XPEL - Earnings call 3 2023

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Operator

Good day, everyone, and welcome to the XPEL, Inc.

Third Quarter 2023 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, John Nesbett, IMS Investor Relations. Sir, the floor is yours.

John Nesbett

Good morning, and welcome to our conference call to discuss XPEL's financial results for the third quarter of 2023.

overview Ryan Wood, President and financial XPEL's Officer, provide today, Officer; Chief Chief results. call operations will Barry business and Senior an the Pape, the and XPEL's Executive Financial and On review the company's of Vice President of company's Immediately transcript website call. comments, after call prepared be will the take questions the call after our available from we'll participants. A this on the safe harbor I'll statement. take read a moment the to

and growth Inc. materially and statements and subject During anticipated forward-looking and expressed are XPEL, the capital course from statements but new uncertainties include, we'll the this based use into on cause and factors those markets statements. from to, known strategy. Such actual results business, certain that make assumptions, company's differ in its could are of call, to proceeds transactions, which current limited expectations these to may expansion execution which regarding not of risk are unknown of

are in Commission. Risk of the Exchange Factors and discussed XA Some Securities in filed Item recent factors our Form including the detail these with under XX-K, most

obligation no statement, or of revise events any information, publicly as a undertakes XPEL result update whether new otherwise. future to or forward-looking

Ryan. that, turn call With Go the Okay. ahead, over now to Ryan. I'll

Ryan Pape

growth quarter-over-quarter XXXX, with the as growing good revenue welcome still the XX.X%. growth X% expectations nice XX.X% XXXX to increase or sequential call. impacted for our to discussed conference a Thank non-China million. morning, and was we our quarter third a our everyone, on you, Overall from QX $XXX.X from John, from was QX quarter expected, strong revenue revenue rate another call. China and have and Also, me in did line our decline QX which in quarter. also and We what This had

to which grew million. region XXXX compared quarter. was U.S. flat QX, a itself XX.X% to Sequentially, was this to essentially $XX record QX Our

for a revenue, serves growth the interest was slight overall, we saw front But customers summer, QX very significant aftermarket results. overall channel relatively peak XXXX this higher us our of as our continued quarter has QX it's And U.S. quarter off is rate tell driver pace Our versus sales see so know, of been new the our despite of we consistent as our did year. lines U.S. now solid XX% rate car watch in you And a the performance fever last of the closely. their the our customers XXXX. environment. We overall business but probably business of be QX. this in marketing in reduction to

that each know I strategy back to for reach of an business multiple and other our our you I the so each want a discuss and customer enable of many take closely, our expanding and opportunity our to to you in how view, the channels, and industry base. complement channel step cover minute covers us

the you many as So paint in of film started exclusively aftermarket. almost protection know,

product And or independently out applied. shop to he car had her first the about the then to into an TPS his have would consumer owned find take

set as buyer. consumer XX% around large to dominate And installation all the a is of and adopt gross aftermarket And profit. staff PPF. can many installers their effective, for to need a a this to technical outsource dealerships in demand and staff. cases, channel, car to simple service a to be or customers have things. the because know, aftermarket to So dealerships of don't of you hire this model or of their still want off, installation center and began move product new own for absences just as reality generate small we fire time And challenging. Consumers be skill trained the reason purchase an make internal be person. recruit, yet the This internal one PPF dealerships Enthusiast to excellence represents buyers. Over in around channel enthusiast to dealership they may in the other saw to can estimate portion challenging that and adoption only time, hiring buyers the they some dealerships dealerships team a for it need

you're presence So are do services. do provide these find they to to exist. time, customers whatsoever some these successfully acquired other our though paint ton. services as or to able even of dealerships. not PPF no over to time teams dealerships In case, to going same businesses window and several they'll protection our themselves for dealership We've choose customers that likely refer to are there film the continue build internal it. At We this have on and dealer retail them locator who and

that so And ourselves. we're in business

of as analyze you scaling dealerships are understand the this human substantially and requires rates penetration a it's enterprise typically a reinvestment in is of really way. It's and a capital across the Likewise, As much constant meet high decided, see our important in installation consistent in aftermarket installers into their to locally patchwork a industry, scaling its that implementation. and groups to flow dealership cash very scale more internally you business. few don't universally interested something it's

