Fox Factory Holding Corp. (NASDAQ: FOXF) (“FOX” or the “Company”)
today reported financial results for the fourth quarter and fiscal
year ended December 29, 2023.
Fourth Quarter Fiscal 2023
Highlights
- Achieved
quarterly net sales of $332 million
while managing challenging macro and industry
headwinds
- Completed
Marucci acquisition; revenue contribution of $17
million
- Delivered
net income of $4 million,
earnings per diluted share of
$0.10, and adjusted net income of
$20 million, adjusted earnings per diluted
shares of $0.48
- Attained
adjusted EBITDA margin of 11.7%
due to UAW strike impact, Bike Original Equipment
Manufacturers (“OEM”) destocking, and higher interest rates
impacting dealers
- Paid down
$15 million on outstanding debt
Full Year 2023 Highlights
-
Returned $25 million to
shareholders through our $300 million share repurchase
plan
- PVG sales
grew 21% on strong OEM demand and
production efficiencies
- Completed
acquisition of Custom Wheel House and Marucci, demonstrating
continued vertical integration and diversification
strategy
- Secured a
Term A Loan for $400 million to fund Marucci
acquisition
-
Successfully launched more products for the second
consecutive year and continued to build our pipeline of new
high-performance products
“We delivered $332 million in revenue in the
fourth quarter of 2023, which included approximately $17 million in
revenue from Marucci. The fourth quarter saw both tailwinds and
headwinds exhibited by a strong aftermarket on one side and ongoing
OEM challenges on the other. The three main factors driving these
headwinds included: the ongoing inventory recalibration in SSG as
it relates to Bike, the impact of the UAW strike on PVG and AAG,
and higher interest rates causing general softness with OEM
customer demand,” commented Mike Dennison, FOX’s Chief Executive
Officer. “The fourth quarter saw growth in our aftermarket product
lines as customers were also upgrading their existing vehicles. Our
significant product roadmap and growing share of OEM business
continues to expand giving us confidence in our strategy, product
leadership and long-term growth plans. We remain focused on
investments in product development and remain committed to winning
from the top down versus selling out from the bottom up,” said
Dennison.
Net sales for the fourth quarter of fiscal 2023
were $332.5 million, a decrease of 18.6%, as compared to net sales
of $408.6 million in the fourth quarter of fiscal 2022. This
decrease reflects a $66.1 million or 41.4% decrease in Specialty
Sports Group (“SSG”) net sales and a $14.2 million or 10.7%
decrease in Powered Vehicles Group (“PVG”), partially offset by a
$4.1 million or 3.5% increase in Aftermarket Applications Group
(“AAG”) net sales. The decrease in SSG net sales from $159.5
million to $93.4 million is primarily related to channel inventory
recalibration and to a lesser extent lower end consumer demand,
partially offset by the inclusion of $16.8 million net sales from
Marucci that was acquired in November 2023. The decrease in PVG net
sales from $132.6 million to $118.3 million is primarily due to the
impact of the United Auto Workers (“UAW”) strike, slower than
expected ramp-up in OEM production, and the effects of
macroeconomic environment. The increase in AAG net sales from
$116.6 million to $120.8 million is primarily due to the inclusion
of $19.5 million revenue from Custom Wheel House, which was
acquired in March 2023, partially offset by a decrease in upfitting
sales due to a change in product mix as a result of the UAW strike
and higher interest rates impacting floor plan financing resulting
in dealers taking a more conservative approach to inventory.
Gross margin was 27.7% for the fourth quarter of
fiscal 2023, a 430 basis point decrease from gross margin of 32.0%
in the fourth quarter of fiscal 2022. The decrease in gross margin
was primarily driven by a shift in our product line mix and costs
associated with keeping our skilled workforce as production slowed
due to the UAW strike, offset by increased efficiencies at our
North American facilities. Adjusted gross margin, which excludes
the effects of amortization of acquired inventory valuation markup,
organizational restructuring expenses, and strategic transformation
costs, decreased 300 basis points to 29.0% from the same prior
fiscal year period.
