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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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20-1117381
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|
||
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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|
||
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618 W. Sunset Road
|
San Antonio
|
Texas
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78216
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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XPEL
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The Nasdaq Stock Market LLC
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Large accelerated filer
|
☐
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Accelerated filer
|
☐
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Non-accelerated filer
|
☒
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Smaller reporting company
|
☒
|
|
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Emerging growth company
|
☒
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Document
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Parts into which Incorporated
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Portions of the registrant’s Proxy Statement relating to the 2020 Annual Meeting of stockholders to be held on May 7, 2020.
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Part III
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Page
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•
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our reliance on a single distributor in China;
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•
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political, regulatory, economic, and other risks arising from the multi-national nature of our business, including our extensive business in China;
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•
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the highly competitive nature of our industry;
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•
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our current reliance on a limited number of suppliers;
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•
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our ability to successfully introduce new products and services;
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•
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our ability to achieve benefits from our business initiatives, including identifying and completing suitable acquisitions and investments;
|
•
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fluctuating revenue and operating results;
|
•
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volatility in currency exchange rates;
|
•
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the potential exit of current key personnel or possibility of failure to attract future qualified personnel;
|
•
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significant demands related to our rapid growth;
|
•
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risks related to possible future indebtedness or the availability of future financing;
|
•
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risks related to internal control over financial reporting;
|
•
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our status as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012;
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•
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risks related to our intellectual property;
|
•
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general global and economic business conditions that may affect demand for our products;
|
•
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the timing and market acceptance of products, including developments and enhancements to our products or our competitors’ products;
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•
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our ability to meet the demands of local markets in high-growth emerging markets, including some in which we have limited experience; and
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•
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difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
|
•
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potential loss of key employees, key contractual relationships or key customers of acquired companies or of ours;
|
•
|
dilution of interests of holders of our common stock through the issuance of equity securities or equity-linked securities.
|
•
|
variations in the demand for our services and products and the use cycles of our services and products by our customers;
|
•
|
changes in general economic and political conditions in countries where we operate, particularly in emerging markets;
|
•
|
the imposition of trade protection measures and import or export licensing requirements, restrictions, tariffs or exchange controls;
|
•
|
changes in tax treaties, laws or rulings that could have a material adverse impact on our effective tax rate;
|
Location
|
Leased or Owned
|
|
Square Footage
|
|
Facility Activity
|
Headquarters:
|
|
|
|
|
|
San Antonio, Texas
|
Leased
|
|
16,651
|
|
Training/Admin functions
|
Other Properties:
|
|
|
|
|
|
Austin, Texas
|
Leased
|
|
8,522
|
|
Sales/Installation
|
Boise, Idaho
|
Leased
|
|
4,986
|
|
Sales/Installation
|
Calgary, Alberta, Canada
|
Leased
|
|
5,680
|
|
Warehouse/Sales/Training
|
Dallas, Texas
|
Leased
|
|
1,625
|
|
Sales/Installation
|
Dallas, Texas
|
Leased
|
|
1,125
|
|
Sales/Installation
|
Guadalajara, Jalisco, Mexico
|
Leased
|
|
6,830
|
|
Warehouse/Sales/Training
|
Houston, Texas
|
Leased
|
|
7,780
|
|
Sales/Installation
|
Las Vegas, Nevada
|
Leased
|
|
6,864
|
|
Sales/Installation
|
Letchworth, United Kingdom
|
Leased
|
|
3,632
|
|
Sales/Installation/Training
|
San Antonio, Texas
|
Leased
|
|
48,770
|
|
Warehouse/production
|
San Antonio, Texas
|
Leased
|
|
4,992
|
|
Sales/Installation
|
Terrebonne, Quebec, Canada
|
Leased
|
|
12,440
|
|
Warehouse/Sales/Training
|
Tilburg, The Netherlands
|
Leased
|
|
21,527
|
|
Warehouse/Sales/Training
|
Yilan City, Yilan County, Taiwan
|
Leased
|
|
4,300
|
|
Warehouse/Sales
|
Renningen, Baden-Württemberg, Germany
|
Leased
|
|
21,689
|
|
Sales/Installation
|
Fullerton, California
|
Leased
|
|
14,121
|
|
Warehouse/production
|
|
Year Ended December 31, 2019
|
|
%
of Total Revenue |
|
Year Ended December 31, 2018
|
|
%
of Total Revenue |
|
$
Change |
|
%
Change |
|||||||||
Total revenue
|
$
|
129,932,881
|
|
|
100.0
|
%
|
|
$
|
109,920,614
|
|
|
100.0
|
%
|
|
$
|
20,012,267
|
|
|
18.2
|
%
|
Total cost of sales
|
86,426,622
|
|
|
66.5
|
%
|
|
76,484,009
|
|
|
69.6
|
%
|
|
9,942,613
|
|
|
13.0
|
%
|
|||
Gross margin
|
43,506,259
|
|
|
33.5
|
%
|
|
33,436,605
|
|
|
30.4
|
%
|
|
10,069,654
|
|
|
30.1
|
%
|
|||
Total operating expenses
|
26,418,912
|
|
|
20.3
|
%
|
|
21,630,602
|
|
|
19.7
|
%
|
|
4,788,310
|
|
|
22.1
|
%
|
|||
Operating income
|
17,087,347
|
|
|
13.2
|
%
|
|
11,806,003
|
|
|
10.7
|
%
|
|
5,281,344
|
|
|
44.7
|
%
|
|||
Other expenses
|
136,919
|
|
|
0.1
|
%
|
|
324,698
|
|
|
0.3
|
%
|
|
(187,779
|
)
|
|
(57.8
|
)%
|
|||
Income tax
|
2,955,356
|
|
|
2.3
|
%
|
|
2,760,073
|
|
|
2.5
|
%
|
|
195,283
|
|
|
7.1
|
%
|
|||
Net income
|
$
|
13,995,072
|
|
|
10.8
|
%
|
|
$
|
8,721,232
|
|
|
7.9
|
%
|
|
$
|
5,273,840
|
|
|
60.5
|
%
|
•
|
Consolidated revenue grew 18.2% to $129.9 million.
