第99.1展示文本
福斯工廠控股公司報告第三財季2024財務業績
2024年10月31日，佐治亞州杜盧斯市-福克斯工廠控股公司（納斯達克：FOXF）（「FOX」或「公司」），作爲一個高端品牌和全球領先的設計、工程和半導體制造業產品與系統的製造商，今日發佈了截至2024年9月27日的第三財季財務報告。
2024財年第三季度亮點
•2024財年第三季度的淨銷售額爲35910萬美元，較上一季度增長3.1%，較去年同期增長8.5%
•營業收入和每股攤薄收益均在我們指引區間的低端
•自行車收入按順序增長了21.9%，比上年增長了38.7%
•執行了40000萬美元的利率互換套期保值，以減少利息支出並提供更大的可預測性
•第三季度在AAG部門啓動戰略行動，旨在改善庫存狀況
•宣佈進一步擴大成本優化工作，旨在在宏觀經濟背景下挑戰的情況下，通過回收利潤來實現超過2500萬美元的利潤。
管理層評論
「儘管我們在第三季度實現了環比和同比營業收入增長，但由於影響消費者自由支出的更廣泛市場條件，我們的原始設備製造商客戶仍面臨挑戰，這使得結果偏向我們預期的較低端，」 FOX首席執行官邁克·丹尼森（Mike Dennison）評論道。「我們已經果斷應對這些挑戰，實施了即時和長期的行動來增強我們的業務，包括積極的成本管理和戰略性的運營改進。重要的是，對於FOX創新產品的基本需求在各個領域持續強勁，特別是在售後市場渠道，在那裏我們持續看到增長。」
Dennison先生表示：「在第三季度，我們開始制定並實施了一系列關鍵任務，體現了調整我們的業務結構以在多種需求環境中高效運營的承諾，以保護利潤率並推動顯著且持續的自由現金流，以減輕我們的資產負債表。我們已通過在AAG部門迅速採取行動來啓動這一策略，我們預計這將在第四季度改善利潤率，並將這些努力擴展到我們的其他業務部門。我們期望我們的綜合努力將使我們每年降低超過2500萬美元的成本，從戰略上定位我們，以便在未來消費者需求加速時抓住機會。」
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2024年第三季度業績
2024財年第三季度淨銷售額爲35910萬美元，比2023財年第三季度的33110萬美元增加了8.5%。這一增長反映了特種體育集團（SSG）銷售額增加7750萬美元，增幅達107.6%，部分抵消了售後應用集團（AAG）銷售額減少3580萬美元，降幅達26.3%，以及動力車輛集團（PVG）銷售額減少1370萬美元，降幅爲11.2%。SSG銷售額從7200萬美元增至14950萬美元，主要是由於我們在2023年11月收購的Marucci銷售額增加4960萬美元，以及自行車銷售額增加2790萬美元。順勢而爲，自行車收入增長了21.9%。儘管自行車銷售增加與前一年相比有所改善，但持續的渠道庫存調整以及較低終端消費者需求仍然是不利因素。AAG銷售額從13600萬美元降至10030萬美元，主要是由於產品組合導致的配件銷售額降低，利率期貨上漲影響了經銷商和消費者，以及經銷商庫存水平較高。PVG銷售額從12310萬美元降至10930萬美元，主要是由於體育和汽車行業需求降低，因爲利率期貨增加。
2024財年第三季度的毛利率爲29.9%，比2023財年第三季度的32.4%下降了250個點子。毛利率下降主要是由產品線組合的變化和低成交量下降的運營槓桿影響。調整後的毛利率，不包括前一年組織重組費用的影響，從同一前財年期間下降了330個點子至29.9%。
2024財年第三季度，總營業費用爲8870萬美元，佔淨銷售額的24.7％，而2023財年第三季度爲6590萬美元，佔淨銷售額的19.9％。營業費用增加了2280萬美元，主要是由於包括了Marucci營業費用的1970萬美元。調整後的營業費用爲7580萬美元，佔2024財年第三季度淨銷售額的21.1％，而去年同期爲5830萬美元，佔淨銷售額的17.6％。
2024財年第三季度稅費爲30萬美元，相比於2023財年第三季度的稅費爲350萬美元。公司所得稅費用的減少主要是由於稅前收入減少。
2024財年第三季度的淨利潤爲480萬美元，而上一財年第三季度的淨利潤爲3530萬美元。2024財年第三季度每股攤薄收益爲0.11美元，相比之下，2023財年第三季度每股攤薄收益爲0.83美元。2024財年第三季度調整後的淨利潤爲1480萬美元，或調整後的每股攤薄收益爲0.35美元。相比之下，上一財年同期的調整後淨利潤爲4480萬美元，或調整後的每股攤薄收益爲1.05美元。
2024財年第三季度調整後的EBITDA爲4200萬美元，而2023財年第三季度爲6370萬美元。2024財年第三季度調整後的EBITDA利潤率爲11.7%，而2023財年第三季度爲19.2%。
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2024財政前九個月的業績
2024年9月27日結束的前九個月的淨銷售額爲104110萬美元，與2023財年前九個月相比下降了8.0%。這一下降反映了AAG淨銷售額下降了12110萬美元，或28.1%，以及PVG淨銷售額下降了6030萬美元，或14.9%。 PVG淨銷售額減少，部分抵消了SSG淨銷售額增加。AAG淨銷售額從43040萬美元減少到30930萬美元，主要是由於產品組合導致的裝配銷售降低，較高的利率影響了經銷商和消費者，以及經銷商庫存水平較高。PVG淨銷售額從40550萬美元降至34520萬美元，主要是由於動力體育和汽車領域需求減少，這是由於較高的利率。SSG銷售額從29580萬美元增加到38660萬美元，這與包括Marucci在內的淨銷售額增加了15080萬美元有關，部分抵消了自行車銷售額減少6000萬美元，原因是由於持續的渠道庫存重新校準，以及較低的終端消費者需求。
Gross margin was 30.9% in the first nine months of fiscal 2024, a 200-basis point decrease, compared to gross margin of 32.9% in the first nine months of fiscal 2023. The decrease in gross margin for the first nine months of fiscal 2024 was primarily driven by shifts in our product line mix and operating leverage on lower volume. Adjusted gross margin, excluding the effects of the amortization of an acquired inventory valuation markup and organizational restructuring expenses, was 31.3% in the first nine months of fiscal 2024, a 270-basis point decrease, compared to 34.0% in the first nine months of fiscal 2023.
