SAN ANTONIO, February 26, 2025--(BUSINESS WIRE)--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

Story Continues

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

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Contacts

For more information, contact:

Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: [email protected]

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