Financial Performance - Net sales for Q3 fiscal 2025 increased by 4.8% year-over-year to $376.4 million, with year-to-date net sales up 6.3%[4] - AAG net sales rose by 17.4% to $117.8 million, while PVG net sales increased by 15.1% to $125.9 million; SSG net sales decreased by 11.2% to $132.7 million[5] - Adjusted EBITDA for Q3 fiscal 2025 was $44.4 million, reflecting a 5.7% year-over-year increase, with an adjusted EBITDA margin of 11.8%[10] - The company reported a net loss of $0.6 million, or $0.02 per diluted share, compared to a net income of $4.8 million, or $0.11 per diluted share, in the prior year quarter[9] - Gross margin improved by 50 basis points year-over-year to 30.4%, driven by favorable shifts in product line mix[6] - Total operating expenses for Q3 fiscal 2025 were $99.4 million, or 26.4% of net sales, up from $88.7 million, or 24.7% of net sales in Q3 fiscal 2024[7] - For Q4 fiscal 2025, net sales are expected to be in the range of $340 million to $370 million, with adjusted earnings per diluted share projected between $0.05 and $0.25[18] - For fiscal year 2025, net sales are now expected to be between $1.445 billion and $1.475 billion, with adjusted earnings per diluted share in the range of $0.92 to $1.12[18] Balance Sheet and Cash Flow - Total current assets as of October 3, 2025, were $758,814 thousand, an increase from $727,680 thousand as of January 3, 2025[29] - The company's total liabilities decreased slightly to $1,019,100 thousand as of October 3, 2025, from $1,033,644 thousand as of January 3, 2025[29] - Cash and cash equivalents decreased to $65,372 thousand as of October 3, 2025, down from $71,674 thousand as of January 3, 2025[29] - The company reported net cash provided by operating activities of $42,766 thousand for the nine months ended October 3, 2025, compared to $50,111 thousand for the same period last year[33] Operational Insights - Operating expenses for the three months ended October 3, 2025, totaled $99,351 thousand, compared to $88,677 thousand for the same period last year, indicating an increase of 11.9%[31] - The adjusted operating expense for the three months ended October 3, 2025, was $85,671 thousand, compared to $75,760 thousand for the same period in 2024, reflecting an increase of 13.5%[46] - The company reported a goodwill impairment of $262,129 thousand for the nine months ended October 3, 2025[40] Market Outlook and Risks - The company anticipates a challenging macroeconomic environment for fiscal year 2026, impacting consumer spending and business investment[19] - The company emphasizes that forward-looking statements regarding future performance and financial results are subject to significant uncertainties and should not be overly relied upon[49] - Key risks include supply chain disruptions, ability to maintain profitability, and adapting to changes in tax laws and international trade policies[49] - The company acknowledges potential impacts from global events, such as the Russia-Ukraine conflict and inflation, on its operations and market conditions[49] - The company is cautious about its international growth and the potential for strategic acquisitions[49] Product Development and Brand Strategy - The company aims to improve operating efficiencies and expects future sales growth, although specific figures are not provided[49] - There is a focus on developing new and innovative products to expand into new categories and end-markets[49] - The ability to maintain relationships with professional athletes and race teams is crucial for the company's brand image[49] - The company is monitoring consumer preferences and competition in the performance-defining products market[49] - Legal and regulatory developments, including environmental regulations, are highlighted as significant factors affecting the company's operations[49]

Core Insights - Fox Factory Holding Corp. reported a net sales growth of 5% year-over-year for the third quarter of fiscal 2025, reaching $376.4 million, driven by strong performance in the Aftermarket Applications Group (AAG) and Powered Vehicles Group (PVG) [3][4] - The company faced challenges in the Specialty Sports Group (SSG), which saw an 11.2% decrease in net sales due to inventory management by OEMs and distributors [3][4] - Adjusted EBITDA increased by 5.7% year-over-year to $44.4 million, with an adjusted EBITDA margin of 11.8% [6][10] Financial Performance - Net sales for Q3 fiscal 2025 were $376.4 million, up from $359.1 million in Q3 fiscal 2024, reflecting a 4.8% increase [4][6] - AAG net sales increased by 17.4% to $117.8 million, while PVG net sales rose by 15.1% to $125.9 million [4][6] - SSG net sales decreased by 11.2% to $132.7 million, primarily due to reduced inventory levels in response to economic conditions [4][6] Profitability Metrics - Gross margin improved to 30.4% in Q3 fiscal 2025, compared to 29.9% in Q3 fiscal 2024, driven by favorable product mix [5][6] - Total operating expenses increased to $99.4 million, or 26.4% of net sales, compared to $88.7 million, or 24.7% of net sales in the prior year [6][7] - The company reported a net loss of $0.6 million, or $0.02 per diluted share, compared to a net income of $4.8 million, or $0.11 per diluted share, in the prior year quarter [6][9] Year-to-Date Results - For the nine months ended October 3, 2025, net sales were $1,106.2 million, a 6.3% increase compared to the same period in the previous year [11][14] - AAG net sales increased by 11.2% to $343.8 million, while PVG net sales rose by 