XPEL Technologies Corp. Reports 2006 Annual Results



    43% Growth in DAP Revenues

    DAP Revenues Increase to 50.7% of Total Revenues

    Overall Gross Margins Improve to 61.4%

    SAN ANTONIO, April 30 /CNW/ - XPEL Technologies Corp. (TSX VENTURE:
DAP.U) announced today results for the year ended December 31, 2006, as
compared to the year ended December 31, 2005.

    XPEL's Chairman and COO, W. Rege Brunner, commented, "We continue to
experience solid double-digit growth through our high margin Design Access
Program ("DAP") revenues. During 2006, our DAP revenues accounted for 51% of
total revenues, which is up from 39.5% during the prior period. Considering
XPEL's deep and highly vertical market segment with the 22,000 new car
dealerships in the U.S. alone, our runway for growth is truly exceptional."

    XPEL's CEO, Steven J. McAuley, further commented, "XPEL's solid business
model is why I joined the organization in January of 2007. However, as a
shareholder too, I will tell you that our 2006 results have great room for
improvement. My primary task as CEO is to accelerate our growth, while at the
same time eliminate operating inefficiencies. During 2006, the Company
experienced some unique and very large non-recurring legal expenses that are
now behind us, but were unquestionably a drag on management and accounted for
a large part of our losses. Since joining the Company, we have made great
strides in many areas - from raising our product prices, improving our cost
structure, forging valuable industry alliances, to introducing unique and
complementary protection products. As the Company has now shown consistent DAP
revenue growth for 5 consecutive quarters, I firmly believe this organization
will soon be discussing positive operating cash flow, positive net income and
growing its earnings per share. I can assure our shareholders we will be
diligent in unlocking ways to more rapidly grow the XPEL model, maximize
utilization of our assets, control costs, and add new products for
distribution through our growing dealer network, which all ultimately leads to
improved shareholder value."

    Year Ended December 31, 2006 compared to the Year Ended December 31, 2005

    Revenues increased from US$3,043,885 to US$3,392,677, or 11.5% between
periods. The improvement in revenues is mainly the result of increases in DAP
revenues between the years. Design Access revenues increased US$517,239 or
43.0% between 2006 and 2005. Additionally, DAP revenues increased to 50.7% of
XPEL's total revenues for the year. This growth continues the momentum XPEL
has experienced for more than two years in the primary value driver of the
Company's revenue streams. The margins generated by XPEL's DAP revenues are
significantly higher than those generated by the Company's other revenue
streams.

    Cost of sales increased from US$1,278,728 to US$1,310,184, but decreased
as a percentage of revenues from 42% to 38.6%, year to year. As the higher
margin DAP revenues continue to grow and the mix of XPEL revenues continues to
evolve, management believes cost of sales, as a percentage of revenues will
continue to improve as well.

    Total expenses increased US$1,025,205 from US$2,508,019 to US$3,533,224,
or approximately 40.8% between years. The increased expenses were primarily a
result of increased general and administrative expenses and increased
amortization of intangible assets.

    General and administrative expenses increased from US$1,954,208 to
US$2,752,031, or 40.8% between years. This increase was due primarily to
increased legal and professional fees, but also increased personnel costs and
increased rent. In September of 2006 and as plaintiff, XPEL settled the
lawsuits filed in the first half of 2005. The increased personnel costs
resulted primarily from the expensing of employee stock options granted
through year-end. The options are being expensed over the three-year vesting
period beginning with the date of grant. In June and August 2006,
respectively, the Company moved into its new corporate offices and its new
training and design facility, which increased rent from that incurred in
previous years.

    During 2006 the Company performed a valuation of its intangible assets
and determined that the lack of further cash flow associated with said assets,
justified a write-off of approximately US $100,000 of assets at year-end.

    The Company had a net loss of US$1,450,731 for the year ended December
31, 2006 as compared to a net loss of US$742,862 for the year ended December
31, 2005. When adjusted for non-cash expenses such as deprecation and
amortization and the expensing of stock options, the normalized cash loss for
2006 was US$875,660 as compared to a cash loss of US$552,732 in 2005. Expenses
increased at a rate greater than the increase in XPEL revenues, as the Company
continued to add to its employee base and incurred significant legal and
professional fees associated with the lawsuits, and the 2006 move to the TSX
Venture Exchange. When further adjusted for non-recurring legal fees incurred
during 2006, the cash loss declined to approximately US$525,000. As the
Company continues to grow its DAP revenues and explores additional revenue
opportunities coupled with the elimination of necessary, but non-recurring
legal and professional fees, it will lead to profitable operations. Management
believes that the Company can achieve cash flow profitability during the
latter half of 2007.

    XPEL Technologies Corp. is the worldwide leader in the electronic
delivery of automotive aftermarket products, utilizing the Internet as an
integral component for its design, manufacturing, distribution and customer
relationship strategies. The Company's DAP software utility offers Dealers the
industry's most efficient and productive tool set to better serve customers
with "best-in-class" solutions in real-time. XPEL has clear advantages over
the competition through its expansive proprietary library of
installation-friendly paint and headlight protection and window tint products,
coupled with a unique web-based remote manufacturing and distribution
software, superior installation training curriculum and world-class
facilities, with established and growing sales channels.

    Certain statements contained herein ("Considering XPEL's deep and highly
vertical market segment with the 22,000 new car dealerships in the U.S. alone,
our runway for growth is exceptional." and "As the Company has now shown
consistent DAP revenue growth for 5 consecutive quarters, I firmly believe
this organization will soon be discussing positive operating cash flow,
positive net income and growing its earnings per share," and "I can assure our
shareholders we will be diligent in unlocking ways to more rapidly grow the
XPEL model, maximize utilization of our assets, control costs, and add new
products for distribution through our growing dealer network, which all
ultimately leads to improved shareholder value.") are considered
"forward-looking statements." These statements are based upon the belief of
the Company's management, as well as assumptions made beyond information
currently available to the Company's management. Because "forward-looking
statements" are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking statements.
Factors that could cause results to differ materially from those expressed or
implied by such forward-looking statements include, but are not limited to,
price competition, the inability to obtain additional capital, loss of key
personnel, unavailability of leased facilities, technological changes, service
interruptions, equipment failures, customer attrition, general economic
conditions, relationships with vendors, government supervision and regulation,
changes in industry practices, the inability to settle legal disputes, and
other factors.

    The TSXV has not reviewed and does not accept responsibility for the
adequacy and accuracy of this information.

    CUSIP: U98409102




For further information:

For further information: XPEL Technologies Corp. Craig K. Clement,
210-678-3716 Senior Vice President ckclement@xpel.com

Organization Profile

XPEL Technologies Corp.

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