Part I - Financial Information [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q2 2022 show significant revenue and net income growth, increased assets and liabilities, and decreased operating cash flow due to inventory build-up [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$189.1 million** by June 30, 2022, driven by inventory growth, while liabilities increased to **$86.0 million** due to higher borrowings Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$189,056** | **$161,015** | | Cash and cash equivalents | $9,321 | $9,644 | | Inventory, net | $74,142 | $51,936 | | Goodwill | $25,071 | $25,655 | | **Total Liabilities** | **$85,979** | **$76,553** | | Borrowings on line of credit | $32,000 | $25,000 | | Accounts payable and accrued liabilities | $36,587 | $32,915 | | **Total Stockholders' Equity** | **$103,077** | **$84,462** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2022 revenue grew **22.0%** to **$83.9 million**, with net income up **16.8%** to **$11.9 million**, and diluted EPS at **$0.43** Statement of Income Summary (in thousands, except EPS) | Metric | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$83,890** | **$68,736** | **$155,754** | **$120,602** | | Gross Margin | $32,983 | $25,247 | $60,700 | $43,534 | | Operating Income | $15,749 | $12,672 | $25,786 | $21,219 | | **Net Income** | **$11,902** | **$10,186** | **$19,706** | **$17,033** | | Diluted EPS | $0.43 | $0.37 | $0.71 | $0.62 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow for H1 2022 was a **$2.5 million** outflow, a significant decrease from the prior year, mainly due to a **$22.7 million** inventory increase Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,525) | $19,073 | | Net cash used in investing activities | $(4,595) | $(33,638) | | Net cash provided by (used in) financing activities | $6,706 | $(5,423) | | **Decrease in cash and cash equivalents** | **$(323)** | **$(20,293)** | - The significant decrease in operating cash flow was mainly caused by a **$22.7 million increase in inventory** and a **$6.6 million increase in accounts receivable**[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation, debt structure, and acquisition activities, highlighting paint protection film revenue and a **$75.0 million** revolving credit facility - The company operates as a single operating segment, with the CEO acting as the Chief Operating Decision Maker (CODM)[31](index=31&type=chunk) Revenue by Product Category - Six Months Ended June 30 (in thousands) | Category | 2022 | 2021 | | :--- | :--- | :--- | | Paint protection film | $92,236 | $81,030 | | Window film | $27,320 | $18,243 | | Installation labor | $20,303 | $8,473 | | **Total Revenue** | **$155,754** | **$120,602** | - The company has a **$75.0 million revolving line of credit**, with a balance of **$32.0 million** as of June 30, 2022. The interest rate was **4.00%**[49](index=49&type=chunk) - Purchase price accounting for five acquisitions completed on October 1, 2021, remains preliminary and will be finalized within one year of completion[47](index=47&type=chunk)[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 2022 performance to high demand, with revenue up **22.0%** to **$83.9 million** and improved gross margin, while managing supply chain risks and maintaining liquidity [Company Overview and Strategy](index=21&type=section&id=Company%20Overview%20and%20Strategy) XPEL, a global provider of automotive protective products, strategically focuses on customer proximity, global expansion, acquisitions, brand awareness, and non-automotive portfolio growth - The company's core strategic philosophy is that being closer to the end customer drives revenue growth by enabling efficient new product introductions and value delivery[75](index=75&type=chunk) - Key strategic initiatives include global expansion with a local presence, increasing brand awareness at premium events, acquiring installation facilities and international partners, and expanding the non-automotive product portfolio[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2022 revenue increased **22.0%** to **$83.9 million**, driven by strong U.S. growth and service revenue, while China declined, and gross margin improved to **39.3%** Q2 2022 vs Q2 2021 Performance (in thousands) | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $83,890 | $68,736 | 22.0% | | Gross Margin | $32,983 | $25,247 | 30.6% | | Gross Margin % | 39.3% | 36.7% | +2.6 p.p. | | Operating Income | $15,749 | $12,672 | 24.3% | | Net Income | $11,902 | $10,186 | 16.8% | Q2 Revenue by Geography (in thousands) | Region | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | United States | $49,166 | $34,296 | 43.4% | | China | $7,904 | $12,626 | (37.4)% | | Canada | $10,877 | $8,877 | 22.5% | | Continental Europe | $6,944 | $5,215 | 33.2% | - Service revenue grew **67.3%** in Q2 2022, driven by a **106.2% increase in installation labor revenue** following the 2021 acquisitions of dealership services businesses[93](index=93&type=chunk)[98](index=98&type=chunk) - Product gross margin percentage increased from **30.8% to 34.0%** in Q2 2022 vs Q2 2021, due to lower product costs and improved operating leverage[107](index=107&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, cash was **$9.3 million**, with **$2.5 million** used in operations for H1 2022 due to strategic inventory build-up, and total debt at **$32.2 million** - Primary liquidity sources are cash on hand (**$9.3 million** at June 30, 2022) and cash from operations[121](index=121&type=chunk) - Cash used in operations for the first six months of 2022 was **$2.5 million**, a decrease from **$19.1 million** in cash provided in the prior year, mainly due to a strategic inventory build-up[122](index=122&type=chunk) - Total debt obligations increased to **$32.2 million** as of June 30, 2022, from **$25.5 million** at year-end 2021, reflecting increased use of the revolving credit facility[124](index=124&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces unhedged foreign currency risk from international operations and interest rate risk from floating-rate credit facility borrowings - The company has exposure to currency risk in the British Pound Sterling, Canadian Dollar, Euro, Mexican Peso, and New Taiwanese Dollar, but does not currently hedge this exposure[131](index=131&type=chunk) - Floating rate bank credit facilities expose the company to interest rate risk. A hypothetical **200 basis point increase** in variable rates could have a material impact[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of the end of the period, the company's disclosure controls and procedures were effective at a reasonable assurance level[134](index=134&type=chunk) - No changes occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[136](index=136&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal actions, with management deeming a material financial impact unlikely - The company is party to actions and potential claims related to the ordinary conduct of its business, including commercial disputes, product liability, and employment matters[138](index=138&type=chunk) - Management believes the likelihood of any litigation having a material impact on the company's financial position is remote[139](index=139&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for the addition of increasing inflation risk impacting product demand - No material changes to risk factors were reported, except for the addition of inflation risk. Economic conditions in several markets are experiencing increasing inflation, which could impact product demand and future financial results[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None[142](index=142&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - Not applicable[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - Not applicable[144](index=144&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[145](index=145&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO and CFO certifications and XBRL financial data - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and financial statements formatted in XBRL[147](index=147&type=chunk)

XPEL, Inc. (NASDAQ:XPEL) Q1 2022 Results Conference Call May 10, 2022 11:00 AM ET Company Participants John Nesbett - Investor Relations Ryan Pape - President and Chief Executive Officer Barry Wood - Senior Vice President and Chief Financial Officer Conference Call Participants Ryan Sigdahl - Craig-Hallum Jeff Van Sinderen - B. Riley Operator Good day, ladies and gentlemen, and welcome to the XPEL Inc.’s First Quarter 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over t ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38858 XPEL, INC. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (State or other jurisdiction of incorporation or organiz ...

XPEL, Inc. (NASDAQ:XPEL) Q4 2021 Earnings Conference Call February 28, 2022 11:00 AM ET Company Participants John Nesbett - Investor Relations Ryan Pape - President and Chief Executive Officer Barry Wood - Senior Vice President and Chief Financial Officer Conference Call Participants Steve Dyer - Craig-Hallum Jeff Van Sinderen - B. Riley Operator Good day, ladies and gentlemen, and welcome to the XPEL, Inc. Fourth Quarter and Year-End 2021 Earnings Call [Operator Instructions]. It is now my pleasure to tur ...