Total operating expenses were $275.3 million, or 26.4% of net sales, for the first nine months of fiscal 2024, compared to $223.7 million, or 19.8% of net sales in the first nine months of fiscal 2023. Operating expenses increased by $51.6 million primarily due to the inclusion of Marucci operating expenses of $59.9 million, partially offset by cost controls. Adjusted operating expenses were $234.5 million, or 22.5% of net sales in the first nine months of fiscal 2024, compared to $199.6 million, or 17.6% of net sales, in the first nine months of the prior fiscal year.
Net income in the first nine months of fiscal 2024 was $6.7 million, compared to $116.8 million in the first nine months of the prior fiscal year. Earnings per diluted share for the first nine months of fiscal 2024 was $0.16, compared to $2.75 in the same period of fiscal 2023. Adjusted net income in the first nine months of fiscal 2024 was $42.6 million, or $1.02 of adjusted earnings per diluted share, compared to $147.2 million, or $3.46 of adjusted earnings per diluted share in the same period of the prior fiscal year.
Adjusted EBITDA decreased to $126.6 million in the first nine months of fiscal 2024, compared to $222.3 million in the first nine months of fiscal 2023. Adjusted EBITDA margin decrease to 12.2% in the first nine months of fiscal 2024, compared to 19.6% in the first nine months of fiscal 2023.
Reconciliations to non-GAAP measures are provided at the end of this press release.
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Balance Sheet Summary
As of September 27, 2024, the Company had cash and cash equivalents of $89.2 million, compared to $83.6 million as of December 29, 2023. Inventory was $401.4 million as of September 27, 2024, compared to $371.8 million as of December 29, 2023. As of September 27, 2024, accounts receivable and accounts payable were $192.5 million and $134.6 million, respectively, compared to $171.1 million and $104.2 million, respectively, as of December 29, 2023. Prepaids and other current assets were $128.0 million as of September 27, 2024, compared to $141.5 million as of December 29, 2023. The increase in cash and cash equivalents was primarily due to a decrease in prepaids and other current assets driven by lower chassis deposits as we worked to sell through model year 2024. Inventory increased by $29.5 million driven by timing and some seasonal inventory. The change in accounts receivable is due to higher sales in fiscal quarter ended September 27, 2024 compared to fiscal quarter ended December 29, 2023. The change in accounts payable reflects the timing of vendor payments. Total debt was $768.4 million as of September 27, 2024, compared to $743.5 million as of December 29, 2023.
