Core Insights - Fox Factory Holding (FOXF) reported revenue of $359.12 million for Q3 2024, an 8.5% year-over-year increase, but fell short of the Zacks Consensus Estimate of $366.51 million by -2.02% [1] - The company's EPS for the quarter was $0.35, down from $1.05 a year ago, and also missed the consensus estimate of $0.42 by -16.67% [1] Revenue Performance - Net Sales for the Aftermarket Applications Group were $100.28 million, below the average estimate of $115.80 million [3] - Net Sales for the Powered Vehicles Group were $109.34 million, compared to the estimated $113.95 million, reflecting a year-over-year decline of -11.2% [3] - Net Sales for the Specialty Sports Group reached $149.50 million, exceeding the average estimate of $140.80 million, with a significant year-over-year increase of +107.6% [3] Stock Performance - Over the past month, shares of Fox Factory Holding have declined by -8.5%, while the Zacks S&P 500 composite decreased by -1% [4] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [4]

Financial Data and Key Metrics Changes - Total consolidated net sales for Q3 2024 were $359.1 million, an increase of 8.5% compared to $331.1 million in Q3 2023, driven by the Marucci acquisition and strength in the bike business [44] - Gross margin decreased to 29.9% in Q3 2024 from 32.4% in the same quarter last year, attributed to shifts in product line mix and reduced operating leverage on lower volumes [45] - Net income for Q3 2024 was $4.8 million or $0.11 per diluted share, down from $35.3 million or $0.83 per diluted share in Q3 2023 [47] Business Line Data and Key Metrics Changes - In the Powered Vehicle Group (PVG), net sales were $109 million, down from $123 million in the prior year quarter, reflecting reduced demand from OEM partners [20] - The Aftermarket Applications Group (AAG) reported net sales of $100 million, compared to $136 million in the prior year quarter, impacted by a leadership transition and inventory optimization efforts [27] - The Specialty Sports Group (SSG) saw net sales of $150 million, up from $72 million last year, primarily due to the inclusion of Marucci and growth in the bike business [33] Market Data and Key Metrics Changes - The automotive sector experienced a significant de-commitment from top OEM customers, resulting in a 19.5% drop in overall product sector within the quarter [22] - The power sports market faced challenges as OEM partners managed production below retail demand, consistent with previous quarters [23] - The European market showed relative strength due to better inventory positioning, while the U.S. market is progressing towards stabilization [36] Company Strategy and Development Direction - The company is focusing on four key initiatives: simplifying and consolidating its footprint, reducing non-performing products, reducing inventory, and cutting costs to improve margins [16] - Strategic expansion into the entry premium bike segment and continued growth in the e-bike category are seen as transformative opportunities [35] - The company aims to build and diversify AAG through new partnerships and expanding product offerings to enhance brand accessibility [30] Management's Comments on Operating Environment and Future Outlook - Management noted that ongoing quality issues and model year changeovers at automotive OEM partners have impacted chassis mix and availability, but these issues are beginning to abate [10][12] - The outlook for Q4 is tempered due to ongoing challenges in the retail environment, with expectations for flat performance in both bike and Marucci segments [52][54] - Management emphasized the importance of controlling costs and investing in innovation to drive future growth despite current market challenges [42][58] Other Important Information - The company executed three interest rate swaps to fix interest expenses for $400 million of its debt, reducing interest expense by $102,000 in Q3 [50] - The company is prioritizing debt paydown, having paid down an additional $25 million since the end of the quarter [51] Q&A Session Summary Question: Main obstacles for the company - Management clarified that quality issues are primarily with automotive OEMs, not within the company, and emphasized that demand remains the greater concern moving into 2025 [62] Question: Outlook for the bike segment - Management indicated that while Q3 showed good sequential growth, Q4 is expected to be softer due to seasonality and ongoing inventory issues [64] Question: SSG margin performance - Management explained that increased spending in preparation for MLB launches impacted SSG margins, despite year-over-year sales growth [66] Question: Marucci growth expectations - Management expressed confidence in Marucci's potential for double-digit growth in 2025, driven by product launches and new partnerships [79] Question: Upfitting business and channel inventories - Management noted that dealer inventories vary by brand, with some brands performing well while others, like Jeep, require more work to clear inventory [82] Question: Pricing environment with OEMs - Management stated that while there are requests for better pricing terms, overall pricing power remains stable, with a focus on driving innovation to maintain margins [84]

