XPEL, Inc. (XPEL) Earnings Call Transcript & Summary

All right, we're live.

All right.

Tint Wizdom #136, after a few minutes of adjustments. How are doing today, Chris?

I'm good. Thank you. How are you?

Very well. Thanks for asking...

What are you drinking?

I'm drinking water actually.

That's all I drink.

Daily. Yes. I drink -- I was drinking coffee and like all the time, like all the time. And for, I don't know, maybe 10 years, I heard my wife tell me that I was probably dehydrated and I was definitely dehydrated, definitely very dehydrated and I feel a lot better when I drink a lot of water now, so.

Yes, it's so much better. Yes. I haven't drank caffeine. Look, don't get me wrong, I love the taste of -- first of all, I love the taste of espresso. And I love Coca-Cola, like I love the taste of Coca-Cola, Cherry Coke or regular Coke for me is like [ piedmont ] have an unearth perfection. But I only drink on maybe I don't know, once every 6 months. But if I have Chinese food buddy, I need to have a Coca-Cola. We go hand in hand.

It's a good timing. Chinese food, pizza, special events.

Yes, I've been for all of that.

So today, first of all, thanks for last week, Manny, what a guy. And I appreciate you introducing him to me and having him come on here and everything. I was just -- it was kind of ringing in my head today. I was just thinking about how -- what -- we were talking about the IWFA last week, and I was like, what a perfect guy to be on the IWFA like. I don't think he is, but I would recommend him, I would nominate him to the highest, highest level because that is somebody with I feel like he has the years of experience, like the decades of experience, but he still sees all of what's in the future, and he's well connected with the President and like that's what you need. You need that total package to be able to really be effective in my opinion, and he is an...

He is there. I agree with you. Like when I first met him in person, I was so incredibly impressed by them. I mean, the fact of the matter is he's a kind of wealth of knowledge. He's very comfortable in sharing it. And he can speak to the largest corporate crowd, just as easy can speak to like at a normal level, like [indiscernible] or are going to store level, if you want to call it that. Like I think he's a jack of all trades, and I really think that he did an amazing job last week. I called him afterwards, I said bro, you killed it. Like you made me look bad. I can't go on with you again.

Well, I appreciate you coming on this week. And specifically to talk about promptly and as always, if there's questions about anything in the world, they're always welcome, but being able to talk about that subject, which is a big subject because it was a very large acquisition in dollar amount and I think in just like value, and it's very -- it's awesome to be able to get to speak to you about it and you to be open to people's questions, and to have that open communication because that's really what it's about. Usually, like when there's great communication, everyone wins. And when there's no communication, everyone loses. So it's really admirably, who came on here to talk about this stuff because usually, I feel like stuff like that is like behind closed doors, hush-hush stuff that nobody really talks about outside of the company from...

Yes. And I think that for a lot of companies that exactly is how they carry something like that off. And I understand, like, look, I'm not trying to say that other companies in the way that they do things is wrong and ours is right. I just prefer our model to be very open about things. And I think we've got some good reasons behind it. And I think that, that speaks true to our clientele versus being hush-hush about it. Because unfortunately, you sit there and you hypothesize, what is the reason for the acquisition? Or what is the reason for the big change? What are they up to? And if you don't get answers, you start developing your own answers in your own mind and/or they pop-up online. And like I saw a lot of stuff being sent to me that was being talked about online afterwards. And some people found it really contentious, especially the PermaPlate acquisition. And I was laughing in my head because I'm like, wow, like you guys all thought that when we merged with Veloce and Harry Rahman, you guys thought that was like unbelievable, and what a great acquisition it was. And yet when we did the PermaPlate deal, there was a number of people who were like, "Oh, you see, look at what XPEL is really up to, and this is what they're planning on doing against you." And look, I know that a lot of those posts were done by some of my competitors. I have a couple of competitors that I'm quite familiar with the purpose you ask or load the lips of some of their clientele to get online and to pose put some negative stuff and to try and swing that idea in people's minds, I laugh about it. But if you want me to address it, I can address a full [ on our ] if you want -- if you have questions in mind first, whatever you think is more appropriate.

Well -- yes. I guess, why don't we start with -- first of all, I know there's -- I think there's a little delay on the software, but I think it will catch up, so we'll just keep going on the same in case anybody notices I'm kind of aware on my end. But I think we're on to go. So why don't we start off just kind of by -- if you could talk about a little bit like what is PermaPlate as a company, like what do they do? Who are they prior to the acquisition?

So PermaPlate was a company that had been started some time ago by a gentleman with the name of David Jorgensen. And I know that there were some other key players with David, but at that time, I'm not saying he did it solely on his own. But what their main focus was, was to go after dealership business specifically. And not only just sell to dealerships, but sell both the labor and the material. So they were approaching dealerships and saying, "Hey, look, we think that you've got a situation where it's very difficult to keep installers in-house. It's very difficult to keep them satisfied and you're constantly going through this battle of training a new person and bringing another person on. And so what we could do for you instead is we could provide the labor component of that. And in turn, we could really satisfy or maybe fill the holes that you've been experiencing. And so they grew this to quite a large business. They were in many different states. A lot of employees, I think the number is over 250 employees. Obviously, a lot of those installers, obviously, a lot of that sales, management, fixed ops, just a massive powerhouse. And one of the things that I love about XPEL is that they don't call them acquisitions, right? They don't look at it as a, hey, we bought somebody because, first of all, it seems really pompous. And second of all, it makes you sound superior and the other person is not at that level, and that's not true. PermaPlate was doing something that XPEL had not been able to accomplish. I don't know that we had ever approached it in the same direction as they had, but we saw their success, and we called it a merger. Just like Veloce, like when Harry Rahman came on Board. We did not call the Veloce an acquisition, we called it a merger. And whether we've worked over some backward or not, it's still to us internally thought of as a merge between 2 great companies that together will be even better than we were beforehand. So going back to the PermaPlate acquisition, yes, I mean -- or sorry, I shouldn't use that word acquisition, a merger. We just saw an opportunity to join 2 companies up, where they were doing a much better job in an area that we weren't doing a very good job and it all. In comparison, they've figured out this labor component part of it. And in turn, through speaking with those people, and it was above my pay grade to be very candid with you, I didn't even know about it until after it was already done. But the like-minded individuals came together, figured out, the deal have made sense for everybody and put it together. So PermaPlate is no longer PermaPlate, right? PermaPlate is now a part of XPEL. Our XPEL, as a part of PermaPlate, but renamed under XPEL whatever you want to call it. Just like Veloce, that's another thing that I love about XPEL. This is a personal thing. Our company doesn't believe in the idea of mergers and then trying to market and advertise another brand name against our own. And there are other companies out there, and some great companies out there where when they do an acquisition, they keep that brand name separate, and they continue to work on that brand. They may be or may they just continue to use the brand name, I don't know. But the reality is that a lot of the brands that they're acquiring don't have the budget for marketing, don't spend millions of dollars a year on marketing like XPEL and 3M does. And so in turn, now they've got this new company that they put into their fold, and if they are going to market anything for it, where is that marketing dollars coming from? It's obviously coming from their existing brands because that have the marketing dollars to begin with. So again, going back to the PermaPlate thing, we don't call it PermaPlate anymore. We just -- everything is just called XPEL, as always, just like Veloce. A lot of people are asking me, "Hey, is Veloce sticking around." And I'm like, look, I seriously doubt it because we don't want to use XPEL vision to compete -- your XPEL' Veloce. It's not good for anybody in our personal opinion. We have another manufacturer out there who obviously thinks the opposite. Great for them, if that's working for them. I'm super happy for them. But on our end, it's not what we're after.

