Part I: Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Net sales increased to $355.0 million, but a **$262.1 million goodwill impairment** led to a **$259.7 million net loss** and reduced total assets [Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | April 4, 2025 | January 3, 2025 | | :--- | :--- | :--- | | **Total Current Assets** | **$714,102** | **$727,680** | | Cash and cash equivalents | $68,601 | $71,674 | | Inventory | $408,786 | $404,736 | | **Goodwill** | **$377,226** | **$639,505** | | **Total Assets** | **$1,938,489** | **$2,232,310** | | **Total Current Liabilities** | **$224,475** | **$259,780** | | Revolver | $163,000 | $153,000 | | Term Loans, less current portion | $522,631 | $527,775 | | **Total Liabilities** | **$998,673** | **$1,031,166** | | **Total Stockholders' Equity** | **$939,894** | **$1,201,182** | - Goodwill decreased significantly from **$639.5 million** to **$377.2 million** due to an impairment charge. Total assets fell by approximately **$294 million** during the quarter[8](index=8&type=chunk) [Condensed Consolidated Statements of Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Loss) Statement of Loss Summary (in thousands, except per share data) | Metric | Q1 2025 (ended Apr 4) | Q1 2024 (ended Mar 29) | | :--- | :--- | :--- | | **Net Sales** | **$355,030** | **$333,472** | | Gross Profit | $109,679 | $103,158 | | **Goodwill Impairment** | **$262,129** | **$0** | | Total Operating Expenses | $360,266 | $94,283 | | (Loss) Income from Operations | ($250,587) | $8,875 | | **Net Loss** | **($259,734)** | **($3,496)** | | **Diluted EPS** | **($6.23)** | **($0.08)** | - The company recorded a non-cash goodwill impairment charge of **$262.1 million** in the first quarter of 2025, which was the primary driver of the significant net loss and negative EPS[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | Q1 2025 (ended Apr 4) | Q1 2024 (ended Mar 29) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $680 | $9,352 | | Net Cash used in Investing Activities | ($7,180) | ($15,298) | | Net Cash from (used in) Financing Activities | $3,349 | ($7,886) | | **Change in Cash and Cash Equivalents** | **($3,073)** | **($14,059)** | - Despite a net loss of **$259.7 million**, net cash from operating activities was positive at **$0.7 million**, primarily because the **$262.1 million** goodwill impairment was a non-cash charge[19](index=19&type=chunk) [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - A triggering event related to adverse changes in U.S. tariff policies and a sustained decline in stock price led to a quantitative impairment assessment in Q1 2025[36](index=36&type=chunk) Goodwill Impairment by Reporting Unit (in thousands) | Reporting Unit | Balance as of Jan 3, 2025 | Impairment Loss | Balance as of Apr 4, 2025 | | :--- | :--- | :--- | :--- | | PVG | $94,063 | ($51,206) | $42,669 | | AAG | $258,243 | ($191,823) | $66,420 | | SSG | $287,199 | ($19,100) | $268,137 | | **Total** | **$639,505** | **($262,129)** | **$377,226** | - The company is involved in a securities class action lawsuit filed on Feb 20, 2024, and two related stockholder derivative complaints, alleging material misstatements regarding product demand and inventory levels. The company denies all allegations and intends to defend itself vigorously[79](index=79&type=chunk)[80](index=80&type=chunk) - As of April 4, 2025, the company had **$163.0 million** outstanding on its revolver and **$546.9 million** in term loans, with **$486.8 million** available borrowing capacity under its 2022 Credit Facility[73](index=73&type=chunk)[75](index=75&type=chunk) [Management's Discussion and Analysis (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net sales increased to **$355.0 million**, but a **$262.1 million goodwill impairment** led to a **$259.7 million net loss**, with Adjusted EBITDA at **$39.6 million** [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 vs. Q1 2024 Performance (in millions) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | **$355.0** | **$333.5** | **$21.5** | **6.5%** | | Gross Profit | $109.7 | $103.2 | $6.5 | 6.3% | | Gross Margin | 30.9% | 30.9% | - | 0 bps | | **Goodwill Impairment** | **$262.1** | **$0.0** | **$262.1** | **N/A** | | (Loss) Income from Operations | ($250.6) | $8.9 | ($259.5) | (2,915.7)% | | **Net Loss** | **($259.7)** | **($3.5)** | **($256.2)** | **7,320.0%** | - The increase in net sales was driven by higher upfitting sales, increased demand for aftermarket products, growth in bike sales, and the expansion of the motorcycle business. This offset lower demand in traditional powersports lines[145](index=145&type=chunk) - Total operating expenses surged to **$360.3 million** from **$94.3 million**, almost entirely due to the **$262.1 million** goodwill impairment charge[147](index=147&type=chunk) [Segment Review](index=34&type=section&id=Segment%20Review) Segment