Revenue Breakdown - Surface and Paint Protection film sales represented 68.6% of consolidated revenue for the year ended December 31, 2021[44]. - Automotive window film sales accounted for 13.6% of the company's consolidated revenue for the year ended December 31, 2021[48]. - Architectural window film sales represented less than 2.0% of the company's consolidated revenue for the year ended December 31, 2021[50]. - Monthly subscriptions for the Design Access Program (DAP) contributed 1.7% to the company's consolidated revenue for the year ended December 31, 2021[51]. - Installation services, including product and labor revenue, represented 11.1% of the company's consolidated revenue for the year ended December 31, 2021[52]. - Approximately 54% of the company's consolidated revenue was generated through independent installers and new car dealerships for the year ended December 31, 2021[61]. - Approximately 28% of the company's consolidated revenue was derived from third-party distributors for the year ended December 31, 2021[65]. - The China Distributor accounted for approximately 18% of the company's consolidated revenue for the year ended December 31, 2021[66]. International Expansion - The company began its international expansion in 2014 by establishing an office in the United Kingdom[36]. - The company expanded its presence in France and acquired assets of France Auto Racing in 2020[39]. - The company acquired several businesses in the United States, Canada, and the United Kingdom during 2021 to enhance its market presence[58]. Product Development - The ULTIMATE product line, introduced in 2011, was the industry's first protective film with self-healing properties, contributing to strong revenue growth[35]. - XPEL ULTIMATE PLUS is the flagship product, a self-healing, stain-resistant film with exceptional clarity and durability[38]. - XPEL ULTIMATE FUSION, the newest paint protection film, includes a hydrophobic top-coat for enhanced performance[40]. Operational Risks - The company relies on one distributor for sales of its products in China, which poses a risk due to trade tensions[14]. - The company is exposed to a wide range of risks due to its multinational operations and must manage rapid growth effectively[14]. - The company is subject to various domestic and international anti-corruption laws, increasing exposure as international presence expands[83]. - Compliance with the GDPR and California Consumer Privacy Act may increase operational costs and complexity for the company[84]. - The company has incurred costs to maintain compliance with environmental, health, and safety laws, although these costs have not been material to date[85]. Financial Management - A hypothetical 100 basis point increase in variable interest rates could materially impact the company's financial statements[243]. - The company does not currently hedge its exposure to foreign currency translation adjustments, which may affect financial results[241]. - The company has not experienced significant effects from changes in interest rates during the periods presented[243]. - The company is subject to market risks related to borrowings under its revolving line of credit, which are influenced by interest rate changes[242]. Intellectual Property - The company owns numerous intellectual property rights, which provide a competitive advantage and are actively protected[86]. - The company has processes in place to protect its intellectual property assets globally and intends to continue enforcing its rights[87]. Workforce - The company employs approximately 709 people as of December 31, 2021, with 493 in the United States and 216 internationally[88]. Installation Centers - The company operates 11 Company-owned installation centers, which represented approximately 5% of consolidated revenue for the year ended December 31, 2021[70]. Supplier Dependency - The company sources approximately 75% of its inventory purchases from one supplier, entrotech inc., under a supply agreement set to terminate on March 21, 2022[78].