It gets very confusing for the customer because you can have a brand that could be a high-end brand, but if they haven't heard of it, and if you're marketing obviously 6 brands instead of 1 brand, it's a division of a pie any way you slice it because like you said, your marketing budget goes somewhere. So -- okay, so dealer installation, how does that, if in any way, does that affect, let's say, installation company as now, a company that does obviously XPEL windows and maybe paint protection as well. How does this acquisition affect them if it does?

Yes. So I mean, we would call that an independent, right?

Merger.

And we have focused strictly on retail, and we haven't focused on wholesale. It's the independence -- both of those independents benefit greatly from it, and I'll explain both avenues. Let's first deal with the independents that doesn't do wholesale work and just does strictly retail. The -- and we're going to refer to PermaPlate, obviously, in terms of history versus now being XPEL. Historically speaking, yes, they did purchase a little bit from XPEL, but the vast majority of their purchases were going through another top brand, another manufacturer. And so the reality is that those dealerships that they were servicing were using another brand and they were not advertising a brand at all. They were actually staying away from that, where, again, going back to XPEL's model with the merger of the 2 coming together, our intention is to have everything that was being looked at by PermaPlate, obviously, first and foremost being using XPEL now. And now there's some legacy accounts that we have to obviously deal with in terms of contractual agreements and stuff like that, where maybe it's not fully XPEL yet, but it certainly will be at some point soon. But our biggest thing, of course, is making sure that all those firms that are having film put on their vehicles at this point or having addendums with the XPEL name on it, having branding put up inside the dealerships and things of that nature and telling everybody and anybody, "Hey, this is XPEL, that's going on this car." And I think that, that was very logical. There was a brand that they were using before, while it's a phenomenal manufacturer does not have much in terms of consumer awareness. They have a lot of awareness from the installer standpoint and the store standpoint, but the consumer awareness is quite low in comparison I feel to XPEL or 3M. And so maybe that's one of the reasons why they didn't feel it would be valuable to capitalize on that using a branding, I don't know. All I know is that for us, it is very valuable to capitalize on the brand name. We are thought of as the high-end brand and we don't want to lose that image. And so the more that, that word is getting out there, the better for the independents because it's just ultimately a lot of free advertising. And I think that it's no secret that not every customer believes that the price they're paying at a dealership is the appropriate price. And now that maybe the workmanship at the dealership level is not the same as it is at an independent installer level. So I think that for that reason as well, you can imagine that if, if, if the name that's being used as XPEL on the addendums, and in the dealership showrooms, and in the dealership drive-throughs and stuff like that where the consumer is going. Yes, I know that I can get my XPEL here, but I got an XPEL shop that my buddy is used or I've used in the past and whatever. I'm going to reach out to them directly. I think that, that's going to see a very positive effect. As a matter of fact, I think it's got 0 negative effect whatsoever for the independents that don't do wholesale at all. The bigger question, of course, was the ones that do wholesale. With the ones that do wholesale, their worry, which of course is logical is, hey, wait a second, is XPEL going to be competing against me for my customer. And very, very emphatic in the idea that we've always stated quite clearly that is never our intention. We do not want to compete against our independents. We, as XPEL, know that it's because of our independents that help us get to where we are. In just 5 years, we go from a $150 million company to -- I don't know -- I think it's around $2 billion market valuation right now, which is, I mean, unfathomably extreme, amazing but it's our independents that help us get there. It's our market that helps us get there, it's our [ adaptors ] helped us get there. It's, of course, our product lines that helped us get there. I get it, but the independents have played a massive role in there, massive. And the last thing we [ don't ] want to do is hurt those independents. We want to help them always. So again, this is another part that made me laugh because I saw some of the stuff that was being sent to me in terms of -- some of these people are posting this negative stuff, and I'm like, men, you have it still backwards. When it was the PermaPlate and they were using predominantly I think well over 90% of this other company's product, you can bet that they were going in and trying to get any single client they could that was an XPEL customer. If they walked into a dealership and inside XPEL, they were like, "Yes, this is what I'm talking, and I'm going after, I'm going to try and land this account." But as you know already from previous conversations, we don't want even our independents hurting each other, if we can avoid that in any way, shape or form. And so now that we bring the PermaPlate and the XPEL together underneath 1 umbrella, we literally had a very straightforward conversation with everybody that was PermaPlate that's now XPEL, that hey, we need you to be aware of how we do business and how it's a little different. A, we like to go with the idea of exclusivity. B, we'd like to go with exclusively into the idea of being somewhat understanding of territorial or regional agreements or metrics. And C, if you walk into a dealership, your new first question, other than hello, how are you is, are you currently doing an in-house program, okay. If you're not, are you currently offering it? If you're currently offering it, is it being offered third party then? If the answer is yes, you must find out what brand they're using. And if they're using XPEL, it's at that point that you're expected to say, "Hey, you know what, you're being used by one of our sister operations already. Well thank you so much for having your business. We already have it. So we'll see you later. And I can tell you, if Joel Valencia is on this call right now from Charleston Window Films, that was a really big conversion for us recently that happened as a huge thanks to Jason Carr from Guardian Security Window Film, my good buddy, sorry, Joel was using another brand from that same company that we're talking about that has multiple brands names -- brands underneath their 1 line up, or under 1 umbrella. And he was working to try and secure a couple of local dealerships for some in-house work and some preload work. He's got, I think, 3 shops now or it's 2 -- no, it's 3 shops, I believe now at this point, and he had shops in different locations and here's an opportunity. Well, lo and behold, those dealerships reached out to the PermaPlate rep. This awesome amazing rep name Regina, who I've come to know now for a little while I mean like out of this world amazing representative for them and, of course, now for XPEL. And so Regina went into the dealership had a very straightforward conversation with them and said, "Look, thank you so much for contacting me. I really appreciate it. However, I'm also under the impression that you're already doing work with Joel at Charleston Window Films, which you guys have been for about a month now. And so because of that, I will not interfere with something that's within our own realm already. And so she actually told the GM, I'm sorry, but I wouldn't even bid on this, like this is not something that we do. This is the way XPEL runs things, and we hope that you can appreciate it. Now if Joel gets to a position where he doesn't want anymore. If Joel gets to a position where he feels he can't handle anymore. If Joel gets to a position where things are unfortunately falling out of its control, then Joel knows to reach out to me and pretalk to Regina, who, by the way, Regina had a face-to-face with Joel, let him know what's going on, and brought them fully up to speed and I mean we are aware of it. And just said to Joel look -- if it's getting to be too much or whatever the case may be, then obviously reach out to us, and we, as XPEL, will gladly step in, and we'll do what we can to take over. So going back to that independent that does dealership services, we have a number of accounts that do nothing but dealer services, nothing but. And there are couple of them and reached out to me right away when they heard about the acquisition and like, hey, so how does this affect me to go, then like in a way that's so beneficial, it's incredible because now you know that we will be dictating to them, they can't go after your accounts. But at the same time, please be mindful that now XPEL has got some accounts through the merger, and that we're asking to due respect that as well. And it's already like, I don't know, in just the last 3 months, I've been involved in no less than a half a dozen of these situations while we were looking after them or somebody else was. And it's like, hey, guys, we're on the same team now. And let's make sure that we're getting that message across. And that's what's happened. And so I know for a fact that I could get 6, 7 people on this call right now with us to say, "Yes, this is -- what Chris is describing is exactly what's happened to a [indiscernible]. And this acquisition was incredibly beneficial for us because before, we were losing a customer or 2 here and there to the PermaPlate guys using that other brand. And now that's with XPEL, that won't happen anymore.