7.6% to $371.5 million [11][14] - The company reported a net loss of $257.6 million for the nine months, compared to a net income of $6.7 million in the prior year [14] Balance Sheet Overview - As of October 3, 2025, cash and cash equivalents were $65.4 million, down from $71.7 million at the beginning of the year [16] - Total debt decreased to $687.7 million from $705.1 million, reflecting efforts to strengthen the balance sheet [16] - Goodwill decreased significantly to $378.9 million due to a non-cash impairment charge related to adverse changes in tariff policies [16] Outlook - The company updated its fourth quarter fiscal 2025 net sales expectations to a range of $340 million to $370 million and adjusted earnings per diluted share to a range of $0.05 to $0.25 [17] - For fiscal year 2025, net sales are expected to be between $1.445 billion and $1.475 billion, with adjusted earnings per diluted share projected between $0.92 and $1.12 [17] - The macroeconomic environment for fiscal year 2026 is anticipated to be challenging, with elevated interest rates and a softening labor market impacting consumer spending [18][19]

Core Insights - FOX introduces Live Valve, an advanced semi-active suspension system for trucks and Jeeps, enhancing vehicle handling and driver comfort [1][2][8] Product Features - Live Valve adapts suspension in real-time by sensing terrain and driver inputs hundreds of times per second, providing optimal suspension tuning [2][8] - The system utilizes an Inertial Measurement Unit (IMU) to monitor vehicle dynamics such as pitch, yaw, and roll, along with other vehicle data [4] - The Electronic Controller Unit (ECU) employs FOX's proprietary Live IQ algorithm to calculate precise damping forces for each wheel in fractions of a second [5] User Control and Experience - Drivers can select from three ride modes—On-Road, Off-Road, and Custom—using the in-cabin Live Valve Mode Selector, with further tuning options available [6] - The FOX Connect App enhances the driving experience by allowing users to monitor system performance, record telemetry, and receive over-the-air updates [7] Company Overview - Fox Factory Holding Corp. is a leader in designing and manufacturing high-performance products for specialty sports and vehicles, with a focus on innovation [9][10] - The company supplies shocks and suspension components to major vehicle manufacturers and has a strong presence in the aftermarket through various distribution channels [10]

Core Insights - Fox Factory Holding Corp. will announce its third-quarter results for the period ending October 3, 2025, on November 6, 2025, after market close [1] - A conference call with the executive management team will take place on the same day at 4:30 p.m. ET to discuss the results [2] Company Overview - Fox Factory Holding Corp. is a global leader in designing, engineering, and manufacturing premium products for specialty sports and vehicles, including shocks and suspension systems [3] - The company’s brand portfolio includes FOX, Marucci, and Method Race Wheels, known for innovation and performance trusted by professional athletes and enthusiasts [3] - Fox Factory integrates engineering and manufacturing expertise through acquisitions to diversify its product offerings beyond its core shock and suspension segment [3] - The company also provides aftermarket products through a global network of retailers and direct-to-consumer channels [3]

Core Insights - Fox Factory Holding Corp. is considered a cheap stock with potential for the next five years, despite a lowered price target from Stifel analyst Peter McGoldrick [1] - The company reported net sales of $375 million in Q2 2025, showing growth across all business segments, but net income decreased to $2.7 million from $5.4 million year-over-year [2] - The company faces significant headwinds from increased tariffs, with the pre-mitigation tariff impact rising from $38 million to $50 million, prompting strategies for supply chain optimization and relocation of manufacturing [3] Financial Performance - Q2 2025 net sales reached $375 million, indicating growth across all three business segments [2] - Net income for Q2 2025 was $2.7 million, a decline from $5.4 million in the same period last year [2] Market Challenges - The most significant challenge for the company is the impact of tariffs, which have increased costs substantially [3] - The CFO highlighted the increase in pre-mitigation tariff impact, which rose from $38 million to $50 million [3] - The company is implementing mitigation strategies, including optimizing the supply chain and relocating manufacturing processes [3]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow generation and growth potential [1] Group 1 - The service offers subscribers access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [1] - The focus on cash flow aims to identify companies with real value and growth prospects in the oil and gas industry [1] Group 2 - A promotional offer is available for a two-week free trial, encouraging new users to explore the oil and gas investment opportunities [2]

Core Insights - The article discusses the aftermarket sector and highlights the author's ongoing research on Fox Factory Holding (NASDAQ: FOXF) [1] Group 1: Company Analysis - Fox Factory Holding is the focus of the author's upcoming article, indicating potential insights into its market position and performance [1] Group 2: Investment Approach - The author employs a strategy that combines long-term conviction holdings with tactical sector rotations, emphasizing the importance of profitability over being right in investment decisions [2] - The focus is on uncovering undercovered opportunities and sectors driven by momentum [2]

