Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38858 | ||
Entity Registrant Name | XPEL, INC. | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 20-1117381 | ||
Entity Address, Address Line One | 618 W. Sunset Road | ||
Entity Address, City or Town | San Antonio | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78216 | ||
City Area Code | 210 | ||
Local Phone Number | 678-3700 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | XPEL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,529,154,407 | ||
Entity Common Stock, Shares Outstanding | 27,612,597 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Document Parts into which Incorporated Portions of the registrant’s Proxy Statement relating to the 2022 Annual Meeting of Stockholders to be held on May 18, 2022 . Part III | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001767258 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte and Touche LLP |
Auditor Location | Austin, Texas |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current | ||
Cash and cash equivalents | $ 9,644,248 | $ 29,027,124 |
Accounts receivable, net | 13,159,036 | 9,944,213 |
Inventory, net | 51,936,164 | 22,364,126 |
Prepaid expenses and other current assets | 3,671,657 | 1,441,749 |
Income tax receivable | 617,141 | 0 |
Total current assets | 79,028,246 | 62,777,212 |
Property and equipment, net | 9,898,126 | 4,706,248 |
Right-of-use lease assets | 12,909,607 | 5,973,702 |
Intangible assets, net | 32,732,771 | 5,423,980 |
Other non-current assets | 790,339 | 486,472 |
Goodwill | 25,655,428 | 4,472,217 |
Total assets | 161,014,517 | 83,839,831 |
Current | ||
Current portion of notes payable | 375,413 | 2,568,172 |
Current portion of lease liabilities | 2,977,794 | 1,650,749 |
Accounts payable and accrued liabilities | 32,914,615 | 16,797,462 |
Income tax payable | 0 | 183,961 |
Total current liabilities | 36,267,822 | 21,200,344 |
Deferred tax liability, net | 2,748,283 | 627,806 |
Other long-term liabilities | 2,630,486 | 729,408 |
Borrowings on line of credit | 25,000,000 | 0 |
Non-current portion of lease liabilities | 9,830,128 | 4,331,214 |
Non-current portion of notes payable | 75,717 | 3,568,191 |
Total liabilities | 76,552,436 | 30,456,963 |
Commitments and Contingencies (Note 15) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding | 0 | 0 |
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 | 10,581,483 | 10,412,471 |
Accumulated other comprehensive (loss) income | (590,446) | 66,215 |
Retained earnings | 74,443,431 | 42,876,569 |
Total stockholders’ equity | 84,462,081 | 53,382,868 |
Total liabilities and stockholders’ equity | $ 161,014,517 | $ 83,839,831 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 27,612,597 | 27,612,597 |
Common stock shares outstanding (in shares) | 27,612,597 | 27,612,597 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | |||
Total revenue | $ 259,263,077 | $ 158,924,448 | $ 129,932,881 |
Cost of Sales | |||
Total cost of sales | 166,586,090 | 104,899,439 | 86,426,622 |
Gross Margin | 92,676,987 | 54,025,009 | 43,506,259 |
Operating Expenses | |||
Sales and marketing | 18,273,197 | 9,748,292 | 7,584,377 |
General and administrative | 34,288,171 | 20,906,785 | 18,834,535 |
Total operating expenses | 52,561,368 | 30,655,077 | 26,418,912 |
Operating Income | 40,115,619 | 23,369,932 | 17,087,347 |
Interest expense | 302,674 | 249,480 | 96,646 |
Foreign currency exchange loss | 372,974 | 316,093 | 40,273 |
Income before income taxes | 39,439,971 | 22,804,359 | 16,950,428 |
Income tax expense | 7,873,109 | 4,522,668 | 2,955,356 |
Net income | 31,566,862 | 18,281,691 | 13,995,072 |
Income attributed to non-controlling interest | $ 0 | $ 0 | 17,447 |
Net income attributable to stockholders of the Company | $ 13,977,625 | ||
Earnings per share attributable stockholders of the Company | |||
Basic (in dollars per share) | $ 1.14 | $ 0.66 | $ 0.51 |
Diluted (in dollars per share) | $ 1.14 | $ 0.66 | $ 0.51 |
Weighted Average Number of Common Shares | |||
Basic (in shares) | 27,612,597 | 27,612,597 | 27,612,597 |
Diluted (in shares) | 27,612,729 | 27,612,597 | 27,612,597 |
Product revenue | |||
Revenue | |||
Total revenue | $ 217,282,531 | $ 136,262,067 | $ 112,204,739 |
Cost of Sales | |||
Total cost of sales | 151,285,632 | 98,502,279 | 82,308,256 |
Service revenue | |||
Revenue | |||
Total revenue | 41,980,546 | 22,662,381 | 17,728,142 |
Cost of Sales | |||
Total cost of sales | $ 15,300,458 | $ 6,397,160 | $ 4,118,366 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other comprehensive income | |||
Net income | $ 31,566,862 | $ 18,281,691 | $ 13,995,072 |
Foreign currency translation | (656,661) | 970,446 | 285,193 |
Total comprehensive income | 30,910,201 | 19,252,137 | 14,280,265 |
Total comprehensive income attributable to: | |||
Stockholders of the Company | 30,910,201 | 19,256,670 | 14,258,916 |
Non-controlling interest | $ 0 | $ (4,533) | $ 21,349 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive (Income) Loss | Equity attributable to Stockholders of the Company | Non-Controlling Interest |
Beginning stock outstanding balance (in shares) at Dec. 31, 2018 | 27,612,597 | ||||||
Beginning balance at Dec. 31, 2018 | $ 20,612,945 | $ 27,613 | $ 11,348,163 | $ 10,617,253 | $ (1,190,055) | $ 20,802,974 | $ (190,029) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 13,995,072 | 13,977,625 | 13,977,625 | 17,447 | |||
Foreign currency translation | 285,193 | 281,291 | 281,291 | 3,902 | |||
Ending stock outstanding balance (in shares) at Dec. 31, 2019 | 27,612,597 | ||||||
Ending balance at Dec. 31, 2019 | 34,893,210 | $ 27,613 | 11,348,163 | 24,594,878 | (908,764) | 35,061,890 | (168,680) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 18,281,691 | 18,281,691 | 18,281,691 | ||||
Foreign currency translation | 970,446 | 974,979 | 974,979 | (4,533) | |||
Purchase of minority interest | (762,479) | (935,692) | 0 | (935,692) | 173,213 | ||
Ending stock outstanding balance (in shares) at Dec. 31, 2020 | 27,612,597 | ||||||
Ending balance at Dec. 31, 2020 | 53,382,868 | $ 27,613 | 10,412,471 | 42,876,569 | 66,215 | 53,382,868 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 31,566,862 | 31,566,862 | 31,566,862 | ||||
Foreign currency translation | (656,661) | (656,661) | (656,661) | ||||
Stock-based compensation | 169,012 | 169,012 | 169,012 | ||||
Ending stock outstanding balance (in shares) at Dec. 31, 2021 | 27,612,597 | ||||||
Ending balance at Dec. 31, 2021 | $ 84,462,081 | $ 27,613 | $ 10,581,483 | $ 74,443,431 | $ (590,446) | $ 84,462,081 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income | $ 31,566,862 | $ 18,281,691 | $ 13,995,072 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property, plant and equipment | 1,887,048 | 1,274,095 | 915,918 |
Amortization of intangible assets | 2,500,620 | 955,937 | 781,105 |
Impairment expense | 0 | 0 | 66,364 |
Gain on sale of property and equipment | (36,344) | (3,198) | (11,298) |
Stock compensation | 169,012 | 0 | 0 |
Bad debt expense | 302,164 | 113,771 | 242,091 |
Deferred income tax | 1,011,275 | (273,299) | 117,328 |
Accretion on notes payable | 24,619 | 64,982 | 61,316 |
Changes in assets and liabilities: | |||
Accounts receivable | (431,582) | (2,431,292) | (1,773,371) |
Inventory, net | (26,939,002) | (6,758,855) | (4,251,134) |
Prepaid expenses and other current assets | (2,172,793) | 948,666 | (1,653,420) |
Income tax receivable or payable | (765,613) | 376,336 | (1,434,052) |
Other assets | (870,704) | (442,188) | 32,576 |
Accounts payable and accrued liabilities | 12,022,112 | 6,359,365 | 3,877,024 |
Net cash provided by operating activities | 18,267,674 | 18,466,011 | 10,965,519 |
Cash flows used in investing activities | |||
Purchase of property, plant and equipment | (6,725,017) | (1,781,464) | (1,569,823) |
Proceeds from sale of property and equipment | 66,053 | 60,806 | 68,457 |
Acquisitions, net of cash acquired, payment holdbacks, and notes payable | (49,184,666) | (2,568,538) | (127,623) |
Development or purchase of intangible assets | (963,912) | (374,358) | (674,581) |
Net cash used in investing activities | (56,807,542) | (4,663,554) | (2,303,570) |
Cash flows from financing activities | |||
Net borrowings on revolving credit agreements | 25,000,000 | 0 | 0 |
Payments on term-loan | (5,064,376) | 0 | 0 |
Borrowing on term-loan | 0 | 6,000,000 | 0 |
Repayments of notes payable | (694,597) | (1,704,118) | (1,143,240) |
Purchase of minority interest | 0 | (784,653) | 0 |
Net cash provided by (used in) financing activities | 19,241,027 | 3,511,229 | (1,143,240) |
Net change in cash and cash equivalents | (19,298,841) | 17,313,686 | 7,518,709 |
Foreign exchange impact on cash and cash equivalents | (84,035) | 212,465 | 11,038 |
(Decrease) Increase in cash and cash equivalents during the period | (19,382,876) | 17,526,151 | 7,529,747 |
Cash and cash equivalents at beginning of year | 29,027,124 | 11,500,973 | 3,971,226 |
Cash and cash equivalents at end of year | 9,644,248 | 29,027,124 | 11,500,973 |
Supplemental schedule of non-cash activities | |||
Notes payable issued for acquisitions | 0 | 893,314 | 0 |
Contingent consideration | 2,576,005 | 541,000 | 0 |
Non-cash lease financing | 9,429,523 | ||
Supplemental cash flow information | |||
Cash paid for income taxes | 7,762,342 | 4,461,256 | 4,079,962 |
Cash paid for interest | $ 210,242 | $ 178,385 | $ 17,850 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Nature of Business - The Company is based in San Antonio, Texas and sells, distributes, and installs protective films and coatings, including automotive surface and paint protection film, headlight protection, automotive and architectural window films and ceramic coatings. The Company was incorporated in the state of Nevada, U.S.A. in October 2003 and its registered office is 618 W. Sunset Road, San Antonio, Texas, 78216. Basis of Presentation - The consolidated financial statements are prepared in conformity with GAAP and include the accounts of the Company and its wholly-owned or majority-owned subsidiaries. The non-controlling participants’ share of the net income is included as “Income attributable to non-controlling interest” on the Consolidated Statements of Income and Comprehensive Income. Intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to conform to the current year presentation. The functional currency for the Company is the United States dollar. The assets and liabilities of each of its foreign subsidiaries are translated into U.S dollars using the exchange rate at the end of the balance sheet date. Revenues and expenses are translated at the average exchange rates for the period. Gains and losses from translations are recognized in foreign currency translation included in accumulated other comprehensive (loss) income in the accompanying consolidated balance sheets. The ownership percentages and functional currencies of the entities included in these consolidated financial statements are as follows: Subsidiaries Functional Currency % Owned by XPEL, Inc. XPEL, Ltd. UK Pound Sterling 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 % XPEL Slovakia Euro 100 % XPEL France Euro 100 % PermaPlate Film, LLC US Dollar 100 % 1 One Armor, Inc. US Dollar 100 % TintNet, Inc. US Dollar 100 % North 1 Technologies, Inc. Canadian Dollar 100 % 1716808 Alberta, Ltd. o/a Shadow Tint Canadian Dollar 100 % 6873391 Canada, Ltd. o/a Shadow Shield Canadian Dollar 100 % invisiFRAME, Ltd. UK Pound Sterling 100 % Segment Reporting - Management has concluded that our chief operating decision maker (“CODM”) is our chief executive officer. The Company’s CODM reviews the entire organization’s consolidated results as a whole on a monthly basis to evaluate performance and make resource allocation decisions. Management views the Company’s operations and manages its business as one operating segment. Use of Estimates - The preparation of these consolidated financial statements in conformity to U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and underlying assumptions are reviewed on an ongoing basis. Actual outcomes may differ from these estimates under different assumptions and conditions. Foreign Currency Translation - The U.S. dollar is the functional currency of our domestic operations located in the United States. The financial statements of subsidiaries located outside of the U.S. are generally measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Cash and Cash Equivalents - Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. The balance, at times, may exceed federally insured limits. Accounts Receivable - Accounts receivable are shown net of an allowance for doubtful accounts of $250,082 and $90,844 as of December 31, 2021 and 2020, respectively. The Company evaluates the adequacy of its allowances by analyzing the aging of receivables, customer financial condition, historical collection experience, the value of any collateral and other economic and industry factors. Actual collections may differ from historical experience, and if economic, business or customer conditions deteriorate significantly, adjustments to these reserves may be required. When the Company becomes aware of factors that indicate a change in a specific customer’s ability to meet its financial obligations, the Company records a specific reserve for credit losses. At December 31, 2021, there were no significant accounts receivable concentrations. Accounts receivable from two large customers accounted for 24.7% of the Company’s total accounts receivable balance at December 31, 2020. Inventory - Inventories of all operating subsidiaries are comprised of film, film-based products, film