Total operating expenses were $81.0 million, or
24.4% of net sales, for the fourth quarter of fiscal 2023, compared
to $74.2 million, or 18.1% of net sales in the fourth quarter of
fiscal 2022. Operating expenses increased by $6.8 million primarily
due to the inclusion of Custom Wheel House and Marucci operating
expenses of $4.3 million and $6.1 million, respectively, and
amortization of acquired intangibles, partially offset by cost
controls. Adjusted operating expenses were $68.5 million, or 20.6%
of net sales in the fourth quarter of fiscal 2023, compared to
$66.1 million, or 16.2% of net sales, in the fourth quarter of the
prior fiscal year.
The Company’s effective tax benefit was $3.1
million in the fourth quarter of fiscal 2023, compared to an
effective tax expanse of $0.2 million in the fourth quarter of
fiscal 2022. The decrease in the Company’s income tax expense was
primarily due to a decrease in pre-tax income.
Net income and net income margin in the fourth
quarter of fiscal 2023 were $4.1 million and 1.2%, respectively,
compared to $53.0 million and 13.0%, respectively, in the fourth
quarter of the prior fiscal year. Earnings per diluted share for
the fourth quarter of fiscal 2023 was $0.10, compared to earnings
per diluted share of $1.25 for the fourth quarter of fiscal 2022.
Adjusted net income in the fourth quarter of fiscal 2023 was $20.3
million, or $0.48 of adjusted earnings per diluted share, compared
to adjusted net income of $60.8 million, or $1.43 of adjusted
earnings per diluted share, in the same period of the prior fiscal
year.
Adjusted EBITDA in the fourth quarter of fiscal
2023 was $38.8 million, compared to $76.8 million in the fourth
quarter of fiscal 2022. Adjusted EBITDA margin in the fourth
quarter of fiscal 2023 was 11.7%, compared to 18.8% in the fourth
quarter of fiscal 2022.
Fiscal 2023
Results
Net sales for the year ended December 29,
2023 were $1,464.2 million, a decrease of 8.6% compared to fiscal
2022. Net sales of SSG decreased $291.8 million or 42.8% and net
sales of PVG and AAG increased $91.5 million or 21.2% and $62.0
million or 12.7%, respectively, for fiscal 2023 compared to the
prior year fiscal period. The decrease in SSG net sales from $681.0
million to $389.2 million is primarily related to channel inventory
recalibration and to a lesser extent lower end consumer demand,
partially offset by the inclusion of $16.8 million net sales from
Marucci. The increase in PVG net sales from $432.4 million to
$523.9 million is primarily due to strong demand in the OEM
channel, partially offset by the impact of the UAW strike and the
effects of macroeconomic environment. The increase in AAG net sales
from $489.1 million to $551.1 million is primarily due to the
inclusion of $65.6 million revenue from Custom Wheel House,
partially offset by a decrease in upfitting sales due to a shift in
product mix and higher interest rates impacting floor plan
financing resulting in dealers taking a more conservative approach
to inventory. Mike Dennison, CEO commented, “Clearly, 2023 was a
tale of two halves with the first half of the year generally on
plan and the back half of the year, especially after Labor Day,
where SSG destocking as it relates to Bike and other macro
headwinds grew significantly. While the second half of 2023 was
challenging, I am pleased that we maintained our disciplined focus
on innovation across the enterprise. PVG launched 141 SKUs,
attaining a new high watermark, and is building a robust pipeline
with even more launches planned in 2024. In SSG with respect to
Bike, we have improved spec share while making significant
developments in suspension and components, and in AAG we are poised
to launch side-by-side upfits beginning in Q1. I am confident this
race will be won by the innovator, and we are not letting off the
accelerator.”
Gross margin was 31.7% in fiscal year 2023, a
150 basis point decrease, compared to a gross margin of 33.2% in
the fiscal year 2022. The decrease in gross margin for the fiscal
year 2023 was primarily driven by a shift in our product line mix
and amortization of acquired inventory valuation markups, offset by
increased efficiencies at our North American facilities. Adjusted
gross margin, excluding the effects of amortization of acquired
inventory valuation markup, organizational restructuring expenses,
and strategic transformation costs, decreased 60 basis points to
32.8% from the same prior fiscal year period.