|
•
|
Gross margin grew 30.1% to $43.5 million. Gross margin percentage improved 3.1% to 33.5% of revenue.
|
•
|
Total operating expenses grew 22.1% to $26.4 million and represented 20.3% of total consolidated revenue.
|
•
|
Income tax expense grew 7.1% to $3.0 million. The effective income tax rate was 17.4%.
|
•
|
Net income grew 60.5% to $14.0 million and represented 10.8% of total revenue. Earnings per share was $0.51 compared with $0.32 in 2018.
|
|
2019
|
|
%
of Total Revenue
|
|
2018
|
|
%
of Total Revenue
|
||||||
Net Income
|
$
|
13,995,072
|
|
|
10.8
|
%
|
|
$
|
8,721,232
|
|
|
7.9
|
%
|
Interest
|
96,646
|
|
|
0.1
|
%
|
|
168,389
|
|
|
0.2
|
%
|
||
Taxes
|
2,955,356
|
|
|
2.3
|
%
|
|
2,760,073
|
|
|
2.5
|
%
|
||
Depreciation
|
915,918
|
|
|
0.7
|
%
|
|
735,983
|
|
|
0.7
|
%
|
||
Amortization
|
781,105
|
|
|
0.5
|
%
|
|
642,801
|
|
|
0.6
|
%
|
||
EBITDA
|
$
|
18,744,097
|
|
|
14.4
|
%
|
|
$
|
13,028,478
|
|
|
11.9
|
%
|
|
Year Ended December 31,
|
|
%
|
|
% of Total Revenue
|
|||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|||||||
Product Revenue
|
|
|
|
|
|
|
|
|
|
|||||||
Paint protection film
|
$
|
97,341,865
|
|
|
$
|
85,495,382
|
|
|
13.9
|
%
|
|
74.9
|
%
|
|
77.8
|
%
|
Window film
|
11,384,437
|
|
|
7,309,773
|
|
|
55.7
|
%
|
|
8.8
|
%
|
|
6.7
|
%
|
||
Other
|
3,478,437
|
|
|
2,721,195
|
|
|
27.8
|
%
|
|
2.7
|
%
|
|
2.4
|
%
|
||
Total
|
$
|
112,204,739
|
|
|
$
|
95,526,350
|
|
|
17.5
|
%
|
|
86.4
|
%
|
|
86.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service Revenue
|
|
|
|
|
|
|
|
|
|
|||||||
Software
|
$
|
3,263,391
|
|
|
$
|
2,566,960
|
|
|
27.1
|
%
|
|
2.5
|
%
|
|
2.3
|
%
|
Cutbank credits
|
7,253,610
|
|
|
6,197,250
|
|
|
17.0
|
%
|
|
5.6
|
%
|
|
5.6
|
%
|
||
Installation labor
|
6,620,527
|
|
|
5,211,633
|
|
|
27.0
|
%
|
|
5.1
|
%
|
|
4.7
|
%
|
||
Training
|
590,614
|
|
|
418,421
|
|
|
41.2
|
%
|
|
0.4
|
%
|
|
0.5
|
%
|
||
Total
|
$
|
17,728,142
|
|
|
$
|
14,394,264
|
|
|
23.2
|
%
|
|
13.6
|
%
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
129,932,881
|
|
|
$
|
109,920,614
|
|
|
18.2
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
%
|
|
% of Total Revenue
|
|||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|||||||
United States
|
$
|
60,452,238
|
|
|
$
|
46,077,624
|
|
|
31.2
|
%
|
|
46.5
|
%
|
|
41.9
|
%
|
China
|
30,490,859
|
|
|
32,279,335
|
|
|
(5.5
|
)%
|
|
23.5
|
%
|
|
29.4
|
%
|
||
Canada
|
17,912,548
|
|
|
15,146,869
|
|
|
18.3
|
%
|
|
13.8
|
%
|
|
13.8
|
%
|
||
Continental Europe
|
7,419,524
|
|
|
5,734,925
|
|
|
29.4
|
%
|
|
5.7
|
%
|
|
5.2
|
%
|
||
United Kingdom
|
3,784,535
|
|
|
2,725,925
|
|
|
38.8
|
%
|
|
2.9
|
%
|
|
2.5
|
%
|
||
Asia Pacific
|
4,370,156
|
|
|
2,754,495
|
|
|
58.7
|
%
|
|
3.4
|
%
|
|
2.5
|
%
|
||
Latin America
|
2,098,873
|
|
|
1,799,180
|
|
|
16.7
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
||
Middle East/Africa
|
3,149,235
|
|
|
2,806,502
|
|
|
12.2
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
||
Other
|
254,913
|
|
|
595,759
|
|
|
(57.2
|
)%
|
|
0.2
|
%
|
|
0.5
|
%
|
||
Total
|
$
|
129,932,881
|
|
|
$
|
109,920,614
|
|
|
18.2
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
%
|
|
% of Category Revenue
|
|||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|||||||
Product
|
$
|
29,896,483
|
|
|
$
|
21,869,961
|
|
|
36.7
|
%
|
|
26.6
|
%
|
|
22.9
|
%
|
Service
|
13,609,776
|
|
|
11,566,644
|
|
|
17.7
|
%
|
|
76.8
|
%
|
|
80.4
|
%
|
||
Total
|
$
|
43,506,259
|
|
|
$
|
33,436,605
|
|
|
30.1
|
%
|
|
33.5
|
%
|
|
30.4
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,500,973
|
|
|
$
|
3,971,226
|
|
Accounts receivable, net
|
7,154,084
|
|
|
5,554,313
|
|
||
Inventory, net
|
15,141,153
|
|
|
10,799,611
|
|
||
Prepaid expenses and other current assets
|
2,391,340
|
|
|
706,718
|
|
||
Income tax receivable
|
93,150
|
|
|
—
|
|
||