installation support products, and supplies which are valued at lower of cost or net realizable value, with cost determined on a weighted average cost basis. Inventory costs include those costs directly attributable to products, including raw materials, labor and overhead. The Company provides reserves for discontinued, slow-moving and excess inventory based upon historical demand calculations, forecasted usage, estimated customer requirements and product line updates. As of December 31, 2021 and 2020, inventory reserves were $114,825 and $113,091, respectively. Property, Plant and Equipment - Property and equipment are recorded at cost, with the exception of property and equipment acquired in connection with the Company’s acquisitions, which are recorded at fair value on the date of acquisition. Expenditures which improve or extend the life of the respective definite-lived assets are capitalized, whereas expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation expense is computed using the straight-line method as follows: Furniture and fixtures 5 years Computer equipment 3-4 years Vehicles 5 years Equipment 5-8 years Leasehold improvements shorter of lease term or estimated useful life Plotters 4 years The following table presents geographic property, plant and equipment, net of accumulated depreciation, by region as of December 31: 2021 2020 United States $ 7,890,492 $ 3,110,979 Canada 655,616 674,821 Europe 1,117,692 584,084 Other 234,326 336,364 Consolidated $ 9,898,126 $ 4,706,248 Goodwill - Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets. Goodwill is tested for impairment at the reporting unit level on an annual basis (at December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company recognized no goodwill impairment in the years ended December 31, 2021 or December 31, 2020, and there is no significant accumulated impairment of goodwill from prior years. Refer to Note 6, Goodwill for more information related to goodwill. The following table presents geographic goodwill by region as of December 31: 2021 2020 United States $ 16,348,332 $ 1,246,383 Canada 5,874,291 3,137,153 Europe 3,428,802 84,733 Asia 4,003 3,948 Consolidated $ 25,655,428 $ 4,472,217 Intangible Assets - Intangible assets consist primarily of software, customer relationships, trademarks and non-compete agreements. These assets are amortized on a straight-line basis over the period of time in which their expected benefits will be realized. The following table presents geographic intangible assets, net by region as of December 31: 2021 2020 United States $ 25,909,551 $ 2,597,670 Canada 3,360,456 2,273,627 Europe 3,277,754 337,282 Other 185,010 215,401 Consolidated $ 32,732,771 $ 5,423,980 The following table presents the anticipated useful lives of intangible assets: Trademarks 10 years Software 5 years Trade name 10-15 years Contractual and customer relationships 9-10 years Non-compete 3-5 years Other 2-10 years Impairment of Long-Lived Assets - The Company reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted expected future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices based upon market participant data developed by third party professionals or by internal licensed real estate professionals. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation. No impairment was recorded during the years ended December 31, 2021 or 2020. Other Long-Term Liabilities - The balance presented as other long-term liabilities on the Company’s consolidated balance sheet at December 31, 2021 primarily relate to contingent liabilities associated with the Company’s 2021 acquisition of invisiFRAME Ltd. and the Company’s 2020 acquisition of Veloce Innovation and a reserve for uncertain tax positions. For further information, refer to Note 14, Income Taxes, Note 15, Commitments and Contingencies and Note 3, Acquisitions of Businesses. Revenue Recognition - Our revenue is comprised primarily of product and services sales where we act as principal to the transaction. All revenue is recognized when the Company satisfies its performance obligation(s) by transferring control/final benefit from the promised product or service to our customer. Due to the nature of our sales contracts, the majority of our revenue is recognized at a point in time. A performance obligation is a contractual promise to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. Revenue is recorded net of returns and allowances. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are accounted for as a fulfillment obligation, on a net basis, and are included in cost of sales. See Note 2, Revenue, for additional accounting policies and transition disclosures. Research and Development - Research costs are charged to operations when incurred. Software development costs, including costs associated with developing software patterns, are expensed as incurred unless the Company incurred these expenses in the development of a new product or long-lived asset. Research and development costs were $370,012, $143,568, and $602,446 in the years ended December 31, 2021, 2020 and 2019, respectively. Advertising costs - Advertising costs are charged to operations when incurred. Advertising costs were $1,106,185, $571,204 and $908,585 in the years ended December 31, 2021, 2020 and 2019, respectively. Provisions and Warranties - We provide warranties on our products. Liability under the warranty policy is based on a review of historical warranty claims. Adjustments are made to the accruals as claims data experience warrant. The following table presents a summary of our warranty liabilities as of December 31, 2021 and 2020: 2021 2020 Warranty balance at beginning of period $ 52,006 $ 65,591 Warranties assumed in period 398,075 283,458 Payments (374,752) (297,043) Warranty balance at end of period $ 75,329 $ 52,006 Income Taxes - Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred and other tax assets and liabilities. The Company accounts for the tax impact of including Global Intangible Low-Taxed Income (“GILTI”) in U.S. taxable income as a period cost. Stock-Based Compensation - We measure stock-based compensation cost at the grant date based on the fair value of the award. Compensation expense is recognized over the period during which the recipient provides service in exchange for the awards. Excess income tax benefits related to share-based compensation expense are recognized as income tax expense or benefit in the Consolidated Statements of Income. We account for forfeitures as they occur, rather than estimate expected forfeitures. Accumulated Other Comprehensive Income (Loss) (“AOCI”) - The Company reports comprehensive income (loss) that includes net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to expenses, gains and losses that are not included in net earnings. These amounts are also presented in the Consolidated Statements of Comprehensive Income. As of December 31, 2021, 2020 and 2019, respectively, AOCI relates to foreign currency translation adjustments. Earnings Per Share - Basic earnings per share is calculated by dividing net income for the year attributable to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of shares outstanding during the period plus the weighted average number of shares that would be issued on the conversion of all the dilutive potential ordinary shares into common shares. Acquisitions of Businesses - Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, over the fair value of the Company’s share of the identifiable net assets acquired is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are recognized as general and administrative expense as incurred. The Company evaluates the materiality of required disclosures related to our business combinations using quantitative and qualitative measures. Fair Value Measurements - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: 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. In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU was effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company has adopted this ASU without a material change to its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU clarifies the treatment of contract assets and liabilities acquired during a business combination. The Company has elected to early-adopt this standard. Adoption of this standard had no material effect on the Company’s consolidated financial statements. Recent Accounting Pronouncements Issued and Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Measurement of Credit Losses on Financial Instruments”, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January 1, 2023 and is required to be applied prospectively. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue recognition The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods and services to a customer, in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. This is achieved through applying the following five-step model: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company generates substantially all of its revenue from contracts with customers, whether formal or implied. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes, with the exception of taxes assessed during the procurement process of select inventories. Shipping and handling costs are included in cost of sales. Revenue from product and services sales are recognized when control of the goods is transferred to the customer which occurs at a point in time typically upon shipment to the customer or completion of the service. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Based upon the nature of the products the Company sells, its customers have limited rights of return which are immaterial. Discounts provided by the Company to customers at the time of sale are recognized as a reduction in sales as the products are sold. Warranty obligations associated with the sale of our products are assurance-type warranties that are a guarantee of the product’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. Warranty expense is included in cost of sales. We apply a practical expedient to expense direct costs of obtaining a contract when incurred because the amortization period would have been one year or less. Under its contracts with customers, the Company stands ready to deliver product upon receipt of a purchase order. Accordingly, the Company has no performance obligations under its contracts until its customers submit a purchase order. The Company does not enter into commitments to provide goods or services that have terms greater than one year. In limited cases, the Company does require payment in advance of shipping product. Typically, product is shipped within a few days after prepayment is received. These prepayments are recorded as contract liabilities on the consolidated balance sheet and are included in accounts payable and accrued liabilities. See Note 10 of the Notes to our Consolidated Financial Statements for further information. As the performance obligation is part of a contract that has an original expected duration of less than one year, the Company has applied the practical expedient to omit disclosures regarding remaining performance obligations. The following table summarizes transactions included within contract liabilities for the years ended December 31, 2021, 2020 and 2019, respectively. Balance, December 31, 2018 $ 136,213 Revenue recognized related to payments included in the December 31, 2018 balance (115,670) Balance, 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 Revenue recognized related to payments included in the December 31, 2019 balance (529,268) Balance, Payments received for which performance obligations have not been satisfied 210,064 Effect of Foreign Currency Translation 4,809 Balance, December 31, 2020 $ 244,837 Revenue recognized related to payments included in the December 31, 2020 balance (198,982) Payments received for which performance obligations have not been satisfied 773,297 Effect of Foreign Currency Translation (1,197) Balance, December 31, 2021 $ 817,955 When the Company transfers goods or services to a customer, payment is due, subject to normal terms, and is not conditional on anything other than the passage of time. Typical payment terms range from due upon receipt to 30 days, depending on the type of customer and relationship. At contract inception, the Company expects that the period of time between the transfer of goods to the customer and when the customer pays for those goods will be less than one year, which is consistent with the Company’s standard payment terms. Accordingly, the Company has elected the practical expedient to not adjust for the effects of a significant financing component. As such, these amounts are recorded as receivables and not contract assets. The table below sets forth the disaggregation of revenue by product category for the years ended December 31, 2021 2020 2019 Product Revenue Paint protection film $ 169,879,447 $ 110,786,164 $ 97,341,865 Window film 38,363,432 20,950,591 11,384,437 Other 9,039,652 4,525,312 3,478,437 Total 217,282,531 136,262,067 112,204,739 Service Revenue Software $ 4,373,083 $ 3,489,348 $ 3,263,391 Cutbank credits 12,371,991 7,784,554 7,253,610 Installation labor 24,252,774 10,925,525 6,620,527 Training 982,698 462,954 590,614 Total 41,980,546 22,662,381 17,728,142 Total $ 259,263,077 $ 158,924,448 $ 129,932,881 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: December 31, 2021 December 31, 2020 Furniture and fixtures $ 2,146,522 $ 1,349,037 Computer equipment 2,201,462 1,482,911 Vehicles 821,678 760,335 Equipment 3,571,517 1,955,254 Leasehold improvements 5,137,705 2,055,798 Plotters 2,132,930 1,282,630 Construction in Progress 117,505 321,764 Total property and equipment 16,129,319 9,207,729 Less: accumulated depreciation 6,231,193 4,501,481 Property and equipment, net $ 9,898,126 $ 4,706,248 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $1,887,048, $1,274,095 and $915,918, respectively. Depreciation expense for equipment used in production is recorded to cost of goods sold. All other depreciation is recorded within general and administrative expense. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Intangible assets consists of the following: December 31, 2021 December 31, 2020 Trademarks $ 500,136 $ 373,374 Software 3,431,276 2,598,985 Trade name 2,578,877 497,545 Contractual and customer relationships 31,325,826 5,043,915 Non-compete 458,655 458,536 Other 692,862 213,218 Total at cost 38,987,632 9,185,573 Less: Accumulated amortization 6,254,861 3,761,593 Intangible assets, net $ 32,732,771 $ 5,423,980 Amortization expense for the years ended December 31, 2021, 2020 and 2019 was $2,500,620, $955,937 and $781,105, respectively. Based on the carrying value of definite-lived intangible assets as of December 31, 2021, we estimate our future amortization expense will be as follows: 2022 $ 4,491,314 2023 4,370,107 2024 4,077,835 2025 3,818,080 2026 3,708,301 Thereafter $ 12,267,134 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The following table summarizes changes in the carrying amounts of goodwill for the years ended December 31, 2021 and 2020: Balance at December 31, 2019 $ 2,406,512 Additions 1,938,656 Foreign currency translation 127,049 Balance at December 31, 2020 $ 4,472,217 Balance at December 31, 2020 $ 4,472,217 Additions 21,284,381 Foreign currency translation (101,170) Balance at December 31, 2021 $ 25,655,428 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The components of inventory, net of reserves, are summarized as follows: December 31, 2021 December 31, 2020 Raw materials $ 2,698,512 $ — Work in process 180,009 — Finished goods 49,057,643 22,364,126 Inventory, net $ 51,936,164 $ 22,364,126 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT REVOLVING FACILITIES The Company has a $75,000,000 revolving line of credit with Texas Partners Bank (which does business as the Bank of San Antonio). The Texas Partners Bank facility was established on May 21, 2021 with a $57,000,000 limit which was increased to $75,000,000 on December 29, 2021. This facility replaced a previous $8,500,000 revolving credit facility and a $6,000,000 term loan facility. The outstanding balances on the prior loan agreements were fully repaid by the Company and the agreements were terminated when we entered into the new facility. The facility is utilized to fund the Company's working capital needs and other strategic initiatives, and is secured by a security interest in substantially all of the Company's current and future assets. Borrowings under the credit agreement bear interest on borrowed amounts at the Wall Street Journal U.S. Prime Rate less 0.75% per annum if the Company's EBITDA ratio is equal to or less than 2.00 to 1.00 or the Wall Street Journal U.S. Prime rate less 0.25% if the Company's EBITDA ratio (as defined in the facility) is greater than 2.00 to 1.00. The facility also contains a fee of 0.25% of the unused capacity on the facility. The interest rate for this credit facility as of December 31, 2021 was 2.50%. The Company paid interest charges on borrowings under this facility of $154,549 during the year ended December 31, 2021, and had a balance of $25.0 million as of December 31, 2021. This facility matures on July 5, 2024. The Loan Agreement governing the facility contains customary covenants relating to maintaining legal existence and good standing, complying with applicable laws, delivery of financial statements, payment of taxes and maintaining insurance. The Loan Agreement contains two financial covenants: (1) Senior Funded Debt (as defined in the Loan Agreement) divided by EBITDA (as defined in the Loan Agreement) at or below 3.50 : 1.00 when tested at the end of each fiscal quarter on a rolling four-quarter basis, and (2) A minimum Debt Service Coverage Ratio (as defined in the Loan Agreement) of 1.25 : 1.00 at the end of each fiscal quarter when measured on a rolling four-quarter basis. The Company also has a CAD $4,500,000 revolving credit facility through HSBC Bank Canada, and is maintained by XPEL Canada Corp., a wholly-owned subsidiary of XPEL. This Canadian facility is utilized to fund the Company's working capital needs in Canada. This facility bears interest at HSBC Canada Bank’s prime rate plus 0.25% per annum and is guaranteed by the parent company. As of December 31, 2021 and 2020, no balance was outstanding on this line of credit. As of December 31, 2021 and December 31, 2020, the Company was in compliance with all debt covenants. NOTES PAYABLE As part of its acquisition strategy, the Company uses a combination of cash and unsecured non-interest bearing promissory notes payable to fund its business acquisitions. The Company discounts the promissory note to fair value using market interest rates at the time of the acquisition. Notes payable are summarized as follows: Weighted Average Interest Rate Matures December 31, 2021 December 31, 2020 Term-loan 3.50% 2023 — 5,056,240 Face value of acquisition notes payable 2.93% 2023 458,188 1,428,384 Total face value of notes payable 458,188 6,484,624 Unamortized discount (7,058) (348,261) Current portion (375,413) (2,568,172) Total long-term debt $ 75,717 $ 3,568,191 The approximate future principal payments on notes payable are as presented in the table below. 2022 $ 376,325 2023 81,863 Thereafter — $ 458,188 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANSThe Company sponsors defined contribution plans for substantially all employees. Annual Company contributions under the plans are discretionary. Company contribution expenses were $531,573, $278,434 and $174,744 for the plan years ended December 31, 2021, 2020 and 2019, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The following table presents significant accounts payable and accrued liability balances as of the periods ending: December 31, 2021 December 31, 2020 Trade payables $ 25,174,805 $ 12,987,487 Payroll liabilities 3,385,307 2,266,643 Contract liabilities 817,955 244,837 Acquisition holdback payments 2,007,294 — Other liabilities 1,529,254 1,298,495 $ 32,914,615 $ 16,797,462 |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
CAPITAL STOCK | CAPITAL STOCKShares issued and outstanding at both December 31, 2021 and 2020 were 27,612,597. Par value of these shares for these same dates was $27,613. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Equity Incentive Plan (the “Plan”) was approved at the May 28, 2020 Annual Meeting of Stockholders. Under this plan, 275,000 shares of the Company’s Common Stock are reserved for issuance, as administered by the Company’s Compensation Committee. Awards may be granted to employees, consultants, or directors of the Company or any parent or subsidiary of the Company; provided that incentive stock options may be granted only to employees. If an award made under the Plan expires, if it is terminated, surrendered, cancelled, or otherwise becomes unexercisable, or if an award is forfeited in whole or in part or is forfeited due to failure to vest, then the unpurchased shares under such award will become available for future grant under the Plan. The Plan allows for different types of awards to be granted. Stock options awarded under the Plan must be at least equal to the fair market value of a share of our Common Stock on the date of the grant. Any option period will not exceed 10 years, except with respect to any participant who owns more than 10% of the voting power of all classes of stock of the Company. Restricted stock, Restricted Stock Units (“RSUs”), Performance Units and Performance Shares, and Other Share-based Awards may be granted at the discretion of the Compensation Committee according to terms and conditions set by the Compensation Committee, subject to the provisions of the Plan. RSU activity for the year ended December 31, 2021 is summarized as follows: Number of Restricted Stock Units Weighted Average Grant Value Per Share Outstanding at December 31, 2020 — N/A Granted 17,520 $ 84.19 Vested — N/A Forfeited or canceled — N/A Outstanding at December 31, 2021 17,520 $ 84.19 During the year ended December 31, 2021, we recorded compensation expense of $169,012 related to RSUs issued under the Plan. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy: Level 1 – Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 – Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions. Financial instruments include cash and cash equivalents, accounts receivable, accounts payable, our line of credit, and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, our line of credit, and short-term borrowings approximate fair value because of the near-term maturities of these financial instruments. The carrying value of the Company’s notes payable approximates fair value due to the relatively short-term nature and interest rates of the notes. The carrying value of the Company's long-term debt approximates fair value due to the interest rates being market rates. The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities. As more fully described in Note 3, Acquisitions of Businesses, the Company incurred contingent liabilities in relation to the 2021 acquisition of invisiFRAME Ltd. and the 2020 acquisition of Veloce Innovation. The payments of these liabilities is contingent on attainment of certain revenue performance metrics in future years. The fair value of these liabilities was determined using a Monte Carlo Simulation method based on the probability and timing of certain future payments related to these metrics. These liabilities are accounted for as Level 3 liabilities within the fair value hierarchy. Level 3 liabilities measured at December 31, 2021 and 2020 at fair value on a recurring basis are as follows: 2021 2020 Level 3: Contingent Liabilities $ 2,665,033 $ 571,833 Reductions in the fair value of level 3 contingent liabilities are reflected in general and administrative expenses in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income before income taxes on which the provision for income taxes was computed is as follows: 2021 2020 2019 Domestic $ 35,647,296 $ 20,546,504 $ 15,375,731 International 3,792,675 2,257,855 1,574,697 Income before income taxes $ 39,439,971 $ 22,804,359 $ 16,950,428 The provision for income taxes differs from the US federal statutory rate as follows: 2021 2020 2019 Income before income taxes $ 39,439,971 $ 22,804,359 $ 16,950,428 Statutory rate 21 % 21 % 21 % 8,282,394 4,788,915 3,559,590 State taxes net of federal benefit 649,208 295,097 31,446 Nondeductible/nontaxable items 100,364 49,252 115,679 Tax Impact of foreign operations 170,958 101,625 45,994 Foreign derived intangible income benefit (969,618) (703,328) (287,606) Other - net (360,197) (8,893) (509,747) Income tax expense $ 7,873,109 $ 4,522,668 $ 2,955,356 The foreign tax rate differential reflects the impact of the differences in our various international tax rates and our US statutory rate. The components of the income tax provision (benefit) are as follows: Years ended December 31 2021 2020 2019 Current income tax expense Federal $ 5,051,373 $ 3,572,812 $ 2,412,157 Foreign 1,157,930 815,968 518,528 State 663,654 407,187 3,068 Total current income tax expense 6,872,957 4,795,967 2,933,753 Deferred income tax expense/(benefit) Federal 968,163 (234,176) 99,870 Foreign 3,316 13,854 (78,267) State 28,673 (52,977) — Total deferred income tax expense/(benefit) 1,000,152 (273,299) 21,603 Total $ 7,873,109 $ 4,522,668 $ 2,955,356 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows: Years ended December 31 2021 2020 Deferred Tax Assets Allowance for Doubtful Accounts $ 48,953 $ 16,081 263(A) Adjustment 122,265 59,852 Accrued Expenses 601,389 399,240 Inventory Reserve 25,978 25,436 Unrealized loss 56,614 37,432 State Tax Credit 151,549 103,350 NOL Carryforward and Other 295,309 160,883 Stock Compensation 38,237 — Capitalized Acquisition Costs 60,627 — Right of Use Lease Liability 2,484,171 1,280,737 Less Valuation Allowance (81,201) — Total deferred tax assets 3,803,891 2,083,011 Deferred Tax Liabilities Fixed and Intangible Assets $ 4,039,066 $ 1,399,311 Unrealized Gain 15,240 15,150 Accretion 1,344 6,852 Cumulative Translation Adjustment — 9,436 Right of Use Lease Asset 2,496,524 1,280,068 Total deferred tax liabilities 6,552,174 2,710,817 Total net deferred tax liabilities $ (2,748,283) $ (627,806) In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company regularly assesses the likelihood that the deferred tax assets will be recovered from future taxable income. The Company considers projected future taxable income, the reversal of taxable temporary differences, and ongoing tax planning strategies, then records a valuation allowance, if deemed necessary, to reduce the carrying value of the net deferred taxes to an amount that is more likely than not able to be realized. Based upon the Company’s assessment of all available evidence, including the previous two years of taxable income and loss after permanent items, estimates of future profitability, and the Company’s overall prospects of future business, the Company determined that it is more likely than not that the Company will realize all of its deferred tax assets in the future, with the exception of an immaterial valuation allowance recorded against net operating losses and intangibles in foreign