Fourth Quarter and Fiscal 2024 Guidance
For the fourth quarter of fiscal 2024, the Company expects net sales in the range of $300 million to $340 million and adjusted earnings per diluted share in the range of $0.25 to $0.40.
For the fiscal year 2024, the Company now expects net sales in the range of $1.341 billion to $1.381 billion, adjusted earnings per diluted share in the range of $1.27 to $1.42, and a full year adjusted tax rate in the range of 15% to 18%.
Adjusted earnings per diluted share exclude the following items net of applicable tax: amortization of purchased intangibles, litigation and settlement-related expenses, acquisition and integration-related expenses, organizational restructuring expenses, and strategic transformation costs. A quantitative reconciliation of adjusted earnings per diluted share for the fourth quarter and full fiscal year 2024 is not available without unreasonable efforts because management cannot predict, with sufficient certainty, all of the elements necessary to provide such a reconciliation. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call & Webcast
The Company will hold an investor conference call today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call dial-in number for North America listeners is (800) 225-9448, and international listeners may dial (203) 518-9708; the conference ID is FOXFQ324 or 36937324. Live audio of the conference call will be simultaneously webcast in the Investor Relations section of the Company’s website at http://www.ridefox.com. The webcast of the teleconference will be archived and available on the Company’s website.
Available Information
Fox Factory Holding Corp. announces material information to the public about the Company through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, webcasts, and the investor relations section of its website (https://investor.ridefox.com/investor-relations/default.aspx) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with its disclosure obligations under Regulation FD.
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About Fox Factory Holding Corp. (NASDAQ: FOXF)
Fox Factory Holding Corp. is a global leader in the design engineering and manufacturing of premium products that deliver championship-level performance for specialty sports and on and off-road vehicles. Its portfolio of brands, like FOX, Marucci, Method Race Wheels and more, are fueled by unparalleled innovation that continuously earns the trust of professional athletes and passionate enthusiasts all around the world. The Company is a direct supplier of shocks, suspension, and components to leading powered vehicle and bicycle original equipment manufacturers and offers premium baseball and softball gear and equipment. The Company acquires complementary businesses to integrate engineering and manufacturing expertise to reach beyond its core shock and suspension segment, diversifying its product offerings and increasing its market potential. It also provides products in the aftermarket through its global network of retailers and distributors and through direct-to-consumer channels.
FOX is a registered trademark of Fox Factory, Inc. NASDAQ Global Select Market is a registered trademark of The NASDAQ OMX Group, Inc. All rights reserved.
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Non-GAAP Financial Measures
In addition to reporting financial measures in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”), FOX is including in this press release certain non-GAAP financial measures consisting of “adjusted gross profit,” “adjusted gross margin,” “adjusted operating expense,” “adjusted operating expense as a percentage of net sales”, “adjusted net income,” “adjusted earnings per diluted share,” “adjusted EBITDA,” and “adjusted EBITDA margin,” all of which are non-GAAP financial measures. FOX defines adjusted gross profit as gross profit adjusted for the amortization of acquired inventory valuation markups. Adjusted gross margin is defined as adjusted gross profit divided by net sales. FOX defines adjusted operating expense as operating expense adjusted for amortization of purchased intangibles, litigation and settlement-related expenses, acquisition and integration-related expenses, organizational restructuring expenses, and certain strategic transformation costs. FOX defines adjusted operating margin as adjusted operating expense divided by net sales. FOX defines adjusted net income as net income adjusted for amortization of purchased intangibles, litigation and settlement-related expenses, acquisition and integration-related expenses, organizational restructuring expenses, and strategic transformation costs, all net of applicable tax. Adjusted earnings per diluted share is defined as adjusted net income divided by the weighted average number of diluted shares of common stock outstanding during the period. FOX defines adjusted EBITDA as net income adjusted for interest expense, net other expense, income taxes or tax benefits, amortization of purchased intangibles, depreciation, stock-based compensation, litigation and settlement related expenses, organizational restructuring expenses, acquisition and integration-related expenses and strategic transformation costs that are more fully described in the tables included at the end of this press release. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. These adjustments are more fully described in the tables included at the end of this press release.