Total current assets
|
36,280,700
|
|
|
21,031,868
|
|
||
Property and equipment, net
|
4,014,653
|
|
|
3,384,206
|
|
||
Right-of-Use lease assets
|
5,079,110
|
|
|
—
|
|
||
Intangible assets, net
|
3,820,460
|
|
|
3,804,026
|
|
||
Goodwill
|
2,406,512
|
|
|
2,322,788
|
|
||
Total assets
|
$
|
51,601,435
|
|
|
$
|
30,542,888
|
|
Liabilities
|
|
|
|
||||
Current
|
|
|
|
||||
Current portion of notes payable
|
$
|
462,226
|
|
|
$
|
853,150
|
|
Current portion lease liabilities
|
1,126,701
|
|
|
—
|
|
||
Accounts payable and accrued liabilities
|
10,197,353
|
|
|
6,292,093
|
|
||
Income tax payable
|
—
|
|
|
1,337,599
|
|
||
Total current liabilities
|
11,786,280
|
|
|
8,482,842
|
|
||
Deferred tax liability, net
|
604,715
|
|
|
478,864
|
|
||
Non-current portion of lease liabilities
|
4,009,949
|
|
|
—
|
|
||
Non-current portion of notes payable
|
307,281
|
|
|
968,237
|
|
||
Total liabilities
|
16,708,225
|
|
|
9,929,943
|
|
||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 100,000,000 shares authorized; 27,612,597 issued and outstanding
|
27,613
|
|
|
27,613
|
|
||
Additional paid-in-capital
|
11,348,163
|
|
|
11,348,163
|
|
||
Accumulated other comprehensive loss
|
(908,764
|
)
|
|
(1,190,055
|
)
|
||
Retained earnings
|
24,594,878
|
|
|
10,617,253
|
|
||
|
35,061,890
|
|
|
20,802,974
|
|
||
Non-controlling interest
|
(168,680
|
)
|
|
(190,029
|
)
|
||
Total stockholders’ equity
|
34,893,210
|
|
|
20,612,945
|
|
||
Total liabilities and stockholders’ equity
|
$
|
51,601,435
|
|
|
$
|
30,542,888
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Revenue
|
|
|
|
|
||||
Product revenue
|
|
$
|
112,204,739
|
|
|
$
|
95,526,350
|
|
Service revenue
|
|
17,728,142
|
|
|
14,394,264
|
|
||
Total revenue
|
|
129,932,881
|
|
|
109,920,614
|
|
||
|
|
|
|
|
||||
Cost of Sales
|
|
|
|
|
||||
Cost of product sales
|
|
82,308,256
|
|
|
73,656,389
|
|
||
Cost of service
|
|
4,118,366
|
|
|
2,827,620
|
|
||
Total cost of sales
|
|
86,426,622
|
|
|
76,484,009
|
|
||
Gross Margin
|
|
43,506,259
|
|
|
33,436,605
|
|
||
|
|
|
|
|
||||
Operating Expenses
|
|
|
|
|
||||
Sales and marketing
|
|
7,584,377
|
|
|
6,802,241
|
|
||
General and administrative
|
|
18,834,535
|
|
|
14,828,361
|
|
||
Total operating expenses
|
|
26,418,912
|
|
|
21,630,602
|
|
||
|
|
|
|
|
||||
Operating Income
|
|
17,087,347
|
|
|
11,806,003
|
|
||
|
|
|
|
|
||||
Interest expense
|
|
96,646
|
|
|
168,389
|
|
||
Foreign currency exchange loss
|
|
40,273
|
|
|
156,309
|
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
16,950,428
|
|
|
11,481,305
|
|
||
Income tax expense
|
|
2,955,356
|
|
|
2,760,073
|
|
||
Net income
|
|
13,995,072
|
|
|
8,721,232
|
|
||
Income attributed to non-controlling interest
|
|
17,447
|
|
|
8,698
|
|
||
Net income attributable to stockholders of the Company
|
|
$
|
13,977,625
|
|
|
$
|
8,712,534
|
|
|
|
|
|
|
||||
Earnings per share attributable stockholders of the Company
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
0.51
|
|
|
$
|
0.32
|
|
Weighted Average Number of Common Shares
|
|
|
|
|
||||
Basic and diluted
|
|
27,612,597
|
|
|
27,612,597
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Other comprehensive income
|
|
|
|
|
||||
Net income
|
|
$
|
13,995,072
|
|
|
$
|
8,721,232
|
|
Foreign currency translation
|
|
285,193
|
|
|
(603,673
|
)
|
||
Total comprehensive income
|
|
14,280,265
|
|
|
8,117,559
|
|
||
Total comprehensive income attributable to:
|
|
|
|
|
||||
Stockholders of the Company
|
|
14,258,916
|
|
|
8,119,162
|
|
||
Non-controlling interest
|
|
21,349
|
|
|
(1,603
|
)
|
||
Total comprehensive income
|
|
$
|
14,280,265
|
|
|
$
|
8,117,559
|
|
|
Common Stock
|
|
Additional Paid-in-Capital
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Equity
attributable to Stockholders of the Company |
|
Non-Controlling
Interest |
|