more opt the in our work they sell aftermarket And grow. the continued on aftermarket are trust. the part car dealerships then And One, seeking directly for PPF installation disruptive not of a as in mentioned to the more continue who new into and for PPF, in market whole, will a channel doing from PPF dealerships view, someone obviously, of the as some still, ago. largest third, by their buyers take is still aftermarket, for has who cases, reasons. minute original several bespoke and then the create I the channel this work dealership more were often buyers, awareness even this participates the overall to So enthusiast ultimately PPF out to this

people begin continue adopt as we've PP, attractive finding are attach by is efficiency. from that of interest the because seen the net-net, would take Installing is the And near again, together motivated. dealership's vehicles for OEMs into So develop. car to or rates the this never to dealerships manufacturer increasing And the their at offering delivery aftermarket. profit interest is PPS point located

The to human any number automated available you processes. do a substantial need is installation a downside currently without and vehicles capacity still considerable footprint manually a as of physical is done installation

to there's limit the that in achieved that ultimately So a can be scale environment.

have to again, to the buyer to that are predominant profit always control. And more generate internalize the and programs being dealerships product would more select Additionally, programs may they because OEM and manufacturer's their who option can enthusiast prefer the believe have original by not and they served susceptible note, it's important is for prefer ability don't and by their like which to captured and workmanship those the other consumers, not about whose overall. they of they reach know local whom that know installer product, yet grow OEMs element the and awareness and consumer still prefer, helping dealerships, any trust channel to the quality

when totality, in cannibalization one mix as development you activities the to So see channel it from segment healthy business to aggregate market. don't the of mandatory we at look another. see of and of and PPF direct the we the

past have for kids at software our end for can many of In as paint separate rate seen few the say, would our traditional over XPEL, ever have front vehicle, XPEL. In or from, the attach be applications internal dealership would and our particular, rates an additional. PPF various we example, related relates we you protection, participation car estimating vehicle been it's revenue attach even a As DAP vehicle the products than is years, to mix. that for bigger look the measures, or be as or this the aftermarket in which it the of including full wear-and-tear

view helping of to more initial It's and factory we our rates buyers grow with U.S. other new case are recent XPEL aftermarket case, of the than makes. a overall. the So OEM attach is manufacturers a In in to development as EV our program, the model an have example, higher likely towards is are the or skew program this new brand enthusiasts. rates many Rivian, whom attach of like a that incremental

So accessible, be similar buy will but dynamics. more industry change attachment time, there's the appeal, with more the be particularly to rates over if higher to the we mass market overall profile price more is would expect initially, if point

less see attach to the production simply, and appeal. new this be buyer put incremental expect time, a vehicle expand go on of is to an likely down enthusiast. This type So rates might means, their market we they as mass over

least this it, enthusiast are the take effective mainstream. We And simply an higher. Tesla, marketing open our said, product than early multiples our time. appropriate example, just of is So the higher process, rate and before, we'll to excluding them wouldn't port OEM likely as vehicle the higher, that this even take into is the rate do consumers there. reach new to new U.S. the channel during variety is to example, XX% today, is for for they XX% pride are I over XX% the access continue substantially as they of for Porsche dominating attach meet U.S. ownership product to yet sales buyer it a network Those of exists enthusiast dominated and the good because free presence example, an estimate consumers trends. that, group our to of protection substantially average Other or earlier selling care. price about core film price the due if of has a and the of if to point and after attach and and vehicle. That an the review again, into at car it because learn we But operation, sale of actually, mentioned easily buy similar is will estimation enthusiast percentage because Overall, that the beyond approaches provide large our with a value. To it never follow buyer channels very the to will don't the probably higher and their range can and at dealer XX% expand activities of product. makes a paint point buyer not that if can market, a enthusiasts that take and they