Total operating expenses were $304.7 million, or
20.8% of net sales, for the fiscal year 2023, compared to $284.6
million, or 17.8% of net sales in the fiscal year 2022. Operating
expenses increased by $20.1 million primarily due to the inclusion
of Custom Wheel House and Marucci operating expenses of $15.2
million and $6.1 million, respectively, amortization of additional
acquired intangibles and operating expenses associated with
facility expansion, partially offset by cost controls. Adjusted
operating expenses were $268.1 million, or 18.3% of net sales in
the fiscal year 2023, compared to $257.1 million, or 16.0% of net
sales, in prior fiscal year.
Net income and net income margin in fiscal year
2023 were $120.8 million and 8.3%, respectively, compared to $205.3
million and 12.8%, respectively, in the prior fiscal year. Earnings
per diluted share for fiscal year 2023 was $2.85, compared to $4.84
in fiscal year 2022. Adjusted net income in fiscal year 2023 was
$167.5 million, or $3.95 of adjusted earnings per diluted share,
compared to $232.7 million, or $5.49 of adjusted earnings per
diluted share in prior fiscal year.
Adjusted EBITDA decreased to $261.0 million in
fiscal year 2023, compared to $321.8 million in fiscal year 2022.
Adjusted EBITDA margin decreased to 17.8% in fiscal year 2023,
compared to 20.1% in fiscal year 2022. “Maintaining strong double
digit adjusted EBITDA margins in the midst of economic uncertainty,
UAW strike impact, and higher interest rate environment,
demonstrates the strength of our brands, product diversification,
and commitment to continuous improvement.” Mr. Dennison
commented.
Reconciliations to non-GAAP measures are
provided at the end of this press release.
Balance Sheet Highlights
As of December 29, 2023, the Company had
cash and cash equivalents of $83.6 million, compared to $145.3
million as of December 30, 2022. Inventory was $371.8 million
as of December 29, 2023, compared to $350.6 million as of
December 30, 2022. As of December 29, 2023, accounts
receivable and accounts payable were $171.1 million and $104.2
million, respectively, compared to $200.4 million and $131.2
million, respectively, as of December 30, 2022. Prepaids and
other current assets were $141.5 million as of December 29,
2023, compared to $101.4 million as of December 30, 2022. The
decrease in cash and cash equivalents was primarily due to debt
payments and share repurchases. Inventory increased by $21.2
million driven by the inclusion of $13.5 million and $52.5 million
of inventory from Custom Wheel House and Marucci, respectively,
partially offset by the continuous improvement efforts to optimize
inventory levels throughout the organization. The change in
accounts receivable reflects a decrease in net sales and the timing
of customer collections. The change in accounts payable reflects
the timing of vendor payments. Total debt was $743.5 million as of
December 29, 2023, compared to $200.0 million as of
December 30, 2022. During fiscal 2023, the Company incurred
additional debt of $400.0 million on the revolver and $393.3
million, net of issuance costs, on the incremental term A loan to
support its working capital and the acquisitions of Custom Wheel
House and Marucci. The Company was able to pay down $230.0 million
of the revolver borrowings and prepay $20.0 million on the
incremental term A loan.
Fiscal 2024 Guidance
For the first quarter of fiscal 2024, the
Company expects net sales in the range of $315.0 million to $350.0
million and adjusted earnings per diluted share in the range of
$0.17 to $0.27.
For the fiscal year 2024, the Company expects
net sales in the range of $1.53 billion to $1.68 billion, adjusted
earnings per diluted share in the range of $2.30 to $2.60, and a
full year effective tax rate in the range of 15% to 18%.
Given our robust pipeline of innovative
products, industry leading market share and best in class brands,
we believe our product roadmap supports our 2025 vision of $2.0
billion in sales. However, our vision of $2.0 billion in sales and
25% Adjusted EBITDA margin will depend on several factors including
uncertainties on volume, and product mix since we are largely tied
to OEMs, the larger macro environment including interest rates, and
our exit rate in Q4 of this year.
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 first 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 FOXFQ423 or 36937423. 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.
About Fox Factory Holding Corp. (NASDAQ:
FOXF)
Fox Factory Holding Corp. is a global leader in
the design 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
(“OEMs”). 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.
Non-GAAP Financial Measures
In addition to reporting financial measures in
accordance with generally accepted accounting principles (“GAAP”),
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 margin”,
“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 certain strategic transformation costs,
non-recurring property tax assessment, and 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, and acquisition and
integration-related expenses. 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. These adjustments are more fully described in
the tables included at the end of this press release. 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, amortization of purchased intangibles, depreciation,
stock-based compensation, litigation and settlement related
expenses, organizational restructuring expenses, non-recurring
property tax assessments, 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.