Total Stockholders’ Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2017
|
27,612,597
|
|
|
$
|
27,613
|
|
|
$
|
11,348,163
|
|
|
$
|
1,904,719
|
|
|
$
|
(596,683
|
)
|
|
$
|
12,683,812
|
|
|
$
|
(188,426
|
)
|
|
$
|
12,495,386
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
8,712,534
|
|
|
—
|
|
|
8,712,534
|
|
|
8,698
|
|
|
8,721,232
|
|
|||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(593,372
|
)
|
|
(593,372
|
)
|
|
(10,301
|
)
|
|
(603,673
|
)
|
|||||||
Balance as of December 31, 2018
|
27,612,597
|
|
|
27,613
|
|
|
11,348,163
|
|
|
10,617,253
|
|
|
(1,190,055
|
)
|
|
20,802,974
|
|
|
(190,029
|
)
|
|
20,612,945
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
13,977,625
|
|
|
—
|
|
|
13,977,625
|
|
|
17,447
|
|
|
13,995,072
|
|
|||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281,291
|
|
|
281,291
|
|
|
3,902
|
|
|
285,193
|
|
|||||||
Balance as of December 31, 2019
|
27,612,597
|
|
|
$
|
27,613
|
|
|
$
|
11,348,163
|
|
|
$
|
24,594,878
|
|
|
$
|
(908,764
|
)
|
|
$
|
35,061,890
|
|
|
$
|
(168,680
|
)
|
|
$
|
34,893,210
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
13,995,072
|
|
|
$
|
8,721,232
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of property, plant and equipment
|
915,918
|
|
|
735,983
|
|
||
Amortization of intangible assets
|
781,105
|
|
|
642,801
|
|
||
Impairment expense
|
66,364
|
|
|
—
|
|
||
(Gain) loss on sale of property and equipment
|
(11,298
|
)
|
|
25,733
|
|
||
Bad debt expense
|
242,091
|
|
|
190,230
|
|
||
Deferred income tax
|
117,328
|
|
|
(86,218
|
)
|
||
Accretion on notes payable
|
61,316
|
|
|
43,416
|
|
||
|
|
|
|
||||
Changes in current assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(1,773,371
|
)
|
|
(261,256
|
)
|
||
Inventory, net
|
(4,251,134
|
)
|
|
11,148
|
|
||
Prepaid expenses and other current assets
|
(1,653,420
|
)
|
|
132,682
|
|
||
Income tax receivable
|
(93,611
|
)
|
|
—
|
|
||
Change in operating lease liabilities
|
32,576
|
|
|
—
|
|
||
Accounts payable and accrued liabilities
|
3,877,024
|
|
|
(3,635,246
|
)
|
||
Income tax payable
|
(1,340,441
|
)
|
|
276,280
|
|
||
Net cash provided by operating activities
|
10,965,519
|
|
|
6,796,785
|
|
||
Cash flows used in investing activities
|
|
|
|
||||
Purchase of property, plant and equipment
|
(1,569,823
|
)
|
|
(2,030,314
|
)
|
||
Proceeds from sale of property and equipment
|
68,457
|
|
|
155,277
|
|
||
Acquisitions, net of cash acquired and notes payable
|
(127,623
|
)
|
|
(831,934
|
)
|
||
Development or purchase of intangible assets
|
(674,581
|
)
|
|
(386,985
|
)
|
||
Net cash used in investing activities
|
(2,303,570
|
)
|
|
(3,093,956
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Net repayments on revolving credit agreement
|
—
|
|
|
(2,000,000
|
)
|
||
Repayment of bank loan payable
|
—
|
|
|
(440,126
|
)
|
||
Repayments of notes payable
|
(1,143,240
|
)
|
|
(658,055
|
)
|
||
Net cash used in financing activities
|
(1,143,240
|
)
|
|
(3,098,181
|
)
|
||
Net change in cash and cash equivalents
|
7,518,709
|
|
|
604,648
|
|
||
Foreign exchange impact on cash and cash equivalents
|
11,038
|
|
|
(132,326
|
)
|
||
Increase in cash and cash equivalents during the period
|
7,529,747
|
|
|
472,322
|
|
||
Cash and cash equivalents at beginning of year
|
3,971,226
|
|
|
3,498,904
|
|
||
Cash and cash equivalents at end of year
|
$
|
11,500,973
|
|
|
$
|
3,971,226
|
|
|
|
|
|
||||
Supplemental schedule of non-cash activities
|
|
|
|
||||
Notes payable issued for acquisitions
|
$
|
—
|
|
|
$
|
998,668
|
|
Forgiveness of debt for acquired entities
|
$
|
—
|
|
|
$
|
88,216
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
||||
Cash paid for income taxes
|
$
|
4,079,962
|
|
|
$
|
2,514,727
|
|
Cash paid for interest
|
$
|
17,850
|
|
|
$
|
86,417
|
|
Subsidiaries
|
|
Functional Currency
|
|
% Owned by XPEL, Inc.