So part sustained ability U.S. the and us I a uniquely demand our U.S. takes wherever key growth. on to know us there drive the channel to digest strategy to that's be positions a on to but our of is lot summarize, our go-to-it

of expectations and growth substantially XXXX QX year which over mentioned approximately a we Canadian but was led in quarter. our X% with dollar XX% China's time. last still year the QX rates. Canada over highest So the impacted Most would previously, exchange prior consistent that over saw America I over QX this as year, that was was QX prior turning performance decline quarterly region, quarters, quarter quarter QX results. by XX.X% posted bit weakened back the year. The by our of sequential which ship revenue recent years. XXXX, using forecast for is revenue our FX Canada's our we And had a assuming growth China Latin and in from and product which other highest in XX.X% have the European our received one rate regions region, QX all grew as grown indicate to the growth positive we solid be from quarters our can forecast distribution would would of China as our

update good overall variety Of country course, we to of past, the but want track a in of course, team goals be on in remain it that terms at can as of to eliminate also China. in sell-through. And work in sell-in go-to-market to a as is India beginning end as have that China, at the And year the we that our lumpiness infancy. direct business establishing project for we're versus have and this in which China. I and the of the quarter of change our we're we're a will first in one assess our its facility they looking as for things our also this will year as aspects of optimistic of on initial we at develops it's doing approach more be opened on the our and with China market you

some past, trade-off QX our and our which the we lowest see seasonality quarter. QX does in drop-off in U.S. As is our a typically business we've and quarters discussed in have QX, QX. then highest being

for of the would million which be revenue to China, earlier, expectations the Given range, can we million on discussed in we've growth this XX% QX $XXX our that the annual revenue forecast, year. XX% rate our expect mentioned assuming I end deliver we toward lower $XX put to as to range in the

in have and On improved margin moved around chain run than $X of at margin, had our And inventory did concerns the into a throughput. the finished adjustments coming and gross years we our is prior, we've XX.X%, onetime the million for for year bit quarter our We which as the manufacturing rate. year-to-date off supply quarter. lower we've

and remnants to as longer process be more safety challenging to and other have is We commercially retained material stock. no that offcuts a that needs

And that of the you adjustment so see that's sort here.

Our and will improve continue has. already processes to area in this

So out been if been year. probably perhaps a gross our quarter-to-quarter margin from want gross little for away that, don't of is certainly choppy some of period. that you this adjustment terrific. But And normalize margin has picture profile would from the big have where our to take I less improving

on nothing's to gross the beyond. quarter in our other opportunities the combined price outlook and of purchase XXXX closed in and expect X changed terms margin margin at/or the We updates, business in $XX XX% with profile acquisitions margin for million. still to gross near expand expect to to So of expansion. fourth we gross then related still the that our close continue year In around

Canadian-based a to came X was of locations chain One market. installation that

The installing around was a that and other add in OEMs we've should year at million will go-to-market $XX X scale. European-based full Both a these our XXXX revenue. discussed, of business complement strategy product nicely for small you and

the X model our of that the in also year and We remainder the to direct have distributor. started last in market close Australia the that acquisitions supplement one in in our one year, with to of acquisition U.S.

is core this the excess expect and for think pipeline all strategy our X still on this we acquisition acquisition focused deploy cash use remains Our that targets. into The of and best healthy, we to our cash. strategy,

we're expand make to other might First, markets key looking distribution to we're our acquiring our distributors globally, sense.

highest can all is I example mentioned country. Our the that of Australia acquisition, profile system, execute second a a revenue of margin on to year directly ago, the we prior acquisition from where had the in the last we this, Xx we in great facets have go-to-market and

are to customer, before, the successful awareness As more as discussed we market we the product that we've are in closer the end particular propagates.

lot or are have the of dozen as dozen acquisition TPU, that to been of for at like is the with wraps market the then covered, sort have you a some we where mainstay all colored construction things PPF my marketing process. It's get of a this products, adjacent few to the X market made or half given to more part an change. Secondly, ensure is entire on cast business. service dealership we tie obviously don't and some this. Today, TPU-based a current for its install the product manual challenges disassemble you've for driven target. to gaps paint probably installation, a market historically, we're painted you film, that more channel a into than film. There complement that don't surfaces We vinyl of bit is And films more to And traditional And or the the possible about scenes of remarks the which where vinyl color vehicle in similar is that or protection purposes films. finally, films what the of dozen it any past coverage. because think products invest One of services, a lines color earlier. well Wrapping the asked application current into PPF you'll is used we'll are vinyl more TPU-based difficult want seen films. vehicle of. looking look portfolio. see a may colored presence in colored adjacent part served have an a cases, be our and today market protection TPU vehicle to by can over example always in now as same so paint or in years,