Financial Data and Key Metrics Changes - Q3 2021 revenue was $68.5 million, flat compared to Q2, but down approximately 5% sequentially when excluding acquisition-related revenue [6][33] - Organic revenue growth for Q3 was approximately 38.4%, with year-to-date revenue growth of 71.4% [33] - Gross margin for Q3 was 35.7%, down from 36.7% in Q2, but up from 34.8% in Q3 2020 [26][27] - Net income increased 26.1% year-over-year to $8.3 million, with an EPS of $0.30 [38] Business Line Data and Key Metrics Changes - Product revenue grew 44.2% to $56.9 million in Q3, with paint protection film growing 35.2% to $43.2 million [33] - Service revenue grew 74.9% in Q3, with total installation revenue from company-owned centers growing 107.6% [34] - The PermaPlate Films acquisition incurred most integration expenses in Q3, expected to complete by year-end [11] Market Data and Key Metrics Changes - U.S. revenue grew 69.5%, with organic growth of 49%, despite new car sales being the slowest in a decade [7] - Canada revenue grew 40.3% to $8.7 million, with strong performance in both U.S. and Canada [12] - China revenue reached $10.6 million, but new car sales were down 13% year-over-year [15] Company Strategy and Development Direction - The company is focused on expanding into mid-range markets through acquisitions like Tint Net and One Armor [8] - Recent acquisitions are aimed at enhancing the product portfolio and increasing market penetration [13][19] - The company plans to maintain an aggressive inventory strategy to mitigate supply chain disruptions [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing pricing pressures and supply chain challenges, with expectations for continued volatility [60][62] - Anticipated Q4 revenue is expected to be slightly higher than Q2 and Q3, contingent on recovery in new car inventories [25] - Management remains confident in achieving gross margins approaching 40% by mid-year next year [27] Other Important Information - The company plans to build inventory levels to approximately $45 million by year-end to hedge against supply interruptions [24] - Integration of recent acquisitions is a priority, with no new acquisitions planned for the remainder of the year [40] Q&A Session Summary Question: Performance amidst new vehicle inventory challenges - Management acknowledged strong performance despite low new vehicle inventory, attributing it to product adoption and dealer incentives [46] Question: Future acquisition strategy - Management indicated that while installation acquisitions have been a focus, they remain open to expanding the product portfolio [51][54] Question: Supply chain and pricing pressure dynamics - Management elaborated on unpredictable pricing and supply chain shortages, emphasizing the need for inventory buildup [58][63]

Revenue Performance - Total revenue for the three months ended September 30, 2021, was $68,528,923, a 48.7% increase from $46,122,796 in the same period of 2020[46] - Revenue from paint protection film for the nine months ended September 30, 2021, reached $124,250,391, up 63.2% from $75,996,440 in 2020[46] - The United States accounted for $37,362,839 of total revenue in Q3 2021, representing a 69.8% increase from $22,041,941 in Q3 2020[47] - Total service revenue for the nine months ended September 30, 2021, was $28,536,076, an increase of 77.1% from $16,076,820 in 2020[46] - Revenue for the nine months ended September 30, 2021, was $199.01 million, a 58.2% increase from $125.72 million in the same period of 2020[71] - Net income for the nine months ended September 30, 2021, was $26.07 million, up 84.9% from $14.09 million in 2020[71] - Basic earnings per share for the nine months ended September 30, 2021, was $0.92, compared to $0.40 in 2020, reflecting a 130% increase[74] Assets and Liabilities - The company's warranty liability decreased to $49,927 as of September 30, 2021, from $52,006 at the end of 2020[34] - Accounts receivable as of September 30, 2021, were net of an allowance for doubtful accounts of $191,804, compared to $90,844 as of December 31, 2020[33] - Total property and equipment increased to $14,282,330 as of September 30, 2021, from $9,207,729 as of December 31, 2020, representing a growth of 55.5%[48] - Intangible assets, net rose to $21,575,724 as of September 30, 2021, compared to $5,423,980 as of December 31, 2020, marking an increase of 297.5%[49] - Goodwill increased significantly to $15,747,077 as of September 30, 2021, from $4,472,217 as of December 31, 2020, reflecting a growth of 252.5%[51] - Inventory totaled $39,554,300 as of September 30, 2021, up from $22,364,126 as of December 31, 2020, indicating an increase of 77.0%[52] - Accounts payable and accrued liabilities increased to $31,654,155 as of September 30, 2021, from $16,797,462 as of December 31, 2020, a rise of 88.3%[58] Expenses - Depreciation expense for the three months ended