023. Normalizing for the FX impact, EBITDA would have decreased 9.0% and EBITDA margin would have been 14.3%. 2
- Net income decreased 25.7% to $8.9 million, or $0.32 per basic and diluted share, versus net income of $12.0 million, or $0.43 per basic and diluted share in the fourth quarter of 2023. Normalizing for the FX impact, net income would have decreased 13.8% and EPS would have been $0.35 per share.
Year End 2024 Overview:
- Revenue increased 6.1% to $420.4 million compared to prior year.
- Gross margin of 42.2% in 2024.
- Net income of $45.5 million, or $1.65 per basic and diluted share, versus net income of $52.8 million, or $1.91 per basic and diluted share in 2023.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $69.5 million, or 16.5% of revenue, compared to $76.9 million, or 19.4% of revenue in 2023.2
Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We saw solid top line performance in the fourth quarter and made great progress in many of our key initiatives during the year including increasing our focus on dealerships, refining our go-to-market strategy in China and executing on our acquisition strategy. The Company is well-positioned to continue to build on this momentum in 2025."
Financial Highlights for the Fourth Quarter 2024:
Summary consolidated financial information for the fourth quarter 2024 and 2023 (unaudited, dollars in thousands):
Three Months Ended December 31, |
% Change |
||||||||||||||
|
2024 |
|
% of Total Revenue |
|
2023 |
|
|
% of Total Revenue |
|
2024 vs. 2023 |
|||||
Total revenue |
$ |
107,527 |
|
100.0 |
% |
|
$ |
105,538 |
|
|
100.0 |
% |
|
1.9 |
% |
Gross margin |
|
43,703 |
|
40.6 |
% |
|
|
40,932 |
|
|
38.8 |
% |
|
6.8 |
% |
Operating Expenses |
|
31,358 |
|
29.2 |
% |
|
|
26,708 |
|
|
25.3 |
% |
|
17.4 |
% |
Net income |
|
8,898 |
|
8.3 |
% |
|
|
11,970 |
|
|
11.3 |
% |
|
(25.7 |
)% |
EBITDA2 |
|
14,250 |
|
13.3 |
% |
|
|
17,654 |
|
|
16.7 |
% |
|
(19.3 |
)% |
Net cash provided by (used in) operating activities |
$ |
6,327 |
|
n/a |
|
|
$ |
(1,117 |
) |
|
n/a |
|
|
n/a |
|
Geographical Revenue Summary
|
Three Months Ended December 31, |
|
% Change |
|
% of Total Revenue |
|||||||||
|
|
2024 |
|
|
2023 |
|
Inc (Dec) |
|
2024 |
|
|
2023 |
|
|
United States |
$ |
59,054 |
|
$ |
55,611 |
|
6.2 |
% |
|
54.9 |
% |
|
52.7 |
% |
Canada |
|
13,370 |
|
|
11,592 |
|
15.3 |
% |
|
12.4 |
% |
|
11.0 |
% |
China |
|
9,238 |
|
|
16,584 |
|
(44.3 |
)% |
|
8.6 |
% |
|
15.7 |
% |
Continental Europe |
|
8,935 |
|
|
8,529 |
|
4.8 |
% |
|
8.3 |
% |
|
8.1 |
% |
United Kingdom |
|
3,881 |
|
|
3,218 |
|
20.6 |
% |
|
3.6 |
% |
|
3.0 |
% |
Middle East/Africa |
|
5,656 |
|
|
4,958 |
|
14.1 |
% |
|
5.3 |
% |
|
4.7 |
% |
Asia Pacific |
|
4,646 |
|
|
2,751 |
|
68.9 |
% |
|
4.3 |
% |
|
2.6 |
% |
Latin America |
|
2,747 |
|
|
2,120 |
|
29.6 |
% |
|
2.6 |
% |
|
2.0 |
% |
Other |
|
— |
|
|
175 |
|
(100.0 |
)% |
|
0.0 |
% |
|
0.2 |
% |
Total |
$ |
107,527 |
|
$ |
105,538 |
|
1.9 |
% |
|
100.0 |
% |
|
100.0 |
% |
Overall Revenue
- Total revenue grew 1.9% compared to fourth quarter 2023 ("YoY"). Excluding China impacts, total revenue increased 10.5% YoY.
- US revenue increased 6.2% YoY.
- All other revenue (excluding US and China) grew 17.7% YoY.
Product and Service Revenue
- Total product revenue was flat YoY. Excluding China impacts, total product revenue increased 10.9% YoY.