That's a beautiful thing. I mean you -- like you said, you took probably the biggest target off of somebody who's servicing dealers back because they're no longer potentially being targeted by PermaPlate, which is now XPEL, which just means you're more protected as a dealer if you're servicing those wholesale accounts. And also it, kind of adds value, I would say, in essence, to being an XPEL dealer because that the ecosystem that demand only has increased and you're part of that like locked in to your location.

Yes, and to go along with -- look, I won't say the name of the account because I'd have to ask information first. But he reached out to me today, a very large dealership services account. They really don't do much of any retail. I mean maybe it's a couple of cars in there, but trust me when I say at least 99% of their business is dealership services. And he's got 4 dealerships, so he's thinking about bringing on the hook in a specific area. And he reached out to me and he said, "Look, like I might need your help with installers because I don't have a presence there yet." And right away, I'm like, "Oh, I think I've been happy to covered because I've got 200-plus installers through the PermaPlate merger, they're now all XPEL." And if we feel that we can free 1 of them up or 2 of them up to help you out, while you find installers for yourself or whatever the case may be or maybe we provide the labor component where you're providing partner there's so many different ways of skin this cat now that we wouldn't have it available to us before. And there's been a number of shops that have reached out to us where they knew that there was the previous PermaPlate individuals now, of course, XPEL saying, "Hey, I'm down a guy or 2 because of COVID or, I'm down a guy or 2 because of holidays around us, is there any chance that you can -- and we're like, "Hey, let's look into it." And we've been able to make that happen. And that's something we couldn't do before. So and again, I know for a fact that, that's amazing. Now of course, there's also the business side, right of the merger. It was a large merger. It was a $30 million merger, and that's a lot of money. But the fact of the matter was an all-cash merger. And people wonder, well, why is that beneficial to them. Well, it's immensely beneficial to you because one of the things that the shareholders, especially don't like is seeing cash sitting in the bank. If the cash is sitting in the bank, it means it's not being used to develop or further the business. Shareholders want to see, obviously, some cash reserves in the bank, yes, but they really want to see profits being utilized to invest back into the company. That is the most important thing. When I talk to so many newer business operators, right? Yourself included when you first started. You poured all your profits back into the industry and not back into your business to make it bigger and better, and to deliver more content, to deliver a better experience, but also because, ultimately, you want to grow that company, we'll XPEL necessity to do that. It's not an option, not that we would change it anyways, but the acquisition was cash burning a hole in the pocket, not being used for anything beneficial. And so the merger was very sensible. It really helped out, obviously, with valuation. Stock goes up. Profits go up. Value goes up. Well, guess what, that means more and more money poured into more R&D, more money poured into more marketing, more money poured into more DAP. I mean that DAP 11 is already insanely better than it ever was before, but the stuff that's coming down the pipeline that I wish I could tell you about and I would say I can't. There's some things I do have to keep secret well below everybody's mind. There's stuff that's already in there. I mean, most people don't know all the details that worth in DAP right now. They think it's the best design app on the planet, but it's so much more than that, and it's going to be so much more be. It's going to be within a year or so, I would say, it will be 10x more operationally benefit -- beneficial to a shop than it is right now. But again, that money has to come from somewhere, right? And so that's... I think there's a lag, I apologize.

It's not your fault. It's -- well, I don't know where it's from, but I'm going to take the responsibility. There is a lag. That's a very, very good point because like where as an industry we're aligned, like dealers who buy film from XPEL, in essence, like, of course, you want the best price as a dealer and so on for your film. But you do want XPEL to make money. You want them to grow. You want them to make mergers. You want them to be the healthiest company that they can be because that ultimately like is the company you do business with. So like what you're saying as far as how this just benefits, like you said, it goes on the DAP, it goes in the marketing. I'm sure it's going to go into distribution and more economies of scale when it comes to product. And you said more development in the product, like that all comes down to you as a dealer, like the dealers out there that are an XPEL dealer. And even if you're not an XPEL dealer, it might be a tougher one to -- a little bit tougher to stomach, but it still benefits to you because you're part of the industry, and it leads innovation. And one company doing something innovative does push another 4 to do something innovative. And one of those might even do something and take a leapfrog in front of the first innovative one. And they wouldn't have if it was not an innovation, and that's the whole point of a healthy industry. And I don't know that we've ever been in a healthier industry and I'm glad you're able to come on here and make this stuff clear. There are a funny -- a couple of funny comments, Marco being one of them, and he had said, how funny, but I think accurate. He said, people need to think and read out loud what they are going to post on social media before they send the message to the universe. And I think like -- that's true. And I think it should be especially true when you're talking amongst your peers and you're talking amongst like your industry, and where you do business, and affecting other people's businesses potentially, and perceptions, and I feel like you do like everybody has a responsibility to not necessarily just shout off at the mouth if they don't know what they're talking about.

Yes. I mean, look, online thing, as we've talked about a few times, it can be quite contentious, right? There's been times where I've seen people posting about another brand. And they're like, this is the greatest brand I've ever used. I'd used everything under the sun. I'm so glad that I went this way. This is the best thing ever. Everything else, I like this brand, I'm like XPEL sucks. And then I like, man, like I wish that I could be as aggressive as I'd like to be. What I could do if I could go into the [ NetSuite ], I could pull out the conversation that you and I had yesterday with you begging me to let you into XPEL and saying that I know XPEL's the greatest, I don't want to go with any other brand. That's the only point I want to go with, which is XPEL, I want the access to the [ partners ]. I want the access to the marketing. I want access to the film. And because we couldn't bring you on board, and it was not because we didn't want to, it's just because we had some agreement that if you will, with another shop maybe that's too close or because you didn't want to go exclusive with us, which was I can completely understand. Then we can do business with each other. But like you're sitting there saying something negative, and I don't care if it's about XPEL, SunTek, LLumar, [ STEK ], 3M, it doesn't matter who it is. You're burning bridges, it's getting noticed. There may be a time like you said where somebody leapfrogs heavily above somebody else. And now you're like, "Wow, what's best for my business is to switch to that brand instead." And if you piss them off, you've been blacklisted by them in essence, what have you gained, right? And you make yourself look petty. So I definitely agree with Marco on that point, it's well taken.

You got it. You always should say what it is and speak your mind and be honest and transparent, but not say things that are not real or you don't know about and -- because those are the things that, like you said, can make you look petty. And even an instance like -- and this is just look, it's a wise -- I think it's a wise business move. It's just a wise like social move to not go around burning bridges for no reason just for fun that day on Facebook because even somebody who burn a bridge with could end up working for a different company in the future and you come across them that way or through somebody or a friend of them. Like you don't know. And the point is not -- again, it's not to be fake just in case. It's just, don't be a schmuck, just for no reason.

Yes. I mean going -- again, like there's always reasons for a company to do the things that they're doing, and I'm talking about from the manufacturers level, right? And at the end of the day, you've got to respect that multiple people are almost always involved in every decision, and they came to a decision. And whatever that decision is, should we just understood and respected that, that made the most sense for them along with their clientele. They didn't make the -- nobody, not Eastman, not 3M, not XPEL makes a decision thinking this is only going to be good for us that's going to suck for our clients, right?

Right.