Core Viewpoint - Fox Factory Holding (FOXF) reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.42 per share, and down from $1.05 per share a year ago, indicating a significant earnings surprise of -16.67% [1][2] Financial Performance - The company posted revenues of $359.12 million for the quarter ended September 2024, which was 2.02% below the Zacks Consensus Estimate, compared to $331.12 million in the same quarter last 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 Performance - Fox Factory Holding shares have declined approximately 45.1% since the beginning of the year, contrasting with the S&P 500's gain of 21.9% [3] - The current Zacks Rank for the stock is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $383.5 million, and for the current fiscal year, it is $1.56 on revenues of $1.43 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock movements [6] Industry Context - The Automotive - Domestic industry, to which Fox Factory belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Sales Performance - For the three months ended September 27, 2024, net sales increased by $28.0 million, or 8.5%, to $359.1 million compared to $331.1 million for the same period in 2023[98]. - The increase in net sales was primarily due to $49.6 million in net sales from Marucci, acquired in November 2023, and a $27.9 million increase in bike sales[98]. - Specialty Sports Group net sales increased by $77.5 million, or 107.6%, primarily due to the inclusion of $49.6 million in net sales from Marucci, acquired in November 2023[113]. - Aftermarket Applications Group net sales decreased by $35.8 million, or 26.3%, due to lower upfitting sales and higher inventory levels at dealerships[112]. - Powered Vehicles Group net sales decreased by $60.3 million, or 14.9%, due to lower industry demand attributed to higher interest rates[128]. - Aftermarket Applications Group net sales decreased by $121.1 million, or 28.1%, driven by lower upfitting sales and higher inventory levels at dealerships[129]. - Specialty Sports Group net sales increased by $90.8 million, or 30.7%, primarily due to the inclusion of $150.8 million in net sales from Marucci[130]. - Consolidated net sales for the nine months ended September 27, 2024 were $1,041.1 million, a decrease of $90.6 million or 8.0% compared to $1,131.7 million for the same period in 2023[127]. Financial Performance - Cost of sales for the three months ended September 27, 2024, increased by $27.7 million, or 12.4%, to $251.6 million compared to $223.9 million for the same period in 2023[99]. - Gross margin decreased by 250 basis points to 29.9% for the three months ended September 27, 2024, compared to the same prior fiscal year period[99]. - Operating expenses for the three months ended September 27, 2024, totaled $65.9 million, compared to $65.0 million for the same period in 2023[96]. - Total operating expenses for the three months ended September 27, 2024 were $88.7 million, an increase of $22.8 million or 34.6% compared to $65.9 million for the three months ended September 29, 2023[100]. - Income from operations for the three months ended September 27, 2024, was $41.4 million, compared to $41.0 million for the same period in 2023[96]. - Income from operations decreased by $22.6 million, or 54.6%, to $18.8 million for the three months ended September 27, 2024, compared to $41.4 million for the same period in 2023[102]. - Net income for the three months ended September 27, 2024, was $35.3 million, compared to $35.0 million for the same period in 2023[96]. - Net income for the three months ended September 27, 2024 was $4.8 million, a decrease of $30.5 million or 86.4% from $35.3 million for the three months ended September 29, 2023[107]. - Total operating expenses for the nine months ended September 27, 2024 were $275.3 million, an increase of $51.6 million or 23.1% compared to $223.7 million for the nine