- Total window film revenue increased 32.9% YoY and represented 17.2% of total revenue.
- Total service revenue increased 9.4% YoY.
- Total installation revenue (labor and product combined) grew 16.1% YoY. Organic total installation revenue grew 8.0% YoY.
- Adjusted product revenue (combining cutbank credits revenue and product revenue) declined 1.0% YoY. Excluding China, adjusted product revenue grew 9.3% YoY.
Other Financial Information
- Gross margin percentage was 40.6% and 38.8% in the fourth quarter of 2024 and 2023, respectively.
- Total operating expenses increased 17.4% YoY.
- Sales and marketing expenses increased 24.6% YoY and represented 10.7% of revenue.
- General and administrative expenses increased 13.6% YoY and represented 18.5% of revenue.
- Net income decreased 25.7% YoY.
- EBITDA decreased 19.3% YoY2.
Cash Flows from Operations
- Cash flows provided by operations were $6.3 million in the fourth quarter 2024.
2025 First Quarter Outlook
- The Company expects first quarter 2025 revenue of approximately $97 - $99 million.
- The Company recently completed a workforce reduction that is expected to yield approximately $2 million in annual run rate savings.
Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2025 First Quarter Outlook.
Conference Call Information
The Company will host a conference call and webcast today, February 26, 2025 at 11:00 a.m. Eastern Time to discuss the Company's fourth quarter and annual 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 (877) 545-0523 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0016. Callers should use access code: 186072.
A replay of the teleconference will be available until March 28, 2025 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 51876.
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 fourth quarter and year end 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 year end 2024 financial information will be included in the filing of the Company's Annual Report on Form 10-K with the Securities and Exchange Commission which is anticipated on or prior to February 28, 2025.
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, damage to 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."
XPEL, Inc. Consolidated Statements of Income (Unaudited) (In thousands except per share data) |
|||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Revenue |
|
|
|
|
|
|
|
||||||
Product revenue |
$ |
81,847 |
|
$ |
82,067 |
|
|
$ |
318,849 |
|
$ |
311,406 |
|
Service revenue |
|
25,680 |
|
|
23,471 |
|
|
|
101,551 |
|
|
84,887 |
|
Total revenue |
|
107,527 |
|
|
105,538 |
|
|
|
420,400 |
|
|
396,293 |
|
|
|
|
|
|
|
|
|
||||||
Cost of Sales |
|
|
|
|
|
|
|
||||||
Cost of product sales |
|
52,415 |
|
|
54,395 |
|
|
|
199,791 |
|
|
198,008 |
|
Cost of service |
|
11,409 |
|
|
10,211 |
|
|
|
43,249 |
|
|
35,871 |
|
Total cost of sales |
|
63,824 |
|
|
64,606 |
|
|
|
243,040 |
|
|
233,879 |
|
Gross Margin |
|
43,703 |
|
|
40,932 |
|
|
|
177,360 |
|
|
162,414 |
|
|
|
|
|
|
|
|
|
||||||
Operating Expenses |
|
|
|
|
|
|
|
||||||
Sales and marketing |
|
11,509 |
|
|
9,234 |
|
|
|
42,817 |
|
|
31,788 |
|
General and administrative |
|
19,849 |
|
|
17,474 |
|
|
|
75,396 |
|
|
63,654 |
|
Total operating expenses |
|
31,358 |
|
|
26,708 |
|
|
|
118,213 |
|
|
95,442 |
|
|
|
|
|
|
|
|
|
||||||
Operating Income |
|
12,345 |
|
|
14,224 |
|
|
|
59,147 |
|
|
66,972 |
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
34 |
|
|
301 |
|
|
|
996 |
|
|
1,248 |