jurisdictions. The Company will continue to assess the potential realization of deferred tax assets on an annual basis, or an interim basis if circumstances warrant. If the Company’s actual results and updated projections vary significantly from the projections used as basis for this determination, the Company may need to change the valuation allowance against the gross deferred tax assets. The Company has net operating losses in certain of its foreign subsidiaries of $1,173,585 available to apply against future taxable income. Losses of $892,888 have no expiration date. The Company has recorded a valuation allowance based on the lack of positive available evidence of realizability of acquired net operating losses of $280,697. The Company has state tax credits of $151,549 available to apply against future taxable income. These credits begin to expire in the year 2039. Reconciliation of Unrecognized Tax Benefits from Uncertain Tax Positions Years Ended December 31, 2021 2020 2019 Beginning unrecognized tax benefits $ 129,082 $ — $ — Increase related to tax positions of the current year — — — Increase related tax positions of prior years — 129,082 — Lapse of statute of limitations — — — Audit Settlements — — — Ending unrecognized tax benefits $ 129,082 $ 129,082 $ — The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely upon its technical merits at the reporting date. The unrecognized tax benefit is the difference between the tax benefit recognized and the tax benefit claimed on the Company’s income tax return. The Company recognized a previously unrecognized tax benefit during the year ended December 31, 2020 in the amount of $165,965 related to an uncertain tax position in one of its foreign subsidiaries. This amount includes an estimate for interest and penalties and are included in income tax expense. The liability is reflected in other long-term liabilities on the Company’s balance sheet. The Company does not expect any changes to this position in the next twelve months. The unrecognized tax benefits in the table above includes $129,082 as of December 31, 2021, that, if recognized, would have impacted income tax expense. The Company believes that all material tax positions in the current and prior years have been analyzed and properly accounted for and that the risk of additional material uncertain tax positions that have not been identified is remote. The Compan y plans to indefinitely reinvest foreign earnings and does not expect to repatriate earnings for the foreseeable future. Determination of the amount of unrecognized deferred tax liabilities related to investment in these foreign subsidiaries is not practicable. The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company is still subject to U.S. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES CONTINGENCIES In the ordinary course of business activities, the Company may be contingently liable for litigation and claims with customers, suppliers and former employees. Management believes that adequate provisions have been recorded in the accounts where required. Management also has determined that the likelihood of any litigation and claims having a material impact on our results of operations, cash flows or financial position is remote. See Note 3, Acquisitions of Businesses and Note 13, Fair Value Measurements of the Notes to our Consolidated Financial Statements for further information related to contingent liabilities related to earn-out provisions associated with certain acquisitions. ENTROTECH SUPPLY AGREEMENT Through our Amended and Restated Supply Agreement that we entered into with entrotech in March 2017 and renewed in March 2020, we have exclusive rights to commercialize, market, distribute and sell its automotive aftermarket products through March 21, 2022. During such term, we have agreed to use commercially reasonable efforts to purchase a minimum of $5,000,000 of products quarterly from entrotech. On January 22, 2022, we gave notice to entrotech that the Company would not extend the term of the supply agreement in its current form. We have met our purchase commitment for the remaining term of the agreement. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES We lease space under non-cancelable operating leases for office space, warehouse facilities, and installation locations. We also lease vehicles and equipment to support our global operations. We have elected the practical expedient to combine lease and non-lease components. We have also elected to adopt the package of practical expedients that allow us not to reassess whether expired leases are or contain leases, not to reassess the lease classification of existing leases, and not to reassess initial direct costs for existing leases. Some of our leases contain options to renew. The exercise of lease renewals is at our sole discretion; therefore, the renewals to extend the lease terms are not included in our right-of-use assets as it is not reasonably certain that they will be exercised. We regularly evaluate the renewal options and, when they are reasonably certain of exercise, we include the renewal period in our lease term. We use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. In determining our incremental borrowing rate for each lease, we use a rate for collateralized borrowings with a term similar to the life of the lease. We have a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, we apply a portfolio approach for determining the incremental borrowing rate. Balance sheet information related to operating leases is as follows: December 31, 2021 December 31, 2020 Operating lease right-of-use assets $ 12,909,607 $ 5,973,702 Current portion of operating lease liabilities 2,977,794 1,650,749 Noncurrent portion of operating lease liabilities 9,830,128 4,331,214 Total operating lease liabilities $ 12,807,922 $ 5,981,963 We had operating lease expense of $2,664,025, $1,515,848, and $1,210,969, respectively, for the years ended December 31, 2021, 2020, and 2019. For the year ended December 31, 2021, short-term lease expenses and cash payments on leases were $548,903 and $2,730,439, respectively. For the year ended December 31, 2020, variable lease payments, short-term lease expense, and cash payments on leases were $234,175, $513,016 and $1,460,422, respectively. We have elected not to apply balance sheet recognition to short-term leases. Weighted-average information associated with the measurement of our remaining operating lease obligations is as follows: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (in years) 5.1 4.9 Weighted-average discount rate 4.70 % 5.84 % The following table summarizes the maturity of our operating lease liabilities as of December 31, 2021: 2022 $ 3,095,241 2023 3,275,877 2024 2,472,419 2025 1,904,203 2026 1,620,982 Thereafter 2,144,676 Total operating lease payments 14,513,398 Less: interest (1,705,476) Total operating lease liabilities $ 12,807,922 |
ACQUISITION OF BUSINESS
ACQUISITION OF BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF BUSINESS | ACQUISITIONS OF BUSINESSES The Company completed the following acquisitions during the years ended December 31, 2021, 2020 and 2019: Acquisition Date Name/Location/Description Purchase Price Acquisition Type Acquisition Purpose November 1, 2021 * invisiFRAME, Ltd, Shrewsbury, Shropshire, United Kingdom, bicycle paint protection film pattern designer and retailer $ 7,389,648 Share Purchase Market Expansion October 1, 2021 * Tintnet, Inc. and 1 One Armor, Inc., Scottsdale, Arizona, United States, window and paint protection film distribution and installation $ 13,000,000 Share Purchase Market Expansion October 1, 2021 * 6873391 Canada Ltd. o/a Shadow Shield, 1716808 Alberta Ltd. o/a Shadow Tint, and North 1 Technologies, Calgary, Alberta, Canada, window and paint protection film distribution, installation provider and pattern developer $ 7,177,646 Share Purchase Local market expansion May 25, 2021 PermaPlate Film LLC, Salt Lake City, Utah, United States, Window film distribution and installation business $ 30,000,000 Membership Interest Purchase Market Expansion December 31, 2020 Veloce Innovation, Houston, Texas, United States, Window film installation business $ 1,441,000 Asset Purchase Local market expansion October 30, 2020 France Auto Racing, Dijon, France, Paint protection film distributor $ 329,390 Asset Purchase Local market expansion February 1, 2020 Protex Centre, Laval, Quebec, Canada - Paint protection installation shop $ 2,475,270 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 *The purchase price and purchase price allocation for these acquisitions has not yet been finalized and is preliminary in nature. These figures will be finalized within one year of the acquisition date. The total purchase price for acquisitions completed during the years ended December 31, 2021, 2020 and 2019 are as follows: December 31, 2021 Acquisitions 2020 Acquisitions 2019 Acquisitions Purchase Price Cash 1 $ 54,991,289 $ 2,811,346 $ 127,623 Promissory note — 893,314 — Contingent consideration 2,576,005 541,000 — $ 57,567,294 $ 4,245,660 $ 127,623 Allocation Cash $ 3,788,920 $ 242,808 $ — Accounts receivable 3,250,364 206,808 — Inventory 2,894,866 182,336 — Prepaid expenses and other assets 73,094 3,764 — Other long-term assets 7,377 6,197 — Property and equipment 440,095 161,702 5,038 Right-of-use lease assets — 587,587 — Software — 1,027 — Trade name 2,120,754 — 25,918 Acquired patterns 488,397 — 52,083 Customer relationships 26,328,900 1,896,220 — Non-compete — 179,093 — Goodwill 21,284,381 1,938,656 44,584 Current portion of lease liabilities — (73,297) — Accounts payable and accrued liabilities (1,982,970) (154,802) — Non-current portion of lease liabilities — (514,290) — Assumed debt — (108,764) — Deferred tax liability (1,126,884) (274,333) — Taxes payable — (35,052) — $ 57,567,294 $ 4,245,660 $ 127,623 1 Total cash consideration is comprised of amounts paid on closing dates plus holdback amounts to be paid in the future. Intangible assets acquired in the years ended December 31, 2021 and 2020 have a weighted average useful life of 9 years. Intangible assets acquired in the year ended December 31, 2019 have a weighted average useful life of 2 years. Goodwill for these acquisitions relates to the expansion into new geographical areas, the acquired employee knowledge of the various markets, distribution knowledge by the employees of the acquired businesses, as well as the expected synergies resulting from the acquisitions. Goodwill and other intangibles acquired in taxable asset purchases are analyzed for allowable amortization for tax purposes over appropriate periods as prescribed by applicable regulatory jurisdictions. Acquisition costs incurred related to these acquisitions were immaterial and were included in selling, general and administrative expenses. The purchase agreements for the acquisitions completed on October 1, 2021 included provisions in which portions of the cash consideration will be kept as holdbacks until a future period. Future payments of $2,007,294 will be made for these holdbacks. The acquired companies were consolidated into our financial statements on their respective acquisition dates. The aggregate revenue and net income of our 2021 acquisitions consolidated into our 2021 consolidated financial statements from the respective dates of acquisition were $16,569,435 and $1,569,235, respectively. The aggregate revenue and operating income of our 2020 acquisitions consolidated into our 2020 consolidated financial statements from the respective dates of acquisition were $3,816,509 and $1,125,311, respectively. The acquisition completed in our 2019 fiscal year did not have a material impact on our financial statements. The following unaudited pro forma financial information presents our results, including the estimated expenses relating to the amortization of intangibles purchased, as if the acquisitions during the year ended December 31, 2021 had occurred on January 1, 2021 and 2020: Twelve Months Ended December 31, 2021 (Unaudited) 2020 (Unaudited) Revenue $ 287,766,877 $ 201,302,152 Net income $ 33,345,208 $ 21,259,199 The unaudited consolidated pro forma combined financial information does not purport to be indicative of the results which would have been obtained had the acquisitions been completed as of the beginning of the earliest period presented or of results that may be obtained in the future. In addition, they do not include any benefits that may result from the acquisition due to synergies that may be derived from the elimination of any duplicative costs. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes effect of granted incremental restricted stock units. The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share: Fiscal Year Ended December 31, Numerator 2021 2020 2019 Net income $ 31,566,862 $ 18,281,691 $ 13,977,625 Denominator Weighted average basic shares 27,612,597 27,612,597 27,612,597 Dilutive effect of restricted stock units 132 — — Weighted average diluted shares 27,612,729 27,612,597 27,612,597 Earnings per share Basic $ 1.14 $ 0.66 $ 0.51 Diluted $ 1.14 $ 0.66 $ 0.51 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The consolidated financial statements are prepared in conformity with GAAP and include the accounts of the Company and its wholly-owned or majority-owned subsidiaries. The non-controlling participants’ share of the net income is included as “Income attributable to non-controlling interest” on the Consolidated Statements of Income and Comprehensive Income. Intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to conform to the current year presentation. |