Performance - Q1 2025 vs Q1 2024 (in millions) | Segment | Net Sales Q1 2025 | Net Sales Q1 2024 | % Change | Adj. EBITDA Q1 2025 | Adj. EBITDA Q1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Powered Vehicles Group (PVG) | $122.1 | $118.1 | 3.4% | $14.4 | $15.9 | (9.4)% | | Aftermarket Applications Group (AAG) | $111.9 | $101.9 | 9.9% | $17.0 | $14.9 | 14.1% | | Specialty Sports Group (SSG) | $121.0 | $113.5 | 6.6% | $23.4 | $24.1 | (2.9)% | | **Total** | **$355.0** | **$333.5** | **6.4%** | **$39.6** | **$40.5** | **(2.2)%** | - **PVG:** Sales increased due to the Marzocchi acquisition (**$12.0M**), offset by lower industry demand in powersports. Adjusted EBITDA decreased due to product mix[155](index=155&type=chunk) - **AAG:** Sales and Adjusted EBITDA grew, driven by higher upfitting sales and demand for aftermarket products[157](index=157&type=chunk) - **SSG:** Sales increased due to growth in bike sales, though channel inventory recalibration remains a headwind. Adjusted EBITDA decreased slightly due to product mix[158](index=158&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flow Summary - Q1 2025 (in millions) | Activity | Q1 2025 | | :--- | :--- | | Net cash from operating activities | $0.7 | | Net cash used in investing activities | ($7.2) | | Net cash provided by financing activities | $3.3 | | **Change in cash and cash equivalents** | **($3.1)** | - The company believes cash on hand, cash flow from operations, and availability under its 2022 Credit Facility will be sufficient to fund operations for the next 12 months and beyond[164](index=164&type=chunk) - The company borrowed the full **$200 million** available under its Delayed Draw Term Loan on May 13, 2024. As of April 4, 2025, the company was in compliance with all debt covenants[174](index=174&type=chunk)[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported, with key risks including interest rate volatility and inflation - There have been no material changes to the disclosures regarding market risk since the last annual report[180](index=180&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of April 4, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[182](index=182&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[183](index=183&type=chunk) Part II: Other Information [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against a securities class action and two derivative lawsuits alleging material misstatements regarding product demand and inventory - A securities class action lawsuit was filed against the company and certain officers, alleging material misstatements and omissions regarding demand and inventory levels for the period of May 6, 2021, to November 2, 2023[185](index=185&type=chunk) - Two related stockholder derivative complaints were also filed, alleging breaches of fiduciary duties by officers and directors. The company denies all allegations of wrongdoing in these cases[186](index=186&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from U.S. global trade and tariff policies, including potential supply chain disruptions from new tariffs and forced labor laws - The company identifies significant risk from existing and potential changes to U.S. policies on global trade and tariffs, which have created uncertainty and could adversely affect results[187](index=187&type=chunk) - Specific tariff actions highlighted include increased tariffs on aluminum and steel, a **20%** tariff on imports from China and Hong Kong, and a universal **10%** "reciprocal" tariff, which has been increased to **125%** for Chinese goods in retaliation[187](index=187&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - The company faces potential supply chain disruptions due to the Uyghur Forced Labor Prevention Act (UFLPA), which could lead to delays, rejections of imported products, and increased operating costs[193](index=193&type=chunk)[194](index=194&type=chunk) [Issuer Purchases of Equity Securities](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired **22,980 shares** for tax obligations, not under its public plan, with **$250 million** remaining for future repurchases Share Repurchase Activity (Quarter ended April 4, 2025) | Period | Total Shares Purchased | Avg. Price Paid per Share | Purchased as Part of Public Plan | Approx. Dollar Value Remaining in Plan | | :--- | :--- | :--- | :--- | :--- | | **Total** | **22,980** | **$25.48** | **0** | **$250,000,000** | - The shares purchased during the quarter were acquired from holders of restricted stock unit awards to satisfy tax-withholding obligations and were not part of the public share repurchase program[197](index=197&type=chunk) - The company's Board of Directors authorized a **$300 million** share repurchase plan on November 1, 2023. As of April 4, 2025, **$250 million** remains available under this authorization[198](index=198&type=chunk)[96](index=96&type=chunk)