for in be through unlikely, parts roofs, as if of we'll However, they and our and the vehicle mass a graphics see final difficulty soon, and what's continue for paint films colors, car the lack to bespoke and a process, given quality of customer like then to they that offered of integrated repairability ever. It's automated anytime attractive need used in more Many installed colored installers and because business a of replace including it's things to base. not into potential contrast reliable are protection opinion, select capability likely came for the larger wrap for today are the business painted paint manufacturing the and our off-line and or more marketing build. the film from installation fleet, business cost now aftermarket installation, traditional PPF found full

the of important suppliers that our we've this context, and its should overall extended that in something though business reduce to the priorities So an suppliers as it's the for lines, had something that materials of even with in to pay us, film terms expand product. XPEL, product our be particular, threatens adjacent relative most decide of next converting business years. markets the and raw In very over to of participate us, approach all colored to it. Across we future can are our one should to our wait-and-see in and base we've developed a market seen not protection probably it, wrap TAM

since diversified outsourced Even asset-light using as model we've manufacturing with strong had the Intratech. XX-year model relationship that inception, a we've used and manufacturing and we've that long-standing

in it formed venture years. possible that period with joint which we colored film a that the venture leadership. with with opportunities year, their Intratec joint many PPF was And a around ways Intratec. We're for over many had senior developed collaboration Intratec PPG do this actively products. Earlier of announced are had there might with discussing welcome PPG. We

a our and team here Next, provide leadership let brief update. turn to me

Remis business our in of Moro as held serving retire from has XXXX Vice all including He additions XX you acquired including the and a of will running has to our him industry excited group we automotive the VP recently, commercial the ever has Tony a experience, X joined missed. We As know, Product. also We Senior increasing about and wish partnerships. since. us of leader dealership positions in Matt of business be decided after automotive after wealth Tony and Sales many of in Revenue joined as responsibility, Canada best. his President company responsibility our And I'm top a capital. has time revenue in and venture strategy

going that but in be. regions, also leadership both across a organization company It's team. And a President no we to East a we we further our the critical key and on got the have operating our board. have brought People we need is changes that great and addition and region Really the tomorrow we and Tim on even of we to mentioned best And will So employees even finally, Middle a as model. the nearly a on organization. We're in decision-making Steiner, Culture. we've Asia, as the now Kim earlier, helping he's growing integral have diverse that operate on and remain around Vice of and forward And reflect drive her to customer importantly role. centers excited working as around be X,XXX key process India to culture around with in doing agile that our what's number internal to business ensure to functions for attitude, decentralized have the been sufficiently

care through show, the in you I'm display paint amazing of to attended and our discussed a film, And of initiatives proud house, into on is other buyer drive know global annual we social year, the products its marketing for which XXXX, non-enthusiast shows as a of got I next there of we innovative there, existence. all the automotive the protection lifetime have then launching our aftermarket have new additionally, including e-commerce just which of web additional really received. We've an number was of great car with the selling earlier. showcased programs our market sponsorships largest well car that of largest I vehicle. and one products may in trade universally marketing global our over to platform SEMA with the increase to we the ship lot touch customers Finally, going the presence on of for have points platform targeted expel kind more a launching their next seen year media way. event enhanced which

is it been the take business. first obviously, business. And And business We're about Before opportunity our providing for by the Barry, by on an our I've intense has deal a we the the strong by our are to note, lines strategy. this the noise bit on team remain that to the in customers, turning outstanding focus more built geography, quarter. diverse having never long-term want quite diverse a industry-leading over on channels strong on track there's then and And have external and optimistic based always XPEL, and for great a best speculation. focused fact executing year been business, product we of a on on and strength very during just a customers. been to conjecture go-to-market of and service and by

that, So Barry. I'll to it with turn over

Barry Wood

morning, good everyone. and Ryan, Thanks,

our Just a color bit little more revenue. on

the little product cutbank quarter and protection sequentially a If at paint was in the revenue you grew under X.X% film look and up combined lines, X%.

