Fox Factory Holding Corp. (NASDAQ:FOXF) Q2 2021 Earnings Conference Call August 5, 2021 4:30 PM ET Company Participants Vivek Bhakuni - Director-Investor Relations & Business Development Mike Dennison - Chief Executive Officer Scott Humphrey - Chief Financial Officer & Treasurer Conference Call Participants Mike Swartz - Truist Securities Jim Duffy - Stifel Craig Kennison - Baird Anna Glaessgen - Jefferies Larry Solow - CJS Securities Scott Stember - CL King Operator Good afternoon, ladies and gentlemen and ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements and management's analysis for the reporting period [Financial Statements](index=3&type=section&id=Item%201%2E%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for Q2 2021, highlighting significant revenue and profitability growth [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Details the balance sheet as of July 2, 2021, showing increased assets from inventory and growth in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 2, 2021 | January 1, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $723,229 | $581,969 | | Inventory | $208,550 | $127,091 | | **Total Assets** | **$1,453,990** | **$1,286,561** | | **Total Current Liabilities** | $248,879 | $165,389 | | Accounts Payable | $154,089 | $92,403 | | **Total Liabilities** | **$649,621** | **$567,390** | | **Total Stockholders' Equity** | **$804,369** | **$719,171** | [Unaudited Condensed Consolidated Statements of Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Reports substantial year-over-year growth in sales and net income for the three and six months ended July 2, 2021 Income Statement Summary (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Sales | $328,164 | $183,102 | $609,300 | $367,463 | | Gross Profit | $111,088 | $59,986 | $209,012 | $116,601 | | Income from Operations | $52,723 | $19,359 | $98,579 | $30,926 | | Net Income Attributable to FOX Stockholders | $44,275 | $12,608 | $82,261 | $20,858 | | Diluted EPS | $1.05 | $0.32 | $1.94 | $0.53 | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Shows a significant increase in comprehensive income attributable to FOX stockholders for both the quarter and six-month periods Comprehensive Income Summary (in thousands) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $44,275 | $13,192 | $82,261 | $21,930 | | Other Comprehensive Income (Loss) | $131 | $923 | $1,752 | $(17) | | Comprehensive Income Attributable to FOX Stockholders | $44,406 | $13,531 | $84,013 | $20,841 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Details the increase in total stockholders' equity driven by net income, partially offset by stock repurchases - Total stockholders' equity grew to **$804.4 million** as of July 2, 2021, from **$719.2 million** as of January 1, 2021[21](index=21&type=chunk) - The increase in equity was primarily driven by net income of **$82.3 million** recognized during the first six months of 2021[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flow activities for the first six months of 2021, showing improved operating cash flow and significant investing and financing activities Cash Flow Summary for the Six Months Ended (in thousands) | Activity | July 2, 2021 | July 3, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81,690 | $5,689 | | Net cash used in investing activities | $(43,273) | $(361,992) | | Net cash (used in) provided by financing activities | $(9,616) | $530,773 | | Change in cash and cash equivalents | $29,212 | $174,229 | - The significant cash used in investing activities in 2020 was due to the acquisition of businesses for **$329.2 million**, primarily SCA[24](index=24&type=chunk) - The large cash inflow from financing activities in 2020 was driven by proceeds from debt issuance (**$392.4 million**) and sale of common stock (**$198.2 million**) to fund the SCA acquisition[24](index=24&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides crucial context to the financial statements, detailing accounting policies, revenue breakdown, acquisitions, debt, and legal contingencies Sales by Product Category for the Six Months Ended (in thousands) | Product Category | July 2, 2021 | July 3, 2020 | | :--- | :--- | :--- | | Powered Vehicles | $352,166 | $219,050 | | Specialty Sports | $257,134 | $148,413 | | **Total sales** | **$609,300** | **$367,463** | - On May 25, 2021, the Company acquired Outside Van for **$15.1 million**, and on May 21, 2021, it acquired Sola Sport Pty Ltd for **$0.5 million**[115](index=115&type=chunk)[117](index=117&type=chunk) - The company is engaged in ongoing patent infringement lawsuits with SRAM Corporation, vigorously defending itself against claims it believes are without merit, with an uncertain outcome[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes the company's financial performance for Q2 and the first half of 2021, highlighting sales growth, margin improvement, and liquidity [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Discusses the significant increase in Q2 2021 sales and gross margin, driven by strong demand and favorable product mix Q2 Sales Comparison (in millions) | Product Category | Q2 2021 | Q2 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Powered Vehicle products | $189.5 | $98.5 | $91.0 | 92.4% | | Specialty Sports products | $138.7 | $84.6 | $54.1 | 63.9% | | **Total sales** | **$328.2** | **$183.1** | **$145.1** | **79.2%** | - Q2 2021 gross margin increased to **33.9%** from **32.8%** in Q2 2020, driven by favorable product/channel mix and strong performance of upfitting product lines[134](index=134&type=chunk) - For the six months ended July 2, 2021, total sales grew **65.8%** to **$609.3 million**, and net income increased **275.8%** to **$82.3 million** compared to the prior year period[143](index=143&type=chunk)[155](index=155&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's liquidity sources, including operating cash flows and credit facility, and details cash flow activities Cash Flow Summary for the Six Months Ended (in thousands) | Activity | July 2, 2021 | July 3, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81,690 | $5,689 | | Net cash used in investing activities | $(43,273) | $(361,992) | | Net cash (used in) provided by financing activities | $(9,616) | $530,773 | - The company's Credit Facility provides a **$250.0 million** revolving line of credit and a **$400.0 million** term loan, maturing in March 2025, with compliance to all covenants as of July 2, 2021[167](index=167&type=chunk)[169](index=169&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that there have been no material changes to the company's market risk disclosures since its last Annual Report on Form 10-K - There have been no material changes to the disclosures regarding market risk since the company's last Annual Report on Form 10-K[173](index=173&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures as of July 2, 2021, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of July 2, 2021[175](index=175&type=chunk) - No changes to internal control over financial reporting were identified during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[176](index=176&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II%2E%20OTHER%20INFORMATION) Provides additional information including legal proceedings, risk factors, and equity security sales [Legal Proceedings](index=39&type=section&id=Item%201%2E%20Legal%20Proceedings) Details the ongoing patent infringement litigation with SRAM Corporation, noting the company's vigorous defense and uncertain outcome - The company is engaged in patent infringement lawsuits with SRAM Corporation, with cases pending in U.S. District Courts[178](index=178&type=chunk)[179](index=179&type=chunk) - In February 2021, the U.S. Patent and Trademark Appeals Board (PTAB) issued a favorable opinion for the company regarding SRAM's '027 Patent but an unfavorable one regarding the '250 Patent[178](index=178&type=chunk) - The company cannot predict the outcome or estimate potential losses, and no financial provision has been made for these legal matters[180](index=180&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A%2E%20Risk%20Factors) Outlines significant risks that could adversely affect the company's business, including operational, financial, and regulatory challenges [Risks Related to Our Business and Operations](index=42&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) Highlights operational risks such as pandemic impacts, intense competition, customer dependency, and supply chain vulnerabilities - The business is exposed to risks from global public health pandemics like COVID-19, which can disrupt demand, manufacturing, and supply chains[189](index=189&type=chunk) - The company's five largest OEM customers accounted for approximately **23%** of sales in fiscal 2020, creating a dependency on their success and purchasing decisions[218](index=218&type=chunk) - The company depends on a limited number of suppliers, including a sole-source supplier (Miyaki Corporation for Kashima coating), which creates supply chain risk[243](index=243&type=chunk)[246](index=246&type=chunk) [Risks Related to Our Indebtedness and Liquidity](index=54&type=section&id=Risks%20Related%20to%20Our%20Indebtedness%20and%20Liquidity) Discusses financial risks associated with the company's debt, including operating restrictions and vulnerability to interest rate increases - The Credit Facility contains covenants that restrict activities such as paying dividends, incurring