It's always bought from those top 3 brands as how can this benefit, everybody involved as much as humanly possible. Look, going back to the investment money, right? I'll let the cat out of the bag on something. And there's a few people that I know Mike Burke of course, definitely knows this is, along with a few others. But most people don't know that we've invested a heavy amount of money into putting an East Coast distribution center together. We are actually opening up a Charlotte distribution center shortly. We were supposed to be open, actually, we can with you by this summer. But unfortunately, Duke Power couldn't get the power transformers in. They were on back order or whatever you want to call it, for a long time due to all the other situations that are happening worldwide with COVID and whatever have you. And we got that up and going. Shelving's up and going. We've already hired the manager to run the whole operation. He has already been hired. He's already been relocated from where it was living to Charlotte. He's already living there now. The only thing we're waiting on is the fire marshal of all people to sign off. The fire marshal seems to be feeling that maybe we need a more adequate sprinkler system than what we have, although what we have is better than we have even in San Antonio, which of course, is a lot hotter year-round historically speaking, in a much larger operation. So anyways, -- but like there's an example, right, that this is something that people don't know. But this acquisition that I keep using the word acquisition, I'm just not supposed to. I'm so sorry, guys. I should -- we keep referring to it as a merger as it's properly called. Obviously, would contribute to that. And we've got a lot more mergers that are coming up a lot more, and super exciting stuff. And we're not the only ones that are doing it. It's no secret that Eastman -- Eastman made an acquisition just about a week ago that they announced it. I don't think it's finished yet. From the article I read, it hasn't completed yet, but a premium shield, right? I mean, good on them, like that's a great company, [ Dominicans ] are awesome people. I've never met Jamie Warner in person, but I know he's an amazing sales manager. I've heard nothing but great things about him. I know he's only spoken positively of me in the past with other individuals who have said, "Hey, you know what Jamie was in here and he was talking about you in a very positive way." I mean, that was a very, very smart acquisition on Eastman's part. I commend them on that one. It was good on them.

Have you seen any acquisitions change hands like amongst mergers or other acquisitions in this case between dealers, dealer to dealer, not to speak on anyone specific, but I'm just saying, do you see a change hand, and is there anything that stands out and there's a little delay on the video. So that's why playing blindly on the audio. Is there anything that you would recommend that you've seen that if a dealer is out there and they're saying, "Hey, I might want to sell my company in the next 2, 5, maybe even 10 years that could point them in the right direction of anything they should start doing now, anything that makes an attractive film like acquisition over an unattractive one, anything you've seen?

Yes. Yes, I can come up with a few. First and foremost is, look, it's no secret a lot of the people do cash deals, right? And I'm not saying that they're not reporting their cash to the government, okay? Like I don't even want to get into like...

There's not. If they're doing cash deals, they're not reporting anything. So it's keep going.

Well, if it's cash and still reported. It doesn't mean you can't take cash put out of the books.

But you wouldn't give them a deal.

But what I am saying is that, that those individuals that are out there that are doing cash deals and not put them on the books, that I would strongly recommend getting away from right away. Yes, it might look beneficial in the beginning because you're feeling like I've somehow avoided some taxation on this money, and I can put that money in the pocket and I can use it. But the reality is that definitely it diminishes the value of your company, should you ever wish to sell it immensely. You cannot approve that cash money. As a matter of fact, if anything, it says a lot to your character to some people. Some people think of individuals who are trying to cheat the government, obviously, in a negative light. And so they may not even want to continue the conversation about acquisition, if that's how they feel that you've been operating and who have you been operating with, who's your clientele? Are these guys just a bunch of drug dealers that are trying to stay up the beaten path and not get noticed and that's why they're coming to you. Like again, it can have negative implications. And again, I'm not saying that -- I'm not trying to point out how a person earns their living or doesn't earn their living as a consequence to me personally. I'm just saying it's all about how it can look. Number two is to make sure that you've done a great job in co-branding. And people go with, what do you mean by that? And I go, look, you have your brand, but you also have the brand that's behind you or with you as a partner, which is that manufacturer, right? And Manny talked really well to that subject last week. And XPEL, I feel, has always done a good job with that as well. And so if you've got a major brand, you really need to make sure that you capitalize on that in all of your marketing. I feel that the companies that sit there and only talk about themselves, they're only resting on their own morals when it comes to acquisition. And that's what I'm talking about just acquisitions, it's not as attractive, where if I can see that a company is co-branded with an ABC shop and they've got great reviews and everything like that, but they're co-branded with 3M or they're co-branded with Eastman or they're co-branded with an XPEL, I feel like there's a lot more clout and there's a lot more that I want to grab a hold of. There's a lot more meat on the bone, right? And that I feel like, hey, they're with a top brand and there's a reason why that top brand is with them, right? And it is a dual situation. And so that's number two. Number three is to make sure that you've invested wisely in the operation itself. If you've got a shabby-looking operation where the walls aren't finished and the floors aren't finished properly, you haven't changed or removed your transfer glass and painted behind the walls and stuff like that for a while and updated the look from everything from your customer waiting area, to your reception, to the floors, to the lifts, to everything like -- it's not -- again, like if I walked into a dirty home, even if the home was amazing. I'm going to notice the dirt, and I might not be so impressed and have a desire to go ahead with the purchase. And of course, the last part is to determine ahead of time what do you want to do afterwards? And I know that sounds funny, but a lot of people, they think that they want to do -- get bought out, but they don't have a plan for after the buyout. And if you don't have a plan for after the buyout, what happens is when the buyout actually finally comes to fruition and it's getting closer, you get a lot of anxiety. And then these questions start popping your head way too late. And then you might even -- you -- wish you washing on the acquisition, and you might give that impression to the buyer. And then things can go south real quick. Look, our good friend, Mike Burke, who we talked about obviously on many of our podcasts, he recently did an acquisition of a really successful operation in the Dallas-Fort Worth area. And he's already done them and saying amount of change on it. Like the place was -- I thought it was good looking before. I actually went and saw it before he changed it over, but now it's stunning. And the numbers that I was doing before were impressive. But the numbers he's doing now already and just -- I don't know, I think Mike's only owned it for about 3 months now or so. It's for sure, at least double its wholesale purchases in just that 3-month operational time. So you think about what was the value -- what is the value today already with just say, 3 months of Mike Burke taking it over versus what it was 3 months ago when he acquired it. While I can tell you it's gone up on an incredible sum. And could that sum have been accomplished by the previous people? Yes. It could have been and it should have been. And they had left out some of those important details that I highlighted earlier or maybe thought that it was already at a good enough level without really diving into it a little harder if that makes sense. And it's always hard to do that, right? I think every one of us when we've had our own shop, looked at our own shop with a lot of admiration, if you will, implied because we put our blood, sweat and tears into this. And we took it from nothing to what it is, but could it be better? Could it be something more than it is, it probably always can be. And to just sit there and assume that it's good enough is not the right attitude, especially if you're thinking about selling out later on.

And that's where I think social media helps and obviously, like the dealer network you're a part of helps because you're able to see what you thought was fast is not fast as somebody else, or you thought was busy is not busy to somebody else, or you thought -- you're able to kind of see and I feel like as people -- as you realize like, what could be done, it's -- it boosts you to be able to do it yourself. Like Mike Burke can go into that shop and say, "Hey, we can do X, Y, Z and 3 months later, double it, whereas like you said, if you were in that shop for the last 15 years, you might think, well, we've kind of -- we've captured our area.

Yes. And again, like I went to that shop. I went down to Dallas, I can't even remember what the reason was. And he had said, "Hey, do me a favor, while you're there, [ while you supply by ] and stop in and see the shop. And I'm like, yes, great. And I went to the shop and I was genuinely impressed. I was genuinely impressed by the person who is managing at that time. Obviously, the installers, the reception area, the customer waiting area, that this really cool like bench out upfront that's like a pickup truck, like the tail -- pickup truck where the tailgate pulls down from the wall, and that's when it becomes the seat, lights in it and everything. And I was like, wow, this is really cool like I get and the person who was managing the shop at the time and said, "Would you mind if I went through my sales process with you?" And I said, "No, not all." Like that's my forte, that's my background, fly at it. And so they did. And I straight up told them like, there's only maybe a couple of little things that I would maybe want to add or change and I went through them and I said, "Why?" And they felt the feedback was very valuable. And I call Mike afterwards. And I said, "Mike, like the shop's awesome. Like I think you've done a great job on your acquisition, and I think that you're going to get your money back out of it within a reasonable period of time." And he's like, "No, I'm going to get it out like much faster than that." He was like, this is my goal. This is what I'm going to do with it. And I'm like, "Wow, like you're going to rip apart what looks like it's already solid now." And he's like, "Yes." And I'm like, "Yes, I shouldn't be expecting anything less than that from you," and he did it? And, wow, like I've seen the numbers myself personally, and I'm just like, obviously, in marvel of demand and what he managed to accomplish in that period of time. So there is a really good example of some of the way that that's happened. And there's been other acquisitions that I've seen, too, and a lot of been very impressive.