Core Insights - Fox Factory Holding (FOXF) reported revenue of $374.86 million for the quarter ended June 2025, marking a year-over-year increase of 7.6% and exceeding the Zacks Consensus Estimate of $345.17 million by 8.6% [1] - The company's EPS for the same period was $0.40, up from $0.38 a year ago, although it fell short of the consensus EPS estimate of $0.43 by 6.98% [1] Revenue Breakdown - Net Sales for Aftermarket Applications Group reached $114.14 million, surpassing the average estimate of $111.75 million, reflecting a year-over-year increase of 6.6% [4] - Net Sales for Powered Vehicles Group amounted to $123.51 million, exceeding the average estimate of $110.15 million, with a year-over-year change of 4.9% [4] - Net Sales for Specialty Sports Group were reported at $137.21 million, significantly above the average estimate of $120.35 million, representing a year-over-year increase of 11% [4] Stock Performance - Over the past month, shares of Fox Factory Holding have returned +4%, outperforming the Zacks S&P 500 composite's +1.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Fox Factory Holding reported quarterly earnings of $0.4 per share, missing the Zacks Consensus Estimate of $0.43 per share, but showing an increase from $0.38 per share a year ago, resulting in an earnings surprise of -6.98% [1] - The company posted revenues of $374.86 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.60% and increasing from $348.49 million year-over-year [2] - Over the last four quarters, Fox Factory has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - The stock has underperformed the market, losing about 3.5% since the beginning of the year compared to the S&P 500's gain of 7.9% [3] - The current consensus EPS estimate for the coming quarter is $0.61 on revenues of $371.05 million, and for the current fiscal year, it is $1.85 on revenues of $1.44 billion [7] - The estimate revisions trend for Fox Factory was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Automotive - Domestic industry, to which Fox Factory belongs, is currently in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Fox Factory's stock performance [5]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, segment performance, debt, and other financial disclosures for the periods ended July 4, 2025, and June 28, 2024 [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, assets, liabilities, and equity at specific dates Balance Sheet Summary | Metric | July 4, 2025 (in thousands) | January 3, 2025 (in thousands) | | :----------------------------- | :-------------------------- | :--------------------------- | | Cash and cash equivalents | $81,451 | $71,674 | | Accounts receivable | $185,359 | $165,827 | | Inventory | $412,762 | $404,736 | | Total current assets | $746,555 | $727,680 | | Goodwill | $377,366 | $639,505 | | Total assets | $1,965,002 | $2,232,310 | | Total current liabilities | $246,011 | $259,780 | | Total liabilities | $1,006,400 | $1,031,166 | | Total stockholders' equity | $958,719 | $1,201,182 | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income (loss) over specific periods Statements of Operations Summary | Metric (in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :-------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Net sales | $374,864 | $348,491 | $729,894 | $681,963 | | Gross profit | $116,991 | $110,963 | $226,670 | $214,121 | | Goodwill impairment | — | — | $262,129 | — | | Income (loss) from operations | $18,528 | $18,590 | $(232,059) | $27,465 | | Net income (loss) | $2,705 | $5,407 | $(257,029) | $1,911 |\ | Basic EPS | $0.07 | $0.13 | $(6.15) | $0.05 |\ | Diluted EPS | $0.07 | $0.13 | $(6.15) | $0.05 | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Reports net income (loss) and other comprehensive income (loss) for specific periods Statements of Comprehensive Income (Loss) Summary | Metric (in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :-------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Net income (loss) | $2,705 | $5,407 | $(257,029) | $1,911 | | Other comprehensive income (loss) | $12,190 | $(2,435) | $7,821 | $(5,643) | | Comprehensive income (loss) | $14,895 | $2,972 | $(249,208) | $(3,732) | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in equity components, including common stock and retained earnings Statements of Stockholders' Equity Summary | Metric (in thousands) | July 4, 2025 | January 3, 2025 | | :-------------------- | :----------- | :-------------- | | Common stock | $42 | $42 |\ | Additional paid-in capital | $345,932 | $339,266 |\ | Treasury stock | $(13,754) | $(13,754) |\ | Accumulated other comprehensive income | $8,045 | $224 |\ | Retained earnings | $618,454 | $875,404 |\ | Total stockholders' equity | $958,719 | $1,201,182 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Activity (in thousands) | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :---------------------- | :-------------------------- | :--------------------------- | | Net cash provided by operating activities | $37,468 | $36,037 | | Net cash used in investing activities | $(19,412) | $(26,579) | | Net cash used in financing activities | $(9,393) | $(10,688) | | Change in cash and cash equivalents | $9,777 | $(1,396) | | Cash and cash equivalents—End of period | $81,451 | $82,246 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and specific financial statement items [Note 1. Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Description%20of%20the%20Business,%20Basis%20of%20Presentation,%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business, financial statement presentation, and key accounting policies - The Company designs, engineers, manufactures, and markets premium products and systems for bikes, powered vehicles, and specialty sports gear globally[24](index=24&type=chunk) - A non-cash **goodwill impairment charge** of **$262.1 million** was recorded in the first quarter of fiscal year 2025, impacting all reporting units, due to adverse changes in U.S. tariff policies and a sustained decline in stock price[37](index=37&type=chunk) - The Company operates on a 52-53-week fiscal year, with the three and six-month periods ended July 4, 2025, and June 28, 2024, each including 13 and 26 weeks, respectively[27](index=27&type=chunk) [Note 2. Revenues](index=14&type=section&id=Note%202.%20Revenues) Details revenue recognition policies and disaggregated net sales by segment, channel, and geography Net Sales by Segment | Segment (Net Sales in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Powered Vehicles Group | $123,514 | $117,795 | $245,612 | $235,908 | | Aftermarket Applications Group | $114,144 | $107,129 | $226,058 | $208,981 | | Specialty Sports Group | $137,206 | $123,567 | $258,224 | $237,074 | | Total net sales | $374,864 | $348,491 | $729,894 | $681,963 | Net Sales by Sales Channel | Sales Channel (Net Sales in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | OEM | $173,757 | $151,299 | $330,078 | $289,108 | | Aftermarket/Non-OEM | $201,107 | $197,192 | $399,816 | $392,855 | | Total net sales | $374,864 | $348,491 | $729,894 | $681,963 | Net Sales by Geographic Location | Geographic Location (Net Sales in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | North America | $271,676 | $278,153 | $543,977 | $562,815 | | Europe | $58,147 | $37,524 | $106,424 | $64,774 | | Asia | $38,741 | $26,315 | $66,550 | $44,485 | | Rest of the world | $6,300 | $6,499 | $12,943 | $9,889 | | Total net sales | $374,864 | $348,491 | $729,894 | $681,963 | [Note 3. Inventory](index=14&type=section&id=Note%203.%20Inventory) Provides a breakdown of inventory components, including raw materials, work-in-process, and finished goods Inventory Breakdown | Inventory Type (in thousands) | July 4, 2025 | January 3, 2025 | | :---------------------------- | :----------- | :-------------- | | Raw materials | $249,602 | $245,368 | | Work-in-process | $23,110 | $16,519 | | Finished goods | $140,050 | $142,849 | | Total inventory | $412,762 | $404,736 | [Note 4. Prepaids and Other Current Assets](index=15&type=section&id=Note%204.%20Prepaids%20and%20Other%20Current%20Assets) Details the composition of prepaid expenses and other current assets Prepaid and Other Current Assets Breakdown | Asset Type (in thousands) | July 4, 2025 | January 3, 2025 | | :------------------------ | :----------- | :-------------- |\ | Prepaid chassis deposits | $31,217 | $47,094 |\ | Advanced payments and prepaid contracts | $22,931 | $26,496 |\ | Other current assets | $12,835 | $11,853 |\ | Total prepaid and other current assets | $66,983 | $85,443 | [Note 5. Property, Plant and Equipment, net](index=15&type=section&id=Note%205.%20Property,%20Plant%20and%20Equipment,%20net) Presents the breakdown of property, plant, and equipment, net of accumulated depreciation Property, Plant and Equipment Breakdown | Asset Type (in thousands) | July 4, 2025 | January 3, 2025 | | :------------------------ | :----------- | :-------------- | | Machinery and manufacturing equipment | $190,516 | $177,261 | | Building and building improvements | $84,492 | $82,224 | | Leasehold improvements | $42,294 | $40,663 | | Internal-use computer software | $38,315 | $38,572 | | Information systems, office equipment and furniture | $34,062 | $28,725 | | Transportation equipment | $24,712 | $23,299 | | Land and land improvements | $15,563 | $15,521 | | Total property, plant and equipment | $429,954 | $406,265 | | Less: accumulated depreciation and amortization | $(182,483) | $(159,872) | | Total property, plant and equipment, net | $247,471 | $246,393 | Property, Plant and Equipment by Geographic Location | Geographic Location (in thousands) | July 4, 2025 | January 3, 2025 | | :--------------------------------- | :----------- | :-------------- | | United States | $203,673 | $203,937 | | International | $43,798 | $42,456 | | Total long-lived assets | $247,471 | $246,393 | [Note 6. Accrued Expenses](index=16&type=section&id=Note%206.%20Accrued%20Expenses) Details the components of accrued expenses and warranty liability activity Accrued Expenses Breakdown | Accrued Expense Type (in thousands) | July 4, 2025 | January 3, 2025 | | :---------------------------------- | :----------- | :-------------- | | Payroll and related expenses | $30,214 | $22,504 | | Warranty | $18,543 | $21,593 | | Current portion of lease liabilities | $16,600 | $16,683 | | Accrued sales rebate | $10,459 | $7,852 | | Income tax payable | $5,460 | $9,343 | | Other accrued expenses | $9,320 | $13,452 | | Total accrued expenses | $90,596 | $91,427 | Warranty Liability Activity | Warranty Activity (in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Beginning warranty liability | $19,113 | $19,327 | $21,593 | $20,001 | | Charge to cost of sales | $2,679 | $5,546 | $4,147 | $9,489 | | Costs incurred | $(3,249) | $(4,180) | $(7,197) | $(8,797) | | Ending warranty liability | $18,543 | $20,693 | $18,543 | $20,693 | [Note 7. Debt](index=17&type=section&id=Note%207.