September 30, 2021, was $455,792, compared to $325,643 for the same period in 2020, reflecting a year-over-year increase of 40.0%[48] - Amortization expense for the three months ended September 30, 2021, was $734,963, up from $239,571 in the same period of 2020, representing an increase of 66.0%[49] Acquisitions - The company completed the acquisition of PermaPlate Film LLC for $30,000,000 on May 25, 2021, aimed at market expansion[67] - Revenue from the acquired company for the three months ended September 30, 2021, was $5,335,387, contributing to a net income of $441,358 during the same period[70] - The company completed the acquisition of five businesses in the U.S. and Canada on October 1, 2021, for a combined preliminary purchase price of approximately $20.1 million[78] - The acquisitions were financed through a combination of cash on hand and borrowings from lines of credit in the U.S. and Canada[79] - Initial accounting for the recent acquisitions is not yet complete[80] Financial Instruments and Risks - The company has a $57.0 million revolving line of credit, with no outstanding balance as of September 30, 2021, and an interest rate of 2.50%[53] - The company has operations exposed to currency risk in multiple currencies, including the British Pound Sterling and the Canadian Dollar[142] - A hypothetical 100 basis point increase in variable interest rates could materially impact the company's financial statements if it borrows under its revolving lines of credit[143] - The company does not currently hedge its exposure to foreign currency translation adjustments or interest rate risk[143] Stock and Equity - The company granted 17,520 restricted stock units (RSUs) with a weighted average grant value of $84.1 per share during the nine months ended September 30, 2021[73] Operating Segments - The company operates as a single operating segment, with consolidated results reviewed by the chief executive officer[31] - The company adopted ASU No. 2019-12 regarding income taxes without a material change to its financial statements[36]

Financial Data and Key Metrics Changes - Revenue grew 92% year-over-year to a record $68.7 million, with a sequential growth of 32.5% from the previous quarter [8][30] - Gross margin for the quarter increased to 36.7% from 32.8% in Q2 2020, reflecting a strong performance despite challenges [24][34] - EBITDA margin finished at 19.8%, with net income margin at 14.8%, indicating significant operational leverage [26][36] Business Line Data and Key Metrics Changes - Product revenue grew 89.5% to approximately $58.7 million, with paint protection film growing 86.6% to $45.2 million [32] - Service revenue more than doubled for the quarter, growing 79.3% for the first half of the year [33] - Total installation revenue grew 124%, representing 9.3% of total revenue for the quarter [33] Market Data and Key Metrics Changes - U.S. revenue grew 112.8% year-over-year to $34.3 million, constituting nearly 50% of total revenue [15] - Canada posted record revenue of $8.9 million, while continental Europe grew 80% to $5.2 million [10][12] - Latin America grew over 100% from a small base, and the Middle East grew over 300% [14] Company Strategy and Development Direction - The company is focused on expanding its direct sales capability in Latin America and investing in Europe [11][14] - The acquisition of PermaPlate film is seen as a strategic move to enhance product offerings and market reach [17][50] - The company plans to continue integrating PermaPlate film and expects to achieve a targeted EBITDA run rate of approximately $6 million by year-end [36][38] Management's Comments on Operating Environment and Future Outlook - Management noted that new car inventory shortages are beginning to impact car sales, with July new car sales down 8% from June [22] - Despite potential challenges from inventory issues, the company remains optimistic about its revenue run rate and overall performance [23][24] - Management expects Q3 revenue to be slightly lower than Q2, indicating a cooling off from an exceptional quarter [21] Other Important Information - The company is actively pursuing acquisitions and has a robust pipeline, supported by a new $57 million credit facility [38] - Cash flow from operations was solid at $10.1 million, with higher-than-normal CapEx due to warehouse build-out [37] Q&A Session Summary Question: Impact of new car sales inventory on business - Management indicated that while new car sales are experiencing pressure from inventory shortages, the attach rate for products on sold vehicles continues to increase [41][42] Question: Pricing strategy in the second half of the year - Management confirmed that they are considering price increases in response to rising costs across various areas, but do not expect significant negative impacts on margins [43] Question: Integration of PermaPlate acquisition - Management reported that the integration of PermaPlate is progressing well, with operational and financial integration largely complete [49][50] Question: Outlook for the Chinese market - Management expressed confidence in the strong performance in China but noted potential near-term uncertainties due to increased COVID prevalence and lockdown pressures [47][48]

