SAN ANTONIO--(BUSINESS WIRE)--

XPEL Technologies Corp. (TSXV: DAP.U), a leading supplier of automotive paint protection and window films, announced results for the third quarter and nine months ended September 30, 2016.

Mr. Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We’re pleased with our strong third quarter results which reflect revenue growth of 25% and significant net income growth of 82%. We continue to see strong demand and growth across our product lines, including our recently launched window tint business.

“We continue to execute on our ‘Get Close to the Customer’ strategy with the goal of controlling our delivery model, efficiently leveraging our distribution channels and enhancing our brand exposure. Last week we announced that Tim Hartt, our Chief Operating Officer and one of XPEL’s founders, will be relocating to Europe as Managing Director of our European operations. His leadership presence will enable us to better align our strategic goals and accelerate the execution of our growth initiatives. Europe is the epicenter of the luxury car market, and our increasing commitment there will help expand the European market and aide our operations globally.”

For the Quarter Ended September 30, 2016:

Revenue: Revenue in the third quarter of fiscal 2016 was $13.55 million, a 24.6% increase compared to revenue of $10.87 million in the prior year. The revenue increase is primarily related to increased sales of XPEL’s core products of automotive protection film and window tint. On a constant currency basis, revenues increased 25.4% to $13.63 million.

Gross Margin: Gross profit as a percentage of sales decreased to 28.1% from 30.3% in the third quarter last year. Direct costs include the costs of our physical goods, the costs related to our Design Access Program software, and the costs of labor directly associated with the production of product. Beginning this year, the Company has allocated more personnel cost to Direct Costs reflecting increased dedication of certain employees to the installation business. The effect of this revised methodology for the quarter was to increase direct costs by approximately $0.20 million. Normalizing for the effect of the aforementioned personnel cost allocation methodology, gross margin for the quarter would have been 29.6%.

Expenses: Selling, general and administrative expenses were essentially flat vs. prior quarter at $2.58 million, but declined as a percentage of revenue to 19.1% as compared to 24.2% in the third quarter of 2015. Normalizing for the effect of the aforementioned personnel cost allocation methodology, selling, general and administrative expenses would have decreased as a percentage of sales to 20.0%.

EBITDA: Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA) increased 67.3% to $1.52 million as compared to EBITDA of $0.91 million in the same prior year quarter. On a constant currency basis, EBITDA grew 72.1% to $1.57 million.

Net Income: Net income for the fiscal 2016 third quarter was $0.72 million or $0.028 per basic and diluted share, compared with net income of $0.40 million or $0.015 per basic and diluted share, for the corresponding prior year period. On a constant currency basis, net income for the fiscal 2016 third quarter grew 92.1% to $0.76 Million.

For the Nine Months Ended September 30, 2016:

Revenue: Revenue in the first nine months of fiscal 2016 was $38.51 million, a 27.1% increase as compared to revenue of $30.3 million in the same period of fiscal 2015. The revenue increase is primarily related to increased sales of XPEL’s core products of automotive protection film and window tint. On a constant currency basis, revenues increased 28.1% to $38.81 million.

Gross Margin: Gross profit as a percentage of sales decreased to 28.2% as compared to 31.3% in the first nine months of 2015. Normalizing for the effect of the aforementioned personnel cost allocation methodology, gross margin for the quarter would have been 29.5%.

Expenses: Selling, general and administrative expenses declined as a percentage of revenue to 19.1% as compared to 23.2% in the first nine months of 2015. Normalizing for the effect of the aforementioned personnel cost allocation methodology, selling, general and administrative expenses would have decreased as a percentage of sales to 20.6%.

EBITDA: EBITDA increased 37.1% to $4.30 million as compared to EBITDA of $3.1 million in the same prior year period. On a constant currency basis, EBITDA increased 43.9% to $4.52 million in the first nine months of 2016.

Net Income: Net income for the first nine months of fiscal 2016 was $2.19 million or $0.085 per basic and diluted share, compared with net income of $1.67 million or $0.065 per basic and diluted share for the corresponding prior year period. On a constant currency basis, net income for the fiscal 2016 first nine months was $2.36 million.

Conference Call Information

The Company will host a conference call to discuss the third quarter and nine month results today, November 17, 2016 at 11:00 a.m. Eastern Time.

To access the live webcast, log onto the XPEL Technologies website at http://www.xpel.com, and click on “Investor Relations” under the “Company” header.

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 December 17, 2016 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 10140.

About XPEL Technologies Corp.

XPEL leads the industry in designing, manufacturing and distributing high-performance automotive paint and headlamp protection film technologies. Using XPEL’s propriety software and materials, our professional design team develops products that deliver the ultimate in vehicle protection, meeting the demands of a broad range of makes and models. With more than 70,000 vehicle-specific applications and a global network of trained installers, XPEL is dedicated to exceeding customer expectations in providing high-quality products, customer service and technical support. XPEL Technologies Corp. (TSXV: DAP.U) is publicly traded on the TSXV Exchange. Visit www.xpel.com for more information.

Safe harbor statement

This release includes forward-looking statements regarding XPEL Technologies Corp. 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Constant Currency

The Company reports results in U.S. Dollars, but does business on a global basis. Exchange rate fluctuations affect the U.S. Dollar value for foreign currency revenue and expenses and may have a significant effect on reported results. Comparisons are made to the prior year in constant currency terms, which Management believes is helpful in understanding the Company’s performance. Constant currency is calculated by converting current period results using the prior year currency exchange rates.

Non-IFRS Measures

In addition to disclosing results in accordance with IFRS as issued by IASB, the Company also provides supplementary non-IFRS measures as a method of evaluating the Company’s performance.

Management uses EBITDA as a measure of company-wide performance. EBITDA is defined as earnings before interest, taxes, depreciation, and amortization. Management believes EBITDA is a useful measure to allow period-to-period comparison of the Company’s operating performance. EBITDA does not have a standardized meaning under IFRS and is not necessarily comparable to measures presented by other Companies. EBITDA excludes components that are significant in understanding and assessing our results of operations and cash flows. EBITDA does not represent funds available for Management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not be considered a substitute for Net Income prepared in accordance with IFRS as issued by the IASB.

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