What do you think the main draw is if you're speculating? If somebody has a shop, they have 2 shops they've obviously done it, they're successful. That's why they have the money to be able to purchase another shop. What do you think that draw is typically -- what's the attraction versus taking that and building it. Is it just a matter of, hey, I can save the time. This will take years and some unknown. I can purchase it right now at this money, is that just basically a timesaver?

I think it's a combination of things. I mean, number one, we all know that the vast majority, if not every single shop owner are typically a Type A personality, right? You have obviously those extreme artists as well and they've sort of become like a hybrid personality, but that Type A personality is always want to conquer more and it's never going to change. And so yes, you can conquer more by sometimes being bigger than you already are, but I think that by diversifying and acquiring more operations is probably going to be a better way of doing it. If you have all the other pieces of puzzle in place, and that's not easy, right, because you have to be able to step away from the existing shop first, a 100% step away from the existing shop first, before if you can even consider the idea of grabbing a second operation or a third operation. And sometimes what happens is you move into a second operation by promoting somebody within to run the existing operation and you have these high hopes that they can do it. They've given you this clear indications. They feel they can do it. And yet the operation is not nearly as successful as it was when you were there yourself, right? And that's a hard thing to admit to both individuals that made that decision. So maybe they need to step back and think about that. So I always recommend that, A, make sure that go away for a month or 2. I know it's crazy, but literally do it, like literally step out of the shop for a month or 2, those people running it, do not be interacting with them on a daily level and confirm that they were accurate and correct and that they can, in fact, do that job with you and for you, right? Now if that's the case. Now let's go look at acquisition. And I can tell you from personal experience that trying to build something from scratch, even when you have a good name behind it and make successful co-branding, isn't easy. As a matter of fact, it's much more difficult than to go out and acquire something that already is operational. But again, it's a kind of like going back to that question, like when the installer comes to you that no longer works for somebody and now is available. When a person looking to sell the shop, what is the reason, right? And I think 99 out of 100 times are going to tell you that they're burnt out. If you can confirm that they're burned out and that's hard to confirm, but if you can confirm that, that's the reason, great, then that is an acquisition that makes a lot of sense. But if you -- if the spidey-sense is going up, going out, they are not telling me everything, they're young. They haven't been in the business that long, whatever, I'm watching them, they're not working 80-hour a weeks, and burning the midnight candle on both ends. You might want to wonder if it's really because they're burned out or because there's some other negative underlying factor that you cannot get a hold of and confirm, be careful, be careful. But I like the idea of acquisition more than the idea of simple expansion. But if I can't find that right person to take over the existing operation, then expansion is another awesome things to sort of consider. I went out to -- oh, I think he's been on the show, right, [ Kyle and Andy ] I went up to his shop a couple of times, and I see what his shop has become versus what it was originally. It's this massive operation. I know I've been at [ Eurotech ], right? I mean like again, in saying a huge operation. I look at Brett & Tiffany grow All American Paint Protection, massive operations. I don't know that they really want to move into having another shop, either of those 3 operators. And obviously, in Brett's case, it's Brett & Tiffany, I want to be clear about that, not we've got Tiffany you out of this. But I think that their idea of just expansion is better because they like being hands on operators to really be interacting with the clients, to really be interacting with the staff, and always be with their finger directly on the pulse, right? Kyle, again, same kind of individual. Would I recommend Kyle to go out and grab a second and third shop, even of course, it's got the funds to do it or [ Danica ] or Brett & Tiffany, they have -- all of those guys have the funds to do and no problem. But whether be smart Like look at Eddie from Detailing Dynamics, right, arguably the most famous shop, maybe in the world along with protected film solutions, they have no desire to acquire another operation. They love what they've got going on. They went from 1 small building to a large building to 2 large buildings to, now they've got 3 large buildings, but they're all clustered with each other and I can see them continuing to do the same thing. We're moving on to a second operation, I don't think would be beneficial for those guys.

If you had a dealer that came to you or maybe you're visiting and they said, "Hey, Chris, I'm thinking about selling my shop, how much do you think it's worth?" What do you say back?

Yes. So I always tell them, look, that's -- there's 2 answers to that question, right? There's what it's worth to an investor, right, whether it's a fellow shop owner or somebody has a fund of some kind that's doing an acquisition. That value is almost always going to be lower than what you are going to want for the business. Part of it, of course, is because you are so personally invested into your own business. The second reason is because you need to be consider of something and that is what I talked about earlier, and that is what are you going to do afterwards. If the idea is that I'm going to take a chunk of money out of it, and I'm going to go back into another industry, then fine. Then the value of that business doesn't need to be as high. However, what if the intention was to take the money and retire? Well, then obviously, the business needs to have the value behind it to provide that retirement operation or opportunity, right? Yes, maybe you scroll away $2 million. But what if you've decided you need $10 million in the bank liquid cash in order to truly retire and feel like for the rest of my life, I will be fine along with my wife and children, right? Well, that means that automatically your business needs to have a valuation of $8 million. It doesn't mean it's legitimately worth it, but that's what it needs to be worth in order for you to sell it. So it's a hard answer because, again, I think that the only correct way to look at it is, first and foremost, what am I doing after, right? I've got clients that came out of other industries. I've got clients that are bankers. I've got clients that were in medical field. I got clients that are amazing programmers. And I think there are a lots of clients that were making well over $0.25 million a year at the job that they had before. If their idea is I got into this, I did my run at it. I liked it. I liked it a lot. And I don't like it so much anymore. I don't want to deal with the clients anymore. I don't want to deal with the COVID situation anymore. I don't want to deal with whatever the unknowns. Maybe I want to sell it. Okay. Are you going to go back and yes, as a matter of fact, to talk to the people used to work with before, and they've said, "Hey, we can come back at any time you want. Your job is available again. We will pay you this much money. Great. Then you have an exit strategy right now that's valuable for you, and you don't need to recover as much funds out of it. And so then they're like, well, then what is the value? And I'm like, well, it comes down to like my business mentor would say to me, look, obviously, a number of years in business plays a major effect in value. Growth plays a major effect in value. Obviously, total income that the business plays is a value. And of course, sales and some guys will try and go, well, it's a multiple of sales. Well, for the investors, it's usually a multiple of earnings. I know that we want to be a multiple of sales, but quite often, the investors are looking at as a multiple of earnings. And if so, the most casual -- sorry, the most -- sorry, not casual, careful investor is going to tell you it's anywhere between 1x and 3x earnings, right? Well, most operators like go screw you. Like there's no way I'm selling it for that little amount of money then because I'm making that much a year off of it. And I'm like, you're right, don't sell it. It's [indiscernible] But if you can get with a single shop operation, if you can get between 5x and 7x earnings, I mean real earnings, right, we're not talking -- I mean, all money on the books, then -- and you're seeing constant growth or 30% growth year-over-year-over-year. And again, that good co-branding yes, you might get a 7x earnings situation happening, and that would be a great value. Now if you have 2 and 3 and 5 and 10 and 15 stores, then that valuation changes dramatically.

