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

Really clear compared to before. It looks.

Yes, way better.

So just real quick, we are live, just put that out there.

Hold on. Let me see if I can turn this to at least we're not staring at the lights above me. Okay, there we go. Is that better?

Yes. Yes, you look good.

You look better though. Man, I look still too dark. Keep going.

I mean I'm orange. I'm not even a person's skin color.

Look, I'm just dark. Like, I'm like -- I mean I think I got like a big tan going on. This is great.

You look well tanned.

Yes, you do.

New Year's resolutions, either of you the type to set New Year's resolutions, business, personal, both?

Both.

To be honest, I didn't -- and I used to be really good about that. I know between maybe being busy and working, I didn't -- I think New Year's Eve, as the fireworks were going off, I was laying black PPF on the core for F8. And so it was like eh, it's another year, here we go.

No I do it once. Every year, I did -- this year decided that I was going to drop baked goods simply because I love them too much. I know I need to cut them out of my diet. And then business, I had made a decision that I was going to do my best to make sure that I responded to anybody and everybody within 2 hours from now on as a go-forward model.

So let's start with the baked goods. You're in phenomenal shape. Anybody who has hugged you knows that you don't have an ounce of fat on you. What is the move for baked goods? Is it just like a feel better thing, like muscle feel better? What is the...

Yes, training feel better, for sure. I mean yes, okay, when you guys have hugged me sometimes, I have maybe felt a little more solid than others. The fact is that when I'm competing then, of course, my diet is a lot more strict and I have a much more regimental schedule and everything that all goes along with it. And so my physique comes along with it as well. When I'm not competing like right now, then it's not as true and so I put weight on and I don't tend to eat healthy nearly as much as I normally would. I just think that -- I talked to a lot of friends. I was with Ryan Burroughs from Auto Paint Guard over the holidays, and Alex Jones also is here. And with Ryan, he's got a pretty strict diet. He's in incredible shape. And he was telling me that dropping a lot of things like bread and stuff like that made him feel insanely better right afterwards. And I'm like, wow, okay, I can understand why that would play a big effect on you physically. And so I'm going to see -- I'm going to do it myself and see how it feels.

Great. So Chris Hardy already doesn't drink. And I'm still trying to catch up to that. Now he's dropping carbs and baked goods. It's like, man, come on.

I'm just trying to make it -- I'm trying to separate us a little further there.

Great. How about you, Erik, what did you do? What was yours?

So I'm definitely going to work -- make an effort to work out maybe every day. Could be a thing. It's something that was -- used to be a part of my life and definitely fell off a little by little. And that's kind of my one real big one. I have work goals, obviously. But to me, that's the one where I'm like, this is a nonnegotiable, I feel like, this year, because it has to be a nonnegotiable eventually. And like -- Chris, like what you were saying, I found out a few years ago, like I had -- let's see, my early 30s, I sat in a desk for a few years straight, and I instantly became like super back pain, pop my knee, like just -- I thought it was falling apart. And then a few -- fast forward a few years later, I did change my diet and I cut out sugar and I eat -- for a long period of time, I cut out like carbs and everything and all that stuff went away. And it was just like the difference between being in like knee and back pain, can't move or feeling great, and being able to like literally jump in the air and land and not have any weird feelings. And with all that knowledge and experience, the self-discipline just hasn't been there in the last couple of years. So I have to do it because I have to eat right and then you have to exercise. Like exercise is a nonnegotiable. If you want to live a long time, you have to exercise. No matter how pretty you may look, if you don't exercise, it doesn't usually work out longer.

For sure.

Good for you.

Yes, Yes, definitely good for you. Yes, working out as huge, especially as we get older. But I wonder with my New Year's resolutions because I realized a while ago that like -- why am I waiting for the new year to make this resolution and then try and stick to it. And I wasn't always following through with that. So I mean in all honesty, I probably make a new resolution every Sunday or every couple of days of like I need to fix this or change this. So I...

But the question is, do you do it?

No, I don't, of course. But I need to be better about that, but I feel like my New Year's resolutions, especially the older I get, I'd probably come up with something new every week, like let's do this, this week. And just do it small because, if I were to take my New Year's resolutions, I'd be curious, if we put on paper our last 20 years of New Year's resolutions, how far did we really go with those. Did we really make it and change ourselves? Did we last a month? And the classic has been working out, right? They always say that the gym for the first week after New Year's is packed. And then by March, it's empty again.

Yes. Gyms actually bank on an 80% attrition rate, but -- where people are still paying their auto-payments.

So I feel like what we're describing is something that really translates into productivity of work because it transcends not just from like physical but also to work because the fast -- like we all have those things, whether it be work or health that we know we need to do that you're like, you know it, you know it's an issue. It's a big bottleneck with the business or at work. And it's like being able to spot it, act on it, and follow through with it. And actually, that could be a year. That could be 5 years, it could be 10 years. It could be a week. It could be a month. It could be anything. And I really think like when you can identify it and do it and stick with it and -- because we all kind of know what we need to do, but doing it can just drag on over years sometimes.

And maybe that's the good part of a New Year's resolution is that it's forcing us to think about what we need to change or be better at.

Yes. Yes. Chris and I actually had a conversation -- we were talking earlier today, and I was telling -- we were to talk about this one thing in particular with me. And that is that if I have a task that's in front of me, I literally have this like obsessive thing that I have to get the task done right now. I can't let it wait. And I know part of the reason why I can't let it wait is because if I let it wait, it's probably not going to get done or it's going to get done last minute, it's not going to get done right, right? And so I like the idea that if something is required of me, just get it done right now and make sure that it gets done properly.

So Mr. Hardy, you said your other resolution was to get back to people. I think as far as like work, everybody and anybody as quickly as possible. Why was that an important thing to make happen now?

So I was listening to some, look, talk [indiscernible]

He's just probably got a call. Maybe...

You guys can still hear me?

No, we can hear you now.

Hold on.

You're back.

Something has gone wrong with this. So sorry, guys.

We can hear you.

Probably going to have to leave and come back in.

That's all right. Maybe it was on a delay, you know what I mean? Sometimes it can happen.

Well, I guess we can continue on. I mean Chris Hardy, it's funny when he said that today in our conversation, with his -- this is super important in business. And it's something which I was better at is my -- procrastination has to be one of the worst personal and business related things that we can do. And I'm guilty of it. You put something off, you don't -- you think you can finish it in 30 minutes and it takes 2 hours or it's longer. And Chris Hardy is very good about that. And like he told me today that he's committed to -- he just gets it done and get it done right away. Don't put it off till the last minute.

Yes. So I'm sorry, guys, I dropped off for a bit. It seems like with this app on my phone, if somebody is calling me on the side, even if I swipe up to get rid of the call, it still somehow messes up with the signal. So I apologize. So I'm trying to answer your question. Look, talking to a lot of individuals within custom -- within not only our own space, but our customers, our customers' customers, and personal connections. I think that a lot of people's pet peeve is that they try and connect with somebody and then they don't hear back from them for 24 or 48 hours later, they're wondering whether or not they even got the message, things of that nature. And so many things have come around now where you can see that the message has been delivered and yet they're still not responding. They're kind of like wondering why, what's up, like have you done something wrong? Or is there some sort of personal reason why they're not responding to you? And I just don't like making somebody feel that way. I don't like when it happens to me either. And some like, look, like I'm pretty good at getting back to people right away. I feel like a lot of -- especially the staff that work with me say that I get back to them right away, but I know that it's not always true. And I'm like, look, you got to do better, like you just got to do better for everybody around you.

Yes. I mean we're definitely at a time where it feels like everything is at your fingertips. So you kind of expect people to be at your fingertips as well. So what could have been a week before, now it feels maybe more like it should be a couple of hours or a day at most or whatever it is. And with the amount of people out there that can possibly reach out to anybody, it can be a lot. So I think everybody has to kind of adapt and do what they can and figure out what streams they want to communicate through because when you're getting reached out to from 8 different places, Instagram, Facebook, Personal Messenger, getting phone calls through different numbers, e-mails, like it makes it obviously more difficult at high volumes. So everybody should know...

I guess I should quantify I'm specifically more referring to phone call and text messages, right? That's the 2 most instantaneous ways to connect with me. Look do I look it at emails? Yes, of course. Do I have the notifications on? Of course. But a lot of times, what happens is the call will come in. And then I won't accept the call because I'm on one. And then another call will come in, and another call will come in. And what's going on is I'm literally never getting off the phone. And so now what I've decided to do is, okay, no, hang up on the first conversation before grabbing the second one. Take a look at your phone, confirm that there's either text message you haven't responded to or that you have those names in red. And it's amazing how often I'll see a name in red, and I'm like, oh my God, yes, they called me on my last client. Totally was thinking I was going to call them right back. And then there's a really good example of how I could easily drop the ball and then not respond to them and have them wondering why I didn't get back to them and then, in turn, maybe missing something that I should have been involved with. So just need to make some adjustments in order to make sure that I'm accomplishing as much as I possibly can. Go ahead. Sorry, Chris, go ahead.