Segment Reporting | Segment Reporting - Management has concluded that our chief operating decision maker (“CODM”) is our chief executive officer. The Company’s CODM reviews the entire organization’s consolidated results as a whole on a monthly basis to evaluate performance and make resource allocation decisions. Management views the Company’s operations and manages its business as one operating segment. |
Use of Estimates | Use of Estimates - The preparation of these consolidated financial statements in conformity to U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make judgments and |
Foreign Currency Translation | Foreign Currency Translation - The U.S. dollar is the functional currency of our domestic operations located in the United States. The financial statements of subsidiaries located outside of the U.S. are generally measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in accumulated other comprehensive income, a separate component of stockholders’ equity. |
Cash and Cash Equivalents | Cash and Cash Equivalents - Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. The balance, at times, may exceed federally insured limits. |
Accounts Receivable | Accounts ReceivableThe Company evaluates the adequacy of its allowances by analyzing the aging of receivables, customer financial condition, historical collection experience, the value of any collateral and other economic and industry factors. Actual collections may differ from historical experience, and if economic, business or customer conditions deteriorate significantly, adjustments to these reserves may be required. When the Company becomes aware of factors that indicate a change in a specific customer’s ability to meet its financial obligations, the Company records a specific reserve for credit losses. At December 31, 2021, there were no significant accounts receivable concentrations. Accounts receivable from two large customers accounted for 24.7% of the Company’s total accounts receivable balance at December 31, 2020. |
Inventory | Inventory - Inventories of all operating subsidiaries are comprised of film, film-based products, film installation support products, and supplies which are valued at lower of cost or net realizable value, with cost determined on a weighted average cost basis. Inventory costs include those costs directly attributable to products, including raw materials, labor and overhead. |
Property, Plant and Equipment | Property, Plant and Equipment - Property and equipment are recorded at cost, with the exception of property and equipment acquired in connection with the Company’s acquisitions, which are recorded at fair value on the date of acquisition. Expenditures which improve or extend the life of the respective definite-lived assets are capitalized, whereas expenditures for normal repairs and maintenance are charged to operations as incurred. |
Goodwill | Goodwill - Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets. Goodwill is tested for impairment at the reporting unit level on an annual basis (at December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. |
Intangible Assets | Intangible Assets - Intangible assets consist primarily of software, customer relationships, trademarks and non-compete agreements. These assets are amortized on a straight-line basis over the period of time in which their expected benefits will be realized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets - The Company reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted expected future cash flows are not sufficient to recover an asset’s |
Revenue Recognition | Revenue Recognition - Our revenue is comprised primarily of product and services sales where we act as principal to the transaction. All revenue is recognized when the Company satisfies its performance obligation(s) by transferring control/final benefit from the promised product or service to our customer. Due to the nature of our sales contracts, the majority of our revenue is recognized at a point in time. A performance obligation is a contractual promise to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. Revenue is recorded net of returns and allowances. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are accounted for as a fulfillment obligation, on a net basis, and are included in cost of sales. See Note 2, Revenue, for additional accounting policies and transition disclosures. Revenue recognition The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods and services to a customer, in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. This is achieved through applying the following five-step model: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company generates substantially all of its revenue from contracts with customers, whether formal or implied. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes, with the exception of taxes assessed during the procurement process of select inventories. Shipping and handling costs are included in cost of sales. Revenue from product and services sales are recognized when control of the goods is transferred to the customer which occurs at a point in time typically upon shipment to the customer or completion of the service. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Based upon the nature of the products the Company sells, its customers have limited rights of return which are immaterial. Discounts provided by the Company to customers at the time of sale are recognized as a reduction in sales as the products are sold. Warranty obligations associated with the sale of our products are assurance-type warranties that are a guarantee of the product’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. Warranty expense is included in cost of sales. We apply a practical expedient to expense direct costs of obtaining a contract when incurred because the amortization period would have been one year or less. Under its contracts with customers, the Company stands ready to deliver product upon receipt of a purchase order. Accordingly, the Company has no performance obligations under its contracts until its customers submit a purchase order. The Company does not enter into commitments to provide goods or services that have terms greater than one year. In limited cases, the Company does require payment in advance of shipping product. Typically, product is shipped within a few days after prepayment is received. These prepayments are recorded as contract liabilities on the consolidated balance sheet and are included in accounts payable and accrued liabilities. See Note 10 of the Notes to our Consolidated Financial Statements for further information. As the performance obligation is part of a contract that has an original expected duration of less than one year, the Company has applied the practical expedient to omit disclosures regarding remaining performance obligations. |
Research and Development | Research and Development - Research costs are charged to operations when incurred. Software development costs, including costs associated with developing software patterns, are expensed as incurred unless the Company incurred these expenses in the development of a new product or long-lived asset. |
Advertising Costs | Advertising costs - Advertising costs are charged to operations when incurred. |
Provisions and Warranties | Provisions and Warranties - We provide warranties on our products. Liability under the warranty policy is based on a review of historical warranty claims. Adjustments are made to the accruals as claims data experience warrant. |
Income Taxes | Income Taxes - Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws |
Stock-Based Compensation | Stock-Based Compensation - We measure stock-based compensation cost at the grant date based on the fair value of the award. Compensation expense is recognized over the period during which the recipient provides service in exchange for the awards. Excess income tax benefits related to share-based compensation expense are recognized as income tax expense or benefit in the Consolidated Statements of Income. We account for forfeitures as they occur, rather than estimate expected forfeitures. |
Accumulated Other Comprehensive Income (Loss) (AOCI) | Accumulated Other Comprehensive Income (Loss) (“AOCI”) - The Company reports comprehensive income (loss) that includes net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to expenses, gains and losses that are not included in net earnings. These amounts are also presented in the Consolidated Statements of Comprehensive Income. As of December 31, 2021, 2020 and 2019, |
Earnings Per Share | Earnings Per Share - Basic earnings per share is calculated by dividing net income for the year attributable to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of shares outstanding during the period plus the weighted average number of shares that would be issued on the conversion of all the dilutive potential ordinary shares into common shares. |
Other Long-Term Liabilities and Acquisitions of Businesses | Other Long-Term Liabilities - |
Fair Value Measurements | Fair Value Measurements - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: 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. ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy: Level 1 – Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 – Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions. Financial instruments include cash and cash equivalents, accounts receivable, accounts payable, our line of credit, and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, our line of credit, and short-term borrowings approximate fair value because of the near-term maturities of these financial instruments. The carrying value of the Company’s notes payable approximates fair value due to the relatively short-term nature and interest rates of the notes. The carrying value of the Company's long-term debt approximates fair value due to the interest rates being market rates. The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities. As more fully described in Note 3, Acquisitions of Businesses, the Company incurred contingent liabilities in relation to the 2021 acquisition of invisiFRAME Ltd. and the 2020 acquisition of Veloce Innovation. The payments of these liabilities is contingent on attainment of certain revenue performance metrics in future years. The fair value of these liabilities was determined using a Monte Carlo Simulation method based on the probability and timing of certain future payments related to these metrics. These liabilities are accounted for as Level 3 liabilities within the fair value hierarchy. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Issued and Not Yet Adopted | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU was effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company has adopted this ASU without a material change to its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU clarifies the treatment of contract assets and liabilities acquired during a business combination. The Company has elected to early-adopt this standard. Adoption of this standard had no material effect on the Company’s consolidated financial statements. Recent Accounting Pronouncements Issued and Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Measurement of Credit Losses on Financial Instruments”, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January 1, 2023 and is required to be applied prospectively. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Ownership Interests and Functional Currencies | The ownership percentages and functional currencies of the entities included in these consolidated financial statements are as follows: Subsidiaries Functional Currency % Owned by XPEL, Inc. XPEL, Ltd. UK Pound Sterling 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 % XPEL Slovakia Euro 100 % XPEL France Euro 100 % PermaPlate Film, LLC US Dollar 100 % 1 One Armor, Inc. US Dollar 100 % TintNet, Inc. US Dollar 100 % North 1 Technologies, Inc. Canadian Dollar 100 % 1716808 Alberta, Ltd. o/a Shadow Tint Canadian Dollar 100 % 6873391 Canada, Ltd. o/a Shadow Shield Canadian Dollar 100 % invisiFRAME, Ltd. UK Pound Sterling 100 % |
Schedules of Property, Plant and Equipment | Depreciation expense is computed using the straight-line method as follows: Furniture and fixtures 5 years Computer equipment 3-4 years Vehicles 5 years Equipment 5-8 years Leasehold improvements shorter of lease term or estimated useful life Plotters 4 years The following table presents geographic property, plant and equipment, net of accumulated depreciation, by region as of December 31: 2021 2020 United States $ 7,890,492 $ 3,110,979 Canada 655,616 674,821 Europe 1,117,692 584,084 Other 234,326 336,364 Consolidated $ 9,898,126 $ 4,706,248 Property and equipment consists of the following: December 31, 2021 December 31, 2020 Furniture and fixtures $ 2,146,522 $ 1,349,037 Computer equipment 2,201,462 1,482,911 Vehicles 821,678 760,335 Equipment 3,571,517 1,955,254 Leasehold improvements 5,137,705 2,055,798 Plotters 2,132,930 1,282,630 Construction in Progress 117,505 321,764 Total property and equipment 16,129,319 9,207,729 Less: accumulated depreciation 6,231,193 4,501,481 Property and equipment, net $ 9,898,126 $ 4,706,248 |
Schedule of Goodwill | The following table presents geographic goodwill by region as of December 31: 2021 2020 United States $ 16,348,332 $ 1,246,383 Canada 5,874,291 3,137,153 Europe 3,428,802 84,733 Asia 4,003 3,948 Consolidated $ 25,655,428 $ 4,472,217 The following table summarizes changes in the carrying amounts of goodwill for the years ended December 31, 2021 and 2020: Balance at December 31, 2019 $ 2,406,512 Additions 1,938,656 Foreign currency translation 127,049 Balance at December 31, 2020 $ 4,472,217 Balance at December 31, 2020 $ 4,472,217 Additions 21,284,381 Foreign currency translation (101,170) Balance at December 31, 2021 $ 25,655,428 |