a grew up of total quarter total our XX% which revenue. grew the QX. previous Our Vision in included film which in of sequentially, total this And quarter represented record line, this info and product XX% approximately approximately film window overall revenue film, to was the billion, represented X.X% XX% this in highest and revenue our $X.X revenue. million was for QX. Revenue XX.X% of history, included quarter-over-quarter high to window over window window film And which coming the second is XX.X% $XX.X off line for our the in line product product

in vacation. little OEMs a million, down also quarter bit revenue growing of August for stops European nice business and OEM to Our $X.X production this with under QX for XX% had a XXXX our sequentially most a as little was versus

sequential the and normal was expected. decline So

included to total Our represented other and in is revenue, coating quarter. XX% grew for which the million product Fusion line, quarter for our revenue revenue $X.X the ceramic X.X% of

installation revenue, total on total of product a Our represented and revenue. quarter in grew and total XX.X%. grew the service year-to-date XX.X% basis, combining XX.X% And revenue

XX.X% QX total our included relocation Our costs legal SG&A represented to million and to that grew and fees revenue expense in QX approximately related of SG&A XX.X% discussed related executive was $XX.X and onetime million $X.X acquisitions of we earlier. to

$X.X We related incurred onetime some research and to in costs around also development approximately million some new development. product

to for normalize per grown year-to-date for finished and the reflecting If X.X% for items the EPS quarter quarter would would EBITDA income XX.X%. began the because and when and items grown we about of XX% some those should happen. would aftermarket And million, quality grew XX.X%. Net per XX.X% Ryan that $XX.X operate QX, And late this experiencing for net we has that $X.XX our EBITDA inventory margin because would to grown with have And really XX.X%. very and EPS XX.X%. know early be this, they have of of it in clear have out previously, we that devastating have be EBITDA you income SG&A do mentioned, seeing can would have income them were everything be And million. We On approximately XX.X% XX.X% on is representing never were resolved. $X.XX $XX.X net income really on I share normalized stockouts one margin quarter, going we to our it run $XX.X finished or that, them issue of XX% and not need, million a something for of at this to abnormal a EBITDA If been we to have share. net normalizing let the team product X.X% an margin margin I at of been our an basis, approximately total most quarter the to QX, reflecting issues. did grew where net our issue just-in-time to XX.X% unable for quarter you grew been start suppliers of if was for customers. grew out income million, again, normalize -- stock customers for would to the for mentioned the And EBITDA that revenue. of during pinpoint $XX.X basis. thing one

quality and they issues to not increase into saw issue with we we But by to later when the we any without more the with alternate quickly, materials good Ultimately, higher impact. really visibility be which that our having able customer-facing suppliers getting would meet We when quarter inventory resolved up resolved. these demand ensure So had orders were to in planned. relatively QX. and any was ended quarter the had time, we ended raw the Consequently, than in pipeline.

should in sells on increase the hand QX through. on days an normal to QX in inventory Our see hand we back were in flat be to we'll and but QX, days as

did this of from our put our advance an million. QX booked that, closed sheet accordingly, quarter reflected We investing to flow in quarter sits balance for our to cash escrow acquisitions We million in with And operating the had slightly closings. This and will the we approximately -- had was the reporting closing cycle USD expense convergence amount quarter in when to our cash quarter. flows. subsequent is flip on acquisition. X.X in on of related these prepaid our in our Cash cash we the $XX.X ops for flow end. improve that the bit the Even in a anomaly

this would operating XX.X approximately cash [ So flows ]. absent have anomaly, been

to expect to this in inventory And And from on deal will you added we to some always line cash course, not did to the our really modest we Even pay seeing And still generally, credit deal the and generate that size, of immediate if we're multiples on to perspective. during compare depend be cash our and execute where of quarter, And issue. slightly plans. the in Xx related we're cash sequentially appropriate. to certainly our to leverage Xx enough due range. to down able acquisition was QX, quality with that, we good it shape off the we're opposed

from perspective, solid us. the and do deals capital a to remain are So allocation value these adds right for thing

we So for to we'll the and questions. quarter open another operator, now for look closing us, forward up year strong. call good out With the that,

Operator

Instructions] question from Dyer Steve Hallum. first Craig coming [Operator from Your is

Steven Dyer

out guess, guess, gross than inventory, backing caught sort on Anything was things the have that in else any think in anticipate you and inventory write-downs margin expected. I Just, I line? call touch of margin first, do kind more quarter, there terms of I a the out gross you then, by of lighter I the in that to the would surprise in quarter even

Ryan Pape

No, we mean, more things mix, of FX. adjustments there's got Steve, nothing the I In that quarter, happen, that. you've of China time, don't a always got sort expect you've longer planned. I think like a over period any but obviously, little

some utilization labor OEM lower got things that. You've the of shutdowns August with like and

probably point nothing like a consequence out, So just pieces to of few incremental that.