Well, no. So what I've been doing because I have the same problem, where especially a big problem I have is I start to respond, and then I get a call that comes in, and then it literally falls like way down the list. So I've been trying to tell people like, hey, I'll give back to you, if you don't hear from me, ping me again. Just saying like, I'm not saying that I'm the busiest guy in the world, but bug me. Like I promise I want to get back to you, but -- and I do these blanket statements where somebody says, "Hey, can you give me some feedback on this?" And I go, "Slammed today. But if you don't hear from me by tomorrow, bug me again. And I promise I want to respond to you, but I want to give you the full response that it deserves."

Sure. Yes. Yes, I was talking to Mike Burke earlier today, right? I mean now they're -- I think they're approaching 60 or they're past their 60 store locations. And he's on the phone like more than I am. Like from the minute that man wakes up to the minute he goes to bed, he is like doing all of this like guidance in terms of like, hey, all this business right guidance and stuff like that, how to build, how to grow, how to train, how to market, all that stuff. And I'm like, "Man, like I think I'm brutally busy, but how in the world are you dealing with this?" And it's funny because there was -- when Mike Burke and I first started interacting with each other 3, 4 years ago, 4 years ago, plus now actually, if I text him, I'd get a response within 10 seconds. Sometimes now, it's a couple of hours later, and there's just a really good example of how you realize that things have changed in terms of people's schedules and how you might actually personally perceive that change and thinking that, "Oh, why isn't he getting back to me right way like he used to? Like is there something up?" And that's just -- again, this is a big part of what I'm sort of mentally dealing with right now in terms of figuring out how to make sure I look after people as best I can.

He takes an hour to get back to you? That's crazy. It's like 5 minutes with me. I don't...

See -- and I'll tell you right now, Erik Devash, he takes his call the minute he calls him.

Yes?

Oh, yes.

True.

Anybody including me to take Erik's call.

Oh man, we're falling down the list.

Yes. Priority has definitely changed.

Yes. Yes. It's -- we're seeing transition of communication, which is pretty awesome. I mean look what we're doing right now, Mr. West, is it okay if I refer you by last name here because I feel like I do Christopher and Chris.

Yes, that's true. We got 2 Chrises, yes.

So you mentioned you're doing a lot of traveling. Obviously, that came into mind when you mentioned getting back to people. I can only imagine when you're on the airplanes like for some -- like can you -- what are you doing so much traveling for?

So I mean my Middle East trip to the UAE was -- started out as a fun trip. I wanted to go see the F1 race in Abu Dhabi. As I've gotten older, I'm trying to find some hobbies that I enjoy. So traveling to find a race every year maybe is pretty fun because they do them all over. So went to Abu Dhabi to watch that one race, awesome experience, super fun. But then while I was there, I decided to do a couple of visits in Dubai and visit some shops. So I went by NVN, who is a phenomenal shop. I did a little shop walk-through and then visited another couple of shops. This is -- one of my favorite things, and I mean I know I worked for XPEL full time, but a big part of that was I love still getting out and interacting with shops and learning and talking with the installers. So wherever I'm at, I try and still make that happen and it was super fun. I mean Dubai, crazy money, it was is -- really need to see those shops.

And for anybody who doesn't know, what is your position with XPEL?

Director of Automotive Films.

So kind of what does that entail?

So I do -- I work with R&D a lot on our films from the paint protection film to the window tint. And with XPEL, it's really neat. I mean when we say R&D, research and development, we really do have a full team of engineers and chemists and all that, that when people say what are you working on now, it's literally -- we're testing different things, windshield films or tint or PPF all the time, seeing how we can make it better, what we can change. And there's criteria and coming from being an installer myself, there's valuable feedback that we can give to the guy who is the chemist to say, "Hey, this is really important to us as an installer. How can we fix this?" And they go, "Oh, I didn't realize that you wanted that. Okay, well, we can change this and tweak this." So they're constantly working on stuff. And then a new role that I'm taking on a lot is working with all of our XPEL shops in the operational side. Having visited so many shops and having my own shop for so many years, it's very fun to interact with all these installers in our shops that we have in Texas and Las Vegas and Boise, and making them an integral part of the whole XPEL community, meaning that it's not a competition with our other independents that are dealers for XPEL, but we all work as a synergy for that local area. And I really enjoy it.

That's -- I like what you said especially at the end because you really painted a picture of like you can spend your energy working against your competition or you can spend your energy working with your team to do better.

100%. If we, as an install shop, are overworked, I want to be able to call -- instead of telling a guy no, I can't service you, we're booked out 3 months, I want to call the other XPEL dealer down the street that I know does phenomenal work because he's trained with us and when we worked with them and say, "Hey, do you mind if we send this guy to you? I'd rather take care of him and make sure he's protected or attended or whatever, than just saying no." So it's a great synergy that we have. It's funny because I get it where I had a shop for 18 years. And if I heard that XPEL or whoever I was carrying was opening another person in that area. I used to lose my mind. I mean I'm calling Jeff Phillips. I'm calling Ryan Pape. I'm like, what are you doing? And it takes some mind changing to understand that it works out. It really does. And I know it's hard to believe, but it's okay, but we can all be a team together.

Chris. I feel like that's something that you've said often, like I've heard from you often. Is that -- did you want to expand on that in any way?

Yes. So I mean I've touched on the subject -- are you talking, which Chris?

Sorry. Mr. Hardy.

Yes. So I've touched on this subject before because we've brought this up where some people have been like -- like some of our competitors have tried to throw us under the bus by trying to make it sound as though XPEL's plan is to take over every single market and basically wipe out the independent shops and somehow just own the entire market ourselves. And that's the farthest thing from the truth. #1, everywhere where we have a shop, that shop does a lot to help out all of the independents around it, and I mean a lot. We do an insane amount of marketing, which is localized marketing, if not store-specific marketing. We do -- we obviously carry a lot of product in those shops so those stores can actually -- quickly go to those stores and grab product that they needed. Those stores can also quite often call on those shops to say, "Hey, I lost a guy to COVID last week. Is there any chance you guys have got an extra one available?" We manipulate our staffing or to try and make that happen. We also tend to be the highest-priced in the marketplace on purpose. So again, they're not utilizing our store because we're the cheapest. We're trying to set the bar actually higher than everywhere else. And what was really an eye-opener for me is, at some point, somebody got to show me the current sales penetration in marketplaces not only where we don't have a shop but where we do have a shop. And I looked at those markets and I saw the drastic number per person per year, which is what our goal is, right? We have a target that we have to try and achieve somewhere between $0.75 and $1 per person per year in the U.S. and in Canada as our initial goal, right? And the goal will change, of course, at some point as we continue to add on product lines and PPF especially continues to do its upward momentum that it's currently doing. But regardless, that's the initial goal. And you can look at those markets like the Houston, San Antonio, Boise, Vegas. Now of course, we're going to go on to Scottsdale. We have Montreal. We have Calgary. When you can look at these markets, you can see how incredibly -- how much higher we are in penetration per person in those markets. Now me right-of-way of course, as you know, being -- I was a partner with David Glendenning for so long with the shops up in Canada. I was like Chris West. I'm like, oh, right away, I'm like, "That's because XPEL came in and they just took over the market and no wonder they have the highest penetration. They're probably doing $6 billion a year out of that store." And then they find out, actually, the store is not doing that much in volume. They're doing good. They're doing respectively good. That's for sure. But what was amazing was to watch -- now the stores that were already in those marketplaces are actually doing insanely better now that the XPEL shop is there. And I'm like, how, like how does that even work out? And then you find out everything's going on behind the scenes to make it happen. And I'm like, oh, yes. Okay, I get it. And so it's funny because when I have had an opportunity to sit down with some independents and show this fact to them, the fact, not just conjectured conversation, but true facts, here's the numbers, here's where they were before, here's where they are now, look at this for yourself, they're like, "Oh, wow, okay, hey, any chance you guys want to open up a store in my city then?" And it's amazing how that's starting to change, and yet our competitors were purposely calling some of the shops that had converted to us going, "Wow, how are you going to feel tomorrow when they open up a store right beside you and they try and take all your customers away from you?" That's the furthest thing from the truth. The absolute proof is in the pudding farthest thing from the truth.

Well, let me add some things, too, because I know it can sound like our team at XPEL, you got Hardy, you got me and we're just going XPEL, XPEL. But I mean I use 3M obviously. I used SunTek for many years, and I have nothing bad to say about other films really. But I know that as XPEL, it was a business owner, I won't even say XPEL. As a business owner, there's so much -- you can have the best film in the world and install and offer that. That doesn't mean you'll be successful. So XPEL, at least for me, I really love that and recognize that, that's important. And when I sit in meetings and talk about how we can grow to help our independence, it isn't about making a better film. Granted, I always want a better film. It's what other ancillary things and supporting things can we do to help business grow. And Mike Burke, of course, great business coach, where we talk about the marketing, the Tint Wiz app where you guys CRM, invoicing, all that. Those are the things that can help make a successful business and where at XPEL, we're looking beyond just product. Product is important. Don't get me wrong, but there's so many additional things to help make a person successful. And that's what excites me because I love the product side. I'm obviously installed a long time. I love the business side. And so it's how can we help people grow beyond that.