|
Foreign currency exchange loss (gain) |
|
1,157 |
|
|
(726 |
) |
|
|
1,373 |
|
|
(307 |
) |
|
|
|
|
|
|
|
|
||||||
Income before income taxes |
|
11,154 |
|
|
14,649 |
|
|
|
56,778 |
|
|
66,031 |
|
Income tax expense |
|
2,256 |
|
|
2,679 |
|
|
|
11,289 |
|
|
13,231 |
|
Net income |
$ |
8,898 |
|
$ |
11,970 |
|
|
$ |
45,489 |
|
$ |
52,800 |
|
|
|
|
|
|
|
|
|
||||||
Earnings per share |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.32 |
|
$ |
0.43 |
|
|
$ |
1.65 |
|
$ |
1.91 |
|
Diluted |
$ |
0.32 |
|
$ |
0.43 |
|
|
$ |
1.65 |
|
$ |
1.91 |
|
Weighted Average Number of Common Shares |
|
|
|
|
|
|
|
||||||
Basic |
|
27,649 |
|
|
27,629 |
|
|
|
27,639 |
|
|
27,622 |
|
Diluted |
|
27,656 |
|
|
27,633 |
|
|
|
27,643 |
|
|
27,634 |
|
XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data) |
|||||||
|
(Unaudited) 12/31/2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
||||
Current |
|
|
|
||||
Cash and cash equivalents |
$ |
22,087 |
|
|
$ |
11,609 |
|
Accounts receivable, net |
|
29,146 |
|
|
|
24,111 |
|
Inventory, net |
|
110,904 |
|
|
|
106,509 |
|
Prepaid expenses and other current assets |
|
5,314 |
|
|
|
3,529 |
|
Income tax receivable |
|
893 |
|
|
|
696 |
|
Total current assets |
|
168,344 |
|
|
|
146,454 |
|
Property and equipment, net |
|
17,735 |
|
|
|
16,980 |
|
Right-of-use lease assets |
|
19,490 |
|
|
|
15,459 |
|
Intangible assets, net |
|
34,562 |
|
|
|
34,905 |
|
Other non-current assets |
|
1,350 |
|
|
|
782 |
|
Goodwill |
|
44,126 |
|
|
|
37,461 |
|
Total assets |
$ |
285,607 |
|
|
$ |
252,041 |
|
Liabilities |
|
|
|
||||
Current |
|
|
|
||||
Current portion of notes payable |
$ |
63 |
|
|
$ |
62 |
|
Current portion of lease liabilities |
|
4,666 |
|
|
|
3,966 |
|
Accounts payable and accrued liabilities |
|
36,789 |
|
|
|
32,444 |
|
Total current liabilities |
|
41,518 |
|
|
|
36,472 |
|
Deferred tax liability, net |
|
469 |
|
|
|
2,658 |
|
Other long-term liabilities |
|
1,810 |
|
|
|
890 |
|
Borrowings on line of credit |
|
— |
|
|
|
19,000 |
|
Non-current portion of lease liabilities |
|
16,126 |
|
|
|
12,715 |
|
Non-current portion of notes payable |
|
229 |
|
|
|
317 |
|
Total liabilities |
|
60,152 |
|
|
|
72,052 |
|
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; 27,651,773 and 27,630,025 issued and outstanding, respectively |
|
28 |
|
|
|
28 |
|
Additional paid-in-capital |
|
15,550 |
|
|
|
12,546 |
|
Accumulated other comprehensive loss |
|
(4,236 |
) |
|
|
(1,209 |
) |
Retained earnings |
|
214,113 |
|
|
|
168,624 |
|
Total stockholders' equity |
|
225,455 |
|
|
|
179,989 |
|
Total liabilities and stockholders' equity |
$ |
285,607 |
|
|
$ |
252,041 |
|
XPEL, Inc. Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
|||||||||||||||
|
Three Months ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
8,898 |
|
|
$ |
11,970 |
|
|
$ |
45,489 |
|
|
$ |
52,800 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation of property, plant and equipment |
|
1,512 |
|
|
|
1,305 |
|
|
|
5,820 |
|
|
|
4,534 |
|
Amortization of intangible assets |
|
1,550 |
|
|
|
1,399 |
|
|
|
5,877 |
|
|
|
5,059 |
|
Gain on sale of property and equipment |
|
(14 |
) |
|
|
(2 |
) |
|
|
(49 |
) |
|
|
(13 |
) |
Stock compensation |
|
868 |
|
|
|
496 |
|
|
|
3,197 |
|
|
|
1,640 |
|
Provision for credit losses |
|
111 |
|
|
|
27 |
|
|
|
390 |
|
|
|
243 |
|
Deferred income tax |
|
(1,367 |
) |
|
|
(77 |
) |
|
|
(2,781 |
) |
|
|
(921 |
) |
|
|
|
|
|
|
|
|
||||||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