|
|
XPEL, Ltd.
|
|
UK Pound Sterling
|
|
85
|
%
|
Armourfend CAD, LLC
|
|
US Dollar
|
|
100
|
%
|
XPEL Canada Corp.
|
|
Canadian Dollar
|
|
100
|
%
|
XPEL B.V.
|
|
Euro
|
|
100
|
%
|
XPEL Germany GmbH
|
|
Euro
|
|
100
|
%
|
XPEL de Mexico S. de R.L. de C.V.
|
|
Peso
|
|
100
|
%
|
XPEL Acquisition Corp.
|
|
Canadian Dollar
|
|
100
|
%
|
Protex Canada, Inc.
|
|
Canadian Dollar
|
|
100
|
%
|
Apogee Corp.
|
|
New Taiwan Dollar
|
|
100
|
%
|
Furniture and fixtures
|
- 5 years
|
Computer equipment
|
- 3-4 years
|
Vehicles
|
- 5 years
|
Equipment
|
- 5-8 years
|
Leasehold improvements
|
- shorter of lease term or estimate useful life
|
Plotters
|
- 4 years
|
|
2019
|
|
2018
|
||||
United States
|
$
|
2,410,737
|
|
|
$
|
2,288,792
|
|
Canada
|
519,066
|
|
|
421,588
|
|
||
Europe
|
679,112
|
|
|
475,345
|
|
||
Other
|
405,738
|
|
|
198,481
|
|
||
Consolidated
|
$
|
4,014,653
|
|
|
$
|
3,384,206
|
|
|
2019
|
|
2018
|
||||
United States
|
$
|
617,334
|
|
|
$
|
617,334
|
|
Canada
|
1,740,884
|
|
|
1,701,826
|
|
||
Other
|
48,294
|
|
|
3,628
|
|
||
Consolidated
|
$
|
2,406,512
|
|
|
$
|
2,322,788
|
|
|
2019
|
|
2018
|
||||
United States
|
$
|
2,074,235
|
|
|
$
|
1,891,479
|
|
Canada
|
1,431,247
|
|
|
1,652,347
|
|
||
Europe
|
81,612
|
|
|
1,773
|
|
||
Other
|
233,366
|
|
|
258,427
|
|
||
Consolidated
|
$
|
3,820,460
|
|
|
$
|
3,804,026
|
|
Trademarks
|
- 10 years
|
Software
|
- 5 years
|
Trade name
|
- 10-15 years
|
Contractual and customer relationships
|
- 9-10 years
|
Non-compete
|
- 3-5 years
|
Other
|
- 10 years
|
|
2019
|
|
2018
|
||||
Warranty balance at beginning of period
|
$
|
70,250
|
|
|
$
|
95,882
|
|
Warranties assumed in period
|
384,214
|
|
|
370,502
|
|
||
Payments
|
(388,873
|
)
|
|
(396,134
|
)
|
||
Warranty balance at end of period
|
$
|
65,591
|
|
|
$
|
70,250
|
|
Level 1:
|
Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2:
|
Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
Level 3:
|
Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
|
Balance, December 31, 2017
|
$
|
1,701,356
|
|
Revenue recognized related to payments included in the December 31, 2017 balance
|
(1,701,356
|
)
|
|
Balance, Payments received for which performance obligations have not been satisfied
|
136,213
|
|
|
Effect of Foreign Currency Translation
|
—
|
|
|
Balance, December 31, 2018
|
$
|
136,213
|
|
Revenue recognized related to payments included in the December 31, 2018 balance
|
(115,670
|
)
|
|
Payments received for which performance obligations have not been satisfied
|
537,683
|
|
|
Effect of Foreign Currency Translation
|
1,006
|
|
|
Balance, December 31, 2019
|
$
|
559,232
|
|
|
2019
|
|
2018
|
||||
Product Revenue
|
|
|
|
||||
Paint protection film
|
$
|
97,341,865
|
|
|
$
|
85,495,382
|
|
Window film
|
11,384,437
|
|
|
7,309,773
|
|
||
Other
|
3,478,437
|
|
|
2,721,195
|
|
||
Total
|
112,204,739
|
|
|
95,526,350
|
|
||
|
|
|
|
||||
Service Revenue
|
|
|
|
||||
Software
|
$
|
3,263,391
|
|
|
$
|
2,566,960
|
|
Cutbank credits
|
7,253,610
|
|
|
6,197,250
|
|
||
Installation labor
|
6,620,527
|
|
|
5,211,633
|
|
||
Training
|
590,614
|
|
|
418,421
|
|
||
Total
|
17,728,142
|
|
|
14,394,264
|
|
||
|
|
|
|
||||
Total
|
$
|
129,932,881
|
|
|
$
|
109,920,614
|
|
|
Twelve Months Ended
December 31, |
||||||
|
2019
|
|
2018
|
||||
United States
|
$
|
60,452,238
|
|
|
$
|
46,077,624
|
|
China
|
30,490,859
|
|
|
32,279,335
|
|
||
Canada
|
17,912,548
|
|
|
15,146,869
|
|
||
Continental Europe
|
7,419,524
|
|
|
5,734,925
|
|
||
United Kingdom
|
3,784,535
|
|
|
2,725,925
|
|
||
Asia Pacific
|
4,370,156
|
|
|
2,754,495
|
|
||
