Fox(US:FOXF)2024-10-31 20:08Financial 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]