Yes. And Jordan just left a comment, just basically resonating what you all are saying from his side of things because he has a dealer down the road from him. And he's always -- what he's saying there is always what he said. So it's not just he is saying it today, it's something I've heard from him before. So what you're describing is just a way that you are viewing what it means to have a dealer network and what -- how you can empower your dealer network and so on. And it's just -- it's frankly probably not something that people have seen in the past. So -- being nobody has done in the past. You just don't know what to expect, but I think the proof is in the pudding. It would be unbelievably shortsighted to go with the other example that you gave, Chris -- Mr. Hardy that people had put in people's ears. It would be unbelievably short-sighted to think that you'll just buy up all the locations and own the world, and that would be end of it. So...

No. Yes.

Yes, then there's the other benefit that, of course, Chris would be personally involved with in his current role, right? And that is that we get a lot of insane real-world testing out of our shops without biased opinions, right?

100%.

Chris will not let -- Chris will not let our shop installers give them a smoke-and-mirrors conversation about how they do or don't like a film or how it's performing or something like that. He can personally sit there and work with them in any given location, whether it's the cold climates of Calgary or it's the super-hot climates of Scottsdale or Vegas, to wherever the market is. And he can work with them and figure out that film and then go, "Hey, let's try this, okay, that's -- what if we change this? What if we change this," and then work with the R&D and make those modifications and then bring real-world tested products.

100%.

Not independent shop review product to market. And I think of that as giving us a major upper end in the current situation that the other manufacturers can't claim to have.

Isn't that critical that you keep that like, like you said, that direct hands-on? Because I feel like the disconnect between a manufacturer and the real world of shops is sometimes a complaint that I've heard from shops and there's no better way to stay connected and stay -- literally staying connected ...

Well, for sure. And I don't know how many of our shop installers with XPEL are listening to this, but to be honest, they kind of are our guinea pigs a little bit, where we put them through some trials and tests to whether we -- from only -- not only the film side, but also the business side, seeing what marketing works well because we're not trying to keep that a secret. It's not a secret sauce just for my shops. It literally is like this worked for me in my Vegas shop. Chris Hardy, why don't you do it all down the East Coast with everybody?

Right. Yes, absolutely. Absolutely. You look at -- I was talking to Tim Ham, right, from Felony Film today. And you look at the growth that Georgia experienced this year. Georgia had like nearly 100% growth. Now a lot of that has to do also with this some incredible rep, [ Zach Locker ], that did an amazing job this year, for sure. But you see that growth that Tim Ham experienced this year, which was astronomical. If you go and look at how many shops we have in Atlanta, there's almost more shops per person in Atlanta than there is probably in any other market. And yet every one of them has seen awesome growth for the year 2021, and it's not slowing down. And they're still booked out and completely on high demand. And it's just -- it's a result of like everything that Chris West and that team is doing in the background to make that possible.

Well, and it's the conversation about opening -- I just had a call from an XPEL customer who is pretty well known in the Midwest or I guess, West region. He's a little bit up in arms about some shops getting opened up in his location. And there's some conversations that is hard to wrap your head around. And I told him as an owner myself, I would have been irritated, but now my eyes have been opened a little bit to like we have an Arizona market where we literally have installers right across the street. I mean literally just walk across the street and they're both XPEL sellers, both killing it. And just like the gentlemen that posted a second ago, they don't even consider themselves competition. They're both booked way out. They're like, I'm so busy, I don't even have time to worry about that. And if I look back at all the times that somebody was set up in my locations in Alaska, it really -- we continue to still grow. If you have all the pieces in place from your quality to your service, you'll be fine.

Right. That's an important thing to look at is do you have all your pieces in place? Because like you're saying, if you have a fear of loss and you let that guide you, your loss won't guide you anywhere good, but you also can't just pretend that everything should go right and it's good if it's not because it probably...

I think guys waste so much energy on worrying about the guy that opened up down the street instead of going back and saying, okay. In fact, Chris Hardy and I just had a conversation with Phenomenal Films.

Phenomenal Films. Mark Friedman. Great guy.

And he said something that resonated with me where he said, "I want to make a power play." And -- but it's just -- it's that attitude that I loved where it was like a power play to the everybody around him, meaning like, I know that this guy is doing this, I know that this guy is doing this, I'm going to make a power play to grow my business and show where I'm at. Because, man, when we get so focused on the other guy, like we lose sight of where we're going.

Yes. And I agree with you. That was an amazing conversation we had with him. And he's got -- I mean we're not going to share what his power play is going to be because that's unfair to him. But the reality is he's got some very key things he's locked onto, but it's going to make that successful. And he's going to do it without worrying about everybody else that's around him...

Right. 100%.

Look, Erik, you've been around a lot of our clients at this point, right, throughout the window film conference or things like that. And obviously, some that have attended some of these podcasts, the 99% of them, if not more, actually really enjoy each other's company and get along very well with each other. You saw what we did for Chris West's birthday up in New York City. You saw what we did with the races down in Texas. I mean I don't know if that's even plausible or possible with other brands. I hear from some of my friends that work for other brands, they couldn't ever carry something like that off because everybody sort of like has this like animosity towards one another and yet in our community, in the XPEL community, I think that that's very few and far between where there is any of that at all.

I completely agree from my perspective. And that's why I think it's so incredibly important for everybody that's an XPEL dealer to go to the conference because that's where you're going to be around all the XPEL dealers and people like what you're saying, that is accurate, and I can only imagine what it will be like this year.

Well, this year is going to be crazy. So -- so hats off to Rob Bezner, the gentleman who's in charge of our marketing team. Like unfortunately, the gentleman who was in charge of our event planning, Tyler, had an opportunity to go back to Facebook, which, of course, was an amazing opportunity that he took. And that left Rob Bezner high and dry in carrying off the most important thing of our year for us in terms of event, which is dealer conference. And we are way over the highest number we've ever had in attendance already, and we've still got quite a bit to go. I know there's a lot of people that are still booking. My suspicion is we're probably going to end up 50% bigger than the biggest conference we've ever had. And we have this amazing breakout sessions that are lined up. As a matter of fact, Chris West is going to hold one himself, which is a dealer roundtable. But we just have so many great things happening at dealer conference that we've talked about dealer conference before, and I think that it is the one genuine thing that an XPEL dealer can do for their business over anything else that they can attend is dealer conference in terms of how it's going to have a positive impact for them.

Oh, yes. It's -- I've almost said, like, I wish it was open to all businesses in our industry. Obviously, it's XPEL only, but it's that important. As I look back to relationships that I formed that help me grow my business or start new businesses, they actually were all created there at that conference.

Yes. It makes sense because when you think about the other opportunities that you have to get together like maybe CMO or the window film conference in September, they're not in any way oriented to what's going to be going on at the XPEL dealer conference. The breakout sessions, the speaking, the networking, like everybody is together, and the whole point is to communicate, whereas trade shows are trade shows. You're talking for a little bit and you're potentially moving on, one way or another.

Right. 100%.

So is there -- at this point, it's what, 30 days away, can I ask the question, is there any chance that COVID is going to mess this up? It's within knowledge. Like I don't know if that's -- is that something all like still kind of like, "s***" ? Or is it good to go pretty much?

