Mr. Ryan Pape reports

XPEL ANNOUNCES THIRD QUARTER 2014 REVENUE GROWTH OF 72%

XPEL Technologies Corp. has released results for the quarter and first nine months of fiscal year 2014 ended Sept. 30, 2014.

Ryan Pape, president and chief executive officer of XPEL, commented, "We were pleased to deliver strong revenue growth as a result of growing market demand for the XPEL solution and the expansion of our installer base, both domestically and internationally."

For the quarter ended Sept. 30, 2014:

Revenue

Revenue in the third quarter of fiscal 2014 was $8.4-million, a 72-per-cent increase as compared with revenue of $4.9-million in the same prior-year quarter and a slight sequential increase compared with revenue of $8.3-million in the second quarter of 2014.

Gross margin

Gross profit as a percentage of revenue decreased slightly to 31 per cent from the previous year but increased sequentially from the second quarter.

Expenses

Selling, general and administrative expenses as a percentage of revenue were 23 per cent, a slight increase compared with 21 per cent in the third quarter last year. The increase is primarily due to one-time acquisition-related expenses of $84,000 and other one-time expenses of approximately $130,000.

Net earnings

Net income for the fiscal 2014 third quarter were $473,296 or 1.8 cents per basic and diluted share based on 25,784,950 shares outstanding, compared with net income of $392,895, or 1.5 cents per basic and diluted share, based on 25,784,950 shares outstanding, for the corresponding prior-year period.

Mr. Pape continued: "Just prior to the close of the third quarter, we completed our acquisition to establish our new XPEL U.K. facility, providing a foothold to move XPEL closer to customers and partners in the region. The facility includes a training and support centre and provides readily available inventory to potential and existing European customers. The acquisition is going well, and the new facility was operating profitably after the first month. As expected, during the third quarter we had modest one-time acquisition-related expenses and also incurred other one-time expenses that impacted net profitability for the quarter."

For the nine months ended Sept. 30, 2014

Revenue

Revenue in the first nine months of fiscal 2014 was $22.0-million, a 70-per-cent increase as compared with revenue of $12.9-million in the same prior-year period.

Gross margin

Gross profit as a percentage of revenue remained relatively unchanged at 31 per cent.

Expenses

Selling, general and administrative expenses as a percentage of revenue remained relatively unchanged at 21 per cent.

Net earnings

Net income for the first nine months of fiscal 2014 was $1.5-million or six cents per basic and diluted share based on 25,784,950 shares outstanding, compared with net income of $1-million, or four cents per basic and diluted share, based on 25,784,950 shares outstanding, for the corresponding prior-year period.

"Our balance sheet remains strong, providing us with the financial flexibility to strengthen our employee base and drive our sales and marketing strategy. Inventory is up substantially over the second quarter. This is partially due to our need for more inventory to meet future demand, but also due to a transition in how we manage our production that requires a near-term increase but, over time, will help constrain the growth of inventory to sales."

Mr. Pape concluded: "Our ability to consistently expand our base of independent installers and dealerships resulted in significant revenue growth in the quarter. International sales account for 37 per cent of our overall revenues, as compared with 33 per cent in the same period last year, and we are excited about the added international traction that is being generated with our new U.K. facility. We believe XPEL's growing brand recognition in the marketplace and our focus on training and support of our partners position us well for long-term growth."

                                                                                               
                                                                         
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME                                  
                  (expressed in United States dollars)                                                            
                                                                                     
                                                      Three months ended
                                                               Sept. 30,
                                                       2014         2013

Revenue                                         $ 8,410,089  $ 4,877,589
Expenses
Direct costs                                      5,770,856    3,261,620
Selling, general and administrative expenses      1,897,277    1,016,634
Income from operations                              741,956      599,335
Interest expense                                     13,260        2,440
Loss on sale of property, plant and equipment         2,475            -
                                                     15,735        2,440
Net income before income taxes                      726,221      596,895
Deferred income tax expense (recovery)               (8,000)     204,000
Current income tax expense                          260,925            -
                                                    252,925      204,000
Net income and comprehensive income                 473,296      392,895
Net income for period attributed to 
Common shareholders                                 477,306      392,895
Non-controlling interest                             (4,010)           -
Earnings per share
Basic and diluted                                     0.018        0.015
                                                                                                  

We seek Safe Harbor.