%20Debt) Describes the company's debt facilities, including revolving loans and term loan principal payments - The **2022 Credit Facility**, maturing on April 5, 2027, provides for revolving loans, swingline loans, and letters of credit up to an aggregate amount of **$650.0 million**[70](index=70&type=chunk) Revolver Loan Status | Revolver Status (in thousands) | July 4, 2025 | January 3, 2025 | | :----------------------------- | :----------- | :-------------- | | Amount outstanding | $157,000 | $153,000 | | Standby letters of credit | $164 | $155 | | Available borrowing capacity | $492,836 | $496,845 | | Total borrowing capacity | $650,000 | $650,000 | Term Loan Principal Payment Schedule | Term Loan Principal Payments (in thousands) | July 4, 2025 | | :------------------------------------------ | :----------- | | For fiscal year 2025 | $12,143 | | For fiscal year 2026 | $24,286 | | For fiscal year 2027 | $512,143 | | Total | $548,572 | | Long-term debt, net of issuance cost | $541,780 | [Note 8. Commitments and Contingencies](index=19&type=section&id=Note%208.%20Commitments%20and%20Contingencies) Outlines significant legal proceedings and other contractual commitments and contingencies - The Company is currently involved in a **federal securities class action lawsuit** and two **stockholder derivative complaints**, all of which the Company denies wrongdoing and intends to vigorously defend[83](index=83&type=chunk)[84](index=84&type=chunk) - **Bailment pool arrangements** for truck chassis with GM and Ford involve **interest payments**, while Stellantis chassis require **cash deposits**, with **interest expense** related to chassis on hand totaling **$1.7 million** for the six months ended July 4, 2025[85](index=85&type=chunk)[86](index=86&type=chunk) [Note 9. Derivatives and Hedging](index=20&type=section&id=Note%209.%20Derivatives%20and%20Hedging) Explains the company's use of derivative instruments for hedging interest rate risk - The Company utilizes **interest rate swaps** to hedge the variability of cash flows in **interest payments** associated with the first **$500.0 million** of its variable rate debt[88](index=88&type=chunk) Interest Rate Swap Contracts Summary | Interest Rate Swap Contracts (in thousands) | July 4, 2025 Unrealized Gain (Loss) in AOCI | January 3, 2025 Unrealized Gain (Loss) in AOCI | | :------------------------------------------ | :---------------------------------------- | :--------------------------------------------- | | April 5, 2022 - April 5, 2027 ($100,000 Notional) | $1,739 | $2,650 | | September 20, 2024 - December 26, 2025 ($100,000 Notional) | $76 | $(87) | | September 20, 2024 - December 25, 2026 ($200,000 Notional) | $(82) | $903 | | September 20, 2024 - September 21, 2029 ($100,000 Notional) | $(86) | $2,219 | | Total | $1,647 | $6,468 | - An estimated **$1.6 million** of existing **net gain** in **Accumulated Other Comprehensive Income (AOCI)** related to **interest rate swap contracts** is expected to be reclassified as a decrease to **interest expense** over the next 12 months[92](index=92&type=chunk) [Note 10. Fair Value Measurements and Financial Instruments](index=21&type=section&id=Note%2010.%20Fair%20Value%20Measurements%20and%20Financial%20Instruments) Presents assets and liabilities measured at fair value and related valuation methodologies Fair Value Assets Summary | Fair Value Assets (in thousands) | July 4, 2025 (Total) | January 3, 2025 (Total) | | :------------------------------- | :------------------- | :---------------------- | | Deferred Compensation Plan Investments | $4,455 | $4,394 | | Interest Rate Swaps | $1,815 | $5,685 | | Total assets measured at fair value | $6,270 | $10,079 | Fair Value Liabilities Summary | Fair Value Liabilities (in thousands) | July 4, 2025 (Total) | January 3, 2025 (Total) | | :------------------------------------ | :------------------- | :---------------------- | | Incremental Term Loans | $541,780 | $552,061 | | Revolver | $157,000 | $153,000 | | Deferred Compensation Plan Liabilities | $4,434 | $4,300 | | Interest Rate Swaps | $168 | — | | Total liabilities measured at fair value | $703,382 | $709,361 | [Note 11. Stockholders' Equity](index=22&type=section&id=Note%2011.%20Stockholders'%20Equity) Details changes in stockholders' equity and stock-based compensation expenses - The Company has an **authorized share repurchase plan** for up to **$300.0 million** in **common stock**, with **$250.0 million** remaining available as of July 4, 2025[100](index=100&type=chunk)[101](index=101&type=chunk)[221](index=221&type=chunk) - No **common stock** was repurchased for retirement during the six months ended July 4, 2025; however, **32,717 shares** were acquired to satisfy **tax-withholding obligations**[101](index=101&type=chunk)[220](index=220&type=chunk) Stock-Based Compensation Expenses | Stock-Based Compensation (in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :-------------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Cost of sales | $347 | $320 | $645 | $556 | | Sales and marketing | $461 | $292 | $850 | $667 | | Research and development | $395 | $361 | $727 | $626 | | General and administrative | $3,359 | $1,230 | $5,695 | $4,259 | | Total | $4,562 | $2,203 | $7,917 | $6,108 | [Note 12. Earnings (Net Loss) Per Share](index=24&type=section&id=Note%2012.