FOX includes these non-GAAP financial measures because it believes they allow investors to better understand and evaluate the Company’s core operating performance and trends. In particular, the exclusion of certain items in calculating the non-GAAP financial measures consisting of adjusted gross profit, adjusted operating expense, adjusted net income and adjusted EBITDA (and accordingly, adjusted gross margin, adjusted operating expense as a percentage of net sales, adjusted earnings per diluted share and adjusted EBITDA margin) can provide a useful measure for period-to-period comparisons of the Company’s core business. These non-GAAP financial measures have limitations as analytical tools, including the fact that such non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies because other companies may calculate adjusted gross profit, adjusted gross margin, adjusted operating expense, adjusted operating margin, adjusted net income, adjusted earnings per diluted share, adjusted EBITDA and adjusted EBITDA margin differently than FOX does. For more information regarding these non-GAAP financial measures, see the tables included at the end of this press release.
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FOX FACTORY HOLDING CORP.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
| As of | As of | ||||||||||
| September 27, 2024 | December 29, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 89,241 | $ | 83,642 | |||||||
Accounts receivable (net of allowances of $1,901 and $1,158, respectively) | 192,539 | 171,060 | |||||||||
| Inventory | 401,363 | 371,841 | |||||||||
| Prepaids and other current assets | 128,026 | 141,512 | |||||||||
| Total current assets | 811,169 | 768,055 | |||||||||
| Property, plant and equipment, net | 243,215 | 237,192 | |||||||||
| Lease right-of-use assets | 108,054 | 84,317 | |||||||||
| Deferred tax assets | 21,554 | 21,297 | |||||||||
| Goodwill | 635,991 | 636,565 | |||||||||
| Trademarks and brands, net | 265,876 | 273,293 | |||||||||
| Customer and distributor relationships, net | 165,775 | 184,269 | |||||||||
| Core technologies, net | 23,904 | 25,785 | |||||||||
| Other assets | 12,721 | 11,525 | |||||||||
| Total assets | $ | 2,288,259 | $ | 2,242,298 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 134,554 | $ | 104,150 | |||||||
| Accrued expenses | 93,874 | 103,400 | |||||||||
| Current portion of long-term debt | 24,286 | 14,286 | |||||||||
| Total current liabilities | 252,714 | 221,836 | |||||||||
| Revolver | 210,000 | 370,000 | |||||||||
| Term Loans, less current portion | 534,144 | 359,242 | |||||||||
| Other liabilities | 94,343 | 69,459 | |||||||||
| Total liabilities | 1,091,201 | 1,020,537 | |||||||||
| Stockholders’ equity | |||||||||||
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of September 27, 2024 and December 29, 2023 | — | — | |||||||||
Common stock, $0.001 par value — 90,000 authorized; 42,573 shares issued and 41,683 outstanding as of September 27, 2024; 42,844 shares issued and 41,954 outstanding as of December 29, 2023 | 42 | 42 | |||||||||
| Additional paid-in capital | 336,231 | 348,346 | |||||||||
Treasury stock, at cost; 890 common shares as of September 27, 2024 and December 29, 2023 | (13,754) | (13,754) | |||||||||
| Accumulated other comprehensive (loss) income | (1,055) | 9,041 | |||||||||
| Retained earnings | 875,594 | 878,086 | |||||||||
| Total stockholders’ equity | 1,197,058 | 1,221,761 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,288,259 | $ | 2,242,298 | |||||||
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FOX FACTORY HOLDING CORP.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Net sales | $ | 359,121 | $ | 331,117 | $ | 1,041,084 | $ | 1,131,683 | |||||||||||||||
| Cost of sales | 251,642 | 223,890 | 719,484 | 759,132 | |||||||||||||||||||