The video still talking, but you paused. I'm just making sure.

I started saying end of sentence.

End of sentence, over and out or over. Yes. And I mean, I would imagine why the value goes up significantly when you have more than one location is the ability to show that your business operates without you in it, and it's able to be replicated. If you can have 5, you could have 10. If you can have 10, you can have a 100. But when there's just 1, and especially, I was surprised that you said you found it like okay or even like a benefit if somebody says I'm burned out. And I see why after you explained it, like if they're burned out, it means it's a healthy business. They're just hired, but it's a great business. You just have to put the right people in there. My first thought was, if they're so burned out, the whole business probably is like they're doing -- they're touching everything probably. They might have a couple of extra staff, but probably nothing happens that in my mind, which is not necessarily the case. And it sounded like to me, I think, like you pull the owner out what do you have left as a business. To me, that's probably at the end of the day, what people are going to be looking at regardless if they're buying the businesses. Hey, if I pull the owner out because he's the one selling. Unless I keep the owner with the acquisition or merger, what's left over. And like you said, years of being there, your staff, if you have multiple locations, those play a role. And I'm curious, I just want to verify, when you said the years in business, that, I would imagine you're saying the longer in business, the more value there is but there could be if there was enough growth, a kind of the reverse effect, yes, like almost like you don't want to be in the middle. You don't want to be average. But if you're new and you're having a lot of growth, you could be valuable if you're existing. But if you're kind of in the middle, is that a fair statement? Or is it just really as long as there's growth, there's just got to be growth?

Yes. Growth is obviously incredibly important. But I mean, again, dealing from an investor standpoint, right, to see a business that's been operational for 15 or 20 years and has weathered obviously some very different financial environments with economies and stuff like that, it shows that there's some lagging behind it that you can feel comfortable that if the owner did step away, the businesses are going to fail. Sometimes when you're seeing such a same growth like you had, and I know you had that in such a short period of time. The worry from an investor standpoint might be that all that growth is completely tied into the people that are there, and they're not going to be there any longer. And that's why sometimes with that acquisition, you have this like deal with the person that they're going to stay on board for a certain time. Quite often, it's a 12-month period. And it's so that you can, A, be trained by them in depth, and B, so that the people will start to become familiar with 2 phases rather than 1, and it makes that acquisition more palatable. But when you see companies that skyrocket from 0 to 1 million in a year or 2, you have to wonder if it's sustainable. And you have to wonder what made that happen. Now if I saw a company that had been around like you said in the middle, maybe 5, 6 years. But they've had very little growth in that time frame. Yes, I'm probably not that interested in it, unless I can really determine that they have a really good infrastructure, really good staff, but that they were the wrong people to run it. And that happens, right? We do meet those people where they were great installers, and they thought, wow, the owner of this operation is making crazy money, which, of course, is never the truth, but they think that they're making gobs and gobs of money and that they should be able to go and do the same thing and being a great installer or even just an okay installer to being an owner operator is -- they don't correlate. Now I'm not saying you can't become a great owner or operator, I'm just saying that I can tell you that I've seen, unfortunately, a lot of individuals that, in my personal opinion, perhaps shouldn't have stepped into that role and taking that on. And in turn, should have probably stayed as a [ lead tech ] or something like that, making phenomenal income without all the headaches that they're currently dealing with. Over.

Yes, over. That's something that I think, like you said, you touched on, it's very important because when you're stepping into that realm, you go from, let's say, working somewhere, you used to a certain amount of money. Now you open your own business, you start growing. The revenue number is impressive. Like you start doing more revenue and you're focused on revenue. But really, like -- I feel like the equal focus has to be on profit as well. Now even if you're going to reinvest that profit, it's still profit that wasn't necessary to operate your business potentially and you chose to reinvest it. But if your revenue is going up, your business is getting bigger, but you're bringing in less money for yourself and there's no money being saved for the company, I feel like it can be a little bit of a trap to focus on revenue. And like you said earlier, as far as your value goes, I mean, if you have a company that does $1 million in sales, and profits $350,000, that you have $1 million in sales and profit [ $50,000 ] of that. You have the same sales, but you couldn't expect somebody purchasing it to pay the same amount. So a multiple off of revenue, just it couldn't -- it just -- it can't be a determining factor. Unfortunately, I don't think with anybody who's going to put up any real money, frankly, in window tint to just go off of revenue. It's about profit.

Yes. I mean, again, I know that I have seen acquisition based off of revenue. But again, it was because the companies were able to determine that there was excess expenditures in areas where they didn't need it. They would be able to amalgamate some staff, obviously let some staff go. Things like that or maybe I could see $1 million in revenue [indiscernible] $200,000 -- sorry, and $50,000 in profit, but I could see where I could get $200,000 more grand in profit out of it with just a few changes that the other operation doesn't have available to them. That's where it would make sense. But ultimately, most investors are looking to work off of the bottom line revenue, yes.

Very interesting. It's great that there's action in the window film industry that everybody is still doing well. We're 1.5 years into COVID and companies are moving, supplies are moving down the chain. People are selling more than ever. The interest in automobiles and protecting the outlay cost is just like people are spending -- I feel like people are probably spending double on a new car purchase than they were 5 years ago. Like between -- not saying cars went up in price double, but I just mean like -- it seems like everything is going well. All cars are going up. People like Ram TRX, that's $100,000 truck. And like you just fly off the shelves? And then what do you want when you spend $100,000 or $80,000 on a vehicle, you want to protect it, you want to be comfortable in it. And it's a great time to be in this industry.

Yes. It's like everybody, when COVID first started to happening, there was -- all of us internally were wondering how is going to affect us. And that's why our CEO, Ryan Pape, at that time was like, look, all acquisition is off right now. There's going to be no mergers for a while. We're going to stockpile the money, and make sure that we can keep everybody getting fully employed of 100% of their working hours, and it was an amazing move that he did. And then, of course, a couple of months later, things really started to show us that, that wasn't the case and that sky wasn't falling and wow, sales took off and we had a record year, and we're having an absolute record year again this year. We had a record second quarter. I think we're on pace to have a record third quarter. As a matter of fact, I'm pretty sure we are. And what's interesting to me is that I, of course, travels a lot and I see a lot of dealerships, showrooms, and lots and the lots look fairly comparison to normal. As a matter of fact, a lot of the vehicles they do have are just strictly used cars. But I talked to clients all day, every day, from all around the country. And everybody is still moving upwards in their sales and in their -- year-over-year compared to what they were doing last year same month, they're still moving drastically upwards. And like you said, I know for a fact that the average car price just in the last 12 months has gone up. And it's predominantly because the stores are, first of all, not discounting because they don't need to. Second of all, the manufacturers do not have any incentives because, again, they don't need to. And third, the dealerships and they're freeloading the vehicles with extras, that the customer can genuinely benefit from? I get it. But again, if the client wants the car, they're going to do it. Look, you just saw Ida, right, that just blew through the Northeast. I was reading that there might be upwards of 1.25 million vehicles that are being written off from the floods. Well, that's another 1 million-plus cars are going to be needed for the environment that don't exist as far as I know, collectively speaking around the U.S. So I think that when you're spending top dollar for your car, whether it's a base car, it's only $20,000 or it's a luxury exotic cars, that's a [ $200,000 ] whatever. I think that your intention at this point is, "Hey, I'm going to hold on to this car longer than I used to. I'm spending more money than I'm used to. And I'm not getting a discount like I'm used to." And so maybe all of that is playing a part of, let me do more to this vehicle. Let me personalize it more with regards to window films. Let me be more protective with the paint protection film and ceramic coatings and things of that nature. I can only hypothesize that all of that is playing a part of it. And all I know is that once in like -- 1 in 100 stores, I'll talk to was like, well, Chris, our numbers are down right now because of COVID, no. No, it's not. It's not because of COVID because the other 99 are telling me the exact opposite right now, and they're all around you in some capacity. So it's not that. It's a 100% you or it's you lying to me. It's one or the other. It's that you've cheated on me and you've gone with another brand. You don't feel come out and tell me about it or -- and that's usually what my suspicion is to be getting with you or it's that -- or is that you're doing something really wrong with your business because everybody else has gone way up, way up.