Latin America
|
2,098,873
|
|
|
1,799,180
|
|
||
Middle East/Africa
|
3,149,235
|
|
|
2,806,502
|
|
||
Other
|
254,913
|
|
|
595,759
|
|
||
Total
|
$
|
129,932,881
|
|
|
$
|
109,920,614
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Furniture and fixtures
|
$
|
1,168,894
|
|
|
$
|
956,467
|
|
Computer equipment
|
1,151,295
|
|
|
939,979
|
|
||
Vehicles
|
683,213
|
|
|
730,765
|
|
||
Equipment
|
1,648,656
|
|
|
1,079,503
|
|
||
Leasehold improvements
|
1,479,594
|
|
|
941,627
|
|
||
Plotters
|
839,455
|
|
|
544,080
|
|
||
Construction in Progress
|
306,100
|
|
|
646,576
|
|
||
Total property and equipment
|
7,277,207
|
|
|
5,838,997
|
|
||
Less: accumulated depreciation
|
3,262,554
|
|
|
2,454,791
|
|
||
Property and equipment, net
|
$
|
4,014,653
|
|
|
$
|
3,384,206
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Trademarks
|
$
|
309,395
|
|
|
$
|
289,734
|
|
Software
|
2,288,062
|
|
|
1,635,731
|
|
||
Trade name
|
492,408
|
|
|
457,766
|
|
||
Contractual and customer relationships
|
3,010,480
|
|
|
2,947,264
|
|
||
Non-compete
|
268,459
|
|
|
261,914
|
|
||
Other
|
208,012
|
|
|
150,267
|
|
||
Total cost
|
6,576,816
|
|
|
5,742,676
|
|
||
Less: Accumulated amortization
|
2,756,356
|
|
|
1,938,650
|
|
||
Intangible assets, net
|
$
|
3,820,460
|
|
|
$
|
3,804,026
|
|
2020
|
$
|
796,029
|
|
2021
|
703,624
|
|
|
2022
|
617,107
|
|
|
2023
|
576,160
|
|
|
2024
|
461,122
|
|
|
Thereafter
|
$
|
666,417
|
|
Balance at December 31, 2017
|
$
|
1,856,642
|
|
Additions
|
576,173
|
|
|
Foreign currency translation
|
(110,027
|
)
|
|
Balance at December 31, 2018
|
$
|
2,322,788
|
|
|
|
||
Balance at December 31, 2018
|
$
|
2,322,788
|
|
Additions
|
44,584
|
|
|
Impairment
|
(35,884
|
)
|
|
Foreign currency translation
|
75,024
|
|
|
Balance at December 31, 2019
|
$
|
2,406,512
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Film and film based products
|
$
|
13,538,610
|
|
|
$
|
9,399,067
|
|
Other products
|
1,226,708
|
|
|
1,264,862
|
|
||
Packaging and supplies
|
496,661
|
|
|
320,738
|
|
||
Inventory reserve
|
(120,826
|
)
|
|
(185,056
|
)
|
||
|
$
|
15,141,153
|
|
|
$
|
10,799,611
|
|
|
Weighted Average Interest Rate
|
|
Matures
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Acquisition notes payable
|
5.76%
|
|
2022
|
|
$
|
769,507
|
|
|
$
|
1,821,387
|
|
|
|
|
|
|
|
|
|
||||
Current portion
|
|
|
|
|
462,226
|
|
|
853,150
|
|
||
Total long-term debt
|
|
|
|
|
$
|
307,281
|
|
|
$
|
968,237
|
|
2020
|
$
|
463,025
|
|
2021
|
300,873
|
|
|
2022
|
42,969
|
|
|
2023
|
—
|
|
|
2024
|
—
|
|
|
Thereafter
|
—
|
|
|
|
$
|
806,867
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Trade payables
|
$
|
7,440,965
|
|
|
$
|
3,905,187
|
|
Payroll liabilities
|
1,367,340
|
|
|
1,194,237
|
|
||
Contract liabilities
|
559,232
|
|
|
136,213
|
|
||
Other liabilities
|
829,816
|
|
|
1,056,456
|
|
||
|
$
|
10,197,353
|
|
|
$
|
6,292,093
|
|
|
2019
|
|
2018
|
||||
Domestic
|
$
|
15,375,731
|
|
|
$
|
10,008,013
|
|
International
|
1,574,697
|
|
|
1,473,292
|
|
||
Income before income taxes
|
$
|
16,950,428
|
|
|
$
|
11,481,305
|
|
|
2019
|
|
2018
|
||||
Income before income taxes
|
$
|
16,950,428
|
|
|
$
|
11,481,305
|
|
Statutory rate
|
21
|
%
|
|
21
|
%
|
||
|
3,559,590
|
|
|
2,411,074
|
|
||
|
|
|
|
|
|||
State taxes net of federal benefit
|
31,446
|
|
|
183,468
|
|
||
Nondeductible/nontaxable items
|
115,679
|
|
|
—
|
|
||
Foreign tax rate differential
|
45,994
|
|
|
81,474
|
|
||
Foreign derived intangible income benefit
|
(287,606
|
)
|
|
—
|
|
||
Return to provision estimated revision
|
(358,986
|
)
|
|
—
|
|
||