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 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.
FOX FACTORY HOLDING CORP.Condensed Consolidated Balance
Sheets(in thousands, except per share
data)(unaudited) |
|
|
As of |
|
As of |
|
December 29, 2023 |
|
December 30, 2022 |
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
83,642 |
|
|
$ |
145,250 |
|
Accounts receivable (net of allowances of $1,158 and $443 at
December 29, 2023 and December 30, 2022,
respectively) |
|
171,060 |
|
|
|
200,440 |
|
Inventory |
|
371,841 |
|
|
|
350,620 |
|
Prepaids and other current assets |
|
141,512 |
|
|
|
101,364 |
|
Total current assets |
|
768,055 |
|
|
|
797,674 |
|
Property, plant and equipment, net |
|
237,192 |
|
|
|
202,215 |
|
Lease right-of-use assets |
|
84,317 |
|
|
|
48,096 |
|
Deferred tax assets |
|
21,297 |
|
|
|
57,339 |
|
Goodwill |
|
636,565 |
|
|
|
323,978 |
|
Trademarks and brands, net |
|
275,480 |
|
|
|
64,214 |
|
Customer and distributor relationships, net |
|
182,731 |
|
|
|
109,887 |
|
Core technologies, net |
|
25,136 |
|
|
|
4,879 |
|
Other assets |
|
11,525 |
|
|
|
10,054 |
|
Total assets |
$ |
2,242,298 |
|
|
$ |
1,618,336 |
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
104,150 |
|
|
$ |
131,160 |
|
Accrued expenses |
|
103,400 |
|
|
|
127,729 |
|
Total current liabilities |
|
207,550 |
|
|
|
258,889 |
|
Line of credit |
|
370,000 |
|
|
|
200,000 |
|
Long-term debt, less current portion |
|
373,528 |
|
|
|
— |
|
Other liabilities |
|
69,459 |
|
|
|
38,061 |
|
Total liabilities |
|
1,020,537 |
|
|
|
496,950 |
|
Redeemable non-controlling interest |
|
— |
|
|
|
— |
|
Stockholders’ equity |
|
|
|
Preferred stock, $0.001 par value — 0 authorized and no shares
issued or outstanding as of December 29, 2023 and
December 30, 2022 |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value — 90,000 authorized; 42,844 shares
issued and 41,954 outstanding as of December 29, 2023; 43,160
shares issued and 42,270 outstanding as of December 30,
2022 |
|
42 |
|
|
|
42 |
|
Additional paid-in capital |
|
348,346 |
|
|
|
356,239 |
|
Treasury stock, at cost; 890 common shares as of December 29,
2023 and December 30, 2022 |
|
(13,754 |
) |
|
|
(13,754 |
) |
Accumulated other comprehensive income |
|
9,041 |
|
|
|
14,782 |
|
Retained earnings |
|
878,086 |
|
|
|
764,077 |
|
Total stockholders’ equity |
|
1,221,761 |
|
|
|
1,121,386 |
|
Total liabilities and stockholders’ equity |
$ |
2,242,298 |
|
|
$ |
1,618,336 |
|
|
FOX FACTORY HOLDING CORP.Condensed Consolidated Statements
of Income(in thousands, except per share
data)(unaudited) |
|
|
For the three months ended |
|
For the twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net sales |
$ |
332,495 |
|
|
$ |
408,641 |
|
$ |
1,464,178 |
|
$ |
1,602,491 |
Cost of sales |
|
240,234 |
|
|
|
277,769 |
|
|
999,366 |
|
|
1,071,148 |
Gross profit |
|
92,261 |
|
|
|
130,872 |
|
|
464,812 |
|
|
531,343 |
Operating expenses: |
|
|
|
|
|
|
|
General and administrative |
|
34,890 |
|
|
|
32,921 |
|
|
124,582 |
|
|
116,103 |
Sales and marketing |
|
25,787 |
|
|
|
20,529 |
|
|
100,451 |
|
|
90,801 |
Research and development |
|
13,805 |
|
|
|
15,394 |
|
|
53,179 |
|
|
56,205 |
Amortization of purchased intangibles |
|
6,527 |
|
|
|
5,323 |
|
|
26,509 |
|
|
21,537 |
Total operating expenses |
|
81,009 |
|
|
|
74,167 |
|
|
304,721 |
|
|
284,646 |
Income from operations |
|
11,252 |
|
|
|
56,705 |
|
|
160,091 |
|
|
246,697 |
Interest expense |
|
7,915 |
|
|
|
2,598 |
|
|
19,320 |
|
|
8,939 |
Other expense, net |
|
2,426 |
|
|
|
927 |
|
|
2,108 |
|
|
3,994 |
Income before income taxes |