additional debt, and making acquisitions[252](index=252&type=chunk) - As of July 2, 2021, the company had **$388.5 million** of indebtedness, with a significant portion at a variable interest rate, exposing it to interest rate fluctuations[255](index=255&type=chunk)[259](index=259&type=chunk) [Risks Related to Laws and Regulations](index=55&type=section&id=Risks%20Related%20to%20Laws%20and%20Regulations) Covers risks from legal and regulatory compliance, including extensive safety, environmental, and tax laws across multiple jurisdictions - The company is subject to extensive U.S. and international safety, environmental, and other government regulations that may require significant expense to maintain compliance[262](index=262&type=chunk) - Changes in tax laws, particularly in the U.S., or interpretations of existing laws could increase tax obligations and adversely affect net income and cash flows[261](index=261&type=chunk) - Compliance with SEC rules on conflict minerals requires ongoing due diligence and expense, and failure to comply could lead to reputational damage[273](index=273&type=chunk) [Risks Related to Ownership of Our Common Stock](index=58&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Outlines risks for stockholders, including stock price volatility, potential dilution, and anti-takeover provisions - The trading price of the common stock may be volatile due to variations in operating results, analyst recommendations, and general market conditions[278](index=278&type=chunk) - Anti-takeover provisions, including a classified board and restrictions under Delaware law (Section 203), could discourage or prevent a change in control[285](index=285&type=chunk)[287](index=287&type=chunk) - The company's charter designates the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder lawsuits, potentially limiting favorable judicial forums for stockholders[288](index=288&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on the repurchase of common stock during the quarter to satisfy tax-withholding obligations from restricted stock unit awards Issuer Purchases of Equity Securities (Q2 2021) | Period | Total Number of Shares Purchased | Weighted-average Price Paid per Share | | :--- | :--- | :--- | | 4/3 - 5/7 | 29,094 | $153.25 | | 5/8 - 6/4 | — | $ — | | 6/5 - 7/2 | 9,113 | $156.28 | | **Total** | **38,207** | **$153.97** | - All repurchased shares were acquired from holders of restricted stock unit awards to satisfy tax-withholding obligations[291](index=291&type=chunk) [Defaults Upon Senior Securities](index=61&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) States that there were no defaults upon senior securities during the reporting period - None[292](index=292&type=chunk) [Mine Safety Disclosures](index=61&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) Indicates that this item is not applicable to the company's operations - Not applicable[293](index=293&type=chunk) [Other Information](index=61&type=section&id=Item%205%2E%20Other%20Information) Reports no information for this item - None[294](index=294&type=chunk) [Exhibits](index=62&type=section&id=Item%206%2E%20Exhibits) Lists the exhibits filed with the Form 10-Q, including credit facility amendments and required certifications - Key exhibits filed with this report include the Second Amendment to the Amended and Restated Credit Facility and certifications from the CEO and CFO pursuant to Sarbanes-Oxley Sections 302 and 906[296](index=296&type=chunk)

Fox Factory Holding Corp. (NASDAQ:FOXF) Q1 2021 Earnings Conference Call May 6, 2021 4:30 PM ET Company Participants Vivek Bhakuni – Director of Investor Relations and Business Development Mike Dennison – Chief Executive Officer Scott Humphrey – Chief Financial Officer and Treasurer. Conference Call Participants Larry Solow – CJS Securities Rafe Jadrosich – Bank of America Mike Swartz – Truist Securities Jim Duffy – Stifel Scott Stember – CL King Anna Glaessgen – Jefferies Craig Kennison – Baird Operator Go ...

Table of Contents Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36040 Fox Factory Holding Corp. UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Exact Name of Registrant as Specified in Its Charter) (State or O ...

Fox Factory Holding Corp. (NASDAQ:FOXF) Q4 2020 Earnings Conference Call February 25, 2021 4:30 PM ET Company Participants Vivek Bhakuni - Director, Investor Relations and Business Development Mike Dennison - Chief Executive Officer Scott Humphrey - Chief Financial Officer and Treasurer Conference Call Participants Larry Solow - CJS Securities Jim Duffy - Stifel Mike Swartz - Truist Securities Scott Stember - CL King Rudy Yang - Berenberg Operator Good afternoon, ladies and gentlemen and thank you for stand ...