%20Earnings%20(Net%20Loss)%20Per%20Share) Provides basic and diluted earnings (net loss) per share calculations Earnings Per Share Summary | EPS (in thousands, except per share) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :----------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Net income (loss) attributable to FOX stockholders | $2,744 | $5,407 | $(256,950) | $1,911 | | Basic EPS | $0.07 | $0.13 | $(6.15) | $0.05 | | Diluted EPS | $0.07 | $0.13 | $(6.15) | $0.05 | - Due to the **net loss reported** for the six months ended July 4, 2025, no **dilutive shares** were included in the calculation of diluted net loss per share for the period[111](index=111&type=chunk) [Note 13. Income Taxes](index=25&type=section&id=Note%2013.%20Income%20Taxes) Details the provision (benefit) from income taxes and effective tax rates Income Tax Provision (Benefit) and Effective Rates | Income Tax (in thousands) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------ | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Provision (benefit) from income taxes | $2,800 | $(371) | $(837) | $(1,638) | | Effective tax rates | **50.9%** | **(7.4)%** | **0.3%** | **(600.0)%** | - The **effective tax rate** for the six months ended July 4, 2025, was **0.3%**, primarily due to the **impairment impact of non-deductible goodwill**[115](index=115&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)** was enacted on July 4, 2025, introducing significant tax provisions, but it does not affect the measurement of **deferred tax assets and liabilities** as of July 4, 2025[117](index=117&type=chunk) [Note 14. Acquisitions](index=26&type=section&id=Note%2014.%20Acquisitions) Describes recent business acquisitions and their financial contributions - The Company **acquired Marzocchi Suspension S.r.l.** on December 19, 2024, for **$20.5 million** (net of cash acquired), aiming to expand its **motorcycle suspension manufacturing capabilities**[120](index=120&type=chunk) Marzocchi Acquisition Financial Contribution | Marzocchi Financial Contribution (in thousands) | 3 Months Ended July 4, 2025 | 6 Months Ended July 4, 2025 | | :---------------------------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $11,691 | $23,660 | | Total pre-tax losses | $(722) | $(2,345) | - **Goodwill** of **$3.3 million** was recognized from the **Marzocchi acquisition**, which is **tax deductible** for U.S. income tax purposes[124](index=124&type=chunk) [Note 15. Segment Information](index=27&type=section&id=Note%2015.%20Segment%20Information) Presents financial information by operating segment, including net sales and Adjusted EBITDA - The Company manages its activities through three **operating segments**: **Powered Vehicles Group (PVG)**, **Aftermarket Applications Group (AAG)**, and **Specialty Sports Group (SSG)**[126](index=126&type=chunk) - **Adjusted EBITDA** is the key financial metric used by the **Chief Operating Decision Maker (CODM)** to measure the **profitability and financial performance** of the **operating segments**[131](index=131&type=chunk) Net Sales by Segment | Net Sales by Segment (in millions) | 3 Months Ended July 4, 2025 | 3 Months Ended June 28, 2024 | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :--------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Powered Vehicles Group | $123.5 | $117.8 | $245.6 | $235.9 | | Aftermarket Applications Group | $114.2 | $107.1 | $226.1 | $209.0 | | Specialty Sports Group | $137.2 | $123.6 | $258.2 | $237.1 | | Total net sales | $374.9 | $348.5 | $729.9 | $682.0 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook, including a detailed analysis of operating results for the three and six months ended July 4, 2025, compared to the prior year, critical accounting policies, liquidity, and capital resources, and a discussion of forward-looking statements and risk factors [Cautionary Note Regarding Forward-Looking Statements](index=30&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Highlights inherent risks and uncertainties associated with forward-looking statements - **Forward-looking statements** are subject to **substantial risks and uncertainties**, including changes in **general economic conditions**, **market disruptions** from escalating **geopolitical tensions** (China-Taiwan, Russia-Ukraine, Israel-Palestine), **growing inflation**, **higher interest rates**, and **tariffs**[143](index=143&type=chunk) - **Key risks** include **dependency on a limited number of suppliers** for materials and vehicle chassis, which could lead to **increased costs** or **supply chain disruptions**[143](index=143&type=chunk) - Other risks encompass the ability to develop new products, expand into new markets, increase aftermarket penetration, accelerate international growth, and manage exchange rate fluctuations[143](index=143&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Discusses key accounting policies and estimates that significantly impact financial reporting - A non-cash **goodwill impairment charge** of **$262.1 million** was recognized in the first quarter of fiscal year 2025, impacting all reporting units, due to **adverse changes in U.S. tariff policies** and a **sustained decline in the Company's stock price**[148](index=148&type=chunk) - The **fair value of reporting units** for **goodwill impairment testing** is determined using a weighting of income (discounted cash flow) and market approaches, with **sensitivity analyses** performed to assess the **impact of changes in key assumptions**[149](index=149&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance and operating results for the reported periods [Three months ended July 4, 2025 compared to three months ended June 28, 2024](index=34&type=section&id=Three%20months%20ended%20July%204,%202025%20compared%20to%20three%20months%20ended%20June%2028,%202024) Compares the company's operating results for the three months ended July 4, 2025, and June 28, 2024 Operating Results: Three Months Ended | Metric (in millions) | July 4, 2025 | June 28, 2024 | Change ($) | Change (%) | | :------------------- | :----------- | :------------ | :--------- | :--------- | | Net sales | $374.9 | $348.5 | $26.4 | **7.6%** | | Cost of sales | $257.9 | $237.5 | $20.4 | **8.6%** | | Gross margin | **31.2%** | **31.8%** | **-0.6%** | - | | Operating expenses | $98.5 | $92.4 | $6.1 | **6.6%** | | Income from operations | $18.5 | $18.6 | $(0.1) | **(0.5)%** | | Net income | $2.7 | $5.4 | $(2.7) | **(50.0)%**| - The **increase in net sales** was driven by **stabilized bike sales**, **increased demand for aftermarket products**, and the **expansion of the motorcycle business**, partially offset by lower industry demand in automotive OE product lines[154](index=154&type=chunk) - **Gross margin decreased** by **60 basis points** primarily due to **product mix and the impact of tariffs**[155](index=155&type=chunk) [Segment Review (Three Months)](index=36&type=section&id=Segment%20Review%20(Three%20Months)) Reviews the financial performance of operating segments for the three-month periods Segment Performance: Three Months Ended | Segment (in millions) | Net Sales (July 4, 2025) | Net Sales (June 28, 2024) | Net Sales Change (%) | Adjusted EBITDA (July 4, 2025) | Adjusted EBITDA (June 28, 2024) | Adjusted EBITDA Change (%) | | :-------------------- | :----------------------- | :------------------------ | :------------------- | :----------------------------- | :------------------------------ | :------------------------- | | Powered Vehicles Group | $123.5 | $117.8 | **4.9%** | $16.4 | $15.9 | **3.1%** | | Aftermarket Applications Group | $114.2 | $107.1 | **6.6%** | $16.0 | $14.2 | **12.7%** | | Specialty Sports Group | $137.2 | $123.6 | **11.0%** | $30.4 | $29.2 | **4.1%** | | Unallocated corporate expenses | - | - | - | $(13.5) | $(15.1) | **(10.6)%** | - **Powered Vehicles Group net sales increased** due to the **Marzocchi acquisition**, while **Aftermarket Applications Group** and **Specialty Sports Group** saw **growth driven by increased aftermarket demand** and **stabilized bike sales**, respectively[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Six months ended July 4, 2025 compared to six months ended June 28, 2024](index=37&type=section&id=Six%20months%20ended%20July%204,%202025%20compared%20to%20six%20months%20ended%20June%2028,%202024) Compares the company's operating results for the six months ended July 4, 2025, and June 28, 2024 Operating Results: Six Months Ended | Metric (in millions) | July 4, 2025 | June 28, 2024 | Change ($) | Change (%) | | :------------------- | :----------- | :------------ | :--------- | :--------- | | Net sales | $729.9 | $682.0 | $47.9 | **7.0%** | | Cost of sales | $503.2 | $467.8 | $35.4 | **7.6%** | | Gross margin | **31.1%** | **31.4%** | **-0.3%** | - | | Operating expenses | $458.7 | $186.7 | $272.0 | **145.7%** | | (Loss) income from operations | $(232.1) | $27.5 | $(259.6) | **(944.0)%**| | Net (loss) income | $(257.0) | $1.9 | $(258.9) | **(13,626.3)%**| - **Net sales increased by 7.0%** due to **stabilized bike sales**, **increased aftermarket product demand**, and **motorcycle business expansion**, despite headwinds from high interest rates and vehicle costs[169](index=169&type=chunk) - The Company reported a **significant net loss of $(257.0) million**, primarily driven by a **$262.1 million goodwill impairment charge** recognized during the period[171](index=171&type=chunk)[176](index=176&type=chunk) [Segment Review (Six Months)](index=39&type=section&id=Segment%20Review%20(Six%20Months)) Reviews the financial performance of operating segments for the six-month periods Segment Performance: Six Months Ended | Segment (in millions) | Net Sales (July 4, 2025) | Net Sales (June 28, 2024) | Net Sales Change (%) | Adjusted EBITDA (July 4, 2025) | Adjusted EBITDA (June 28, 2024) | Adjusted EBITDA Change (%) | | :-------------------- | :----------------------- | :------------------------ | :------------------- | :----------------------------- | :------------------------------ | :------------------------- | | Powered Vehicles Group | $245.6 | $235.9 | **4.1%** | $30.8 | $31.8 | **(3.1)%** | | Aftermarket Applications Group | $226.1 | $209.0 | **8.2%** | $33.0 | $29.0 | **13.8%** | | Specialty Sports Group | $258.2 | $237.1 | **8.9%** | $53.8 | $53.3 | **0.9%** | | Unallocated corporate expenses | - | - | - | $(28.7) | $(29.5) | **(2.7)%** | - **Aftermarket Applications Group** showed the **strongest Adjusted EBITDA growth at 13.8%**, driven by increased demand, while **Powered Vehicles Group's Adjusted EBITDA** decreased slightly due to **higher R&D expenses**[178](index=178&type=chunk)[180](index=180&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet short-term and long-term financial obligations Cash Flow Activities Summary | Cash Flow Activity (in millions) | 6 Months Ended July 4, 2025 | 6 Months Ended June 28, 2024 | | :------------------------------- | :-------------------------- | :--------------------------- | | Net cash provided by operating activities | $37.5 | $36.0 | | Net cash used