|
911 |
|
|
|
53,180 |
|
|
138,663 |
|
|
233,764 |
(Benefit) provision for income taxes |
|
(3,140 |
) |
|
|
221 |
|
|
17,817 |
|
|
28,486 |
Net income |
$ |
4,051 |
|
|
$ |
52,959 |
|
$ |
120,846 |
|
$ |
205,278 |
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.10 |
|
|
$ |
1.25 |
|
$ |
2.86 |
|
$ |
4.86 |
Diluted |
$ |
0.10 |
|
|
$ |
1.25 |
|
$ |
2.85 |
|
$ |
4.84 |
Weighted-average shares used to compute earnings per share: |
|
|
|
|
|
|
|
Basic |
|
42,169 |
|
|
|
42,284 |
|
|
42,305 |
|
|
42,232 |
Diluted |
|
42,242 |
|
|
|
42,417 |
|
|
42,432 |
|
|
42,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FOX FACTORY HOLDING CORP.Condensed Consolidated Statements
of Cash Flows(in thousands)(unaudited) |
|
|
For the twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
120,846 |
|
|
$ |
205,278 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
58,603 |
|
|
|
49,242 |
|
Provision for inventory reserve |
|
6,184 |
|
|
|
8,923 |
|
Stock-based compensation |
|
16,465 |
|
|
|
16,351 |
|
Amortization of acquired inventory step-up |
|
13,008 |
|
|
|
— |
|
Amortization of loan fees |
|
905 |
|
|
|
1,086 |
|
Write off of unamortized loan origination fees |
|
— |
|
|
|
1,927 |
|
Amortization of deferred gains on prior swap settlements |
|
(4,252 |
) |
|
|
(3,177 |
) |
(Gain) Loss on disposal of property and equipment |
|
1,492 |
|
|
|
(1,740 |
) |
Deferred taxes |
|
(7,867 |
) |
|
|
(18,445 |
) |
Changes in operating assets and liabilities, net of effects of
acquisitions: |
|
|
|
Accounts receivable |
|
64,527 |
|
|
|
(63,957 |
) |
Inventory |
|
31,613 |
|
|
|
(87,460 |
) |
Income taxes |
|
(19,094 |
) |
|
|
8,717 |
|
Prepaids and other assets |
|
(38,180 |
) |
|
|
18,132 |
|
Accounts payable |
|
(44,029 |
) |
|
|
40,493 |
|
Accrued expenses and other liabilities |
|
(21,478 |
) |
|
|
11,724 |
|
Net cash provided by operating activities |
|
178,743 |
|
|
|
187,094 |
|
INVESTING ACTIVITIES: |
|
|
|
Acquisitions of businesses, net of cash acquired |
|
(701,112 |
) |
|
|
(714 |
) |
Acquisition of other assets, net of cash acquired |
|
(2,432 |
) |
|
|
(3,500 |
) |
Purchases of property and equipment |
|
(46,852 |
) |
|
|
(43,701 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
|
3,180 |
|
Net cash used in investing activities |
|
(750,396 |
) |
|
|
(44,735 |
) |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from line of credit |
|
400,000 |
|
|
|
602,356 |
|
Payments on line of credit |
|
(230,000 |
) |
|
|
(404,336 |
) |
Proceeds from issuance of debt, net of origination fees |
|
393,528 |
|
|
|
— |
|
Repayment of term debt |
|
— |
|
|
|
(382,500 |
) |
Prepayment of term debt |
|
(20,000 |
) |
|
|
— |
|
Purchase and retirement of common stock |
|
(25,000 |
) |
|
|
— |
|
Installment on purchase of non-controlling interest |
|
— |
|
|
|
(2,700 |
) |
Repurchases from stock compensation program, net |
|
(6,195 |
) |
|
|
(4,231 |
) |
Deferred debt issuance costs |
|
(3,354 |
) |
|
|
— |
|
Proceeds from termination of swap agreement |
|
— |
|
|
|
12,270 |
|
Net cash provided by (used in) financing
activities |
|
508,979 |
|
|
|
(179,141 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
1,066 |
|
|
|
2,346 |
|
CHANGE IN CASH AND CASH EQUIVALENTS |
|
(61,608 |
) |
|
|
(34,436 |
) |
CASH AND CASH EQUIVALENTS—Beginning of period |
|
145,250 |
|
|
|
179,686 |
|
CASH AND CASH EQUIVALENTS—End of period |
$ |
83,642 |
|
|
$ |
145,250 |
|
|
FOX FACTORY HOLDING CORP.NET INCOME TO ADJUSTED NET INCOME
RECONCILIATIONAND 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 twelve
months ended December 29, 2023 and December 30, 2022.