Schedules of Intangible Assets | The following table presents geographic intangible assets, net by region as of December 31: 2021 2020 United States $ 25,909,551 $ 2,597,670 Canada 3,360,456 2,273,627 Europe 3,277,754 337,282 Other 185,010 215,401 Consolidated $ 32,732,771 $ 5,423,980 The following table presents the anticipated useful lives of intangible assets: Trademarks 10 years Software 5 years Trade name 10-15 years Contractual and customer relationships 9-10 years Non-compete 3-5 years Other 2-10 years Intangible assets consists of the following: December 31, 2021 December 31, 2020 Trademarks $ 500,136 $ 373,374 Software 3,431,276 2,598,985 Trade name 2,578,877 497,545 Contractual and customer relationships 31,325,826 5,043,915 Non-compete 458,655 458,536 Other 692,862 213,218 Total at cost 38,987,632 9,185,573 Less: Accumulated amortization 6,254,861 3,761,593 Intangible assets, net $ 32,732,771 $ 5,423,980 |
Schedule of Product Warranty Liability | The following table presents a summary of our warranty liabilities as of December 31, 2021 and 2020: 2021 2020 Warranty balance at beginning of period $ 52,006 $ 65,591 Warranties assumed in period 398,075 283,458 Payments (374,752) (297,043) Warranty balance at end of period $ 75,329 $ 52,006 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Transactions Within Contract Liabilities | The following table summarizes transactions included within contract liabilities for the years ended December 31, 2021, 2020 and 2019, respectively. Balance, December 31, 2018 $ 136,213 Revenue recognized related to payments included in the December 31, 2018 balance (115,670) Balance, 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 Revenue recognized related to payments included in the December 31, 2019 balance (529,268) Balance, Payments received for which performance obligations have not been satisfied 210,064 Effect of Foreign Currency Translation 4,809 Balance, December 31, 2020 $ 244,837 Revenue recognized related to payments included in the December 31, 2020 balance (198,982) Payments received for which performance obligations have not been satisfied 773,297 Effect of Foreign Currency Translation (1,197) Balance, December 31, 2021 $ 817,955 |
Schedule of Disaggregation of Revenue | The table below sets forth the disaggregation of revenue by product category for the years ended December 31, 2021 2020 2019 Product Revenue Paint protection film $ 169,879,447 $ 110,786,164 $ 97,341,865 Window film 38,363,432 20,950,591 11,384,437 Other 9,039,652 4,525,312 3,478,437 Total 217,282,531 136,262,067 112,204,739 Service Revenue Software $ 4,373,083 $ 3,489,348 $ 3,263,391 Cutbank credits 12,371,991 7,784,554 7,253,610 Installation labor 24,252,774 10,925,525 6,620,527 Training 982,698 462,954 590,614 Total 41,980,546 22,662,381 17,728,142 Total $ 259,263,077 $ 158,924,448 $ 129,932,881 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedules of Property, Plant and Equipment | Depreciation expense is computed using the straight-line method as follows: Furniture and fixtures 5 years Computer equipment 3-4 years Vehicles 5 years Equipment 5-8 years Leasehold improvements shorter of lease term or estimated useful life Plotters 4 years The following table presents geographic property, plant and equipment, net of accumulated depreciation, by region as of December 31: 2021 2020 United States $ 7,890,492 $ 3,110,979 Canada 655,616 674,821 Europe 1,117,692 584,084 Other 234,326 336,364 Consolidated $ 9,898,126 $ 4,706,248 Property and equipment consists of the following: December 31, 2021 December 31, 2020 Furniture and fixtures $ 2,146,522 $ 1,349,037 Computer equipment 2,201,462 1,482,911 Vehicles 821,678 760,335 Equipment 3,571,517 1,955,254 Leasehold improvements 5,137,705 2,055,798 Plotters 2,132,930 1,282,630 Construction in Progress 117,505 321,764 Total property and equipment 16,129,319 9,207,729 Less: accumulated depreciation 6,231,193 4,501,481 Property and equipment, net $ 9,898,126 $ 4,706,248 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedules of Intangible Assets | The following table presents geographic intangible assets, net by region as of December 31: 2021 2020 United States $ 25,909,551 $ 2,597,670 Canada 3,360,456 2,273,627 Europe 3,277,754 337,282 Other 185,010 215,401 Consolidated $ 32,732,771 $ 5,423,980 The following table presents the anticipated useful lives of intangible assets: Trademarks 10 years Software 5 years Trade name 10-15 years Contractual and customer relationships 9-10 years Non-compete 3-5 years Other 2-10 years Intangible assets consists of the following: December 31, 2021 December 31, 2020 Trademarks $ 500,136 $ 373,374 Software 3,431,276 2,598,985 Trade name 2,578,877 497,545 Contractual and customer relationships 31,325,826 5,043,915 Non-compete 458,655 458,536 Other 692,862 213,218 Total at cost 38,987,632 9,185,573 Less: Accumulated amortization 6,254,861 3,761,593 Intangible assets, net $ 32,732,771 $ 5,423,980 |
Schedule of Future Amortization Expense of Finite-Lived Intangible Assets | Based on the carrying value of definite-lived intangible assets as of December 31, 2021, we estimate our future amortization expense will be as follows: 2022 $ 4,491,314 2023 4,370,107 2024 4,077,835 2025 3,818,080 2026 3,708,301 Thereafter $ 12,267,134 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents geographic goodwill by region as of December 31: 2021 2020 United States $ 16,348,332 $ 1,246,383 Canada 5,874,291 3,137,153 Europe 3,428,802 84,733 Asia 4,003 3,948 Consolidated $ 25,655,428 $ 4,472,217 The following table summarizes changes in the carrying amounts of goodwill for the years ended December 31, 2021 and 2020: Balance at December 31, 2019 $ 2,406,512 Additions 1,938,656 Foreign currency translation 127,049 Balance at December 31, 2020 $ 4,472,217 Balance at December 31, 2020 $ 4,472,217 Additions 21,284,381 Foreign currency translation (101,170) Balance at December 31, 2021 $ 25,655,428 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventory, net of reserves, are summarized as follows: December 31, 2021 December 31, 2020 Raw materials $ 2,698,512 $ — Work in process 180,009 — Finished goods 49,057,643 22,364,126 Inventory, net $ 51,936,164 $ 22,364,126 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable are summarized as follows: Weighted Average Interest Rate Matures December 31, 2021 December 31, 2020 Term-loan 3.50% 2023 — 5,056,240 Face value of acquisition notes payable 2.93% 2023 458,188 1,428,384 Total face value of notes payable 458,188 6,484,624 Unamortized discount (7,058) (348,261) Current portion (375,413) (2,568,172) Total long-term debt $ 75,717 $ 3,568,191 |
Schedule of Maturities of Long-term Debt | The approximate future principal payments on notes payable are as presented in the table below. 2022 $ 376,325 2023 81,863 Thereafter — $ 458,188 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table presents significant accounts payable and accrued liability balances as of the periods ending: December 31, 2021 December 31, 2020 Trade payables $ 25,174,805 $ 12,987,487 Payroll liabilities 3,385,307 2,266,643 Contract liabilities 817,955 244,837 Acquisition holdback payments 2,007,294 — Other liabilities 1,529,254 1,298,495 $ 32,914,615 $ 16,797,462 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Unit Activity | RSU activity for the year ended December 31, 2021 is summarized as follows: Number of Restricted Stock Units Weighted Average Grant Value Per Share Outstanding at December 31, 2020 — N/A Granted 17,520 $ 84.19 Vested — N/A Forfeited or canceled — N/A Outstanding at December 31, 2021 17,520 $ 84.19 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | Level 3 liabilities measured at December 31, 2021 and 2020 at fair value on a recurring basis are as follows: 2021 2020 Level 3: Contingent Liabilities $ 2,665,033 $ 571,833 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax | Income before income taxes on which the provision for income taxes was computed is as follows: 2021 2020 2019 Domestic $ 35,647,296 $ 20,546,504 $ 15,375,731 International 3,792,675 2,257,855 1,574,697 Income before income taxes $ 39,439,971 $ 22,804,359 $ 16,950,428 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the US federal statutory rate as follows: 2021 2020 2019 Income before income taxes $ 39,439,971 $ 22,804,359 $ 16,950,428 Statutory rate 21 % 21 % 21 % 8,282,394 4,788,915 3,559,590 State taxes net of federal benefit 649,208 295,097 31,446 Nondeductible/nontaxable items 100,364 49,252 115,679 Tax Impact of foreign operations 170,958 101,625 45,994 Foreign derived intangible income benefit (969,618) (703,328) (287,606) Other - net (360,197) (8,893) (509,747) Income tax expense $ 7,873,109 $ 4,522,668 $ 2,955,356 |
Schedule of Components of Income Tax Expense (Benefit) | The components of the income tax provision (benefit) are as follows: Years ended December 31 2021 2020 2019 Current income tax expense Federal $ 5,051,373 $ 3,572,812 $ 2,412,157 Foreign 1,157,930 815,968 518,528 State 663,654 407,187 3,068 Total current income tax expense 6,872,957 4,795,967 2,933,753 Deferred income tax expense/(benefit) Federal 968,163 (234,176) 99,870 Foreign 3,316 13,854 (78,267) State 28,673 (52,977) — Total deferred income tax expense/(benefit) 1,000,152 (273,299) 21,603 Total $ 7,873,109 $ 4,522,668 $ 2,955,356 |
Schedule of Deferred Tax Assets (Liabilities) | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows: Years ended December 31 2021 2020 Deferred Tax Assets Allowance for Doubtful Accounts $ 48,953 $ 16,081 263(A) Adjustment 122,265 59,852 Accrued Expenses 601,389 399,240 Inventory Reserve 25,978 25,436 Unrealized loss 56,614 37,432 State Tax Credit 151,549 103,350 NOL Carryforward and Other 295,309 160,883 Stock Compensation 38,237 — Capitalized Acquisition Costs 60,627 — Right of Use Lease Liability 2,484,171 1,280,737 Less Valuation Allowance (81,201) — Total deferred tax assets 3,803,891 2,083,011 Deferred Tax Liabilities Fixed and Intangible Assets $ 4,039,066 $ 1,399,311 Unrealized Gain 15,240 15,150 Accretion 1,344 6,852 Cumulative Translation Adjustment — 9,436 Right of Use Lease Asset 2,496,524 1,280,068 Total deferred tax liabilities 6,552,174 2,710,817 Total net deferred tax liabilities $ (2,748,283) $ (627,806) |
Schedule of Unrecognized Tax Benefits Roll Forward | Reconciliation of Unrecognized Tax Benefits from Uncertain Tax Positions Years Ended December 31, 2021 2020 2019 Beginning unrecognized tax benefits $ 129,082 $ — $ — Increase related to tax positions of the current year — — — Increase related tax positions of prior years — 129,082 — Lapse of statute of limitations — — — Audit Settlements — — — Ending unrecognized tax benefits $ 129,082 $ 129,082 $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Balance Sheet Information Related To Leases | Balance sheet information related to operating leases is as follows: December 31, 2021 December 31, 2020 Operating lease right-of-use assets $ 12,909,607 $ 5,973,702 Current portion of operating lease liabilities 2,977,794 1,650,749 Noncurrent portion of operating lease liabilities 9,830,128 4,331,214 Total operating lease liabilities $ 12,807,922 $ 5,981,963 |
Schedule of Weighted Average Remaining Lease Term and Discount Rate Information | Weighted-average information associated with the measurement of our remaining operating lease obligations is as follows: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (in years) 5.1 4.9 Weighted-average discount rate 4.70 % 5.84 % |
Schedule of Maturities of Operating Lease Liabilities | The following table summarizes the maturity of our operating lease liabilities as of December 31, 2021: 2022 $ 3,095,241 2023 3,275,877 2024 2,472,419 2025 1,904,203 2026 1,620,982 Thereafter 2,144,676 Total operating lease payments 14,513,398 Less: interest (1,705,476) Total operating lease liabilities $ 12,807,922 |
ACQUISITION OF BUSINESS (Tables