So from everything I'm hearing so far, it's 100% good to go. Look, Ryan Pape, our -- the most amazing CEO probably on the planet, is like full gung-ho that we're putting on dealer conference. And in fairness, he was doing that last year. The only reason, the only reason we didn't do dealer conference last year had nothing to do with XPEL. It had to do with the fact that the hotel told us, "Hey, we need to change the way that you're allowed to interact inside the hotel. So you need to go down to 50% occupancy within the rooms. You have to have -- all your meals are within the conference room. You can't go and have like the buffet-style that you were going to do before. The competition, you're going to have to be 6 feet away from each other." Well, how in the world is that going to carry over with people being able to watch the competitions? And then on top of that, your group could be seated together, but you had to be more than 6 feet away from the next group. So as big as those conference rooms were, we were like, wow, we had over, I don't remember, it was a big number, for sure, over 500 people registered or something like that to attend conference. And we were like this room is not even going to be able to fit 250 by the time we put in all these restricted measures. So we pulled out. I heard that, unfortunately, LLumar just canceled their dealer conference, and that's a shame. I mean that's a very great competitor of ours that both Chris West and I are big fans -- and both him and I are really good fans of Eastman and 3M, right? Those are our 2 main competitors. Those are the 2 guys that we -- those are the 2 companies that we always have to keep our eyes on in terms of, hey, what are they doing, where are they innovating. And so to hear that they had to cancel their dealer conference is a shame. I'm sure that there's a lot of their dealers that are disappointed in that. But look, at the end of the day, they made the decision that makes the most sense, and I respect them for that call. Even SEMA, right? I mean how many people pulled out of SEMA? And yet I think that a lot of people were pulling out because they saw the initial numbers in terms of attendance. And it was very low, right, very low registration up until like a month before, and then it skyrocketed. Well, a lot of people already pulled out by them because then they didn't have any penalties. We ended up doing SEMA anyways, and I think that it was an incredibly successful SEMA for us. I think that all of the reps felt like it was probably one of the best if not the best SEMA ever because there was a lot of traffic, but it wasn't overwhelming traffic, right? And so going back to dealer conference and whether or not we're going to cancel, everything we're hearing is that no chance. The hotel is not restricting us, which this is Texas. It doesn't sound like they're going to restrict anything anytime soon, if ever again. We're carrying forward. And hopefully, people act as best as they possibly can. I was talking to Ray Van Dexter from Dynamic today. He's got COVID. There's 4 of his employees that caught COVID. Back to Ryan Burroughs at Auto Paint Guard, COVID with 4 of his employees. I do hope that, of course, if people feel like they're sick or that they might have been in contact with someone with COVID, they're not irresponsible, they attend conference with the possibility of getting everybody else sick. But the other kind of maybe wishful thinking on my part is that Omicron is not seen as negative a detriment to people who catch it as the Delta variant has. There's not been as much hospitalization per positivity rate. And so with that, maybe it's a much weaker form of COVID. Look, guys, I had COVID, the Alpha version, last September, not this September, but the year before. I blew through it like nothing, but I have a lot of friends that didn't -- that caught it and had a really difficult time with it. We had a lot of community members that did -- had some big problems, right, some of the men got put into the hospitals and stuff like that. And the Delta variant definitely had a negative impact. But so far, again, fingers crossed and let's hope that this is true and accurate, so far, the Omicron doesn't seem to be that bad and I think that conference is happening. Chris has the ear of a couple of people that I don't. So you might know better than I do.

I mean no, it's happening. I haven't heard anything that it wouldn't be. And personally, I think that it's kind of a personal decision if people want to attend or not. I think we're far enough with COVID now. And for the industry, I think we need it. I mean it's -- we kind of look forward to it every year, and we missed it. The competition is completely sold out, as it does every year. It's like I got people calling me like, "Can you squeeze me in still?" And I'm like, "Man, it's -- I'm sorry, it's done." And it's -- because it's not my call, but I can't even pull the drawstrings to make it happen. It's -- slots are full.

The other funny thing is -- sorry, Erik, I know you going to say something, but real quick. Every one of these guys has got a business that's currently running. They're taking in clients, they're interacting with people on a daily level right now. So I think that it's kind of interesting that the vast majority -- not vast, every client we have is open enough for business. So like if they're interacting with people already, then is there really that much of a difference between -- and I realize, okay, you're going to a large event with a lot of people in the same rooms and what have you. But you don't know where that client just came from who's interacting with right now dropping off their car and you're doing concentration with whatever. They might have had 20 people over last night for dinner for some New Year's celebration or something or at a party. I think that, again, at the end of the day, like Chris is saying, we need this. We really are at that point where SEMA was one of those, right? We needed SEMA this year. Thankfully, it went on, and I think we need dealer conference as well.

I'm glad it's going to happen. If you have, obviously, staff to go to it and the venue says go for it, feel like anybody who doesn't want to go just wouldn't go. And the only people that would be there are either the people that want to be there. So like pretty easy like [indiscernible] right?

They've already made that judgment call, "Hey, I'm going, COVID or not. I'm just going to go and have a good time and enjoy myself and let's see where the chips fall."

So a short 12 months ago, I believe, if I have my years right, Veloce at this time hadn't been announced that it has been acquired by XPEL. PermaPlate hadn't happened, and probably another 15 acquisitions that happened last year hadn't happened either. So I think it would be fair to say that XPEL not only grew their dealer network but just grew as a company, right, like exploded. I would say, not grew, exploded, exploded is the word I was going for, not grew. What things from the corporate side of things, from your side of things, do you see changing as far as XPEL goes moving forward, maybe because of the growth? And what things do you see absolutely not changing and you carrying through even so the growth is so tremendous?

You want to take those first, Chris, or me?

No, go ahead.

So okay. Let's address the question, right? #1 is it is a massive growth. You are talking about, I think the latest number is close to 800 employees. And 16 months ago, 17 months ago, whatever that number is, you're probably talking 450. So we're probably talking nearly double the amount of staff. What's I think still true to this day is that the staff are realizing -- and we don't like the word acquisition. As you know, we really prefer the word merger, right? So with the merger with PermaPlate, the merger with Veloce, the merger with Filmwraps, the merger with invisiFRAME, I feel like they may have been wondering like, wow, is this going to be corporate life now? Am I really going into that corporate world structure, everything is meetings, everything is cross the I -- cross the t's and dot the I's and don't fall out of lines at all in any way, shape or form, you get written warning? And now if you talk like Regina or George or Zach Burke or any of these people, you -- I mean anybody -- I think anybody that's been part of whatever merger has happened, they recognize real quick that we're still just operating like a family. Is there a little bit more corporate infrastructure? Yes. Of course, there has to be. But have we lost sight of still acting as that mom-and-pop designated supplier to those individuals? No, we really haven't. And I think that that's most true, especially on the sales side. I mean look, they are the people that are interacting with the clients every day. It's -- and the customer support team is too. But the sales staff is the first line of interaction. And it's the most important interaction that goes on with the customers. And if at any point in time they're giving a more corporate feel to the client, that's just not what we want. That's not what we're looking for. That's not what we train for. That's not what we hire for. And that's not something that we would tolerate. And we need to make sure that we -- is that we keep that in our sight, and we keep that same feeling, that same mentality, that same belief that ultimately, we need to act as a brotherhood, sisterhood as -- within each other, within our competitors and, of course, most importantly, with our clientele. And I don't see that change. I don't. I can see, as I said, a little bit more above me, a little bit more corporate infrastructure and stuff, perhaps a little bit more meetings. Chris West is certainly involved in a little more meetings than he ever thought he was going to be. But it's just so that we can get items crossed off the list and knock projects out but not because we're changing the way that we're doing business. And I think that, that, that's what I'm really trying to get to. I think a lot of our operations assume that we're changing the way that we're doing business. It's just not true. Talking to Mike Burke once again, he was like pointing out the fact that it was like, hey, like it kind of feel like you're getting a little too corporate. You're not doing as many events you just did and I'm like, "Oh, oh, oh well, wait a second. We weren't doing events during COVID because most events were being canceled." But if you can look at our current event calendar and how many events we've been doing it's been one after another after another. The marketing department is like slammed 24/7 putting a lot of stuff in place. Harry and the Veloce merger, same thing. Like a lot of other stuff is going on behind the scenes to still do everything that they did that got us here and then that much more. Only now we've gone on to some even bigger and better things. You've seen the Penske situation where we're a title sponsor of IndyCar. We just announced the title sponsor of a NASCAR race coming up in Texas next year. And I think it's a multiyear deal. So okay, maybe that is a little bit more of the league that we were in before, if you will, but it still hasn't resonated to the point where we've lost touch on where we were in the first place and what got us here. I know about -- I can't mention everything because I don't want to steal Rob Bezner's thunder, but I was talking to him earlier today and hearing about all the things he's got lined up for 2022, whether it's publications that we're involved in, whether it's influences that we're involved in with -- and there was a lot of that conversation and I'm just like blown away, going, "Wow." Like this is going to be our best year ever in terms of our strategy.

Well then so my two cents on it is there's a lot of concern about, okay, XPEL's huge. They make a bunch of money, they're corporates, they're just taking over. They don't care about any of us small guys anymore. I'd like to remind people that I owned a shop for 18 years in Alaska that's pretty small. Chris Hardy is still is involved in a shop and owned one. Mat Moreau owns shops. Mike at Pro-Tect, our VP of Sales, he owned Pro-Tect in Las Vegas for 15 years. So on an executive level, you have people that do understand because they have owned shops. Now maybe they aren't tinting every day or installing. I don't even install as much as I used to, of course. But we do come from that background and understand that, that's an important part of the business. Secondly, if we look at the acquisitions, our mergers, like Chris Hardy says, so PermaPlate, which is an in-house dealer program, I would much rather have in-house dealer programs be XPEL than DigiCut. So in Alaska I fought DigiCut for a long time. It wasn't the best film. It was bad patterns as -- if XPEL were to buy them and now be the in-house dealer, now I actually have an in. I have a relationship for the overflow, for if the installer gets sick or gets fired or quits, now they immediately go to the XPEL dealer. So I don't look at the PermaPlate is like damaging the industry that we bought them or acquired them. And then if I look at some of the independent mergers and acquisitions that we've done, it actually helped that area because that -- the person that we acquired was actually territorial and wouldn't allow other people to open up. Well, now that we acquired them, we said, "Sure, open up, go ahead, be XPEL, be XPEL." It was a plus for that area. So -- I'm saying this truly having owned my own shop of any of the acquisitions that we've done that haven't benefited the surrounding people.