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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net income |
$ |
4,051 |
|
|
$ |
52,959 |
|
|
$ |
120,846 |
|
|
$ |
205,278 |
|
Amortization of purchased intangibles |
|
6,527 |
|
|
|
5,323 |
|
|
|
26,509 |
|
|
|
21,537 |
|
Litigation and settlement-related expenses |
|
433 |
|
|
|
2,626 |
|
|
|
2,724 |
|
|
|
4,222 |
|
Other acquisition and integration-related expenses (1) |
|
7,494 |
|
|
|
112 |
|
|
|
19,214 |
|
|
|
1,824 |
|
Organizational restructuring expenses (2) |
|
2,178 |
|
|
|
— |
|
|
|
4,027 |
|
|
|
— |
|
Loss on fixed asset disposals related to organizational
restructure |
|
1,027 |
|
|
|
— |
|
|
|
1,027 |
|
|
|
— |
|
Strategic transformation costs (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,769 |
|
Non-recurring property tax assessment (4) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
841 |
|
Tax impacts of reconciling items above (5) |
|
(1,421 |
) |
|
|
(180 |
) |
|
|
(6,874 |
) |
|
|
(3,801 |
) |
Adjusted net income |
$ |
20,289 |
|
|
$ |
60,840 |
|
|
$ |
167,473 |
|
|
$ |
232,670 |
|
|
|
|
|
|
|
|
|
Adjusted EPS |
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
$ |
1.44 |
|
|
$ |
3.96 |
|
|
$ |
5.51 |
|
Diluted |
$ |
0.48 |
|
|
$ |
1.43 |
|
|
$ |
3.95 |
|
|
$ |
5.49 |
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute adjusted
EPS |
|
|
|
|
|
|
|
Basic |
|
42,169 |
|
|
|
42,284 |
|
|
|
42,305 |
|
|
|
42,232 |
|
Diluted |
|
42,242 |
|
|
|
42,417 |
|
|
|
42,432 |
|
|
|
42,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Acquisition related costs and expenses |
$ |
4,389 |
|
$ |
112 |
|
$ |
6,206 |
|
$ |
1,824 |
Finished goods inventory valuation adjustment |
|
3,105 |
|
|
— |
|
|
13,008 |
|
|
— |
Other acquisition and integration-related
expenses |
$ |
7,494 |
|
$ |
112 |
|
$ |
19,214 |
|
$ |
1,824 |
(2) Represents expenses associated with various
restructuring initiatives, including the reduction of our Specialty
Sports Group workforce. For the three and twelve month periods
ended December 29, 2023, $1,016 and $2,865 is classified as
cost of sales, and $1,162 is classified as operating expense,
respectively.
(3) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations.
(4) Represents amounts paid for a non-recurring
property tax assessment.
(5) Tax impact calculated based on the
respective year-to-date effective tax rate.