Revenue Performance - The Company reported total revenue of $120.6 million for the six months ended June 30, 2021, a 88% increase compared to $64.2 million for the same period in 2020[47] - The Company recognized $68.7 million in total revenue for the three months ended June 30, 2021, compared to $35.8 million for the same period in 2020, marking a 92% increase[47] - Total revenue for the three months ended June 30, 2021, was $68.74 million, a 91.8% increase from $35.81 million in the same period of 2020[48] - Pro forma combined revenue for the six months ended June 30, 2021, was $130,481,516, representing a 78.3% increase from $73,227,881 in 2020[75] Product Revenue - Product revenue for the six months ended June 30, 2021, was $103.6 million, up 89% from $54.7 million in the same period of 2020[47] - Paint protection film revenue for the six months ended June 30, 2021, was $81 million, a 84% increase from $44 million in the same period of 2020[47] Acquisitions - The Company acquired PermaPlate Film LLC for $30 million, funded with cash on hand, to expand its distribution and installation capabilities in the automotive window film market[28] - The company completed the acquisition of PermaPlate Film LLC for $30 million on May 25, 2021, aimed at market expansion[70] - The acquisition of PermaPlate Film was completed for a total purchase price of $30 million, with cash allocation of $30 million[72] - The consolidated revenue from the acquired company for the six months ended June 30, 2021, was $2,474,496, and the net income was $367,647[74] Financial Position - The Company entered into a new $57 million revolving line of credit facility to enhance its liquidity and financial flexibility[27] - The company has a $57 million revolving line of credit established on May 21, 2021, to fund working capital needs[55] - Warranty liabilities decreased to $45,764 as of June 30, 2021, from $52,006 as of December 31, 2020, reflecting adjustments based on historical claims data[35] - The Company’s accounts receivable allowance for doubtful accounts was $116,268 as of June 30, 2021, compared to $90,844 as of December 31, 2020[34] - The Company’s balance of contract liabilities was $619,463 as of June 30, 2021, reflecting payments received for which performance obligations have not yet been satisfied[47] - Total property and equipment increased to $12.85 million as of June 30, 2021, compared to $9.21 million at the end of 2020[49] - Intangible assets, net, rose to $21.90 million as of June 30, 2021, from $5.42 million at the end of 2020[51] - Inventory increased to $25.73 million as of June 30, 2021, compared to $22.36 million at the end of 2020[54] - Trade payables increased to $17.77 million as of June 30, 2021, from $12.99 million at the end of 2020[61] Expenses and Liabilities - Depreciation expense for the three months ended June 30, 2021, was $419,607, compared to $293,860 in the same period of 2020[49] - The fair value of contingent liabilities related to acquisitions was $475,031 as of June 30, 2021, down from $571,833 at the end of 2020[68] Goodwill and Intangible Assets - Goodwill from the acquisition, amounting to $11,271,949, is tax-deductible and reflects expected synergies and employee knowledge[73] - The intangible assets acquired have a weighted average useful life of 9 years and will be amortized on a straight-line basis[72] Risk Factors - The company does not currently hedge its exposure to foreign currency translation adjustments, which may impact financial statements[136] - A hypothetical 100 basis point increase in variable interest rates could have a material impact on the company's financial statements if borrowing occurs[137] Stock Options - The company granted 17,520 Restricted Stock Units (RSUs) to key executives at a grant price of $84.19 per unit, vesting over four years[76] Customer Concentration - The largest customer accounted for 18.4% of net sales in Q2 2021, down from 27.9% in Q2 2020[48] Operating Segments - The Company operates as a single operating segment, with its chief operating decision maker reviewing consolidated results monthly to evaluate performance[32]

XPEL, Inc. (NASDAQ:XPEL) Q1 2021 Earnings Conference Call May 10, 2021 11:00 AM ET Company Participants John Nesbett - IMS IR Ryan Pape - President & CEO Barry Wood - CFO Conference Call Participants Jeff Van Sinderen - B. Riley Steve Dyer - Craig-Hallum Operator Greetings, and welcome to the XPEL Inc. First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] please note that this con ...