Fox Factory Holding Corp. (NASDAQ:FOXF) Q3 2020 Results Earnings Conference Call November 10, 2020 4:30 PM ET Company Participants David Haugen - Vice President, General Counsel and Secretary Mike Dennison - Chief Executive Officer Scott Humphrey - Chief Financial Officer Conference Call Participants Jim Duffy - Stifel Lawrence Solow - CJS Securities Michael Swartz - SunTrust Scott Stember - CL. King Craig Kennison - Baird Alex Maroccia - Berenberg Capital Markets Ryan Sundby - William Blair Operator Greeti ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 2, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36040 Fox Factory Holding Corp. (Exact Name of Registrant as Specified in Its Charter) (State or ...

Fox Factory Holding Corp. (NASDAQ:FOXF) Q2 2020 Earnings Conference Call August 5, 2020 4:30 PM ET Company Participants David Haugen - Vice President, General Counsel and Secretary Mike Dennison - Chief Executive Officer Scott Humphrey - Chief Financial Officer Conference Call Participants Lawrence Solow - CJS Securities, Inc. Michael Swartz - Truist Securities Scott Stember - CL King & Associates, Inc. Rafe Jadrosich - Bank of America Merrill Lynch Jim Duffy - Stifel Alex Maroccia - Berenberg Capital Marke ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 3, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36040 Fox Factory Holding Corp. (Exact Name of Registrant as Specified in Its Charter) Delaware 26- ...

Financial Data and Key Metrics Changes - In Q1 2020, the company generated sales of $184.4 million, a 14% increase compared to $161.7 million in Q1 2019 [21][36] - Gross margin was 30.7%, a decrease of 90 basis points from 31.6% in the prior year [37] - Non-GAAP adjusted net income was $20.5 million, a decrease of approximately $1.1 million compared to $21.6 million in Q1 2019 [44] - The effective tax rate for Q1 2020 was 9.5%, lower than the expected mid- to long-term rate due to a reduction of foreign tax [42] Business Line Data and Key Metrics Changes - Powered Vehicles Group product sales increased by 24.6% compared to Q1 2019, driven by strong OEM channel performance prior to the pandemic [21] - Specialty Sports Group sales decreased by 1.8% compared to the prior year, reflecting a shift in timing of OEM orders [22] - The Specialty Sports Group's model year 2021 introductions have been well received, indicating potential for future growth despite a slight decline in Q1 [23] Market Data and Key Metrics Changes - The company experienced a temporary slowdown in the Powered Vehicles Group due to OEM customer closures, while aftermarket sales remained strong [19][60] - In April, OEMs were shut down in the U.S., impacting Powered Vehicles Group results, but the Specialty Sports Group functioned in a more normalized production environment [24][60] Company Strategy and Development Direction - The company is focused on expanding its powered vehicles manufacturing footprint in Georgia, with the first phase of the new facility set to be operational soon [20][29] - The acquisition of SCA is expected to enhance the company's North American manufacturing footprint and diversify its brand and product portfolio [30][31] - The company remains optimistic about growth opportunities as North America and Europe begin to reopen their economies [29] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of employee health and safety while navigating the challenges posed by the COVID-19 pandemic [9][52] - The company believes that the issues faced are transitory and not indicative of a long-term demand problem [27] - There is an expectation of pent-up demand for powered vehicles as the economy reopens, although the exact timing remains uncertain [101] Other Important Information - The company incurred approximately $1.8 million in COVID-19-related costs in Q1, which impacted gross profit results [11][37] - The company has taken measures to manage costs, including reducing nonessential operating expenses and furloughing employees [48][49] - The company has a $250 million revolving credit facility, providing financial flexibility moving forward [50] Q&A Session Summary Question: Impact of COVID-19 on Powered Vehicle Sales - Management noted that while end-customer demand remained strong, factory shutdowns significantly impacted sales in April [58][60] Question: Resilience of Customers During Economic Slowdown - Management indicated that the current situation is a pandemic response rather than a recessionary one, and end-customer demand has remained strong [64][66] Question: Annualized Benefit from Cost-Cutting Measures - Management stated that it is difficult to specify the annualized benefit from cost-cutting measures due to the variability in furlough durations and production ramp-up [70][74] Question: Retail Demand and Lead Times - Management confirmed that the order book was strong going into Q2, reflecting good visibility into demand for model year 2021 products [101] Question: Aftermarket Trends - Management reported that aftermarket demand for bikes remained strong, while powered vehicle aftermarket sales were impacted by installer availability [90][91]