Yes. So dealer meetings coming up this year. There'll be a dealer -- XPEL Dealer Conference in March, yes, San Antonio?

Actually, in February, yes, the specialist is on right now. Do you keep in mind, some people have asked me this question privately. They asked if they can attend if they're not XPEL. The answer is no. I'm sorry, guys, but we reserved the dealer conference for the XPEL' clientele. It's an unbelievable time. Everybody that attends conference will tell you that they will never miss another conference after that. There is a lot that they gained from conference. One of the things that I'm always proud about is the fact that it's not 2 days of Ryan Pape standing up on a stage talking about how awesome XPEL is. And instead, what he might do is he might stand up on stage for 1 hour, 1.5 hours and tell you about, hey, this is how the company has done in the past, but this is the things that he feels are important to us coming up with the future, and he sort of lets the cat out of the bag with a few obviously important details. But then he always bring up marketing, which is amazing because, of course, marketing will talk about what they have in mind for the company as a whole, which, of course, is beneficial because we're all co-branding like I talked about earlier. And then they always bring in a guest speaker. And the guest speaker is not XPEL. They don't work for XPEL. They have something of their own, in some way or capacity. And what they'll do is they will talk to you about how to improve your business. And so I'm really excited for this year's guest speaker. This year's guest speaker, has his own television show called Gas Monkey. His name is Richard Rawlings. [indiscernible] excited to meet him. I've been watching his show since it first came on. And I know that he's going to be amazing. I got to listen to a 5-minute cutdown version of some guests speaker and he'd done another event, and I was blown away by it. And I know that our clients are going to really resonate with him, right? The guy that went from running a little shop of a zone with just him and one other person to now obviously running quite an empire. I think that a lot of his story is going to correlate with a lot of our owner operators. But it goes beyond that. We have competitions. We have breakout sessions. This year's competition, man, our grand prize cash, and I'm talking $100 bills is $10,000 to the paint protection film, to the auto window tint and to the flat glass division. Second place, if I remember correctly, I think it's [ $2,500 ] cash. I think third place is a grand cash. And if I'm not mistaken, and please forgive me because we didn't have a conference last year, unfortunately, due to COVID. But if I'm not mistaken, not only is it [ $100,000 ] cash to the winner, but there's also [ $2,500 ] and free product to the winning operation as well. So maybe the winning operation, let's say, it's SunStopper as well. Let's say, Mike Burke of his installers there and his installer happens to win the flat glass division or window tint or [indiscernible] or whatever it is, the SunStoppers would also get [ $2,500 ] of free product to go along with it. But we also have breakout sessions, right? And I don't know if this is done yet. So I'm hoping it is because otherwise, I'm going to get in trouble from Mr. Rob Bezner who is Vice President and incharge of marketing, but I believe we're bringing back Jared Guynes again. And I hope I didn't put through Jared's last name, my apologies. But Jared is the guy that motivated myself and more importantly, motivated Mike Burke to come up with the idea of doing the Guinness World Record event. So a few years ago, we were at a dealer conference and Jared Guynes was one of the guest speakers, and he had talked about how he's done this world record, actually did a twice event. And -- but his specialty is social media. And the guy is unbelievable. When people reach out to me and they say, "Hey, look, like do you guys have an in-house social media specialist that I can lock on to." Well, we can give you some guidance, yes, but we cannot run your individual pages for you. We don't have a paid-for program like that, but I always recommend Jared for that. So I'm fairly confident that he's back again this year, but we will have advanced PPF. We'll have advanced tint. We'll probably have a security attachment like we have in the past or security film. We'll have things like, hey, how to keep your staff motivated, how to manage your bottom line, how to invest wisely within yourself. Things like that. And these breakout sessions are awesome. Usually, there'll be a rep from XPEL like myself mediating the room. But it's usually us strong upon our clients that have had immense success within those fields, that we ask them to sort of spearhead the topic for us. We did dealership development was a big one and Willis Auto Campus, which is a really cool operation up in Des Moines, Iowa. We had one of their top level individuals come in and they were -- they ran the whole dealership development thing. So here was a dealership, telling you how to get into dealerships as independent if you wanted to and give you some guidance. But I was just like, well, it's so cool, like if the dealership that doesn't ever want to use third party that's actually helping you understand how to get in as a third party into it. So I mean -- and of course, you already know that the XPEL brotherhood is very cliche but very real and accurate. And you have all these guys that are normally competitors that would normally -- and I think in a lot of other industries, maybe even with other brands, I get along so well with each other. They get along on famously with each other, and they're breaking bread with each other, and they're having a good time. And COVID really messed that up for us last year. Ryan was really adamant that he wanted to have a dealer conference, come hell or high water, but the hotel turned around with like, I don't know, a couple of months left to go and said, we will only allow you to run 50% occupancy and on that, but you can't do the welcome night where we normally would sit down at the bar and have a drink or twining on each other. And you guys would have to have all your meals seated at the position that you're in, in the conference room and you'd have to be socially distance from anybody else within the groups, I mean, it's just like, wow, there's no way we could carry that up. So unfortunately, we had to cancel that. I think the one that everybody is wondering right now is CIMA, right? Like we're hearing the CIMA as a go, but there's a lot of people that are hypothesizing that CIMA is going to get canceled. And if it doesn't get canceled, are they going to require a mask, they were going to require a vaccination. I don't know. I'm hoping, of course, that CIMA happens because I think the CIMA is incredibly valuable to especially speak to our clients, but we'll see. But dealer conference, yes, early bird is already up in live guys. So if you guys are looking to save money, which I always say is a smart thing to do within any business, yes, go ahead and click on, but do you keep in mind that we will verify that you are, in fact, an authorized XPEL client?

I feel there's tremendous value. If you're an XPEL dealer and you have the means to make it there, I think like tremendous value, tremendous, tremendous, like that goes for anybody like if you're a manufacturer as a meeting, I think you should go every single time if you possibly can. And I think it says something that you have people reaching out that are not XPEL dealers want to come to the meeting. I feel like you're going to have to have some sort of like extra-long meeting in the future that includes a day or 2 for non-XPEL dealers, which doesn't quite even make sense in a sense that other dealers want to come to it. I mean it does make sense, but it really says something.

Yes. I don't know if you're -- are you getting crackly with the microphone on your end because I am on.

I'm getting crackly, the video is off, but I could still hear you well. I think we're okay.

Yes. I mean I know why some -- like, I don't want to be rude or anything like that, but we've had competitors that have asked some of their idea of like how we -- like why is our so unique? Why do we have the turnout we do? Why do people come back from it as Jazz as they are. And again, we're really good friends with most of our competitors. We have a lot of admiration and respect, especially for 3M and Eastman. Those 2 specifically are the ones that we really feel that they are the top 3 brands with us included. And -- but at the same point, they've got their own secret sauce, and so do we, and we want to keep some way it to ourselves. And I'm not saying that they are the companies that have asked some of their clients to attend. I apologize, I even suggested that, that's definitely not what I'm suggesting. I just know for a fact because I've had some people reaching out to me and tell me that straight to my face if you will.

Yes. I mean, of course, like dealers are...

Some guys want to attend because they want to try and...

Say that again because I want to rip up.

Sorry, I didn't mean to cut you off.