| Gross profit | 107,479 | 107,227 | 321,600 | 372,551 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative | 32,436 | 25,710 | 106,819 | 89,692 | |||||||||||||||||||
| Sales and marketing | 29,103 | 24,439 | 89,828 | 74,664 | |||||||||||||||||||
| Research and development | 16,103 | 8,904 | 45,331 | 39,374 | |||||||||||||||||||
| Amortization of purchased intangibles | 11,035 | 6,809 | 33,355 | 19,982 | |||||||||||||||||||
| Total operating expenses | 88,677 | 65,862 | 275,333 | 223,712 | |||||||||||||||||||
| Income from operations | 18,802 | 41,365 | 46,267 | 148,839 | |||||||||||||||||||
| Interest expense | 14,228 | 3,466 | 41,422 | 11,405 | |||||||||||||||||||
| Other income, net | (456) | (878) | (458) | (318) | |||||||||||||||||||
| Income before income taxes | 5,030 | 38,777 | 5,303 | 137,752 | |||||||||||||||||||
| Provision (benefit) for income taxes | 250 | 3,484 | (1,388) | 20,957 | |||||||||||||||||||
| Net income | $ | 4,780 | $ | 35,293 | $ | 6,691 | $ | 116,795 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 0.11 | $ | 0.83 | $ | 0.16 | $ | 2.76 | |||||||||||||||
| Diluted | $ | 0.11 | $ | 0.83 | $ | 0.16 | $ | 2.75 | |||||||||||||||
| Weighted-average shares used to compute earnings per share: | |||||||||||||||||||||||
| Basic | 41,699 | 42,395 | 41,674 | 42,350 | |||||||||||||||||||
| Diluted | 41,724 | 42,510 | 41,719 | 42,497 | |||||||||||||||||||
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FOX FACTORY HOLDING CORP.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| For the nine months ended | |||||||||||
| September 27, 2024 | September 29, 2023 | ||||||||||
| OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 6,691 | $ | 116,795 | |||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 61,699 | 43,519 | |||||||||
| Provision for inventory reserve | 2,685 | 3,906 | |||||||||
| Stock-based compensation | 6,574 | 14,042 | |||||||||
| Amortization of acquired inventory step-up | 4,485 | 9,903 | |||||||||
| Amortization of loan fees | 2,572 | 679 | |||||||||
| Amortization of deferred gains on prior swap settlements | (3,189) | (3,189) | |||||||||
| Loss on disposal of property and equipment | 55 | 372 | |||||||||
| Deferred taxes | (752) | (512) | |||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
| Accounts receivable | (21,825) | 53,299 | |||||||||
| Inventory | (28,997) | 20,411 | |||||||||
| Income taxes | (25,270) | (20,384) | |||||||||
| Prepaids and other assets | 9,911 | (53,502) | |||||||||
| Accounts payable | 24,154 | (51,389) | |||||||||
| Accrued expenses and other liabilities | 11,318 | (7,265) | |||||||||
| Net cash provided by operating activities | 50,111 | 126,685 | |||||||||
| INVESTING ACTIVITIES: | |||||||||||
| Acquisitions of businesses, net of cash acquired | (5,041) | (130,918) | |||||||||
| Acquisition of other assets, net of cash acquired | (5,344) | (2,432) | |||||||||
| Purchases of property and equipment | (32,087) | (32,048) | |||||||||
| Net cash used in investing activities | (42,472) | (165,398) | |||||||||
| FINANCING ACTIVITIES: | |||||||||||
| Proceeds from revolver | 169,000 | 210,000 | |||||||||
| Payments on revolver | (329,000) | (220,000) | |||||||||
| Proceeds from issuance of debt | 200,000 | — | |||||||||
| Repayment of term debt | (13,214) | — | |||||||||
| Purchase and retirement of common stock | (25,000) | — | |||||||||
| Repurchases from stock compensation program, net | (2,613) | (6,163) | |||||||||
| Deferred debt issuance/modification costs | (855) | — | |||||||||
| Net cash used in financing activities | (1,682) | (16,163) | |||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (358) | 257 | |||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | 5,599 | (54,619) | |||||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | 83,642 | 145,250 | |||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | 89,241 | $ | 90,631 | |||||||
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FOX FACTORY HOLDING CORP.
