Fox Factory Holding Corp (FOXF) 10-Q Quarterly Report August 2020

BRASELTON, Georgia, August 5, 2020 - Fox Factory Holding Corp. (NASDAQ: FOXF) (“FOX” or the “Company”) today reported financial results for the second quarter and six months ended July 3, 2020.

Second Quarter Fiscal 2020 Highlights

•Sales decreased 4.7% to $183.1 million, compared to $192.1 million in the same period last fiscal year

•Gross margin increased 40 basis points to 32.8%, compared to 32.4% in the same period last fiscal year; non-GAAP adjusted gross margin increased 40 basis points to 33.1% compared to the same period last fiscal year

•Net income attributable to FOX stockholders was $12.6 million, or 6.9% of sales and $0.32 of earnings per diluted share, compared to $22.9 million, or 11.9% of sales and $0.59 of earnings per diluted share in the same period last fiscal year

•Non-GAAP adjusted net income was $19.7 million, or $0.50 of adjusted earnings per diluted share, compared to $26.6 million, or $0.68 of adjusted earnings per diluted share in the same period last fiscal year

•Adjusted EBITDA was $33.7 million, or 18.4% of sales, compared to $38.2 million, or 19.9% of sales in the same period last fiscal year

"FOX's resilient second quarter results reflect the strength of our diversified customer base and performance-defining product portfolio, as well as the commitment and dedication of our talented management team," commented Mike Dennison, FOX’s Chief Executive Officer. "We overcame an unprecedented shutdown of our U.S. factories and economy associated with the COVID-19 pandemic which lasted for over half of our quarter and we were able to not only effectively restart our business but support an incredibly strong surge in demand for our products across all channels. In addition, our Specialty Sports Group was a standout success in the quarter, exceeding our pre-COVID expectations and delivering 10.0% growth."

"We remain optimistic and confident about the growth opportunities ahead of us, grounded in our strategic initiatives as well as the consumer loyalty and power of the FOX brand,” Dennison went on to say.

Sales for the second quarter of fiscal 2020 were $183.1 million, a decrease of 4.7% as compared to sales of $192.1 million in the second quarter of fiscal 2019. This decrease in sales reflects a 14.5% decrease in Powered Vehicles Group sales, partially offset by a 10.0% increase in Specialty Sports Group sales. The decrease in Powered Vehicles Group products is primarily due to impacts of the COVID-19 pandemic, including production shutdowns at certain OEM customers, partially offset by the impact of SCA, a subsidiary which was acquired in March 2020. The increase in Specialty Sports Group products is primarily driven by increased demand in both the OEM and aftermarket channels.

The following information was filed by Fox Factory Holding Corp (FOXF) on Wednesday, August 5, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Fox Factory Holding Corp's 10-Q Quarterly Report:

Financial - Expense Highlight
However, significant increases in inflation, particularly those related to wages and increases in the cost of raw materials, could have an adverse impact on our business, financial condition and results of operations.

Financial - Earnings Highlight
The increase in gross margin was primarily due to the impact of the SCA acquisition, product and channel mix, and improvement in supply chain efficiencies, partially offset by higher factory related costs including incremental costs related to the COVID-19 pandemic.
Financial - Debt Highlight
Non-cash items and other adjustments consisted of depreciation and amortization of $8.3 million, stock-based compensation of $3.4 million, and loss on the extinguishment of debt of $0.5 million, offset by a $0.8 million change in deferred taxes and uncertain tax positions.
Financial - Earnings Highlight
For the three months ended July 3, 2020, our gross margin increased 40 basis points to 32.8% compared to 32.4% for the three months ended June 28, 2019.
Other - Other Highlight
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the "Risk Factors" section included in Part II, Item 1A.
Other - Other
We have based the forward-looking...Read more
Revenue - Geography
For the three months ended...Read more
Revenue - Geography
For the six months ended...Read more
Other - Other
Non-cash items and other adjustments...Read more
Financial - Income
To the extent such a...Read more
Financial - Expense
The decrease in cost of...Read more
Financial - Expense
General and administrative expenses increased...Read more
Financial - Income
The effective tax rate for...Read more
Revenue - Product
Six months ended July 3,...Read more
Financial - Expense
Within operating expenses, our sales...Read more
Other - Other
"Risk Factors" of our 2019...Read more
Revenue - Product
Additionally, Specialty Sports product sales...Read more
Revenue - Product
Additionally, Specialty Sports product sales...Read more
Other - Other
35 Table of Contents Inflation...Read more
Financial - Income
The effective tax rate for...Read more
Revenue - Product
Powered Vehicle product sales increased...Read more
Financial - Expense
The increase in other expense,...Read more
Financial - Earnings
For the six months ended...Read more
M & A - Other
In connection with the acquisition,...Read more
Financial - Income
Income from operations As a...Read more
Financial - Income
Income from operations As a...Read more
M & A - Other
On March 11, 2020, we,...Read more
Revenue - Geography
For the three months ended...Read more
Revenue - Geography
We reassess our projections and...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Fox Factory Holding Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: FOXF
CIK: 1424929
Form Type: 10-Q Quarterly Report
Accession Number: 0001424929-20-000087
Submitted to the SEC: Wed Aug 05 2020 4:54:06 PM EST
Accepted by the SEC: Wed Aug 05 2020
Period: Friday, July 3, 2020
Industry: Motorcycles Bicycles And Parts

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Fox Factory Holding Corp (FOXF) SEC Filing 10-Q Quarterly report for the period ending Friday, July 3, 2020

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