(129 |
) |
|
|
2,483 |
|
|
|
(5,604 |
) |
|
|
(7,000 |
) |
Inventory, net |
|
(9,959 |
) |
|
|
(13,260 |
) |
|
|
(4,785 |
) |
|
|
(24,843 |
) |
Prepaid expenses and other assets |
|
631 |
|
|
|
7,892 |
|
|
|
(2,154 |
) |
|
|
604 |
|
Income tax receivable or payable |
|
(637 |
) |
|
|
(1,517 |
) |
|
|
(267 |
) |
|
|
(1,197 |
) |
Accounts payable and accrued liabilities |
|
4,863 |
|
|
|
(11,833 |
) |
|
|
2,691 |
|
|
|
6,478 |
|
Net cash provided by (used in) operating activities |
|
6,327 |
|
|
|
(1,117 |
) |
|
|
47,824 |
|
|
|
37,384 |
|
Cash flows used in investing activities |
|
|
|
|
|
|
|
||||||||
Purchase of property, plant and equipment |
|
(1,628 |
) |
|
|
(1,615 |
) |
|
|
(6,713 |
) |
|
|
(6,356 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
|
9 |
|
|
|
40 |
|
|
|
29 |
|
Acquisitions, net of cash acquired, payment holdbacks, and notes payable |
|
(3,335 |
) |
|
|
(14,038 |
) |
|
|
(9,855 |
) |
|
|
(18,735 |
) |
Development or purchase of intangible assets |
|
(455 |
) |
|
|
(493 |
) |
|
|
(1,876 |
) |
|
|
(1,291 |
) |
Net cash used in investing activities |
|
(5,418 |
) |
|
|
(16,137 |
) |
|
|
(18,404 |
) |
|
|
(26,353 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
||||||||
Net borrowings (payments) on revolving credit agreements |
|
— |
|
|
|
19,000 |
|
|
|
(19,000 |
) |
|
|
(7,000 |
) |
Restricted stock withholding taxes paid in lieu of issued shares |
|
(18 |
) |
|
|
— |
|
|
|
(193 |
) |
|
|
(167 |
) |
Repayments of notes payable |
|
(16 |
) |
|
|
(15 |
) |
|
|
(60 |
) |
|
|
(92 |
) |
Net cash (used in) provided by financing activities |
|
(34 |
) |
|
|
18,985 |
|
|
|
(19,253 |
) |
|
|
(7,259 |
) |
Net change in cash and cash equivalents |
|
875 |
|
|
|
1,731 |
|
|
|
10,167 |
|
|
|
3,772 |
|
Foreign exchange impact on cash and cash equivalents |
|
226 |
|
|
|
(496 |
) |
|
|
311 |
|
|
|
(219 |
) |
Increase in cash and cash equivalents during the period |
|
1,101 |
|
|
|
1,235 |
|
|
|
10,478 |
|
|
|
3,553 |
|
Cash and cash equivalents at beginning of year |
|
20,986 |
|
|
|
10,374 |
|
|
|
11,609 |
|
|
|
8,056 |
|
Cash and cash equivalents at end of year |
$ |
22,087 |
|
|
$ |
11,609 |
|
|
$ |
22,087 |
|
|
$ |
11,609 |
|
|
|
|
|
|
|
|
|
||||||||
Supplemental schedule of non-cash activities |
|
|
|
|
|
|
|
||||||||
Contingent consideration |
$ |
1,600 |
|
|
$ |
— |
|
|
$ |
1,600 |
|
|
$ |
— |
|
Non-cash lease financing |
$ |
2,491 |
|
|
$ |
2,384 |
|
|
$ |
8,701 |
|
|
$ |
4,231 |
|
Issuance of common stock for vested restricted stock units |
$ |
210 |
|
|
$ |
327 |
|
|
$ |
1,110 |
|
|
$ |
1,038 |
|
|
|
|
|
|
|
|
|
||||||||
Supplemental cash flow information |
|
|
|
|
|
|
|
||||||||
Cash paid for income taxes |
$ |
3,361 |
|
|
$ |
4,149 |
|
|
$ |
13,617 |
|
|
$ |
15,293 |
|
Cash paid for interest |
$ |
31 |
|
|
$ |
240 |
|
|
$ |
1,026 |
|
|
$ |
1,240 |
|
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) |
|||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Net Income |
$ |
8,898 |
|
$ |
11,970 |
|
$ |
45,489 |
|
$ |
52,800 |
Interest |
|
34 |
|
|
301 |
|
|
996 |
|
|
1,248 |
Taxes |
|
2,256 |
|
|
2,679 |
|
|
11,289 |
|
|
13,231 |
Depreciation |
|
1,512 |
|
|
1,305 |
|
|
5,820 |
|
|
4,534 |
Amortization |
|
1,550 |
|
|
1,399 |
|
|
5,877 |
|
|
5,059 |
EBITDA |
$ |
14,250 |
|
$ |
17,654 |
|
$ |
69,471 |
|
$ |
76,872 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250226143725/en/
For more information, contact:
Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: [email protected]