XPEL Reports First Quarter Revenue of $24.7 Million; Gross Margin Improves to 33%

SAN ANTONIO–(BUSINESS WIRE)–XPEL, Inc. (TSXV: DAP.U), a global provider of protective films and
coatings, announced results for the quarter ended March 31, 2019.

Highlights for the quarter include:

• 36% growth in US region; strong growth in United Kingdom and Asia
  Pacific
• Gross margin improvement to 33% from 30% in first quarter last year
• Pending SEC Registration and Nasdaq listing remains on track

Ryan Pape, President and Chief Executive Officer of XPEL, commented,
“During the first quarter we saw continued strong growth in key regions,
particularly the US, where revenue increased 36% as compared to the
first quarter 2018. As expected, sales to China declined significantly
during the first quarter due mainly to acceleration of sales into China
during the first half of last year. On the product front, we launched
our XPEL FUSION PLUS ceramic coating during the quarter, a natural
extension of our product line that offers a self-cleaning, hydrophobic
coating that’s complementary to the rest of our product offering. We’re
excited about the interest we’re seeing in the product and in its
potential to provide additional revenue opportunities to our installer
network.”

The Company filed Amendment No. 2 to Form 10 with the U.S. Securities
and Exchange Commission which includes results for the quarter ended
March 31, 2019.

For the Quarter Ended March 31, 2019:

Revenues. Revenues decreased approximately $0.4 million or 1.6%
to $24.7 million as compared to $25.1 million in the prior year.

Gross Margin. Gross margin was 33.0% versus 30.3% in the first
quarter of 2018. The increase was related to an improved mix of
increased sales to higher margin customers.

Expenses. Selling, general and administrative expenses increased
to $5.7 million or 22.9% of sales as compared to $4.8 million or 19.2%
of sales in the prior year period. This increase was due mainly to
increases in personnel, occupancy, information technology and research
and development costs to support the ongoing growth of the business.

EBITDA. EBITDA (Earnings Before Interest, Taxes, Depreciation,
and Amortization) of $2.8 million decreased as compared to $3.1 million
in the prior year¹.

Net income. Net income decreased slightly to $1.9 million, or
$0.07 per basic and diluted share versus net income of $2.1 million, or
$0.08 per basic and diluted share in the first quarter of 2018.

Mr. Pape continued, “We are continuing to build our brand recognition in
all of our regions. We remain optimistic about the long-term opportunity
in China and continue to focus on adjusting our product assortment and
marketing efforts to keep pace with the evolving needs of our customers
there and in all the markets we serve.

“As we move through 2019 we’re focused on continuing gross margin
improvement, broadening our international presence, enhancing XPEL’s
global brand recognition, furthering our channel acquisition strategy
and expanding our non-automotive product portfolio. We’re encouraged by
the strong interest we’re seeing for our products worldwide and believe
the market recognition for our diverse, high quality portfolio of
products and ancillary services is growing every day.”

Conference Call Information

The Company will host a conference call to discuss the first quarter
results today, May 30, 2019, at 11:00 a.m. Eastern Time.

To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/investor.

To participate in the call by phone, dial (877) 407-8033 approximately
five minutes prior to the scheduled start time. International callers
please dial (201) 689-8033.

A replay of the teleconference will be available until June 30, 2019 and
may be accessed by dialing (877) 481-4010. International callers may
dial (919) 882-2331. Callers should use conference ID: 49192.

About XPEL, Inc.

XPEL is a leading provider of protective films and coatings, including
automotive paint protection film, surface protection film, automotive
and architectural window films and ceramic coatings. With a global
footprint, a network of trained installers and proprietary DAP software,
XPEL is dedicated to exceeding customer expectations by providing
high-quality products, leading customer service, expert technical
support and world-class training. XPEL, Inc. (TSXV: DAP.U) is publicly
traded on the TSXV Exchange.

Safe harbor statement

This release includes forward-looking statements regarding XPEL, Inc.
and its business, which may include, but is not limited to, anticipated
use of proceeds from capital transactions, expansion into new markets,
and execution of the company’s growth strategy. Often, but not always,
forward-looking statements can be identified by the use of words such as
“plans,” “is expected,” “expects,” “scheduled,” “intends,”
“contemplates,” “anticipates,” “believes,” “proposes” or variations
(including negative variations) of such words and phrases, or state that
certain actions, events or results “may,” “could,” “would,” “might” or
“will” be taken, occur or be achieved. Such statements are based on the
current expectations of the management of XPEL. The forward-looking
events and circumstances discussed in this release may not occur by
certain specified dates or at all and could differ materially as a
result of known and unknown risk factors and uncertainties affecting the
company, performance and acceptance of the company’s products, economic
factors, competition, the equity markets generally and many other
factors beyond the control of XPEL. Although XPEL has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results to differ from those anticipated, estimated or intended. No
forward-looking statement can be guaranteed. Except as required by
applicable securities laws, forward-looking statements speak only as of
the date on which they are made and XPEL undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a
result of new information, future events, or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Reconciliation of Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure. EBITDA is defined as net income
(loss) plus interest expense, net, plus income tax expense plus
depreciation expense and amortization expense. EBITDA should be
considered in addition to, not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. It is not a
measurement of our financial performance under GAAP and should not be
considered as alternatives to revenue or net income (loss), as
applicable, or any other performance measures derived in accordance with
GAAP and may not be comparable to other similarly titled measures of
other businesses. EBITDA has limitations as an analytical tool and you
should not consider it in isolation or as a substitute for analysis of
our operating results as reported under GAAP.

EBITDA does not reflect the impact of certain cash charges resulting
from matters we consider not to be indicative of ongoing operations and
other companies in our industry may calculate EBITDA differently than we
do, limiting its usefulness as a comparative measure.

Contacts

Investor Relations:
John Nesbett/Jennifer Belodeau
IMS
Investor Relations
(203) 972-9200
jnesbett@institutionalms.com