Other - net
|
(150,761
|
)
|
|
84,057
|
|
||
Income tax expense
|
$
|
2,955,356
|
|
|
$
|
2,760,073
|
|
|
Years ended December 31
|
||||||
|
2019
|
|
2018
|
||||
Current Income Tax Expense
|
|
|
|
||||
Federal
|
$
|
2,412,157
|
|
|
$
|
2,182,415
|
|
Foreign
|
518,528
|
|
|
431,638
|
|
||
State
|
3,068
|
|
|
232,238
|
|
||
Total Current Income Tax Expense
|
2,933,753
|
|
|
2,846,291
|
|
||
Deferred Income Tax Expense/(Benefit)
|
|
|
|
||||
Federal
|
99,870
|
|
|
(65,801
|
)
|
||
Foreign
|
(78,267
|
)
|
|
(20,417
|
)
|
||
Total Deferred Income Tax Expense/(Benefit)
|
21,603
|
|
|
(86,218
|
)
|
||
Total
|
$
|
2,955,356
|
|
|
$
|
2,760,073
|
|
|
Years ended December 31
|
||||||
|
2019
|
|
2018
|
||||
DEFERRED TAX ASSETS:
|
|
|
|
||||
Allowance for Doubtful Accounts
|
$
|
31,073
|
|
|
$
|
161
|
|
263(A) Adjustment
|
31,427
|
|
|
17,421
|
|
||
Accrued Expenses
|
212
|
|
|
9,485
|
|
||
Inventory Reserve
|
9,725
|
|
|
34,978
|
|
||
Accretion of Acquisition Notes
|
—
|
|
|
8,156
|
|
||
Unrealized loss
|
6,282
|
|
|
—
|
|
||
State Tax Credit
|
27,867
|
|
|
48,770
|
|
||
NOL Carryforward and Other
|
162,005
|
|
|
249,772
|
|
||
Total deferred tax assets
|
268,591
|
|
|
368,743
|
|
||
|
|
|
|
||||
DEFERRED TAX LIABILITIES:
|
|
|
|
||||
Fixed and Intangible Assets
|
$
|
860,592
|
|
|
$
|
824,822
|
|
Unrealized Gain
|
12,713
|
|
|
14,146
|
|
||
Accretion
|
—
|
|
|
8,639
|
|
||
Total deferred tax liabilities
|
873,305
|
|
|
847,607
|
|
||
Total net deferred tax liabilities
|
$
|
(604,714
|
)
|
|
$
|
(478,864
|
)
|
|
December 31, 2019
|
||
Operating lease right-of-use assets
|
$
|
5,079,110
|
|
|
|
||
Current portion of operating lease liabilities
|
1,126,701
|
|
|
Noncurrent portion of operating lease liabilities
|
4,009,949
|
|
|
Total operating lease liabilities
|
$
|
5,136,650
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term (in years)
|
5.6
|
|
Weighted-average discount rate
|
5.84
|
%
|
2020
|
$
|
1,060,213
|
|
2021
|
1,084,622
|
|
|
2022
|
1,011,538
|
|
|
2023
|
908,901
|
|
|
2024
|
580,481
|
|
|
Thereafter
|
1,077,086
|
|
|
Total operating lease payments
|
5,722,841
|
|
|
Less: interest
|
(586,191
|
)
|
|
Total operating lease liabilities
|
$
|
5,136,650
|
|
2019
|
$
|
869,492
|
|
2020
|
736,169
|
|
|
2021
|
667,551
|
|
|
2022
|
601,593
|
|
|
2023
|
528,427
|
|
|
Thereafter
|
1,372,388
|
|
|
|
$
|
4,775,620
|
|
Acquisition Date
|
|
Name/Location/Description
|
|
Purchase Price
|
Acquisition Type
|
|
Acquisition Purpose
|
April 1, 2018
|
|
9352-4692, Quebec, Inc., Quebec City, Quebec, Canada - Paint protection and window film installation shop
|
|
$87,248
|
Share Purchase
|
|
Local market expansion
|
June 1, 2018
|
|
eShields, LLC, La Verne, CA, USA - Antimicrobial film distributor
|
|
$496,982
|
Asset Purchase
|
|
Product line expansion
|
August 1, 2018
|
|
9341-9182 Quebec, Inc., Pointe Claire, Quebec, Canada - Paint protection and window film installation shop
|
|
$363,239
|
Share Purchase
|
|
Local market expansion
|
August 1, 2018
|
|
9846905 Canada, Inc., Calgary, Alberta, Canada - Paint protection and window film installation shop
|
|
$332,798
|
Share Purchase
|
|
Local market expansion
|
November 1, 2018
|
|
Apogee, Corp., Yilan City, Yilan County, Taiwan - Paint protection and window film distributor
|
|
$638,552
|
Share Purchase
|
|
Local market expansion
|
December 20, 2019
|
|
Paintshield, Ltd., Salisbury, Wiltshire, United Kingdom - Paint protection and window film installation shop
|
|
$127,623
|
Asset Purchase
|
|
Local market expansion
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
Paintshield, Ltd.
