XPEL, Inc.

Good morning, everyone, and welcome to the Expel Incorporated Second Quarter 2026 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open to our presentation. It's now my pleasure to turn the floor over to your host, John Nesbitt of IMS Investor Relations. John, the floor is yours.

Good morning and welcome to our conference call to discuss Expel's second quarter 2026 financial results. On the call today, Ryan Pape, Expel's president and chief executive officer, and Barry Wood, Expel's senior vice president and chief financial officer, will provide an overview of the business operations and review the company's financial results. Immediately after the prepared comments, we'll take questions from call participants. The transcript of this call will be available on the company's website after the call. Take a moment to read the safe harbor statement. During the course of this call, we'll make certain forward-looking statements regarding Expel, Inc. and its business, which may include, but are not limited to, anticipated use of proceeds from capital transactions, expansion into new markets, and execution of the company's growth strategy. Such statements are based on our current expectations and assumptions, which are subject to known and unknown risk factors and uncertainties that could cause our actual results to be materially different from those expressed in these statements. Some of these factors are discussed in detail in our most recent Form 10-K, including under Item 1-A, Risk Factors, filed with the SEC. Expel undertakes no obligation to publicly update or revise any forward-looking statement, whether a result of new information, future events, or otherwise. With that, I will now turn the call over to Ryan. Please go ahead.

Thank you, John, and good morning, everyone. Welcome to our second quarter 2026 call. Thank you for joining us. either actual or perceived coming price increases that would go into effect in Q3. So all said, I still think that's really good performance. Our US region turned in another solid quarter with revenue growing 11.7% to 78.6 million, which was a record high for the region. Our independent channel had another strong quarter. In contrast to the broader trend we've seen over previous quarters, we actually saw better performance Thank you for joining us. With these challenges, though, there is opportunity as a flight to quality helps us in many of these scenarios. Our Canada region grew 10.8% in the quarter. If you recall from last quarter's call, we have a large distributor in Canada, and there's always some timing impact in terms of their ordering cadence. So last quarter, that was a bit of a drag. Obviously, it helped us this quarter. To exclude that timing, revenue grew around 4%. certainly a good for Canada, which has really sort of struggled in the past year. Our China region had a good corner revenue coming in at $15.9 million. In September, we'll cross the one-year anniversary of our acquisition of the distributor there. The team's doing a really great job. I'm very happy in our progress in integrating the acquisition. And these are good results despite a very challenging Q2 for domestic car sales in China. Many focus on the headline sales, which includes exports. But if you subtract those out, which is really what we're focused on in the China market, the domestic sales, they're down something on the order of 20% year over year. So it's a super challenging quarter in China for domestic sales.