FOX FACTORY HOLDING CORP.NET INCOME TO ADJUSTED EBITDA
RECONCILIATION ANDNET 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 twelve months ended December 29, 2023 and
December 30, 2022. 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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net income |
$ |
4,051 |
|
|
$ |
52,959 |
|
$ |
120,846 |
|
$ |
205,278 |
(Benefit) provision for income taxes |
|
(3,140 |
) |
|
|
221 |
|
|
17,817 |
|
|
28,486 |
Depreciation and amortization |
|
15,083 |
|
|
|
12,428 |
|
|
58,603 |
|
|
49,241 |
Non-cash stock-based compensation |
|
2,423 |
|
|
|
4,972 |
|
|
16,465 |
|
|
16,351 |
Litigation and settlement-related expenses |
|
433 |
|
|
|
2,626 |
|
|
2,724 |
|
|
4,222 |
Other acquisition and integration-related expenses (1) |
|
7,494 |
|
|
|
112 |
|
|
19,214 |
|
|
1,710 |
Organizational restructuring expenses (2) |
|
2,104 |
|
|
|
— |
|
|
3,952 |
|
|
— |
Loss on fixed asset disposals related to organizational
restructure |
|
1,027 |
|
|
|
— |
|
|
1,027 |
|
|
— |
Strategic transformation costs (3) |
|
— |
|
|
|
— |
|
|
— |
|
|
2,769 |
Non-recurring property tax assessment (4) |
|
— |
|
|
|
— |
|
|
— |
|
|
841 |
Interest and other expense, net |
|
9,313 |
|
|
|
3,525 |
|
|
20,400 |
|
|
12,933 |
Adjusted EBITDA |
$ |
38,788 |
|
|
$ |
76,843 |
|
$ |
261,048 |
|
$ |
321,831 |
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net income margin |
1.2 |
% |
|
13.0 |
% |
|
8.3 |
% |
|
12.8 |
% |
(Benefit) provision for income taxes |
(0.9 |
) |
|
0.1 |
|
|
1.2 |
|
|
1.8 |
|
Depreciation and amortization |
4.5 |
|
|
3.0 |
|
|
4.0 |
|
|
3.1 |
|
Non-cash stock-based compensation |
0.7 |
|
|
1.2 |
|
|
1.1 |
|
|
1.0 |
|
Litigation and settlement-related expenses |
0.1 |
|
|
0.6 |
|
|
0.2 |
|
|
0.3 |
|
Other acquisition and integration-related expenses (1) |
2.3 |
|
|
— |
|
|
1.3 |
|
|
0.1 |
|
Loss on fixed asset disposals related to organizational
restructure |
0.3 |
|
|
— |
|
|
0.1 |
|
|
— |
|
Organizational restructuring expenses (2) |
0.6 |
|
|
— |
|
|
0.3 |
|
|
— |
|
Strategic transformation costs (3) |
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
Non-recurring property tax assessment (4) |
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
Interest and other expense, net |
2.8 |
|
|
0.9 |
|
|
1.4 |
|
|
0.8 |
|
Adjusted EBITDA Margin |
11.7 |
% |
|
18.8 |
% |
|
17.8 |
% |
|
20.1 |
% |
*Percentages may not foot due to rounding.
(1) Represents various acquisition-related costs
and expenses incurred to integrate acquired entities into the
Company’s operations, excluding $114 in stock-based compensation
for the twelve months ended December 30, 2022, 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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Acquisition related costs and expenses |
$ |
4,389 |
|
$ |
112 |
|
$ |
6,206 |
|
$ |
1,710 |
Finished goods inventory valuation adjustment |
|
3,105 |
|
|
— |
|
|
13,008 |
|
|
— |
Other acquisition and integration-related
expenses |
$ |
7,494 |
|
$ |
112 |
|
$ |
19,214 |
|
$ |
1,710 |
(2) Represents expenses associated with various
restructuring initiatives, such as the reduction of our Specialty
Sports Group workforce, excluding $75 in stock-based compensation
for the three and twelve month periods ended December 29,
2023. For the three and twelve month periods ended
December 29, 2023, $1,016 and $2,865 is classified as cost of
sales, and $1,087 is classified as operating expense,
respectively.
(3) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations.
(4) Represents amounts paid for a non-recurring
property tax assessment.