No, no. You're good.

Well, no, what I was on to attend because, of course, they want a time, of course, win the competitions and win the money, but we would obviously want that to go to an XPEL client, especially if we're going to give away a free product to go with it, so yes.

Yes. I think it just says to like the -- again, like enthusiasm in the industry that exists right now. And even if it's like an XPEL event, you're not an XPEL dealer, there's a certain draw to just going there, if you could, hypothetically, wanting to go there, see your peers and learn what you can learn and so on. So obviously, it doesn't make sense when it's an XPEL meeting to have non-XPEL dealers there, but it just -- it's a nod to the enthusiasm and that exists right now in the industry, which again just points to such a healthy industry to be a part of.

Agreed. Agreed. And as you said, every manufacturer, top-level manufacturer tends to have some kind of get together, some kind of meaning, look, we spend -- I mean it's public record. You guys can go in and look at our fiscal reports, we spent way over $0.5 million on our dealer conference, way over.

I printed out some numbers ahead of this just in case.

What's that?

I'm sorry, I said I printed out some numbers ahead of time. At the videos, you'll see it in 30 seconds from now, but I have like a handful of papers of like the quarterly reports, just like it could be up to date with any numbers in case we're in there. But it is interesting, and like you're saying, it is public information, and you can see how much revenue and expenses and so on. So like it's a good exercise in business, even if you're not going to do anything with the information just to -- I find it interesting, and...

Yes. People are always -- because the dealer conference isn't free, right? There's an early bird special, which obviously saves you a lot of money. And -- but at the end of the day, what people are always surprised by is how much -- and again, those that pull over our financials realize how much we spend over and above what our clients spent. And it's -- but I mean, dealer conference is unreal. Like I can't express it enough. Like it's the first dealer conference I went to, I was shocked because I honestly anticipated coming from Corporate America before in a long while ago, of course, the conferences were very different. It was all about us, us, us and this is how great we are and this is what we do, and some of them wasn't even relevant, and then to go to the first dealer conference with XPEL, and here a very different approach was mind-boggling and rewarding at the same time. And of course, getting to hang out with a lot of my friends in one spot is obviously something that comes with a lot of enjoyment.

Well, that's February, and it will be right around the corner because time flies and we're basically in October. So like you said, if you haven't bought your tickets, and you're XPEL dealer, buy them now because it will be cheaper now than if you buy them on last minute. And...

Yes. Well, the thing is -- well, go ahead.

No, no, you go ahead, you go ahead.

Well, I was -- I wanted to point something out. When we do these podcasts, There's a lot of people that are making comments and stuff and saying things like, hey, Chris, and then saying a lot of stuff, just so you guys know, again, I'm on social media. I do have my profile. And so what I can do sometimes is I can sometimes click on it and like something. But if I even try and comment on it because I deleted the app, it just doesn't work properly. I get about halfway through the sentence and then it stalls and it won't let me continue. So I did want to point out that I hope people weren't thinking that I was being rude and not responding to the remarks or sometimes comment on that you can see that I can't.

Yes. No, no worries. I'm glad you said that, but I don't -- I haven't been -- I've been reading the comments, but they haven't been on screen and usually like it does go better, even if you could see the comments, cannot be distracted, frankly, and I'll ask any questions that are important. But yes, good pointing that out, so nobody thinks that. And they do go fast and sometimes just putting it out there, they don't even show on my screen, and I'll go back after and see comments that I didn't see. So I'll take that at the moment to put the disclaimer out there that sometimes I miss them as well. It's just how it goes. Anything that you wanted to discuss that we didn't touch on yet?

No. I mean this is just really exciting times for all of us. XPEL, if we're just going to touch on just XPEL specifically, our stock is amazing. Our product quantity on hand is unbelievable. I was down in Texas, 5 weeks ago, we are building an in -- man, so 3 years ago -- 3 years ago, in 2018, I was Mike Burke, and I took them on a tour of our new facility, right? And it was, it had a clean room in it and everything. And if I remember correctly, it was something like 50,000 square feet facility, and this is now separate from where we used to be because we used to have our warehouse and our head office and everything located together. And then we went and built out this massive warehouse facility that [ Carlos Alvarez ] is incharge of. And it was very impressive, like genuinely really impressive. And we had really started to get -- I mean, we were really starting to get into tint and stuff like that at that point, we'd already been selling it for quite a few years now. But I mean, paint protection film occupied, I don't know, -- in terms of film product, at least 90% of the shelf space. And my boss, Mike Mayall was there and he said, mark my words, within 2 years, we're going to outgrow this space, and it's going to be because of window films. Our window film sales are going to surpass our paint protection film sales by square footage, and we need more shelf space for that. Well, So I was just down in Texas, 5, 6 weeks ago, for our sales meeting, and we did go look at this new facility. This new facility is 120,000 square feet. And it is so state-of-the-art. I mean, man, it's incredible, like even to the point where they thought of like, for instance, like the table in the -- like lunch area for like when people are doing training and stuff like that, the table has like the charges where you just put your phone on the table and charge up your phones and stuff like that. It's like a part of the technology when there is another cool part is that they have this like little like cubicle where it's soundproof so that you could go into this room and have a private conversation with either a client or somebody from back at our shop, and not have everybody else -- and not have that worry about somebody else over hearing it because normally what you would do is you would like leave and call it siding walk around the parking lot, trying avoid somebody over hearing that. But like that the new training centers, there's now 6 rooms of training centers instead of 3, I guess what we currently have. So we doubled the number, but also like way larger the reception and everything, and the craziest part is that, that original facility that was around [ 50, 000 ] square feet, and it has been bumped up by another 20,000 was busting at the themes with window film and paint protection film, but the window film, so what I'm really proud about is that if you look at those reports, you're going to see something interesting, and that is that XPEL now sells more square footage of window film than it sells of paint protection films. So I don't know, I just thought that, that's maybe part of closing, something that we hadn't talked about is that started facility coming together, but the San Antonio facility is ultramodern. I mean you're going to think of like a Tesla factory, an Apple factory or something like that in terms of when you see it. And the clean room and everything like that is being done in an equipment that is being designed specifically for is marvelous. And then to consider the fact that right now, that facility that -- that when I went into 3 years ago, it was like, wow, like we've never used all this, that every single inch of square footage of shelving space was not utilized, but so was the centers in between the shelves packed was pallets and pallets just [indiscernible] times. I'm just super excited for where XPEL is, and where it's going. And I feel like you said like the industry as a whole is doing that. So yes. That's it.

Well, congratulations on the success and keep killing it. You're doing amazing things for XPEL, and XPEL for the industry in general. And the same that's been turned around is the tides rises -- all ships rise with the tide, something along those lines. And I believe that is definitely the case. And really, it's exciting. It's fun to watch and keep killing it. I can't wait to here in a year or 2, hey, remember Tint Wizdom, where I was talking about the new location and now that's busting at the themes, and we're expanding to it.

My boss Mike Mayall give it 2 years. He's convinced 2 years is all it's going to take. Like, you know what, but we're -- we put it in [indiscernible] can we put in Vegas, we put in 2 in [ Canada ] and we put this 1 and going in and start. He's like, yes, mark my words, 2 years, okay. You were right last time. You going to pull out this time. So listen, without any further ado, thank you, Erik. I love doing this podcast as you know, and I can't tell you enough how much I appreciate what you're doing for the industry, and of course, Tint Wiz itself as the program, I think, is unbelievable. I highly recommend it as you know to the clients. So keep doing buddy.

Thank you. Thank you so much. I appreciate you saying that. I appreciate you doing this. The video today, obviously completely sucked, but the audio is crisp and clear and that's what's important. So again, thanks, Chris, and I look forward to the next one.

Sounds good.