Fox Factory Holding Corp. Reports Fourth Quarter Fiscal 2024 Financial Results

Core Viewpoint - Fox Factory Holding Corp. reported financial results for the fourth fiscal quarter ended January 3, 2025, highlighting a mixed performance across its segments amid challenging market conditions [1][3]. Financial Performance - Net sales for Q4 fiscal 2024 were $352.8 million, a 6.1% increase from$ 332.5 million in Q4 fiscal 2023, driven by a 33.3% increase in Specialty Sports Group (SSG) sales [4][6]. - The SSG segment's sales rose from $93.4 million to$ 124.5 million, largely due to the acquisition of Marucci, which contributed $41.5 million in sales for the full quarter [4][11]. - Aftermarket Applications Group (AAG) sales decreased by 7.1% to$ 112.2 million, while Powered Vehicles Group (PVG) sales fell by 1.8% to $116.2 million due to lower industry demand [4][11]. Margins and Earnings - Gross margin for Q4 fiscal 2024 was 28.9%, up 120 basis points from 27.7% in Q4 fiscal 2023, primarily due to the amortization of acquired inventory valuation markup from the Marucci acquisition [5][6]. - Adjusted gross margin increased by 20 basis points to 29.2% compared to the prior year [5][6]. - The company reported a net loss of$ 0.1 million for Q4 fiscal 2024, compared to a net income of $4.1 million in the same period last year, with adjusted earnings per diluted share at$ 0.31 [9][14]. Operating Expenses - Total operating expenses for Q4 fiscal 2024 were $90.6 million, or 25.7% of net sales, compared to$ 81.0 million, or 24.4% of net sales in Q4 fiscal 2023 [7][13]. - Adjusted operating expenses were $76.4 million, or 21.7% of net sales, up from$ 68.5 million, or 20.6% of net sales in the prior year [7][13]. Yearly Overview - For the fiscal year ended January 3, 2025, net sales were $1,393.9 million, a decrease of 4.8% compared to fiscal 2023, with significant declines in AAG and PVG sales [11][14]. - Gross margin for fiscal 2024 was 30.4%, down 130 basis points from 31.7% in fiscal 2023, attributed to shifts in product line mix and operating leverage on lower volume [12][14]. - Adjusted EBITDA for fiscal 2024 decreased to$ 167.0 million, with an adjusted EBITDA margin of 12.0%, down from 17.8% in fiscal 2023 [15][15]. Balance Sheet and Cash Flow - As of January 3, 2025, the company had cash and cash equivalents of $71.7 million, down from$ 83.6 million at the end of the previous quarter, with total debt reduced to $705.1 million [17][17]. - Working capital improvements allowed the company to pay down$ 63 million in debt during Q4 fiscal 2024 [3][17]. Guidance - For Q1 fiscal 2025, the company expects net sales between $320 million and$ 350 million, with adjusted earnings per diluted share ranging from $0.12 to$ 0.32 [18][19]. - For the full fiscal year 2025, net sales are projected to be between $1.385 billion and$ 1.485 billion, with adjusted earnings per diluted share expected to range from $1.60 to$ 2.60 [18][19].