|
|
2018 Acquisitions
|
||||
Purchase Price
|
|
|
|
||||
Cash
|
$
|
127,623
|
|
|
$
|
831,934
|
|
Promissory note
|
—
|
|
|
998,668
|
|
||
Forgiveness of debt
|
—
|
|
|
88,216
|
|
||
|
$
|
127,623
|
|
|
$
|
1,918,818
|
|
|
|
|
|
||||
Allocation
|
|
|
|
||||
Cash
|
$
|
—
|
|
|
$
|
41,407
|
|
Accounts receivable
|
—
|
|
|
155,434
|
|
||
Inventory
|
—
|
|
|
494,663
|
|
||
Prepaid expenses and other assets
|
—
|
|
|
78,631
|
|
||
Property and equipment
|
5,038
|
|
|
167,622
|
|
||
Trade name
|
25,918
|
|
|
—
|
|
||
Acquired patterns
|
52,083
|
|
|
—
|
|
||
Customer relationships
|
—
|
|
|
609,751
|
|
||
Goodwill
|
44,584
|
|
|
576,173
|
|
||
Accounts payable
|
—
|
|
|
(126,715
|
)
|
||
Other accrued liabilities
|
—
|
|
|
(78,148
|
)
|
||
|
$
|
127,623
|
|
|
$
|
1,918,818
|
|
|
Twelve Months Ended
|
||||||
|
December 31,
|
||||||
|
2019 (Unaudited)
|
|
2018 (Unaudited)
|
||||
Revenue
|
$
|
130,507,185
|
|
|
$
|
111,048,518
|
|
Net income
|
$
|
13,981,033
|
|
|
$
|
8,480,919
|
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
3.1
|
|
|
10-12B
|
|
3.1
|
|
04/03/2019
|
|
3.2
|
|
|
10-12B
|
|
3.2
|
|
04/03/2019
|
|
3.3
|
|
|
10-12B
|
|
3.3
|
|
04/03/2019
|
|
3.4
|
|
|
8-K
|
|
3.1
|
|
11/18/2019
|
|
4.1*
|
|
|
|
|
|
|
|
|
10.1
|
|
|
10-12B/A
|
|
10.1
|
|
05/30/2019
|
|
10.2
|
|
|
10-12B/A
|
|
10.2
|
|
05/30/2019
|
10.3
|
|
|
10-12B/A
|
|
10.3
|
|
05/30/2019
|
|
10.4
|
|
|
10-12B/A
|
|
10.4
|
|
04/24/2019
|
|
10.5
|
|
|
10-12B/A
|
|
10.5
|
|
05/30/2019
|
|
10.6+
|
|
|
10-12B
|
|
10.6
|
|
04/03/2019
|
|
14.1
|
|
|
10-12B/A
|
|
14.1
|
|
04/24/2019
|
|
21.1*
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
101*
|
|
Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
|
|
|
|
|
|
|
104*
|
|
Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set.
|
|
|
|
|
|
|
|
|
|
XPEL, Inc. (Registrant)
|
|
|
|
|
|
|
By:
|
/s/ Barry R. Wood
|
|
|
|
Barry R. Wood
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Date:
|
March 16, 2020
|
|
(Authorized Officer and Principal Financial and Accounting Officer)
|
Name and Signature
|
|
Title
|
|
Date
|
/s/ Ryan L. Pape
|
|
Chairman of the Board, President and Director (Principal Executive Officer)
|
|
March 16, 2020
|
Ryan L. Pape
|
|
|
|
|
/s/ Barry R. Wood
|
|
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
March 16, 2020
|
Barry R. Wood
|
|
|
|
|
/s/ John A. Constantine
|
|
Director
|
|
March 16, 2020
|
John A. Constantine
|
|
|
|
|
/s/ Richard K. Crumly
|
|
Director
|
|
March 16, 2020
|
Richard K. Crumly
|
|
|
|
|
/s/ Michael A. Klonne
|
|
Director
|
|
March 16, 2020
|
Michael A. Klonne
|
|
|
|
|
/s/ Mark E. Adams
|
|
Director
|
|
March 16, 2020
|
Mark E. Adams
|
|
|
|
•
|
Authorizing our Board to adopt, amend or repeal our Amended and Restated By-Laws without stockholder approval;
|
•
|
Requiring advance notice of any stockholder nomination for the election of directors or any stockholder proposal;
|
•
|
Requiring any stockholder action to be taken only at a duly called annual or special meeting of the stockholders, and not by written consent;
|
•
|
Authorizing only our Board, and not stockholders, to fix the number of directors; and
|
•
|
Authorizing only our Board to fill director vacancies and newly created directorships.
|
Entity
|
|
Jurisdiction of Organization
|
|
Ownership
|
XPEL Inc.
|
|
Nevada, USA
|
|
Parent
|
XPEL Ltd.
|
|
U.K.
|
|
85%
|
ArmourfendCAD, LLC.
|
|
Nevada, USA
|
|
100%
|
XPEL Canada Corp.
|
|
Canada
|
|
100%
|
XPEL B.V.
|
|
Netherlands
|
|
100%
|
XPEL Germany GmbH
|
|
Germany
|
|
100%
|
XPEL de Mexico S. de R.L. de C.V.
|
|
Mexico
|
|
100%
|
XPEL Acquisition Corp.
|
|
Canada
|
|
100%
|
Protex Canada Inc.
|
|
Canada
|
|
100%
|
Apogee Corp.
|
|
Taiwan
|
|
100%
|
1.
|
I have reviewed this Annual Report on Form 10-K of XPEL, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 16, 2020
|
/s/ Ryan L. Pape
Ryan L. Pape
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of XPEL, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 16, 2020
|
/s/ Barry R. Wood
Barry R. Wood
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
|
Date: March 16, 2020
|
/s/ Ryan L. Pape
Ryan L. Pape
President and Chief Executive Officer
|
Date: March 16, 2020
|
/s/ Barry R. Wood
Barry R. Wood
Senior Vice President and Chief Financial Officer
|