That makes a lot of sense especially, like you said, if somebody is territorial and now they're no longer territorial. Instead now they become support and a source of more exposure for the area.

100%.

Yes, you should see that as a perfect example. I mean I like the fact that Chris highlighted that. The gentleman that we're talking about, I won't say his name, but was very territorial and for a good reason. He was an amazing, massive account, massive. And I can understand him really demanding that from XPEL as a reciprocal thing for him purchasing so much product. And yet we did the merger, I could try to stay away from that word acquisition, we did the merger. And immediately, it opened the door for a bunch of people who have been asking for XPEL shops to become XPEL shops for years. We turned them on knowing full well that, that business -- that we are turning on might cost us personally to do so. Like that was an internal business with the labor and part component combined, which is obviously more profitable than just the part component on its own, right, and full retail price versus wholesale price of just product. It's a massive difference in revenue possibility, and yet, we turned them on and gladly did so. And already, those shops are both -- I can think of 3 shops that we turned on actually. And all 3 of them are like out of the gate like crazy busy. And we love it.

I'm okay. We love it. Because I oversee that store that we bought, and I'm 100% on board. That's why we are here is to support that entire market, not just look out for ourselves.

Yes. That makes a lot of sense. So what -- is there anything that XPEL is doing just like that really stands out like this coming year that kind of excites you? Doesn't have to be necessarily related to your position or anything like that, but just something you know of them doing that kind of -- you looking forward to 2022.

Okay, I'll give you one. So we are looking at how to address the labor problem. And I don't know -- I probably could go into more detail, but I'll just leave it at that to kind of dangle the carrot because if I go into too more detail, I'll have a bunch of people calling me like when is it happening, when is it happening. But as we've...

I already got those calls because of what Chris told them.

And as Chris and I have gone and talked to guys and they get frustrated with you opened a shop down the street from me and we say, "Well, aren't you busy?" And they'll say, "Yes, I'm booked out 3 months. So why does it matter to you?" And they go, "Okay, fair enough. But why don't you help me grow mine, so I'm not booked out 3 months?" Which means that we have a labor problem. So this is one thing that I love about XPEL that I alluded to earlier is we aren't just looking at giving you the best film or creating new products. We want to help on that. So we have some ideas that we're brainstorming of how to help the labor problem because we have -- and that's the good part about us owning our own shops is that I have a labor problem in our shops. So I know everybody else does. How do I solve that for everybody? So that's -- I'm excited about that.

So he's been very cryptic what he needs to be because otherwise, my phone will blow up more than his maybe because I interact with just as many clients as he does. But that's one thing. There's some definite real exciting product launches that are coming out. There's some soft launching that's already happened, but I don't think that we're allowed to talk about it openly as of yet. Chris West can make that decision. I can't. But Chris West was personally involved in really exciting stuff. Not only have our own independent -- have our own, sorry, internal stores have been testing a lot of new exciting products, they have actually been in the hands of quite a few independent shops now as well, I think probably, on average, at least 50 in the U.S. alone and probably that many in Canada, also, for that matter. And the response rate has been unbelievable. So that's exciting. The fact is that -- this I can talk about for sure is that our vision, right? I mean and vision being our flat glass lineup. Look, the Harry Rahman thing, it's no secret that he was, him and [ Pfizer ] were a huge obviously that the creators of Hüper and stuff like that, and then, of course, was an acquisition from one of our awesome competitors. And then Harry left and went and started Veloce and then merged Veloce with XPEL. I mean look, the fact that we merged the Veloce clientele in with XPEL was beneficial. That's true. But I know that the real reason for the merger wasn't the clientele, it was to get Harry. And that was the only way we could get him, much like Chris West. We have been after him for years. We had him on a contractual basis to be exclusive for XPEL. And then we're like, man, we need to lock this in and how do we do it and figured that out, right? Well, Harry's -- the stuff that Harry showed me -- I was in San Antonio a couple of weeks back doing actually what's kind of cool is my first time doing an investors meeting in San Antonio. And so I got a chance to see all the new vision lineup that's coming out, the new packaging, the new products themselves, the new marketing materials are coming, the data sheets, everything and anything. And it's not quite ready to launch yet because we want to put all those pieces in place before we do a launch. But my guess from Harry's perspective is that everything goes well. You'll see that all roll out within the next 60 to 90 days at the most, and it's a game changer. I can't talk about who. I can't -- and there's a good reason why. But let's put it this way, one of the largest flat glass operations in the U.S. got a chance to see what I got to see about a month ago as well. He was personally invited to take a look at it. And I can tell you that he placed a 6-digit preorder of this -- but I don't know if Chris West is even aware of this, he placed a 6-digit -- and I can't say how large is the 6 digits, but it was large -- preorder with this full intention of helping us launch. And he is maybe the biggest player in the U.S., I don't know, one of the biggest players in the U.S. to restore for another brand. And so again, I can't talk about like who and, obviously, what brand and what have you because that would be very inappropriate to that brand, not only to the brand but also to that shop. But knowing that he was that impressed with it and knowing that he was making that commitment to say, "Hey, I want to give you a check. Here's the check. Here's the amount I'm writing the check out for, but I want to get in first and I want all this product designated to me when it comes out," was awesome. And think that that's where -- I do think that that's where you're going to see probably the biggest splash for 2022 for XPEL is going to be. Look, we know how much we dominate paint protection film market already, right? We know how amazing our window film has now started to penetrate the market in terms of market share. Obviously, the coding is the same. I mean it's just insane the growth that we've seen in those 2 product lines. I think it's absolutely, literally the word unbelievable. The flat glass hasn't done that. And flat glass was started back in 2014 the same time as automotive window film was. And it was that we needed to have that merger with Harry. And of course, Carole Lockwood came along with that package. We needed to have that happen in order to make those ways that you're going to see 2022, the ways that XPEL is going to create in the flat glass market is going to take everybody by surprise.

Yes. And then to add to that, if I were to look at 3 things that would help us make a successful business, I mean there's a lot of things, but let's say that XPEL can help with, it's product, we get you good product, we've get you new innovations, we're on that. We're working on it. We got an R&D team. I mean we just wrote a purchase order for $1 million worth of equipment to look at everything. I mean it's really cool. And our new headquarters is -- this is the cool part too. As you come to get trained at our new headquarters in our warehouse, you get to see all of that as you come in and see where R&D is doing a lot. So anyway, product. Then we have sales, right? We have -- Harry is working on how do we get sales and big commercial jobs to our independents. As sales reps, they are going out our territory managers and saying, "Hey, let me get this dealership and let me give it to you." So there's sales. And now I'm talking excited about getting labor. So if XPEL can help you with sales, product and labor, as long as you follow up with a smile on your face and a fair price, it's a home run.

I love that you're leaning into fixing labor because it's so easy, everybody knows labor is an issue, right? But it's easy as maybe a film manufacturer to say, well, it's not my issue. The dealers will figure it out. We sell film, the market will figure out, they're going to buy the film one way or another. And -- but like when you lean into it and you go, "Hey, this is a big issue in the industry. We're a big company with big resources. We can find a big solution that fixes this or at least gives our network some headway with it," I really like -- really, really sincerely commend leaning into those big problems and trying to solve them, however that ends up look.

And that's what we love doing. We could sit back and just say, "Hey, we got a good film. We got a good marketing presence" and focus on that. It's like, no, let's keep trucking ahead. How do we help people be more successful? And that's where, again, having our own shops, and it makes us invested into that as well and helps us refine and learn those processes to help everybody. So yes, it's exciting.

Yes, I got a chance to see that -- the new warehouse, which has the training facility as part of it, it has the clean room. And I actually got to see some of the -- I don't know if you realized, Chris, maybe you do, but there's a lot of that new R&D equipment that's actually been delivered.

Yes. Yes.

And I'm looking in that room with those investors as I was there and I was just blown away. I mean some of the stuff looks like it belongs like I don't know, some scientific movie lab. Like it's crazy, the investment that XPEL is making obviously.

And Erik, it's -- we really -- and I've said this for a long time that if you're at the top, that's not the time to be complacent and sit back and say, we made it. You -- I mean it's almost more incentive to really keep going full trajectory. I mean our sales staff, and Chris Hardy would know better than I, I think we doubled in the last year, close to, right and then from our R&D team, doubled that. We've been bringing on new -- it's just...

Oh, you mean staff-wise? I thought you're talking sales-wise.

No.

Yes. Staff-wise, we more than doubled.