Steven Dyer

of really quarter continued XX% that and of Okay. bit lower what QX gives your a you margin me little mix, the margins revenue that cetera. pretty that sort strong understand implies confidence China a help with And be of guidance pushing then et will Kind number. gross gross kind for even --

Ryan Pape

expected talked that a and of mean, had into start year. full all year be to year. on the in the running China loaded. terms we it for back-end strong what on looking really the that at We've to we've about knew of basis, we what were, expectations we hot kind a planned I Well, expected And year year QX going our we're

in the running revenue will modeling mix, we they aside relatively did our XX%. were aggregate, things been continues what the on whole the third. But to say, quarter for from, above for gross margin, has that's QX year like suggest. And matter where pushing obviously, fourth So then these consistent currency, hot really that

Steven Dyer

of Any any for give Yes. questions, of I've that I there? R&D you A development? guess the couple that expense Is out still detail is? you guess, I product heard product not Can in more just quarter. color new more on sort before. what development onetime call

Ryan Pape

by either both to for R&D and that trying third the investment expertise But Steve, built certain that on. quality and a parties years, the team, R&D, in people then don't we've internal equipment. for we over have faster projects utilize also do X internal functions, we past adjacent substantial we're

and it expenses. just this happens when of larger expense a noteworthy not amount hit this quarter with case, happened timing the that on really of to it some based sort So and in it's occurs. In onetime of of kind the these other alongside slightly

it want And called the products as our but one-off, things in we're it of sort do might a else we to how look adjacencies, better make cadence at continuing out. go. doing, not we're where then existing in. of the we at really reflects markets we we looking So

So any I wouldn't call it out area focused on. specific to we're

of it just due think timing presented. call out we to the I how really it

Steven Dyer

you. Got

guess interest cetera. in I in But year? one maybe you've you a that's know a range you're at Okay. And year, guess I we're forward for only typically next recession, then big quarter as of I going thinking long in guide swipe any et look out, picture a XX-plus feels you been running taking how time, next a but to into kind aggressive it about percent year that that like

Ryan Pape

you I XXXX year, for mean, we was yourself too, ended think, guess we with We've accounts last that year and and 'XX. by time everybody, probably stronger it coming or into if you. question, I had at I XXXX, picture agree this than in macro November Well, all had rather, the up into coming really thought had this I

XXXX been the of caveat $X.XX in the pace think a acquisition That's how if tempo downside, of the That's organically at for little percent, least we change XX% on, would compounded organic might challenge us rate? sustained be I mind, that inorganic you think think to the I kind that But give obviously, into could you larger to in be environment. be going sort with the that angles components. And organic sort little it. of in as we growth think I see from from to to Are growth the tough XX% now good to That that growth XX-plus we of $X.XX organic hit So subject of that I potentially kind it's we're market been downside. kind a we would a enough would opportunity environment then it's recession to But steam to get if to kind to in future this looking that year-over-year? at numbers. see rate. to were lose see get we the the a a of or risk auto continue,

Steven Dyer

paint. don't venture. but or just been PPG to to in of on comment business, to work opportunity, give And quite chatter Intratec as some an I I absolutely. you alternative like or on you joint else's have done it and wish. that on around anything that the embedding progress then seen would into touched the PPF not suggest happening, around There's guess, ask their comment ability that, guess, lastly, I you PPF you want somebody but We've that's Yes, remotely a necessarily a bit

Ryan Pape

aware tell watch We that you something there's technology no that puts is closely. not I paint partners are that things Yes. of, Sure. PPG at film known can these we're inside doing. our that and this

think you're basis replace film but far is past limited And a circumstances. at you or so and what's pace, on to for cry films can inside exist. use a theoretical that I probably the developing XX that of paint kind years broader that's paint what augment been from a put in to technology some slow That's seeing doesn't

Operator

coming Your Van Sinderen next from question from Riley. is Jeff B.