months ended September 29, 2023[119]. - Net income for the nine months ended September 27, 2024 decreased by $110.1 million, or 94.3%, to $6.7 million from $116.8 million for the same period in 2023[125]. Research and Development - Research and development expenses increased to $8.9 million for the three months ended September 27, 2024, compared to $7.4 million for the same period in 2023[96]. - Research and development expenses for the three months ended September 27, 2024 increased by $7.2 million, or 80.9%, primarily due to personnel investments and a state research and development tax credit[100]. Debt and Interest - Interest expense increased by $10.7 million, or 305.7%, due to additional debt and higher interest rates for the three months ended September 27, 2024[103]. - Interest and other expense, net for the nine months ended September 27, 2024 increased by $29.8 million to $40.9 million, compared to $11.1 million for the same period in 2023, with interest expense rising by $30.0 million to $41.4 million due to additional debt and higher interest rates[122]. - As of September 27, 2024, the weighted-average interest rate on outstanding borrowing was 6.30%[140]. - The Company entered into a new credit agreement on April 5, 2022, providing for revolving loans and letters of credit up to $650.0 million[140]. - On November 14, 2023, the Company amended the 2022 Credit Facility, securing an Incremental Term A Loan of $400.0 million and a Delayed Draw Term Loan of $200.0 million[140]. - The Incremental Term Loans are subject to quarterly amortization payments of principal at a rate of 5.00% per annum[140]. - The Company paid $10.1 million in debt issuance costs related to the Incremental Term Loans[140]. - On July 31, 2024, the Company entered into the Third Amendment to the Credit Facility to improve its covenant profile for greater flexibility[141]. - The 2022 Credit Facility is secured by substantially all of the Company's assets and requires compliance with customary financial ratios[141]. - The Company was in compliance with the covenants as of September 27, 2024[141]. Economic Factors - The company continues to face headwinds from ongoing channel inventory recalibration and lower end consumer demand despite improved bike sales[98]. - Future growth may be impacted by macroeconomic factors, including inflation and interest rates, as well as supply chain dependencies[91]. - Significant increases in inflation could adversely impact the Company's business and financial condition[143]. - There have been no material changes to the Company's cash requirements or market risk disclosures since the last Annual Report[142][144]. Cash Flow - Net cash provided by operating activities for the nine months ended September 27, 2024 was $50.1 million, a decrease from $126.7 million for the same period in 2023[135]. - Net cash used in investing activities for the nine months ended September 27, 2024 was $42.5 million, significantly lower than $165.4 million for the same period in 2023[138]. - Net cash used in financing activities for the nine months ended September 27, 2024 was $1.7 million, compared to net cash provided of $16.2 million for the same period in 2023[139].

Financial Performance - Net sales for Q3 fiscal 2024 were $359.1 million, an 8.5% increase from $331.1 million in Q3 fiscal 2023[4] - Net income for Q3 fiscal 2024 was $4.8 million, a significant decline from $35.3 million in Q3 fiscal 2023, with diluted earnings per share dropping to $0.11 from $0.83[7] - Adjusted EBITDA for Q3 fiscal 2024 was $42.0 million, down from $63.7 million in Q3 fiscal 2023, with an adjusted EBITDA margin of 11.7%[7] - Net income for the three months ended September 27, 2024, was $4,780 million, down from $35,293 million in the same period last year, a decline of about 86.5%[27] - Adjusted net income for the nine months ended September 27, 2024, was $42,585,000, compared to $147,184,000 for the nine months ended September 29, 2023[31] - Adjusted EBITDA for the nine months ended September 27, 2024, was $126,577,000, down from $222,260,000 for the same period in 2023[36] - Adjusted earnings per share (EPS) for the nine months ended September 27, 2024, was $1.02, down from $3.46 for the same period in 2023[32] Revenue and Sales Growth - Bike revenues grew 21.9% sequentially and 38.7% year-over-year, contributing to a $77.5 million increase in Specialty Sports Group (SSG) sales[2] - AAG segment net sales decreased by 26.3% to $100.3 million due to lower upfitting sales and higher inventory levels[4] - Net sales for the three months