XPEL Inc., a global provider of protective films and coatings, announced results for the first quarter ended March 31, 2020.
First Quarter 2020 Highlights:
- Revenues increased 14.8% to $28.4 million compared to first quarter 2019
- Gross margin improved to 36.3% compared to 33.0% in the same quarter of 2019
- XPEL reported net income of $1.6 million or $.06 per share.
The company incurred approximately $0.4 million in foreign currency exchange losses resulting from currency fluctuations late in the quarter in response to the spread of COVID-19. Additionally, the company incurred approximately $0.5 million in net costs related to its annual XPEL Dealer Conference held in the first quarter this year but held in the second quarter last year. Normalizing for these two items, net income would have been $2.3 million or 8 cents per share.
The company posted strong revenue growth in most of its regions, with global revenue growth of 30% excluding China which was down 55% from the prior year due to impact of COVID-19. XPEL has seen a substantial rebound in China during the second quarter and expects significant year-over-year growth for the China region in the second quarter.
Ryan Pape, president and CEO of XPEL, commented, “We experienced the impact of COVID-19 early in the first quarter with our large China business. We have taken aggressive steps to safeguard our team while managing through the crisis as it now impacts our other regions. We have seen a rebound in our China business, and we remain optimistic that we will see continued recovery in other regions coming out of the peak COVID-19 impact. Early signs thus far have been encouraging.”
For the Quarter Ended March 31, 2020:
Revenues.Revenues increased approximately $3.7 million or 14.8% to $28.4 million as compared to $24.7 million in the prior year.
Gross Margin. Gross margin improved to 36.3% compared to 33.0% in the first quarter of 2019.
Expenses. Operating expenses increased to $7.8 million or 27.5% of sales as compared to $5.7 million or 23.0% of sales in the prior year period. The increase was primarily due to $0.7 million in expenses associated with the company’s annual dealer conference. The 2019 dealer conference took place in the second quarter.
Foreign Currency Exchange. Foreign Currency Exchange loss increased to $0.4 million in the first quarter compared to $0.02 million in the first quarter last year.
Net income.Net income was $1.6 million, or $0.06 per basic and diluted share versus net income of $1.9 million, or $0.07 per basic and diluted share in the first quarter of 2019.
EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $2.6 million, or 9.1% of sales, as compared to $2.8 million in the prior year1.
As of March 31, 2020, XPEL had cash and cash equivalents of $14.8 million compared to $11.5 million at December 31, 2019.