NET INCOME TO ADJUSTED NET INCOME RECONCILIATION
AND CALCULATION OF ADJUSTED EARNINGS PER SHARE
(in thousands, except per share data)
(unaudited)
The following table provides a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to adjusted net income (a non-GAAP measure), and the calculation of adjusted earnings per share (a non-GAAP measure) for the three and nine months ended September 27, 2024 and September 29, 2023. These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Net income | $ | 4,780 | $ | 35,293 | $ | 6,691 | $ | 116,795 | |||||||||||||||
| Amortization of purchased intangibles | 11,035 | 6,809 | 33,355 | 19,982 | |||||||||||||||||||
| Litigation and settlement-related expenses | 466 | 654 | 3,226 | 2,291 | |||||||||||||||||||
| Other acquisition and integration-related expenses (1) | 459 | 1,121 | 6,092 | 11,720 | |||||||||||||||||||
| Organizational restructuring expenses (2) | 723 | 1,849 | 1,243 | 1,849 | |||||||||||||||||||
| Strategic transformation costs (3) | 266 | — | 1,520 | — | |||||||||||||||||||
| Tax impacts of reconciling items above | (2,964) | (967) | (9,542) | (5,453) | |||||||||||||||||||
| Adjusted net income | $ | 14,765 | $ | 44,759 | $ | 42,585 | $ | 147,184 | |||||||||||||||
| Adjusted EPS | |||||||||||||||||||||||
| Basic | $ | 0.35 | $ | 1.06 | $ | 1.02 | $ | 3.48 | |||||||||||||||
| Diluted | $ | 0.35 | $ | 1.05 | $ | 1.02 | $ | 3.46 | |||||||||||||||
| Weighted average shares used to compute adjusted EPS | |||||||||||||||||||||||
| Basic | 41,699 | 42,395 | 41,674 | 42,350 | |||||||||||||||||||
| Diluted | 41,724 | 42,510 | 41,719 | 42,497 | |||||||||||||||||||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations and the impact of the finished goods inventory valuation adjustment recorded in connection with the purchase of acquired assets, per period as follows:
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Acquisition related costs and expenses | $ | 459 | $ | 113 | $ | 1,607 | $ | 1,817 | |||||||||||||||
| Purchase accounting inventory fair value adjustment amortization | — | 1,008 | 4,485 | 9,903 | |||||||||||||||||||
| Other acquisition and integration-related expenses | $ | 459 | $ | 1,121 | $ | 6,092 | $ | 11,720 | |||||||||||||||
(2) Represents expenses associated with various restructuring initiatives.
(3) Represents costs associated with various strategic initiatives.
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FOX FACTORY HOLDING CORP.
NET INCOME TO ADJUSTED EBITDA RECONCILIATION AND
NET INCOME MARGIN TO ADJUSTED EBITDA MARGIN RECONCILIATION
(in thousands, except percentages)
(unaudited)
The following tables provide a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to adjusted EBITDA (a non-GAAP measure), and a reconciliation of net income margin to adjusted EBITDA margin (a non-GAAP measure) for the three and nine months ended September 27, 2024 and September 29, 2023. These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Net income | $ | 4,780 | $ | 35,293 | $ | 6,691 | $ | 116,795 | |||||||||||||||
| Provision (benefit) for income taxes | 250 | 3,484 | (1,388) | 20,957 | |||||||||||||||||||
| Depreciation and amortization | 20,845 | 14,807 | 61,699 | 43,519 | |||||||||||||||||||
| Non-cash stock-based compensation | 465 | 3,858 | 6,574 | 14,042 | |||||||||||||||||||
| Litigation and settlement-related expenses | 466 | 654 | 3,226 | 2,291 | |||||||||||||||||||
| Other acquisition and integration-related expenses (1) | 459 | 1,121 | 6,092 | 11,720 | |||||||||||||||||||
| Organizational restructuring expenses (2) | 723 | 1,849 | 1,199 | 1,849 | |||||||||||||||||||
| Strategic transformation costs (3) | 266 | — | 1,520 | — | |||||||||||||||||||
| Interest and other expense, net | 13,772 | 2,588 | 40,964 | 11,087 | |||||||||||||||||||
| Adjusted EBITDA | $ | 42,026 | $ | 63,654 | $ | 126,577 | $ | 222,260 | |||||||||||||||
| Net income margin | 1.3 | % | 10.7 | % | 0.6 | % | 10.3 | % | |||||||||||||||
| Adjusted EBITDA margin | 11.7 | % | 19.2 | % | 12.2 | % | 19.6 | % | |||||||||||||||
| Powered Vehicles Group | $ | 8,948 | $ | 26,385 | $ | 40,719 | $ | 67,925 | |||||||||||||||
| Aftermarket Applications Group | 9,394 | 31,877 | 38,420 | 105,986 | |||||||||||||||||||
| Specialty Sports Group | 36,521 | 19,727 | 89,792 | 95,666 | |||||||||||||||||||
| Unallocated corporate expenses | (12,837) | (14,335) | (42,354) | (47,317) | |||||||||||||||||||
| Adjusted EBITDA | $ | 42,026 | $ | 63,654 | $ | 126,577 | $ | 222,260 | |||||||||||||||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations and the impact of the finished goods inventory valuation adjustment recorded in connection with the purchase of acquired assets, per period as follows:
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Acquisition related costs and expenses | $ | 459 | $ | 113 | $ | 1,607 | $ | 1,817 | |||||||||||||||
| Purchase accounting inventory fair value adjustment amortization | — | 1,008 | 4,485 | 9,903 | |||||||||||||||||||
| Other acquisition and integration-related expenses | $ | 459 | $ | 1,121 | $ | 6,092 | $ | 11,720 | |||||||||||||||
(2) Represents expenses associated with various restructuring initiatives, excluding $44 in stock-based compensation for the six month period ended September 27, 2024.