Which is exciting because you know what it means? If you're an independent shop, you are not now are dealing with a sales rep that is over 5 states. He might be just in your state or even your city. So that's a direct relationship. It used to be that you didn't get that much attention that we -- the attention is to focus on these guys now.

Yes, I'm a perfect example of that. When I came to work for XPEL, I handled 15 U.S. states on my own. 1 of my competitors has 4 in just one of the states that I used to deal with. So I had to openly tell clients, "Look, we're going to have one disconnect, and that is that you probably will not physically see me in your shop ever," because it's just not reasonable to be able to carry that out. And yet, because of our marketing, which drove so many clients to shops, that was the reason why they quite often selected us over somebody else was because, look, instead of me showing up at your store trying to get you to spend money with me, customers were showing up at your stores trying to spend money with you and that was obviously a lot more attractive. But at the same time, like Chris was saying, XPEL being at the top doesn't want to just be complacent and sit back. Like I think it's fair to say that one other brand did that, and we now see where that brand is currently up. And again, it's an amazing brand. But I think that that's where they were and now where they are now is a result of that. And I think they're aware of it. I think they're trying to tackle that. So right, in fairness to them, kudos to them. They're working on it. But we know that, that was something that we were sort of like call it, slacking or lacking anyway. What we needed it was a little bit more of that one-on-one interaction with that clientele. And so we are continually looking to divide up territories and create more reps and the reps have to be localized, right? There was a time when all the reps were in San Antonio and whatever city or state they looked after, they would fly out to maybe once every few years to go say hello, right? So now the requirements are that you have to live and work within your territory, and that allows you to communicate and interact and get to those shops much faster. Look, I can be on the phone with Mike Burke at 7:00 in the morning because the guy is always up at 5:00 am working out. And I can be like, "Man, it sounds like he's having to [ buy a date ]. Look, I can get in the car and be there in less than 3 hours." And I've done it many times. And we would like to see that and I -- but I couldn't do that with everybody, right? I could do that with Jason Carr here at Guardian, or obviously at Myrtle Beach, I can get Charleston in 2 hours. But so the rest of my territory, it was a haul and now we're looking to make that as a continuing change so that those people can get that kind of love that they deserve.

Are you also -- am I right in saying that you're adding to your like shipping facilities as well?

Yes. So we -- look, I think I had mentioned on the last podcast that we did, I let the cat out of the bag that we had gained an operation in Charlotte, right? We already have one in -- we have shipping that goes out of Vegas. We have shipping that goes out of California. We have shipping that can go out of Idaho. Obviously, our main one is in San Antonio. We have Calgary, we have Montreal for Canada. But we really didn't have a solid East Coast operation. And we have been looking at East Coast operations literally since Sun Stoppers joined us. It was one of the concerns that Sun Stoppers have brought up, right, which was that they were dealing with Eastman. Eastman was in Martinsville, Virginia. Most of the stores were located in Charlotte. It's a couple of hour drive -- and this was something that they wanted to know that we were going to try and tackle for them if they came on board. And we made that commitment to them. And it took us a long time to make it happen. We were looking at Florida. We were looking in Atlanta. We were really close in Florida, actually finalizing a deal, fell through at the last minute. And thankfully, it did. And so we're opening up in Charlotte, right? We're opening up in Sun Stoppers' backyard. We're actually just on the street from one of their main locations. It's a beautiful facility. I got a chance to meet the director of the operation just a few weeks ago. We actually all went to -- Mike Burke and I went and checked out this warehouse facility and met that individual at the same time. And Mike, being the guy that he is, he invites him to his Christmas party, which was happening the next night. We all went to the Christmas party and hung out. But anyways, my point is that, look, we gained our occupancy permit. The problem is that a fire marshal came in after we thought everything was already signed off on and after determining the products that were going to be housed within the unit, said that he didn't feel comfortable with the sprinkler system that was in place. And I don't know, there's some terminology, ESFR system or something like that. So we had to go back to the drawing board. We had to get an engineering team together to come up with a better sprinkler system that, that fire marshal would pass. A lot more pounds per square inch or pressure or whatever the heck the terminology is. And Carlos Alvarez, thank God for him. He's got his foot on the gas like everybody else does within the organization. He's like, hey, this ESFR system they want, this is going to pass, this is going to cost $400,000. We already signed our lease, how do you go back to the landlord and renegotiate now on a price you've already taken occupancy and more right? Like the landlord is not responsible for it at this point. It's going to be a big bill. We don't care. We're going forward with it. We're making it happen. There's product there now, but it's sitting on the floor on pallets. It's been obviously supposed to be up in racking system with everything else going on like normal, like all of our other operations are. It's not. So is it running? Kind of not really, not really. We need to get that sprinkler system done, then we're going to put the racking in, get the fire marshal to sign off and everything, and then we will start shipping. So -- my anticipation is within 60 days, it will be up and running and fully operational.

But in all fairness, I got to give credit to the logistics side of XPEL. They do pretty dang good. I mean 10 years ago in my shop, we regularly would have missed orders. It would not ship on time. Stuff would be backordered. But at XPEL, there's guys that just work on estimating future inventory 6 months out, 12 months out, we don't on back order. And the warehouse runs in 2 shifts from, I think, 7 a.m. to midnight. And it's -- I remember asking Carlos one time who runs all of that, he's the director of operations for that. I said, "Can you put a hold on this order?" And he goes, "When did you put it in?" I said an hour ago, and he goes, "That probably shipped in 5 minutes." They turn it and burn it that quick. It's crazy.

Yes. We've had some pain points, obviously, with year-end, but everybody does, right? Because we had a lot of operations that had record years in profit, record years in profit this year. And of course, there were -- they're talking to their accountants, their accountants are going, "Man, you need to get your tax percentage down, you need to go spend some money." And so we had a lot of accountants making some very last-minute, very large purchases in order to get those invoices in on time. And of course, with COVID and FedEx and UPS and shipping companies, look, they've all had their trials and tribulations with labor, obviously, COVID outbreaks, things of that nature. So are we saying it's been perfect? No. I think that if you could take COVID out of the equation, then our fixed operations team is running at 100% perfection. Add COVID in with all that, that messes things up a little, we're still running at like 98% perfection, which is incredible in this current situation we're dealing with.

Words of wisdom for shop owners for 2022. What do you got?

Okay. So I just was with the shop manager for Austin. And she's just come new into this role and she's starting to adapt and learn. And as we've gone through some trials and tribulations that have really stressed her out, tonight, I really wanted to emphasize, and I think this is pretty important, that as we run our businesses, we come into these trials and tribulations. And over my tenure of owning my business, I remember like being curled up in the fetal position, thinking like it can't get worse than this. We wrecked the GM's Chevy Silverado, I'll never get that account again or this customer left me a 1-star review, or we had to repaint this car, you could go down the list, right? And I told her, and I said, after all of those years, it really wasn't -- it was okay. We still -- I had my morals, I gave good service. I offered the best install I could. And it all turned out okay. So I -- I'm going to probably do that one because it was like you'll be okay. Just keep your head up. It isn't the end of the world. And I know you'll sit there and go, and we can go down the list, tax burdens, all that, just keep doing what you do and do the best that what you can do. And I promise you in a year you'll go like, wow, I made it out of that okay. It wasn't as big of a deal as I thought.

I think for me, look, every single XPEL shop that I'm aware of has had the best year of their life. I don't think that they've ever had a better year period. Most of our shops have grown a minimum 30% plus. I would say that the vast majority of them actually have grown over 50% this year, right? And so for me, my words of wisdom is just keep your foot on the gas. Like it's not going to slow down anytime soon. The inventory levels are -- I mean I got to see the final numbers of how many vehicles were actually delivered into the U.S. last year over the year before. And it was actually 80%, which is kind of interesting, right? Because you kept hearing that no inventory coming, no inventory were coming, no inventories. It's not true. It was 80% of the penetration that they had in vehicle sales for the year before, meaning delivered to dealerships, happened in the year 2021. And they're anticipating obviously a higher number than that for 2022. What you're seeing, of course, is that these clients are spending more for their cars. They're not getting all the rebates and the breakthroughs that they were getting. They're not getting the super cheap interest rates. So I think that because of that, they're feeling a lot prouder and -- of their purchase and like they have to take better care of it, and that they have to understand this might be a longer value than they had previously anticipated. And so that's translating into incredible sales, right? So keep your foot on the gas. And to go along with that, something that Chris talked about a little bit earlier that sort of coincides is that, look, when you're at the top, don't become complacent. Don't sit there and just assume that it's always going to be this good. Instead, continue to invest in yourself. Continue to invest in your people. Continue to invest in your marketing, right? That's something that we realize all the time that people are just not spending enough time in the marketing, look. "Well, Chris, I'm currently booked out 6, 7 weeks. What do you mean to spend money in marketing?" Yes, you don't do it when it's dead. You do it all the time, right? And you keep that momentum going, and I think that, that's important. So look to diversify in terms of finding more locations, building bigger locations, maybe taking on -- maybe not even bigger, but maybe another location to look to invest in more staff and ramp things up even further than where they were before.