in investing activities | $(19.4) | $(26.6) | | Net cash used in financing activities | $(9.4) | $(10.7) | | Change in cash and cash equivalents | $9.8 | $(1.4) | - The Company expects **cash on hand**, **cash flows from operations**, and availability under its **2022 Credit Facility** to be **sufficient to fund operations** for the next 12 months and beyond[188](index=188&type=chunk) - The **2022 Credit Facility** provides **$650.0 million** in **revolving loans**, maturing April 5, 2027, with a **weighted-average interest rate of 6.41%** as of July 4, 2025[194](index=194&type=chunk)[195](index=195&type=chunk) - Recent developments, including **new and expanded tariffs** under the **Trump administration** and the enactment of the **One Big Beautiful Bill Act (OBBBA)**, introduce **cost and tax framework uncertainties**, which the Company is **evaluating**[200](index=200&type=chunk)[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States no material changes to market risk disclosures from the prior annual report [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=43&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of the company's disclosure controls and procedures - Management, with the participation of the **CEO and CFO**, evaluated the **effectiveness of disclosure controls and procedures** as of July 4, 2025, and concluded they were **effective at the reasonable assurance level**[207](index=207&type=chunk) [Changes in Internal Control over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any material changes in internal control over financial reporting - There was **no change in internal control over financial reporting** identified during the period covered by this Quarterly Report on Form 10-Q that has **materially affected**, or is **reasonably likely to materially affect**, **internal control over financial reporting**[208](index=208&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=43&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Acknowledges the inherent limitations that restrict the effectiveness of control systems - Management acknowledges that **control systems provide only reasonable, not absolute, assurance** of achieving objectives due to **inherent limitations** such as **faulty judgments**, **simple errors**, **circumvention by individual acts or collusion**, and **management override**[209](index=209&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing legal actions, including class action and derivative lawsuits - A **federal securities class action** was filed on February 20, 2024, alleging **material misstatements and omissions** regarding **product demand and inventory levels**, with the defendants **denying all allegations**[210](index=210&type=chunk) - Two **stockholder derivative complaints** were filed in October 2024, premised on similar factual allegations as the securities fraud case, claiming officers and directors **breached fiduciary duties**[211](index=211&type=chunk) - The court **dismissed the initial amended complaint** in the securities fraud case but **granted leave to file a second amended complaint**, which the defendants have **moved to dismiss**[210](index=210&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Highlights significant risks, particularly those related to trade policies and supply chain - **New and expanded U.S. tariffs**, including a **universal 'reciprocal' tariff of 10%** on all countries effective August 1, 2025, introduce **additional costs and uncertainty** into the supply chain[215](index=215&type=chunk) - There is a risk that continued U.S. tariffs could be met with additional **retaliatory tariffs on U.S.-produced exports**, intensifying **broader trade uncertainty** and potentially impacting **global economic conditions**[216](index=216&type=chunk) - The **Uyghur Forced Labor Prevention Act (UFLPA)** poses **risks of product detentions**, **supply chain disruptions**, and **penalties** if **suppliers are found to have dealings**, directly or indirectly, with entities on the **UFLPA entities list**[217](index=217&type=chunk)[218](index=218&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on common stock repurchases and the remaining authorization under the plan Common Stock Repurchases | Period | Total Number of Shares Purchased | Weighted-average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs | | :---------- | :------------------------------- | :------------------------------------ | :--------------------------------------------------------------------------------------- | | 4/5-5/9 | 32,406 | $20.65 | $250,000,000 | | 5/10-6/6 | 311 | $26.32 | $250,000,000 | | 6/7-7/4 | — | — | $250,000,000 | | Total | 32,717 | $20.70 | $250,000,000 | - The **shares purchased were acquired** from holders of **restricted stock unit awards** to satisfy **tax-withholding obligations**[220](index=220&type=chunk) - As of July 4, 2025, **$250.0 million** remains available under the **$300.0 million share repurchase plan authorized** on November 1, 2023[221](index=221&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults occurred on senior securities during the reporting period [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) Discloses information regarding Rule 10b5-1 trading arrangements by officers and directors [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the quarterly report on Form 10-Q [Signatures](index=48&type=section&id=Signatures) Contains the official certifications by the company's principal financial and accounting officers