Group 1: Earnings Performance - Fox Factory Holding reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, but down from $0.29 per share a year ago, representing an earnings surprise of 4.55% [1] - The company posted revenues of $355.03 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.06%, compared to year-ago revenues of $333.47 million [2] - Over the last four quarters, Fox Factory has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Fox Factory Holding shares have declined approximately 32.9% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $347.5 million, and for the current fiscal year, it is $1.88 on revenues of $1.42 billion [7] Group 3: Industry Context - The Automotive - Domestic industry, to which Fox Factory belongs, is currently in the bottom 22% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Fox Factory's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - First quarter sales reached $355 million, reflecting a 6.5% increase year-over-year, with adjusted earnings per share at $0.23, aligning with expectations [7][24] - Gross margin improved by 200 basis points sequentially to 30.9%, while adjusted gross margin decreased to 30.9% from 32.3% year-over-year due to a shift in product mix [7][25] - Net loss for the quarter was $259.7 million, or negative $6.23 per diluted share, primarily due to a goodwill impairment charge [26] Business Line Data and Key Metrics Changes - In the Powered Vehicles Group (PVG), net sales increased by 3.4% to $122.1 million, driven by motorcycle business growth [12] - The Aftermarket Applications Group (AAG) saw net sales rise by 9.9% to $111.9 million, with adjusted EBITDA margin improving to 15.2% [15] - Specialty Sports Group (SSG) reported a 6.6% increase in net sales to $121 million, although adjusted EBITDA margins decreased to 19.3% due to seasonality and investments in product engineering [17] Market Data and Key Metrics Changes - The automotive sector is showing signs of stabilization, particularly in the premium truck category, despite broader market caution [13] - The motorcycle business is experiencing growth, offsetting declines in traditional powersports product lines [12][15] - The company is leveraging international growth opportunities, particularly in Asia, to mitigate domestic market challenges [53] Company Strategy and Development Direction - The company is focused on operational efficiency, innovation, and strategic growth initiatives to drive long-term shareholder value [22][32] - Key initiatives include simplifying and consolidating manufacturing footprint, optimizing product portfolio, and enhancing working capital management [9][10] - The company aims to achieve $25 million in cost savings through various strategic actions throughout 2025 [11][30] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the broader market environment but is optimistic about sequential margin improvements and top-line growth across segments [21][32] - The company is continuously analyzing tariff impacts and implementing mitigation strategies, including cost reductions and price adjustments [22][31] - Despite uncertainties, management reaffirms full-year guidance for 2025, anticipating continued growth and margin improvement [29][30] Other Important Information - The company completed the closure of one of its Taiwan facilities, which is expected to yield cost benefits starting in Q2 [9][18] - The company is actively managing inventory levels to support demand and prepare for potential tariff impacts [27][44] Q&A Session Summary Question: Update on demand from bicycle OEM partners regarding tariffs - Management noted a spectrum of responses from OEM customers, with no significant demand reduction observed due to tariffs [38][39] Question: Key drivers of growth in the upfitting business - Growth is attributed to better product execution, improved dealer relationships, and a favorable product mix [41][42] Question: Quality of inventory and potential for cash generation - Management emphasized a strategic approach to inventory builds, focusing on high-demand aftermarket products [43][44] Question: Updates on international opportunities - The company is expanding its international relationships, particularly in Asia, to diversify its market presence [53] Question: Impact of tariffs on supply chain and consumer demand - Management discussed various strategies to mitigate tariff impacts, including commodity price adjustments and insourcing [64][66] Question: Did the company see any pull-forward in demand due to tariffs? - Management indicated minimal pull-forward in demand, with some product launches influencing sales [70][71] Question: Insights on the performance of the lower-priced fork in the market - The lower-priced fork has expanded market share and is performing well [105]