FOX FACTORY HOLDING CORP. GROSS PROFIT TO ADJUSTED
GROSS PROFIT RECONCILIATION ANDCALCULATION OF GROSS MARGIN AND
ADJUSTED GROSS MARGIN(in
thousands)(unaudited) |
|
The following table provides a reconciliation of
gross profit to adjusted gross profit (a non-GAAP measure) for
the three and twelve months ended December 29, 2023
and December 30, 2022, 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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net sales |
$ |
332,495 |
|
|
$ |
408,641 |
|
|
$ |
1,464,178 |
|
|
$ |
1,602,491 |
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
92,261 |
|
|
$ |
130,872 |
|
|
$ |
464,812 |
|
|
$ |
531,343 |
|
Strategic transformation costs (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,769 |
|
Non-recurring property tax assessment (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
841 |
|
Amortization of acquired inventory valuation markup |
|
3,105 |
|
|
|
— |
|
|
|
13,008 |
|
|
|
— |
|
Organizational restructuring expenses (3) |
|
1,016 |
|
|
|
— |
|
|
|
2,865 |
|
|
|
— |
|
Adjusted Gross Profit |
$ |
96,382 |
|
|
$ |
130,872 |
|
|
$ |
480,685 |
|
|
$ |
534,953 |
|
|
|
|
|
|
|
|
|
Gross Margin |
|
27.7 |
% |
|
|
32.0 |
% |
|
|
31.7 |
% |
|
|
33.2 |
% |
|
|
|
|
|
|
|
|
Adjusted Gross Margin |
|
29.0 |
% |
|
|
32.0 |
% |
|
|
32.8 |
% |
|
|
33.4 |
% |
(1) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations.
(2) Represents amounts paid for a non-recurring
property tax assessment.
(3) Represents expenses associated with various
restructuring initiatives, such as the reduction of our Specialty
Sports Group workforce.
FOX FACTORY HOLDING CORP.OPERATING EXPENSE TO ADJUSTED
OPERATING EXPENSE RECONCILIATION ANDCALCULATION OF ADJUSTED
OPERATING MARGIN(in thousands)(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 twelve months ended
December 29, 2023 and December 30, 2022. 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 twelve months ended |
|
December 29, 2023 |
|
December 30, 2022 |
|
December 29, 2023 |
|
December 30, 2022 |
Net sales |
$ |
332,495 |
|
|
$ |
408,641 |
|
|
$ |
1,464,178 |
|
|
$ |
1,602,491 |
|
|
|
|
|
|
|
|
|
Operating Expense |
$ |
81,009 |
|
|
$ |
74,167 |
|
|
$ |
304,721 |
|
|
$ |
284,646 |
|
Amortization of purchased intangibles |
|
(6,527 |
) |
|
|
(5,323 |
) |
|
|
(26,509 |
) |
|
|
(21,537 |
) |
Litigation and settlement-related expenses |
|
(433 |
) |
|
|
(2,626 |
) |
|
|
(2,724 |
) |
|
|
(4,222 |
) |
Other acquisition and integration-related expenses (1) |
|
(4,389 |
) |
|
|
(112 |
) |
|
|
(6,206 |
) |
|
|
(1,824 |
) |
Organizational restructuring expenses (2) |
|
(1,162 |
) |
|
|
— |
|
|
|
(1,162 |
) |
|
|
— |
|
Adjusted operating expense |
$ |
68,498 |
|
|
$ |
66,106 |
|
|
$ |
268,120 |
|
|
$ |
257,063 |
|
|
|
|
|
|
|
|
|
Operating margin |
|
24.4 |
% |
|
|
18.1 |
% |
|
|
20.8 |
% |
|
|
17.8 |
% |
|
|
|
|
|
|
|
|
Adjusted operating margin |
|
20.6 |
% |
|
|
16.2 |
% |
|
|
18.3 |
% |
|
|
16.0 |
% |
(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, such as the reduction of our Specialty
Sports Group workforce.
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 other similar
terms or expressions and 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, as well as statements about the impact of the
global outbreak of COVID-19 on the Company’s business and
operations; 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 Company’s ability to increase its
aftermarket penetration; the Company’s exposure to exchange rate
fluctuations; the loss of key customers; strategic transformation
costs; the outcome of pending litigation; 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 high-end suspension and ride
dynamics product 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
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 30, 2022 and filed with the Securities and Exchange
Commission on February 23, 2023, 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:Fox Factory Holding
Corp.Vivek BhakuniSr. Director of Investor Relations and Business
Development706-471-5241vbhakuni@ridefox.com
Fox Factory (NASDAQ:FOXF)
過去 株価チャート
から 4 2024 まで 5 2024
Fox Factory (NASDAQ:FOXF)
過去 株価チャート
から 5 2023 まで 5 2024