ACQUISITION OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Completed Acquisitions | The Company completed the following acquisitions during the years ended December 31, 2021, 2020 and 2019: Acquisition Date Name/Location/Description Purchase Price Acquisition Type Acquisition Purpose November 1, 2021 * invisiFRAME, Ltd, Shrewsbury, Shropshire, United Kingdom, bicycle paint protection film pattern designer and retailer $ 7,389,648 Share Purchase Market Expansion October 1, 2021 * Tintnet, Inc. and 1 One Armor, Inc., Scottsdale, Arizona, United States, window and paint protection film distribution and installation $ 13,000,000 Share Purchase Market Expansion October 1, 2021 * 6873391 Canada Ltd. o/a Shadow Shield, 1716808 Alberta Ltd. o/a Shadow Tint, and North 1 Technologies, Calgary, Alberta, Canada, window and paint protection film distribution, installation provider and pattern developer $ 7,177,646 Share Purchase Local market expansion May 25, 2021 PermaPlate Film LLC, Salt Lake City, Utah, United States, Window film distribution and installation business $ 30,000,000 Membership Interest Purchase Market Expansion December 31, 2020 Veloce Innovation, Houston, Texas, United States, Window film installation business $ 1,441,000 Asset Purchase Local market expansion October 30, 2020 France Auto Racing, Dijon, France, Paint protection film distributor $ 329,390 Asset Purchase Local market expansion February 1, 2020 Protex Centre, Laval, Quebec, Canada - Paint protection installation shop $ 2,475,270 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 *The purchase price and purchase price allocation for these acquisitions has not yet been finalized and is preliminary in nature. These figures will be finalized within one year of the acquisition date. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total purchase price for acquisitions completed during the years ended December 31, 2021, 2020 and 2019 are as follows: December 31, 2021 Acquisitions 2020 Acquisitions 2019 Acquisitions Purchase Price Cash 1 $ 54,991,289 $ 2,811,346 $ 127,623 Promissory note — 893,314 — Contingent consideration 2,576,005 541,000 — $ 57,567,294 $ 4,245,660 $ 127,623 Allocation Cash $ 3,788,920 $ 242,808 $ — Accounts receivable 3,250,364 206,808 — Inventory 2,894,866 182,336 — Prepaid expenses and other assets 73,094 3,764 — Other long-term assets 7,377 6,197 — Property and equipment 440,095 161,702 5,038 Right-of-use lease assets — 587,587 — Software — 1,027 — Trade name 2,120,754 — 25,918 Acquired patterns 488,397 — 52,083 Customer relationships 26,328,900 1,896,220 — Non-compete — 179,093 — Goodwill 21,284,381 1,938,656 44,584 Current portion of lease liabilities — (73,297) — Accounts payable and accrued liabilities (1,982,970) (154,802) — Non-current portion of lease liabilities — (514,290) — Assumed debt — (108,764) — Deferred tax liability (1,126,884) (274,333) — Taxes payable — (35,052) — $ 57,567,294 $ 4,245,660 $ 127,623 1 Total cash consideration is comprised of amounts paid on closing dates plus holdback amounts to be paid in the future. |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents our results, including the estimated expenses relating to the amortization of intangibles purchased, as if the acquisitions during the year ended December 31, 2021 had occurred on January 1, 2021 and 2020: Twelve Months Ended December 31, 2021 (Unaudited) 2020 (Unaudited) Revenue $ 287,766,877 $ 201,302,152 Net income $ 33,345,208 $ 21,259,199 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share: Fiscal Year Ended December 31, Numerator 2021 2020 2019 Net income $ 31,566,862 $ 18,281,691 $ 13,977,625 Denominator Weighted average basic shares 27,612,597 27,612,597 27,612,597 Dilutive effect of restricted stock units 132 — — Weighted average diluted shares 27,612,729 27,612,597 27,612,597 Earnings per share Basic $ 1.14 $ 0.66 $ 0.51 Diluted $ 1.14 $ 0.66 $ 0.51 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Ownership Percentages and Functional Currencies (Details) | Dec. 31, 2021 |
XPEL, Ltd. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL Canada Corp. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL B.V. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL Germany GmbH | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL de Mexico S. de R.L. de C.V. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL Acquisition Corp. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
Protex Canada, Inc. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
Apogee Corp. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL Slovakia | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
XPEL France | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
PermaPlate Film, LLC | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
1 One Armor, Inc. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
TintNet, Inc. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
North 1 Technologies, Inc. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
1716808 Alberta, Ltd. o/a Shadow Tint | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
6873391 Canada, Ltd. o/a Shadow Shield | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
invisiFRAME, Ltd. | |
Noncontrolling Interest [Line Items] | |
Ownership percentage | 100.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ 90,844 | $ 250,082 |
Accounts Receivable | Customer Concentration Risk | Large Customers | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 24.70% |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Inventory reserves | $ 114,825 | $ 113,091 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 9,898,126 | $ 4,706,248 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 7,890,492 | 3,110,979 |
Canada | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 655,616 | 674,821 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 1,117,692 | 584,084 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 234,326 | $ 336,364 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 5 years | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 5 years | |
Plotters | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 4 years | |
Minimum | Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 3 years | |
Minimum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 5 years | |
Maximum | Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 4 years | |
Maximum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful life (in years) | 8 years |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Goodwill | $ 25,655,428 | $ 4,472,217 | $ 2,406,512 |
United States | |||
Goodwill [Line Items] | |||
Goodwill | 16,348,332 | 1,246,383 | |
Canada | |||
Goodwill [Line Items] | |||
Goodwill | 5,874,291 | 3,137,153 | |
Other | |||
Goodwill [Line Items] | |||
Goodwill | 3,428,802 | 84,733 | |
Asia | |||
Goodwill [Line Items] | |||
Goodwill | $ 4,003 | $ 3,948 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 32,732,771 | $ 5,423,980 |
United States | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 25,909,551 | 2,597,670 |
Canada | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 3,360,456 | 2,273,627 |
Europe | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 3,277,754 | 337,282 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 185,010 | $ 215,401 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 10 years | |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 5 years | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 10 years | |
Minimum | Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 10 years | |
Minimum | Contractual and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 9 years | |
Minimum | Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 3 years | |
Maximum | Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 15 years | |
Maximum | Contractual and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 10 years | |
Maximum | Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (in years) | 5 years |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Impairment loss of intangible assets, excluding goodwill | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLIC_12
SIGNIFICANT ACCOUNTING POLICIES - Research and Development (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Research and development expense | $ 370,012 | $ 143,568 | $ 602,446 |
SIGNIFICANT ACCOUNTING POLIC_13
SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 1,106,185 | $ 571,204 | $ 908,585 |
SIGNIFICANT ACCOUNTING POLIC_14
SIGNIFICANT ACCOUNTING POLICIES - Provisions and Warranties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance warranty liability | $ 52,006 | $ 65,591 |
Warranties assumed in period | 398,075 | 283,458 |
Payments | (374,752) | (297,043) |
Ending balance warranty liability | $ 75,329 | $ 52,006 |
REVENUE - Schedule of Transacti
REVENUE - Schedule of Transactions Within Contract Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Deferred Revenue [Roll Forward] | |||
Beginning contract liabilities | $ 244,837 | $ 559,232 | $ 136,213 |
Revenue recognized related to payments | (198,982) | (529,268) | (115,670) |
Payments received for which performance obligations have not been satisfied | 773,297 | 210,064 | 537,683 |
Effect of Foreign Currency Translation | (1,197) | 4,809 | 1,006 |
Ending contract liabilities | $ 817,955 | $ 244,837 | $ 559,232 |
REVENUE - Schedule of Disaggreg
REVENUE - Schedule of Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 259,263,077 | $ 158,924,448 | $ 129,932,881 |
Product revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 217,282,531 | 136,262,067 | 112,204,739 |
Paint protection film | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 169,879,447 | 110,786,164 | 97,341,865 |
Window film | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 38,363,432 | 20,950,591 | 11,384,437 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 9,039,652 | 4,525,312 | 3,478,437 |
Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 41,980,546 | 22,662,381 | 17,728,142 |
Software | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 4,373,083 | 3,489,348 | 3,263,391 |
Cutbank credits | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12,371,991 | 7,784,554 | 7,253,610 |
Installation labor | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 24,252,774 | 10,925,525 | 6,620,527 |
Training | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 982,698 | $ 462,954 | $ 590,614 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
The China Distributor | Customer Concentration Risk | Revenue from Contract with Customer Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 17.90% | 20.60% | 23.50% |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 16,129,319 | $ 9,207,729 |
Less: accumulated depreciation | 6,231,193 | 4,501,481 |
Property and equipment, net | 9,898,126 | 4,706,248 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 2,146,522 | 1,349,037 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 2,201,462 | 1,482,911 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 821,678 | 760,335 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 3,571,517 | 1,955,254 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 5,137,705 | 2,055,798 |
Plotters | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 2,132,930 | 1,282,630 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 117,505 | $ 321,764 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 1,887,048 | $ 1,274,095 | $ 915,918 |
INTANGIBLE ASSETS, NET - Schedu
INTANGIBLE ASSETS, NET - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 38,987,632 | $ 9,185,573 |
Less: Accumulated amortization | 6,254,861 | 3,761,593 |
Intangible assets, net | 32,732,771 | 5,423,980 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 500,136 | 373,374 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 3,431,276 | 2,598,985 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,578,877 | 497,545 |
Contractual and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 31,325,826 | 5,043,915 |
Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 458,655 | 458,536 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 692,862 | $ 213,218 |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 2,500,620 | $ 955,937 | $ 781,105 |
INTANGIBLE ASSETS, NET - Sche_2
INTANGIBLE ASSETS, NET - Schedule of Future Amortization Expense of Finite-Lived Intangible Assets (Details) | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 4,491,314 |
2023 | 4,370,107 |
2024 | 4,077,835 |
2025 | 3,818,080 |
2026 | 3,708,301 |
Thereafter | $ 12,267,134 |
GOODWILL - Schedule of Goodwill
GOODWILL - Schedule of Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill beginning balance | $ 4,472,217 | $ 2,406,512 |
Additions | 21,284,381 | 1,938,656 |
Foreign currency translation | (101,170) | 127,049 |
Goodwill ending balance | $ 25,655,428 | $ 4,472,217 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,698,512 | $ 0 |
Work in process | 180,009 | 0 |
Finished goods | 49,057,643 | 22,364,126 |
Inventory, net | $ 51,936,164 | $ 22,364,126 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | May 21, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021CAD ($) | Dec. 29, 2021USD ($) | May 20, 2021USD ($) | Dec. 31, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||
Notes payable | $ 458,188 | |||||
The Bank of San Antonio | Term-loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Notes payable | $ 6,000,000 | |||||
Line of Credit | The Bank of San Antonio | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||
Line of credit facility interest rate equal to or less than) | 2.50% | 2.50% | ||||
Line of Credit | The Bank Of San Antonio | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 57,000,000 | $ 8,500,000 | ||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | |||||
Interest expense, debt | $ 154,549 | |||||
Amount outstanding | 25,000,000 | |||||
Debt instrument, covenant, funded debt to EBITDA ratio, maximum | 3.50 | |||||
Covenant, debt service coverage ratio required, minimum | 1.25 | |||||
Line of Credit | The Bank Of San Antonio | Revolving Credit Facility | Scenario One | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility interest rate equal to or less than) | 200.00% | |||||
Line of Credit | The Bank Of San Antonio | Revolving Credit Facility | Scenario Two | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility interest rate equal to or less than) | 200.00% | |||||
Line of Credit | HSBC Bank Canada | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 4,500,000 | |||||
Amount outstanding | $ 0 | $ 0 | ||||
Prime Rate | Line of Credit | The Bank Of San Antonio | Revolving Credit Facility | Scenario One | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on prime rate | 0.75% | |||||
Prime Rate | Line of Credit | The Bank Of San Antonio | Revolving Credit Facility | Scenario Two | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on prime rate | 0.25% | |||||
Prime Rate | Line of Credit | HSBC Bank Canada | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on prime rate | 0.25% |
DEBT - Schedule of Notes Payabl