ended September 27, 2024, were $359,121 million, an increase from $331,117 million for the same period in 2023, representing a growth of approximately 8.4%[27] Expenses and Margins - Gross margin decreased to 29.9%, down 250 basis points from 32.4% in Q3 fiscal 2023, primarily due to product mix shifts[5] - Total operating expenses increased to $88.7 million, or 24.7% of net sales, compared to $65.9 million, or 19.9% of net sales in the prior year[5] - Research and development expenses increased to $16,103 million for the three months ended September 27, 2024, compared to $8,904 million in the same period last year, reflecting a growth of approximately 80.5%[27] - Operating expenses for the three months ended September 27, 2024, increased to $88,677 from $65,862 in the prior year, leading to an operating expense as a percentage of net sales of 24.7% compared to 19.9%[42] Assets and Liabilities - Total current assets increased to $811,169 million as of September 27, 2024, compared to $768,055 million as of December 29, 2023, reflecting a growth of about 5.6%[25] - Total liabilities rose to $1,091,201 million as of September 27, 2024, from $1,020,537 million as of December 29, 2023, marking an increase of approximately 6.9%[25] - Total assets as of September 27, 2024, were $2,288,259 million, up from $2,242,298 million as of December 29, 2023, indicating an increase of about 2.0%[25] Strategic Actions and Future Outlook - The company executed $400 million in interest rate swap hedges to reduce interest expenses and enhance predictability[2] - The company initiated strategic actions in the AAG segment aimed at improving inventory position and expects over $25 million in annualized cost reductions[2] - The company anticipates future growth driven by the acquisition of Marucci and expects to improve operating efficiencies[45] - The company is focused on developing new and innovative products to expand into new categories and end-markets[45] Risks and Challenges - The company faces risks related to supply chain disruptions and the ability to maintain relationships with key suppliers and customers[45] - The company is committed to maintaining its premium brand image and high-performance products while navigating market uncertainties[45]

Financial Data and Key Metrics Changes - Total consolidated net sales for Q2 2024 were $348.5 million, a decrease of 13% compared to $400.7 million in Q2 2023 [28] - Adjusted net income was $15.9 million or $0.38 per diluted share, down from $51.4 million or $1.21 per diluted share in the same quarter last year [30] - Adjusted EBITDA was $44.1 million for Q2 2024, compared to $79.4 million in the same quarter last year, with an adjusted EBITDA margin of 12.7% [31] Business Line Data and Key Metrics Changes - In the Powered Vehicle Group (PVG), net sales were $118 million, down from $140 million in the prior year, primarily due to lower OEM demand [12] - In the Automotive sector, demand from major OEMs was mixed, with premium trucks remaining robust while broader OEM automotive space showed signs of excess inventory [13] - In the Aftermarket and Accessories Group (AAG), net sales were $107 million compared to $156 million in the prior year quarter, with growth in the component aftermarket portion [15] - In the Specialty Sports Group (SSG), net sales were $124 million, reflecting a $19 million increase driven by the inclusion of Marucci, despite a $23 million reduction in bike sales [17] Market Data and Key Metrics Changes - The bike segment saw a 52% sequential revenue increase, indicating stabilization as the channel destocking phase nears conclusion [9][17] - The European market continues to improve relative to the U.S. market, which remains in a state of transition towards stabilization [18] Company Strategy and Development Direction - Diversification across business segments, products, markets, and geographies is a key component of the company's long-term strategy to mitigate risk and enhance growth opportunities [8] - The company is focused on innovation and product development, particularly in the bike and aftermarket segments, to drive future growth [9][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic challenges but remains optimistic about sequential growth in the second half of the year, driven by new product launches and improving market conditions [24][36] - The company is adjusting its full-year guidance to reflect a more tempered sequential revenue lift in the second half, influenced by industry demand and quality challenges [23][34] Other Important Information - Leadership transitions were announced, with Dennis Schemm taking over as President of the AAG segment [10] - The company has secured an improved covenant profile on its capital structure to provide more flexibility amid uncertain macro conditions [33] Q&A Session Summary Question: Revised outlook and confidence in recovery - Management indicated that the revised outlook is primarily influenced by AAG and PVG, with SSG on track for the year [36] Question: Impact of quality issues and supply chain on automotive OEMs - Management clarified that demand is not the issue for premium products, but quality issues and supply chain challenges are significant factors [39] Question: Cost management initiatives - Management highlighted significant reductions in corporate operating expenses and actions taken to improve cost of goods sold [41] Question: Growth expectations for Marucci - Management expects strong double-digit growth for Marucci, projecting it to exceed $200 million for the year [49] Question: Future product launches and market conditions - Management confirmed that product launches are on track and that the company is optimistic about the trajectory of the bike segment [22][46]

For the quarter ended June 2024, Fox Factory Holding (FOXF) reported revenue of $348.49 million, down 13% over the same period last year. EPS came in at $0.38, compared to $1.21 in the year-ago quarter. The reported revenue represents a surprise of +0.55% over the Zacks Consensus Estimate of $346.58 million. With the consensus EPS estimate being $0.34, the EPS surprise was +11.76%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to de ...

Fox Factory Holding (FOXF) came out with quarterly earnings of $0.38 per share, beating the Zacks Consensus Estimate of $0.34 per share. This compares to earnings of $1.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 11.76%. A quarter ago, it was expected that this vehicle suspension maker would post earnings of $0.19 per share when it actually produced earnings of $0.29, delivering a surprise of 52.63%. Over the last four ...

Core Viewpoint - Hennessey Performance and Fox Factory have partnered to create a limited edition sport truck, the MAMMOTH 400, celebrating American independence with unique design elements and performance enhancements [1][8]. Company Overview - Hennessey Performance, based in Sealy, Texas, specializes in high-performance vehicle modifications and has re-engineered over 16,000 vehicles since its inception in 1991 [3][4]. - Fox Factory Holding Corp. is a global leader in premium product design and manufacturing for specialty sports and on- and off-road vehicles, known for its innovative shock and suspension systems [5]. Product Details - The MAMMOTH 400 will be limited to 250 units globally for 2024, featuring signature Hennessey badging and a serial-numbered engine plaque [2][8]. - Customers can choose from three color options: Viper Red, Viper White, and GTS Blue, each with heritage Viper Stripes [9][10]. - The truck is powered by a 5.7-liter HEMI V8 engine, delivering 420 horsepower, and features a FOX/Ridetech suspension system for improved handling [10]. Warranty and Availability - Each MAMMOTH 400 truck comes with a 3-year / 36,000-mile limited warranty and is available exclusively through authorized Chrysler, Dodge, Jeep, or RAM dealers [2][8].

Core Insights - Hennessey has partnered with FOX Factory to produce a limited edition of the 2024 RAM 1500 sport truck, named the MAMMOTH 400, with only 250 units available globally [3][5][9] - The MAMMOTH 400 features a 5.7-liter HEMI V8 engine, producing 420 horsepower, and is designed with a premium FOX and Ridetech suspension system for enhanced performance [4][9] - The truck is offered in three custom paint options: Viper Red, Viper White, and GTS Blue, each adorned with heritage Viper Stripes, reflecting Hennessey's historical ties to the Dodge SRT Viper community [9][10] Company Overview - Hennessey Performance, based in Sealy, Texas, has re-engineered over 16,000 vehicles for performance enthusiasts since its inception in 1991, focusing on high-performance upgrades across various vehicle types [6][12] - The company operates with a dedicated team of 100 members and has the capacity to work on approximately 50 vehicles simultaneously, making it a leading specialist in vehicle engineering [13] - Fox Factory Holding Corp. is recognized for its premium products that enhance performance for specialty sports and on- and off-road vehicles, with a diverse portfolio that includes brands like FOX and Method Race Wheels [13]