Both great advice, obviously. And Chris West, like what you said, things go wrong. But the next day, it's always less of a problem. And a week later, it becomes less of a problem. And probably a week later, you're on to 2 problems ahead from that one anyway.

Right, exactly. And it's just -- I know for me, I used to get super stressed out. And so it's just kind of a comforting thing and saying like, it will be all right, man. If you're doing the right stuff, you'll be okay. Just keep doing good quality, working hard. You'll get through those tough times.

Yes. Yes. And Mr. Hardy, to your point, of the advertising being consistent, it should be something consistent throughout the entire year. And I think it's -- you do what you have to do, but like if you find yourself in December and January overspending to try and acquire clients because you're dead and you want to stay busy, to me, that's kind of a waste of resources. If you forget about it, you can't handle the business come summer because you didn't maybe invest in adding staff and so on, and then you get through the summer booked out like crazy. But then you're back in the winter, you're dead and you're going, okay, let me throw more money at marketing because now is the time to waste money on marketing, like it's that kind of silly vicious cycle that is easy to step into, whereas maybe now is the time you can spend time investing into finding staff and getting those staff onboarded and training them, and you're going to make a lot more money when the customers are ready.

100%. You're exactly right, Erik. It's cyclical. You take your slow months to build your staff, you're going to eat it a little bit. You're going to have to pay a little bit more. Now you're ready for summertime. You don't want to train them in the busy season. That's for sure.

Of course, right.

So okay. So Erik, what words of wisdom do you have for 2022? Besides that you need to get the Tint Wiz.

Besides being on Tint Wiz, Tint Wiz or die. I'm kidding. -- like grow or die. My advice would really be focused on to me, first of all, you got to know where you're going, where you want to go. You got to make your life happy. Everybody's business is going to look different and so on. But ultimately, the one that really stands out to me is focus on profitability instead of just top line revenue. It's easy to chase top line revenue and keep adding more top line revenue and so on and find your profitability diminishing and so on. And to me, you want to make sure that your profit margins are ones that are something you're happy with or at least are getting you to where you want to go. Maybe size is important to get to scale and so on. But you also want to make sure your systems are in place so that what you're doing now, if you double it, you can also double your labor and double your -- if you need a facility, you can -- you account for that because you don't want to grow in a direction that puts you in a bum spot as far as your facility goes or something you're not -- so just focusing on that profitability because you can really narrow down what's profitable, what you enjoy, what there's a mid-demand for and so on. And you can grow that instead of just growing everything, which kind of can exponentially grow problems. I know when I had an auto shop, it was -- first of all, it was slack us, right? But then it was like, well, after enough time, I said, I have to do something with these automotive leads, right? Did I have to do something with them? No. I didn't have to do anything. I could have booked what I'm doing, but I felt I had to. So then you open the auto shop. And then what do you do after that? You add PPF. You add -- let me do a blackout trim. I can do roofs and I can do trim. And then next thing you're doing, I'm doing color changes. Why not print the wrap? And when you're doing so many things, you end up running into so many new scenarios and so many newbie mistakes to assess, so many problems. And at the end of the day, I know I found myself in a scenario where like you said, curled up in a -- you don't know how this is going to end. You build such a monster for yourself, you're going, "I don't really know" like and knowing that and not wanting to walk into it, I think since it's important that people should take advice all the advice do what's right for them, but don't blindly just grow to grow.

Oh, people -- I remember starting up, just like you said, I started as somebody said, "Hey, do you know where I can get this done?" I went, "Oh, I'm going to do it." And before I knew it, I had way too much space, too many employees. I was doing stuff. I didn't even look at the margins. Like, am I really making that much money on this? I was like, "No, it's just more revenue. It's more business," and then fast forward 10 years later, got rid of space, got rid of employees, got rid of services and focused on the stuff that like you say, was profitable. Let me -- Jeff Phillips texted me about Christian Alvarez with Disciple Tinting in Texas. Poor guy just had a shop burned down, total loss. We're talking about loss. And it was an industry if anybody does know him to reach out. We always help each other out. But brother, I mean -- you can -- and I haven't been through that, thank God, but you'll get through it, man.

I saw he posted that he was -- first of all, nobody was hurt, which is amazing because everything is gone. And then the next thing I saw that, obviously, at the moment, he's just basically shifting over to being a mobile-only. And that tragedy, but what a pivot....

Right, but I mean I love it. Instead of just saying sitting at home, drinking whiskey, saying it's over, he's like, "No, I'll go to mobile, I'll make this work." And I mean that's a testament to surviving right there.

And the community is starting to help with ideas on how because he was asking how to stay contaminant-free mobile and so on and so. And then Dean Mitchell, obviously, you know that gentleman. Tinters For a Cause, I mean it's like it's obviously -- what a cause.

Yes. Yes, everybody helping it.

Yes it's Tinters For a Cause is going to be amazing. It's something that I'm working with them on as is a lot of other individuals. I know actually, Erik, that you're also involved. I'm actually staring at the format for setting the thing up and we've got some legal counsel involved and what have you as well. That's going to be an awesome program. I'm really excited for the fact that Dean thought of this and brought this to the table. And it's going to take us a bit to get it up and running properly because, of course, there's a lot of legal ramifications that we've got to contend with for a nonprofit organization. But with the tenacity that Dean has, he can make sure it's going to happen.

XPEL as a team, I mean it so sincerely, you're leveling up the industry from the way you handle your dealer network and empowering everybody to what you're talking about with R&D and facilities to Tinters For a Cause, even Dean being part of XPEL and so on, like that's -- it's using your resources and using the network to level up and make things better. And I really, really sincerely applaud you all for that because that's what the industry needs. It doesn't matter what brand film you sell right now. It's an industry and it really is important that there's people that -- there are companies before XPEL and there'll be other companies with XPEL, and there'll be other companies maybe doing things after -- and everybody's job in the industry during their time to do what they can do, do the best they can. And that's...

At the end of the day, I mean we're all people, right? I mean I just got done telling somebody who's left our company now the other day and that I said, I want you to be happy, brother. I want -- I care about you. I don't care if you are selling computers, if you're selling another brand, if you're with us. I want you genuinely to be happy with you.

Yes. As you said, like we are one community and regardless of what brands you're with, the idea that we can come together and work with each other and not try and hurt each other and not slander each other and understand that there's a mutual respect that should be had amongst all, that's the way that we should all interact with each other. And inside XPEL, which is what I can talk about, obviously, firsthand, it's clearly like that. One of my best friends on the whole planet, Brett Miller from All American Paint Protection, his brother Brian unfortunately passed away due to a very tragic car accident, and I was scheduled to be in Chicago the day that they had the funeral for him. And I had reached -- I was supposed to be traveling with a couple of other XPEL employees within management and to meet up with some really important clientele. I actually was very open with everybody about what had gone on and how I felt that I think would -- I needed to be there for Brett. And everyone, including the prospective client, who is currently with another brand, said, "Oh, man, this meeting can wait. Please go be with your brother right now and help him through this trying time and help him get through this." And I was so in love with that prospective client already for saying it, that they felt that way that they weren't like, "Well, hold on a sec. We've had this meeting scheduled for 5 weeks now and what's going on, like you should be here instead." It was the exact opposite. And the fellow staff within XPEL said the same thing, "Hey, look, we're good. This, we can postpone this for next week, no big deal. We'll pull it up next week instead." And I don't know. I just feel like within XPEL at least, it always feels like that to me. It literally always feels like a family. And I can't say enough about that. Like you talked about that earlier with people wondering. As we go so much larger in the corporate world, are we going to lose that touch? I don't think we're going to ever.

Is there anything we didn't touch on that either of you wanted to get out there?

I think I'm good on my end. Chris knows a lot more about -- because again, he's got this upper hand, I mean having all the hands in the pie of so many things on of the background. I'm always like, "You're still the beast, Chris. Tell me what you're working on."

No, it's exciting. I've said this before. I -- for a long time told like Hardy said, I told XPEL no. I really loved my freedom and I loved being unbiased that I could go to any shop or whatever. And so now coming on full board with XPEL, I'm super excited. It hasn't been -- people asked me all the time though, so how is it? And it's super exciting. I mean -- and there's no part of me that questions like, oh, am I -- and is there some conflict? Is there some moral dilemmas? Because I was a shop owner. And I can wholeheartedly say that, yes, XPEL is growing big, and we're trying to contain that and understand and grow that dynamic. But everybody from Ryan Pape on down is still thinking about the small guy. There's the big guys, the small guys, there's everybody in between. And that isn't lost. And I know that, that's a concern sometimes. And there's some growing pains. Like Hardy said, when you have 700, 800 employees and you're quickly trying to hire people here and there, it can seem like they don't care, but I promise you -- at least for me, I'm there saying, and I know Hardy is the same way, it's -- we're still in everybody's corner for sure.