DEBT - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 458,188 | $ 6,484,624 |
Unamortized discount | (7,058) | (348,261) |
Current portion | (375,413) | (2,568,172) |
Total long-term debt | $ 75,717 | 3,568,191 |
Term-loan | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 3.50% | |
Total debt | $ 0 | 5,056,240 |
Face value of acquisition notes payable | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 2.93% | |
Total debt | $ 458,188 | $ 1,428,384 |
DEBT - Schedule of Debt Maturit
DEBT - Schedule of Debt Maturities (Details) | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 376,325 |
2023 | 81,863 |
Thereafter | 0 |
Notes payable | $ 458,188 |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Contribution expense | $ 531,573 | $ 278,434 | $ 174,744 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Schedule of Accounts Payable and Accrued Liability (Details) - USD ($) | Dec. 31, 2021 | Oct. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | |||||
Trade payables | $ 25,174,805 | $ 12,987,487 | |||
Payroll liabilities | 3,385,307 | 2,266,643 | |||
Contract liabilities | 817,955 | 244,837 | $ 559,232 | $ 136,213 | |
Acquisition holdback payments | 2,007,294 | $ 2,007,294 | 0 | ||
Other liabilities | 1,529,254 | 1,298,495 | |||
Accounts payable and accrued liabilities | $ 32,914,615 | $ 16,797,462 |
CAPITAL STOCK - Narrative (Deta
CAPITAL STOCK - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||||
Common stock par value issued | $ 27,613 | $ 27,613 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock issued (in shares) | 27,612,597 | 27,612,597 | ||
Common stock outstanding (in shares) | 27,612,597 | 27,612,597 | 27,612,597 | 27,612,597 |
Common stock par value issued | $ 27,613 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | May 28, 2020 | |
Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 275,000 | |
Maximum term in number of years | 10 years | |
Maximum number of allocated and made available to be issued shares as a percent | 10.00% | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 169,012 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of Restricted Stock Units | |
Number of Restricted Stock Units, Beginning Balance (in shares) | 0 |
Granted (in shares) | 17,520 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Number of Restricted Stock Units, Ending Balance (in shares) | 17,520 |
Weighted Average Grant Value Per Share | |
Granted (in dollars per share) | $ / shares | $ 84.19 |
Ending Balance (in dollars per share) | $ / shares | $ 84.19 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Level 3 | Recurring | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Business Combination, Contingent Consideration, Liability | $ 2,665,033 | $ 571,833 |
INCOME TAXES - Income Before In
INCOME TAXES - Income Before Income Tax (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 35,647,296 | $ 20,546,504 | $ 15,375,731 |
International | 3,792,675 | 2,257,855 | 1,574,697 |
Income before income taxes | $ 39,439,971 | $ 22,804,359 | $ 16,950,428 |
INCOME TAXES - Income Taxes Pro
INCOME TAXES - Income Taxes Provision Difference (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Income before income taxes | $ 39,439,971 | $ 22,804,359 | $ 16,950,428 |
Statutory rate | 21.00% | 21.00% | 21.00% |
Income statutory rate amount | $ 8,282,394 | $ 4,788,915 | $ 3,559,590 |
State taxes net of federal benefit | 649,208 | 295,097 | 31,446 |
Nondeductible/nontaxable items | 100,364 | 49,252 | 115,679 |
Tax Impact of foreign operations | 170,958 | 101,625 | 45,994 |
Foreign derived intangible income benefit | (969,618) | (703,328) | (287,606) |
Other - net | (360,197) | (8,893) | (509,747) |
Income tax expense | $ 7,873,109 | $ 4,522,668 | $ 2,955,356 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of the Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current income tax expense | |||
Federal | $ 5,051,373 | $ 3,572,812 | $ 2,412,157 |
Foreign | 1,157,930 | 815,968 | 518,528 |
State | 663,654 | 407,187 | 3,068 |
Total current income tax expense | 6,872,957 | 4,795,967 | 2,933,753 |
Deferred income tax expense/(benefit) | |||
Federal | 968,163 | (234,176) | 99,870 |
Foreign | 3,316 | 13,854 | (78,267) |
State | 28,673 | (52,977) | 0 |
Total deferred income tax expense/(benefit) | 1,000,152 | (273,299) | 21,603 |
Income tax expense | $ 7,873,109 | $ 4,522,668 | $ 2,955,356 |
INCOME TAXES - Schedule of Co_2
INCOME TAXES - Schedule of Components of Deferred Income Tax Assets (Liabilities) (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets | ||
Allowance for Doubtful Accounts | $ 48,953 | $ 16,081 |
263(A) Adjustment | 122,265 | 59,852 |
Accrued Expenses | 601,389 | 399,240 |
Inventory Reserve | 25,978 | 25,436 |
Unrealized loss | 56,614 | 37,432 |
State Tax Credit | 151,549 | 103,350 |
NOL Carryforward and Other | 295,309 | 160,883 |
Stock Compensation | 38,237 | 0 |
Capitalized Acquisition Costs | 60,627 | 0 |
Right of Use Lease Liability | 2,484,171 | 1,280,737 |
Less Valuation Allowance | (81,201) | 0 |
Total deferred tax assets | 3,803,891 | 2,083,011 |
Deferred Tax Liabilities | ||
Fixed and Intangible Assets | 4,039,066 | 1,399,311 |
Unrealized Gain | 15,240 | 15,150 |
Accretion | 1,344 | 6,852 |
Cumulative Translation Adjustment | 0 | 9,436 |
Right of Use Lease Asset | 2,496,524 | 1,280,068 |
Total deferred tax liabilities | 6,552,174 | 2,710,817 |
Total net deferred tax liabilities | $ (2,748,283) | $ (627,806) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 1,173,585 | |
Operating loss carryforwards, not subject to expiration | 892,888 | |
State tax credit | 151,549 | $ 103,350 |
Unrecognized tax benefits, decrease resulting from foreign subsidiaries | 165,965 | |
Unrecognized tax benefits that would impact effective tax rate | 129,082 | |
Operating loss carryforwards, valuation allowance | $ 280,697 |
INCOME TAXES - Schedule of Unre
INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning unrecognized tax benefits | $ 129,082 | $ 0 | $ 0 |
Increase related to tax positions of the current year | 0 | 0 | 0 |
Increase related tax positions of prior years | 0 | 129,082 | 0 |
Lapse of statute of limitations | 0 | 0 | 0 |
Audit Settlements | 0 | 0 | 0 |
Ending unrecognized tax benefits | $ 129,082 | $ 129,082 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Quarterly purchase commitment | $ 5,000,000 |
LEASES - Schedule of Balance Sh
LEASES - Schedule of Balance Sheet Information Related to Leases (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 12,909,607 | $ 5,973,702 |
Current portion of operating lease liabilities | 2,977,794 | 1,650,749 |
Noncurrent portion of operating lease liabilities | 9,830,128 | 4,331,214 |
Total operating lease liabilities | $ 12,807,922 | $ 5,981,963 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease expense | $ 2,664,025 | $ 1,515,848 | $ 1,210,969 |
Short-term lease expense | 548,903 | 513,016 | |
Operating lease payment | $ 2,730,439 | 1,460,422 | |
Variable lease payment | $ 234,175 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Remaining Lease Term and Discount Rate Information (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 5 years 1 month 6 days | 4 years 10 months 24 days |
Weighted-average discount rate | 4.70% | 5.84% |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 3,095,241 | |
2023 | 3,275,877 | |
2024 | 2,472,419 | |
2025 | 1,904,203 | |
2026 | 1,620,982 | |
Thereafter | 2,144,676 | |
Total operating lease payments | 14,513,398 | |
Less: interest | (1,705,476) | |
Total operating lease liabilities | $ 12,807,922 | $ 5,981,963 |
ACQUISITION OF BUSINESS - Sched
ACQUISITION OF BUSINESS - Schedule of Business Combinations Complete by Year-End (Details) - USD ($) | Nov. 01, 2021 | Oct. 01, 2021 | May 25, 2021 | Dec. 31, 2020 | Oct. 30, 2020 | Feb. 01, 2020 | Dec. 20, 2019 |
invisiFRAME, Ltd. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 7,389,648 | ||||||
TintNet, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 13,000,000 | ||||||
6873391 Canada, Ltd. o/a Shadow Shield | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 7,177,646 | ||||||
PermaPlate Film, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 30,000,000 | ||||||
Veloce Innovation | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 1,441,000 | ||||||
France Auto Racing | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 329,390 | ||||||
Protex Centre | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 2,475,270 | ||||||
Paintshield, Ltd | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 127,623 |
ACQUISITION OF BUSINESS - Sch_2
ACQUISITION OF BUSINESS - Schedule of Acquisition Purchase Price (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allocation | |||
Goodwill | $ 25,655,428 | $ 4,472,217 | $ 2,406,512 |
2021 Acquisitions | |||
Purchase Price | |||
Cash | 54,991,289 | ||
Promissory note | 0 | ||
Contingent consideration | 2,576,005 | ||
Purchase price | 57,567,294 | ||
Allocation | |||
Cash | 3,788,920 | ||
Accounts receivable | 3,250,364 | ||
Inventory | 2,894,866 | ||
Prepaid expenses and other assets | 73,094 | ||
Other long-term assets | 7,377 | ||
Property and equipment | 440,095 | ||
Right-of-use lease assets | 0 | ||
Goodwill | 21,284,381 | ||
Current portion of lease liabilities | 0 | ||
Accounts payable and accrued liabilities | (1,982,970) | ||
Non-current portion of lease liabilities | 0 | ||
Assumed debt | 0 | ||
Deferred tax liability | (1,126,884) | ||
Taxes payable | 0 | ||
Assets acquired and liabilities assumed, net | 57,567,294 | ||
2021 Acquisitions | Software | |||
Allocation | |||
Intangible assets | 0 | ||
2021 Acquisitions | Trade name | |||
Allocation | |||
Intangible assets | 2,120,754 | ||
2021 Acquisitions | Acquired patterns | |||
Allocation | |||
Intangible assets | 488,397 | ||
2021 Acquisitions | Contractual and customer relationships | |||
Allocation | |||
Intangible assets | 26,328,900 | ||
2021 Acquisitions | Non-compete | |||
Allocation | |||
Intangible assets | $ 0 | ||
2020 Acquisitions | |||
Purchase Price | |||
Cash | 2,811,346 | ||
Promissory note | 893,314 | ||
Contingent consideration | 541,000 | ||
Purchase price | 4,245,660 | ||
Allocation | |||
Cash | 242,808 | ||
Accounts receivable | 206,808 | ||
Inventory | 182,336 | ||
Prepaid expenses and other assets | 3,764 | ||
Other long-term assets | 6,197 | ||
Property and equipment | 161,702 | ||
Right-of-use lease assets | 587,587 | ||
Goodwill | 1,938,656 | ||
Current portion of lease liabilities | (73,297) | ||
Accounts payable and accrued liabilities | (154,802) | ||
Non-current portion of lease liabilities | (514,290) | ||
Assumed debt | (108,764) | ||
Deferred tax liability | (274,333) | ||
Taxes payable | (35,052) | ||
Assets acquired and liabilities assumed, net | 4,245,660 | ||
2020 Acquisitions | Software | |||
Allocation | |||
Intangible assets | 1,027 | ||
2020 Acquisitions | Trade name | |||
Allocation | |||
Intangible assets | 0 | ||
2020 Acquisitions | Acquired patterns | |||
Allocation | |||
Intangible assets | 0 | ||
2020 Acquisitions | Contractual and customer relationships | |||
Allocation | |||
Intangible assets | 1,896,220 | ||
2020 Acquisitions | Non-compete | |||
Allocation | |||
Intangible assets | $ 179,093 | ||
2019 Acquisitions | |||
Purchase Price | |||
Cash | 127,623 | ||
Promissory note | 0 | ||
Contingent consideration | 0 | ||
Purchase price | 127,623 | ||
Allocation | |||
Cash | 0 | ||
Accounts receivable | 0 | ||
Inventory | 0 | ||
Prepaid expenses and other assets | 0 | ||
Other long-term assets | 0 | ||
Property and equipment | 5,038 | ||
Right-of-use lease assets | 0 | ||
Goodwill | 44,584 | ||
Current portion of lease liabilities | 0 | ||
Accounts payable and accrued liabilities | 0 | ||
Non-current portion of lease liabilities | 0 | ||
Assumed debt | 0 | ||
Deferred tax liability | 0 | ||
Taxes payable | 0 | ||
Assets acquired and liabilities assumed, net | 127,623 | ||
2019 Acquisitions | Software | |||
Allocation | |||
Intangible assets | 0 | ||
2019 Acquisitions | Trade name | |||
Allocation | |||
Intangible assets | 25,918 | ||
2019 Acquisitions | Acquired patterns | |||
Allocation | |||
Intangible assets | 52,083 | ||
2019 Acquisitions | Contractual and customer relationships | |||
Allocation | |||
Intangible assets | 0 | ||
2019 Acquisitions | Non-compete | |||
Allocation | |||
Intangible assets | $ 0 |
ACQUISITION OF BUSINESS - Narra
ACQUISITION OF BUSINESS - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets weighted average useful life (in years) | 9 years | 9 years | 2 years | |
Acquisition holdback payments | $ 2,007,294 | $ 0 | $ 2,007,294 | |
Revenue | 287,766,877 | 201,302,152 | ||
Net income | 33,345,208 | $ 21,259,199 | ||
2021 Acquisitions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Revenue | 16,569,435 | |||
Net income | $ 1,569,235 | |||
2020 Acquisitions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Revenue | $ 3,816,509 | |||
Net income | $ 1,125,311 |
ACQUISITION OF BUSINESS - Sch_3
ACQUISITION OF BUSINESS - Schedule of Pro Forma Results (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 287,766,877 | $ 201,302,152 |
Net income | $ 33,345,208 | $ 21,259,199 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | |||
Net income | $ 31,566,862 | $ 18,281,691 | $ 13,995,072 |
Denominator | |||
Weighted average basic shares (in shares) | 27,612,597 | 27,612,597 | 27,612,597 |
Dilutive effect of restricted stock units (in shares) | 132 | 0 | 0 |
Weighted average diluted shares (in shares) | 27,612,729 | 27,612,597 | 27,612,597 |
Earnings per share | |||
Basic (in dollars per share) | $ 1.14 | $ 0.66 | $ 0.51 |
Diluted (in dollars per share) | $ 1.14 | $ 0.66 | $ 0.51 |