Fox Factory (FOXF) Q1 2025 Earnings Call May 08, 2025 04:30 PM ET Speaker0 Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Fox Factory Holding Corp's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I'd now like to turn the conference over to Toby Merchant, Chief Legal Officer at Fox Factory Holdi ...

Exhibit 99.1 Fox Factory Holding Corp. Reports First Quarter Fiscal 2025 Financial Results DULUTH, Georgia, May 8, 2025 - Fox Factory Holding Corp. (NASDAQ: FOXF) ("FOX" or the "Company"), a premium brand and a global leader in the design, engineering and manufacturing of performance-defining products and systems for customers worldwide, today reported financial results for the first fiscal quarter ended April 4, 2025. First Quarter Fiscal 2025 Highlights Management Commentary Mike Dennison, FOX's Chief Exe ...

Core Viewpoint - Fox Factory Holding Corp. reported financial results for the first fiscal quarter of 2025, showing a 6.5% increase in net sales compared to the previous year, despite facing challenges from high interest rates and tariffs [1][4][9]. Financial Performance - Net sales for Q1 2025 were $355.0 million, up from $333.5 million in Q1 2024, driven by increases in all segments: AAG up 9.9%, SSG up 6.6%, and PVG up 3.4% [4][7]. - Gross margin remained stable at 30.9%, while adjusted gross margin decreased by 140 basis points to 30.9% [5][40]. - Total operating expenses surged to $360.3 million, or 101.5% of net sales, primarily due to a goodwill impairment charge of $262.1 million [6][9]. - The company reported a net loss of $259.7 million, translating to a loss per diluted share of $6.23, compared to a loss of $3.5 million or $0.08 per share in the prior year [9][27]. Segment Performance - The Aftermarket Applications Group (AAG) saw net sales increase from $101.9 million to $111.9 million, attributed to higher upfitting sales and demand for aftermarket products [4][35]. - Specialty Sports Group (SSG) net sales rose from $113.5 million to $121.0 million, driven by growth in bike sales, although inventory recalibration and consumer demand posed challenges [4][35]. - Powered Vehicles Group (PVG) net sales increased from $118.1 million to $122.1 million, mainly due to the expansion of the motorcycle business [4][35]. Operational Insights - Adjusted EBITDA for Q1 2025 was $39.6 million, down from $40.4 million in Q1 2024, with an adjusted EBITDA margin of 11.2% compared to 12.1% in the prior year [10][33]. - The company is implementing operational improvements and strategic cost management initiatives to enhance margins throughout the year [3][6]. Guidance and Outlook - For Q2 2025, the company expects net sales between $340 million and $360 million, with adjusted earnings per diluted share projected between $0.32 and $0.62 [12]. - For the full fiscal year 2025, net sales are anticipated to range from $1.385 billion to $1.485 billion, with adjusted earnings per diluted share expected between $1.60 and $2.60 [12]. Balance Sheet Summary - As of April 4, 2025, cash and cash equivalents were $68.6 million, down from $71.7 million at the beginning of the year, while total debt increased to $709.9 million [11][24]. - Goodwill decreased significantly to $377.2 million due to a non-cash impairment charge related to adverse changes in U.S. tariff policies [11][24].

Fox Factory (NASDAQ: FOXF ) is a worthy candidate to bet on the eventual recovery of discretionary spending and commitment of enthusiasts to their sports and hobbies. Fox and many of its other trademarks are strong premium brands amongI focus on investment ideas about companies that pay a (healthy) dividend while you wait for capital appreciation. I like to find good businesses which reward shareholders. The shares of the company should be for a temporary reason undervalued in relation to its fundamentals, ...

DULUTH, Ga., April 17, 2025 (GLOBE NEWSWIRE) -- Fox Factory Holding Corp. (Nasdaq: FOXF) (the “Company”), a premium brand and a global leader in the design, engineering and manufacturing of performance-defining products and systems for customers worldwide, will announce results for the first quarter ended April 4, 2025, on Thursday, May 8, 2025, after the market close. The Company will host a conference call with members of the executive management team to discuss these results with additional comments and ...

Fox Factory Holding (FOXF) shares ended the last trading session 19.6% higher at $21.97. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 25.8% loss over the past four weeks.Fox Factory's stock surged amid a broader market rebound following the Trump administration’s announcement of a temporary halt on reciprocal tariffs for most countries. The move came in response to steep market declines and growing fears that ta ...

Core Viewpoint - Fox Factory Holding (FOXF) shares have increased by 1.5% recently, closing at $27.73, with a potential upside of 35.5% based on Wall Street analysts' mean price target of $37.57 [1] Price Targets and Analyst Estimates - The mean estimate consists of seven short-term price targets with a standard deviation of $5.09, indicating variability among analysts [2] - The lowest price target is $30, suggesting an 8.2% increase, while the highest target is $45, indicating a potential surge of 62.3% [2] - A low standard deviation signifies strong agreement among analysts regarding the stock's price movement direction [7] Earnings Estimates and Analyst Agreement - Analysts have shown increasing optimism about FOXF's earnings prospects, with a positive trend in earnings estimate revisions [9] - Over the past 30 days, one estimate has increased, leading to a 6.4% rise in the Zacks Consensus Estimate [10] - FOXF holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11] Conclusion on Price Targets - While consensus price targets may not reliably indicate the extent of potential gains, they can provide a directional guide for price movement [12]