Yes. Yes. And Erik, I love this platform of yours. I get a lot of amazing feedback on this platform of yours. I commend you wholeheartedly on the fact that you keep doing this. There's -- I don't know that -- I don't see how you're benefiting from this other than giving back to the community. So I applaud you for it. I think it's awesome and I'm really glad that you're continuing to do it.

Thank you both for being on here. I could go talk for a little while how I benefit because I get to talk to people like yourselves as well as interact with the community and really that is community support, I feel it. I definitely feel it, and I'm definitely like it's a big part of my life. I don't have in-real-life friends. It's like everybody in the [ big ] community through the computer for the most part. So I really get a lot of value out of it. One last question. If there's somebody out there, maybe they're not an XPEL dealer, maybe they're an installer, maybe they are a zoner or whatever it is, if they were thinking, wow, one day maybe I'd like to work for XPEL, how can I find out if XPEL hiring or like what kind of jobs exist and so on? [indiscernible]

I'm actually glad you brought that up because to be honest, we are so understaffed, meaning -- I don't want to say understaffed. We are growing so quickly that literally positions, whether it's at our stores, whether it's in marketing, whether it's, I mean if you go to the XPEL website and check under careers because trust me, we would love to have passionate, qualified people that can grow with us. And it's -- I tell everybody like you almost want to check weekly. It's -- positions pop up that fast that we are growing in need that it's -- just check weekly. Wouldn't you say so, Chris?

I would. I'm going to add a little caveat to this. It's a little tiny thing. I need people to also understand that we have to respect the relations that we have with existing XPEL dealers, okay? We have had quite a few people inquire with us that our employees within one of our shops that we currently service, that makes things very uncomfortable for us. So I need that person to understand that, that shop, whether small or large, is an important client of XPEL's. And we don't want to feel like we're doing something underhanded to them.

If it's an installer that wants to, oh, of course 100%.

Yes. So I just want people to know that like, hey, yes, please keep your eye out. And if you have an interest in joining XPEL, we would love for you to obviously apply with us and see if you can come onboard. But if you are working within an XPEL shop already...

There's some conversations.

Please do me the favor of contact -- having that conversation with the shop owner first prior to contacting us because we don't want to be put in that awkward situation. We won't, we won't, we won't let it happen.

Sure.

That makes sense. And that just means a lot of opportunity if you're not any way related to XPEL because there's a lot of opportunity there because I can see it being like a how do I get in touch? Who do I get in touch maybe so xpel.com, go down to Careers and check it often if it's something you're very interested in.

We openly want more people like -- myself and Chris that have that background. Tad is another one, right? -- like you mentioned, you got Mike Mayler (sic) [ Mayall ], you've got our Vice President or Senior Vice President, Mat Moreau, like all these individuals that come from shop owners/installer background. This has been, for us, what we think is a major winning point that we want to continue to expand on. So we're looking for people within the industry. We enjoy that opportunity with that person probably more so than any other opportunity in terms of employment.

Yes.

Beautiful. Well, that's even more opportunity in the industry being created. So...

Erik, are you going to go look at our careers section is what I'm hearing?

I mean there's people in the comment. People want to know that people definitely want to know every time it comes up. And now I'm curious I'm going to go after that. Out of curiosity to see what exists. Marco Cazorla, you probably know him. I've also said you can go to Indeed and search XPEL and that they're hiring for tint trainer and PPF trainer, and you could let him know as well. So...

Way to go, Marco.

He's a rock star for sure.

Did he send you the image of the 3 of us?

He did and what I said was sounds like first of all, I was like, holy s***. Your editing skills are on point. That didn't look edited at all.

Your head, in particular, did not look like it was cropped in.

I thought both of you and all of us, all 3 of us.

I couldn't figure out when us 3 were together and I was in a muscle shirt.

I thought about it like, what if we could all get the shirts in time to where those shirts during the live show, it really would [indiscernible].

We got to set up now.

But Marco killed it. Yes. Marco's a man of many talents.

Marco is unreal.

Yes. I don't know if you follow like the tinter battles when they were doing the voting to be a competitor. Marco is going to be a competitor who's voted on and there was a lot of memes being created. And Marco mastered editing photos very quickly.

Is there any other comments in there that -- because I can't see them through the phone, but do you think we need to address?

Yes. So as I scroll through that, let me address that. The reason I stopped putting them in the comments because I realized maybe an episode or 2 ago, I can distract the person talking every time I put up on the screen, I can see a pause in their voice and they're like. So I didn't like -- I just feel like the conversation goes a lot better. That's the main reason.

Sure.

A lot of support, not maybe any questions that weren't addressed. I know somebody had asked earlier regarding the 5-mile territory radius, if you're still doing that. And I believe Dean Mitchell jumped in and answer that depending on where and maybe set market penetration.

Yes, it's kind of funny. I've actually had a few clients say that to me, that specific designation. I'm like, look, I don't know where that came from.

Yes. I've never heard that either.

You know that one of our reps in particular, which was Keith Baxter in Florida, tried to stick to this 5-mile idea. And I think he did quite successfully with it. But for the rest of the U.S., that number was not the number that we worked off of. The idea was, hey, where are you located? And therefore, who are you closest to physically? And then what we would do is we would determine what is that distance between look like. So let's just pretend it's 10 miles. Well, we would box that out on a program called Power BI, and it would show us in that 10 square mile radius, what is the population density. And so let's say, the population density within that 10 square miles between the 2 shops is 100,000 people to make this really easy. If we were only selling $10,000 a year to the existing shop, that's $0.10 a person, it's not even -- that's -- we need to be 10x higher than that to get to that $1 per person. So we would know that by bringing on another shop within that distance, it was not going to affect the shop that's already there at all, 0. Hold on there. Let me just keep going, Chris. So if the other shop don't mind you was doing $100,000 a year, well, they're already at $1 per person in that geographical area. So bringing on another shop is probably going to affect their business. It may not take 100% of it away. It might not even take 50% of it away, but it probably is going to affect it somewhat. So that's where we had some difficulty. Now there's still more caveats. What if the first shop was only doing paint protection films? But we need to sell window tint and ceramic coating and black glass film in that market also. So if the new operation offers those services, we got to bring them on even if you're already at $1 because you're not satisfying the entire product skew, right? And that was understood as well. And to further go along with that was that in the past, there was some reps who were being territorial for customers who weren't. And what I mean by that is they were looking after a shop and not bringing on new locations. But that shop was not being exclusive with us. That shop was maybe purchasing somebody else's coating or somebody else's tint. Well, then immediately, I said that makes no sense. You want to have a one-sided marriage. You want to have me marred to you. You want to get pissed off at me if I base another shop in the area, but you don't want me to lambaste you 24/7 for the fact that you're carrying a competitor of mine, it isn't working like that. That's not fair. That's not logical. My marriage doesn't work that way. Neither does business. So this idea of it being specifically 5-miles has a lot of caveats to go with it. Could it be 5 miles? Yes, it can even be less. It could be a lot more. 5 miles in rural Pennsylvania is going to mean nothing. 25 miles might not mean much in rural Pennsylvania. So again, like, you've got to be -- the true answer is that it's that there is a method to the madness. And when it's properly explained, it makes complete sense to everybody that we talk to about it. Sorry, Chris, go ahead.

Oh no, I was going to laugh because the 5-mile thing when I had somebody bring me that -- present the same question, and I was like, wow, and we just had a discussion about how the hurricane that he had in, the guy had trucked up 5 states who visit him. So I was like, "Well, wow, you get a lot of customers like that?" He's like, "I get customers from all over." So I was like, "Then why do you care if a shop is 4 miles from you because you're a destination spot? People -- they're coming to you for your quality, you're not -- nobody is driving by your place to see because he's in like a little back alley anyway." Nobody is even driving by in to see that, oh, yes, let me stop in and see what he offers. So -- there's more to the discussion a lot of times. If you pry further, that radius isn't the real issue. It's oh, he's taking my clients or his pricing is too low -- and I personally like to get that out more and say, let's solve those problems, the radius isn't really the problem.

Yes. Go ahead, though, was there anything else there?

Not me. I got -- if I don't use the bathroom soon, I'm going to just jet right now.

So all right. Well, let's wrap it up then. And -- thank you. It's great first. Great time to catch up at the beginning of the new year, and I think you gave a lot of wisdom, and thank you for doing this as always.

Thank you, man.

Thank you so much as always, Erik.

Chris Hardy can go on every couple of weeks. I haven't been on for like 2 years. So I was super excited.

Listen, you might be more important now in the XPEL world and with Mike Burke in the 5-minute phone call response, but I take the cake when it comes to Erik Devash.

Press the bat signal, and we'll be on Tint Wizdom live in a few minutes. Just any time. Thank you for watching.

Good night, everybody. Happy New Year to everybody, and hope you kill it.

Yes. 100%. good night.

Have a good night, everyone.