XPEL(US:XPEL)2021-08-09 19:06Financial 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]