Jeff Van Sinderen

can And any business. for bit how you mentioned you more. that on I you overall, outlook that? give on give touch more speak Maybe think see just business, on kind your you little us a detail a OEM-related thoughts developing? business the just you if of business could of OEM to acquired you we your OEM your us small kind maybe there's said actually can So that

Ryan Pape

Sure.

as give could this net-net-net, see the a this that lot And we business. just and on I But our think, of time we all beyond to how tried awareness one we cannibalize Jeff, buyer other. remarks unit to from individual channel because see do channel dominated the one enthusiast more complementary. to traditional basis, the these unit reach view we our color you an grow as a pieces and has to way

real a and see end, to basis, percent ability come So dominate it's centralized it's And to has business, and opportunity ability it's repair I OEM think to from to understand even on not the doing. about to -- the to you have installed, the that certainly any more we're it still installed product in have to going complementary in with have environment, else really to service everything the still an you to revenue be of world. the total if but I it grow that's

for the And that's area channel. where the so you another need business aftermarket OEM have the intersect

more we're to something for will it's going revenue and just overall protection go of pursue to create But view to piece likely it a it's buyer the So grow to basis. awareness of expand percent It's trying paint in one revenue. be continue to our going of going on not to dominate the film, and pie.

Jeff Van Sinderen

also you're I you and then Okay. little And evolving speak think more to India maybe more perhaps could approach around a thought India. around us mentioned the quick to and maybe I you're a that? And then how on what give China understanding guess, color business, color any China if in seeing you

Ryan Pape

the possible. in in say the countries best in led ways, that think for distribution in customer if that channel Yes. a us, more the terms is including always exception country. us really And of much the well there saying, close setting distributors was various we Jeff, and we've all stronger do And learned support platform the to variety as we growth. think participate set lessons up need we on to are I of that years in for that's now go-to-market the when but I at business an to even up caveat exceptionally to look as we in a acquiring and it is to the we the for have to you know strategy. And over our China really where China that's well, open mind get

in this master maybe we And mentioned we're about I do as our lumpiness we can of make whole and assembled. so put together the better. And in been working the inventory distributor closely our example. country and do the and prepared sell-in. We've in that getting to how make planning with remarks is plan one China thing team doing very Well, for easier a inventory thing says, first around that everybody the really things sell-through

business, kind its in present continues the from years, the world we've there not had do The the of we market other and the COVID got is of side just -- closer much X.X you to outside the much thing. to China

to increasingly increasingly it. be we've and close so to got And present

So for modifications at all expect as is of country the per have development higher evolve we see develop, today, we're and year next but I the to prospects continues a that and market to see would for on very the feedback the great that. I from grow India, income country people capita number think to what and similarly revenue development incomes little grow. the guess we we're continues very market. the we active better to there India on go-to doing And to whatever based I get

there's is need we lessons have applied say on I be candidly the to present China to the we distribution, think to beginning. to room there's be present there our from into that the no And for no ground strategy. and those for one -- and not need room But go-to-market table. India of to need we very All on we be things bifurcated at a local and are be

in that's lessons particular, from the market and then in had a a with see And was India had world that also, you from to you we've distribution so the And us you're with seeing I do India. leader rapidly Texas developing. where think lessons what that We're China, learned to around lead that. relocating

So way. I think those a look can similar at you in kind of

Jeff Van Sinderen

extraordinary more just over anticipate that one And P&L? the impact then quarters that any Okay. couple items more next helpful. might That's one. Are you quick the there of

Ryan Pape

But Well, the no. doing mind. the I long-term in is view company that of anticipate would we we're everything say with that

but further accelerated So expenses be product to in activities development the see continues acquisition or even by in we of the identify increases we're always to horizon you're saw the decisions. you recent there's or on if could decisions versus we on the resources going But have we're feel if to outside the going going point, extent that second all view company year, like to to said, term making it those like development short our this the and this what quarter-to-quarter. accelerated, make cadence long-term side the legal nothing half those things at the of

Operator

of go call. the I portion That now remarks. management concludes the ahead. Please hand to closing Q&A will back for the conference

Ryan Pape

our more we've elsewhere. the parts we've the thank like including I'd in everyone on to got for people seen deep quarter. lot We've then that amazing folks going the an really have, and had drive we team, a to responsibility. of those XPEL taking further the thank and vision to development entire participating team relocating today. And huge world initiatives to other help our

So do everyone without it Thank soon. much, you I speaking them. to look can to very and forward

XPEL (XPEL) 8 Nov 232023 Q3 Earnings call transcript