(3) Represents costs associated with various strategic initiatives.
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FOX FACTORY HOLDING CORP.
GROSS PROFIT TO ADJUSTED GROSS PROFIT RECONCILIATION AND
CALCULATION OF GROSS MARGIN AND ADJUSTED GROSS MARGIN
(in thousands, except percentages)
(unaudited)
The following table provides a reconciliation of gross profit to adjusted gross profit (a non-GAAP measure) for the three and nine months ended September 27, 2024 and September 29, 2023, and the calculation of gross margin and adjusted gross margin (a non-GAAP measure). These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Net sales | $ | 359,121 | $ | 331,117 | $ | 1,041,084 | $ | 1,131,683 | |||||||||||||||
| Gross Profit | $ | 107,479 | $ | 107,227 | $ | 321,600 | $ | 372,551 | |||||||||||||||
| Amortization of acquired inventory valuation markup | — | 1,008 | 4,485 | 9,903 | |||||||||||||||||||
| Organizational restructuring expenses (1) | 32 | 1,849 | 118 | 1,849 | |||||||||||||||||||
| Adjusted Gross Profit | $ | 107,511 | $ | 110,084 | $ | 326,203 | $ | 384,303 | |||||||||||||||
| Gross Margin | 29.9 | % | 32.4 | % | 30.9 | % | 32.9 | % | |||||||||||||||
| Adjusted Gross Margin | 29.9 | % | 33.2 | % | 31.3 | % | 34.0 | % | |||||||||||||||
(1) Represents expenses associated with various restructuring initiatives.
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FOX FACTORY HOLDING CORP.
OPERATING EXPENSE TO ADJUSTED OPERATING EXPENSE RECONCILIATION AND
CALCULATION OF ADJUSTED OPERATING EXPENSE AS A PERCENTAGE OF NET SALES
(in thousands, except percentages)
(unaudited)
The following tables provide a reconciliation of operating expense to adjusted operating expense (a non-GAAP measure) and the calculations of operating expense as a percentage of net sales and adjusted operating expense as a percentage of net sales (a non-GAAP measure), for the three and nine months ended September 27, 2024 and September 29, 2023. These non-GAAP financial measures are provided in addition to, and not as an alternative for, the Company’s reported GAAP results.
| For the three months ended | For the nine months ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Net sales | $ | 359,121 | $ | 331,117 | $ | 1,041,084 | $ | 1,131,683 | |||||||||||||||
| Operating expense | $ | 88,677 | $ | 65,862 | $ | 275,333 | $ | 223,712 | |||||||||||||||
| Amortization of purchased intangibles | (11,035) | (6,809) | (33,355) | (19,982) | |||||||||||||||||||
| Litigation and settlement-related expenses | (466) | (654) | (3,226) | (2,291) | |||||||||||||||||||
| Other acquisition and integration-related expenses (1) | (459) | (113) | (1,607) | (1,817) | |||||||||||||||||||
| Organizational restructuring expenses (2) | (691) | — | (1,126) | — | |||||||||||||||||||
| Strategic transformation costs (3) | (266) | — | (1,520) | — | |||||||||||||||||||
| Adjusted operating expense | $ | 75,760 | $ | 58,286 | $ | 234,499 | $ | 199,622 | |||||||||||||||
| Operating expense as a percentage of net sales | 24.7 | % | 19.9 | % | 26.4 | % | 19.8 | % | |||||||||||||||
| Adjusted operating expense as a percentage of net sales | 21.1 | % | 17.6 | % | 22.5 | % | 17.6 | % | |||||||||||||||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations.
