XPEL(XPEL)2024-08-10 03:25Financial Data and Key Metrics - Q2 2024 revenue grew 7.5% to 64.9 million [4] - Gross margin for the quarter was 43.5%, with some downward pressure expected as China returns to normal levels [12] - SG&A expenses grew 20.5% to 21.8 million, with an EBITDA margin of 19.9% [21] - Net income declined 4.5% to 0.54 per share [21] - Cash flow performance was strong at 4.4 million due to sell-in vs sell-through dynamics, but a new product line showed promise [6] - Rest of the world revenue, excluding the U.S. and China, grew 16.1%, with Continental Europe growing 17.2% [7] - Window film product line revenue grew 8.4% to 112 million and $114 million [8] - The company is focused on optimizing SG&A spend and leveraging investments in product quality and manufacturing teams [12][13] - Inventory management improvements are expected to continue driving strong cash flow [14][21] Other Important Information - The company launched a pilot program with a new OEM, with interest from several others, to refer customers to XPEL's e-commerce site [10][11] - The marine market is identified as an adjacent opportunity, with plans to expand offerings through the PFS acquisition [15] - The company is actively working to reduce inventory days on hand and improve cash conversion cycles [14][21] Q&A Session Summary Question: OEM Business and Rivian Promotion - The promotion with Rivian for free XPEL wraps was well-received and successful, with potential for similar programs in the future [22][23] - The OEM referral program is seen as a tool to bridge the gap between consumers and the aftermarket, with applications across various OEMs [24][25][26] Question: Product Trends and Windshield Film - Interest in matte films, including Stealth, continues to grow across multiple OEMs, not just Rivian [27][28] - The windshield film is designed for damage protection, with a strong value proposition due to rising windshield costs [29] Question: Revenue Guidance and New Product Impact - Revenue guidance is based on current customer performance, with new products and programs seen as upside potential rather than core drivers [31] Question: China Market and Product Strategy - The company is adapting its product strategy for low labor cost markets like China, Southeast Asia, and India, with lessons from China influencing other markets [32][33][34] Question: Vehicle Coverage Trends - The trend in the U.S. is toward more PPF film per car in the aftermarket, while dealerships focus on getting smaller amounts of film on more vehicles [35][36] Closing Remarks - Management thanked the team for their hard work and expressed optimism for continued momentum [39][40]