(2) Represents expenses associated with various restructuring initiatives.
(3) Represents costs associated with various strategic initiatives.
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Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release including earnings guidance may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends that all such statements be subject to the “safe-harbor” provisions contained in those sections. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Such forward-looking statements include, but are not limited to, statements with regard to expectations related to the acquisition of Marucci and the future performance of Fox and Marucci; the Company’s expected demand for its products; the Company’s execution on its strategy to improve operating efficiencies; the Company’s expectation regarding its operating results and future growth prospects; the Company’s expected future sales and future adjusted earnings per diluted share; and any other statements in this press release that are not of a historical nature. Many important factors may cause the Company’s actual results, events or circumstances to differ materially from those discussed in any such forward-looking statements, including but not limited to: the Company’s ability to complete any acquisition and/or incorporate any acquired assets into its business including, but not limited to, the possibility that the expected synergies and value creation from the Marucci acquisition will not be realized, or will not be realized within the expected time period; the Company’s ability to maintain its suppliers for materials, product parts and vehicle chassis without significant supply chain disruptions; the Company’s ability to improve operating and supply chain efficiencies; the Company’s ability to enforce its intellectual property rights; the Company’s future financial performance, including its sales, cost of sales, gross profit or gross margin, operating expenses, ability to generate positive cash flow and ability to maintain profitability; the Company’s ability to adapt its business model to mitigate the impact of certain changes in tax laws; changes in the relative proportion of profit earned in the numerous jurisdictions in which the Company does business and in tax legislation, case law and other authoritative guidance in those jurisdictions; factors which impact the calculation of the weighted average number of diluted shares of common stock outstanding, including the market price of the Company’s common stock, grants of equity-based awards and the vesting schedules of equity-based awards; the Company’s ability to develop new and innovative products in its current end-markets and to leverage its technologies and brand to expand into new categories and end-markets; the spread of highly infectious or contagious diseases, such as COVID-19, causing disruptions in the U.S. and global economy and disrupting the business activities and operations of our customers, business and operations; the Company’s ability to increase its aftermarket penetration; the Company’s exposure to exchange rate fluctuations; the loss of key customers; strategic transformation costs; legal and regulatory developments, including the outcome of pending litigation; the cost of compliance with, or liabilities related to, environmental or other governmental regulations or changes in governmental or industry regulatory standards; the possibility that the Company may not be able to accelerate its international growth; the Company’s ability to maintain its premium brand image and high-performance products; the Company’s ability to maintain relationships with the professional athletes and race teams that it sponsors; the possibility that the Company may not be able to selectively add additional dealers and distributors in certain geographic markets; the overall growth of the markets in which the Company competes; the Company’s expectations regarding consumer preferences and its ability to respond to changes in consumer preferences; changes in demand for performance-defining products as well as the Company’s other products; the Company’s loss of key personnel, management and skilled engineers; the Company’s ability to successfully identify, evaluate and manage potential acquisitions and to benefit from such acquisitions; product recalls and product liability claims; the impact of change in China-Taiwan relations on our business, our operations or our supply chain, the impact of the Russian invasion of Ukraine or the Israel-Palestine conflict or rising tension in the Middle East on the global economy, energy supplies and raw materials; future economic or market conditions, including the impact of inflation or the U.S. Federal Reserve’s interest rate increases in response thereto; and the other risks and uncertainties described in “Risk Factors” contained in its Annual Report on Form 10-K for the fiscal year ended December 29, 2023 and filed with the Securities and Exchange Commission on February 23, 2024, or Quarterly Reports on Form 10-Q or otherwise described in the Company’s other filings with the Securities and Exchange Commission. New risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company’s forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CONTACT:
ICR
Jeff Sonnek
646-277-1263
Jeff.Sonnek@icrinc.com
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