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Fox Factory Holding Corp. Announces Second Quarter Fiscal 2022 Financial Results

Achieves Record Quarterly Sales of $406.7 Million

Reports Record Earnings per Diluted Share of $1.26 and Non-GAAP Adjusted Earnings per Diluted Share of $1.38

DULUTH, Ga., Aug. 04, 2022 (GLOBE NEWSWIRE) -- Fox Factory Holding Corp. (NASDAQ: FOXF) (“FOX” or the “Company”) today reported financial results for the second quarter ended July 1, 2022.

Second Quarter Fiscal 2022 Highlights

  • Sales increased 23.9% to $406.7 million, compared to $328.2 million in the same period last fiscal year
  • Gross profit increased 28.7% to $142.9 million, compared to $111.1 million in the same period last fiscal year. Gross margin percentage increased 120 basis points to 35.1%, compared to 33.9% in the same period last fiscal year; non-GAAP adjusted gross margin percentage increased 120 basis points to 35.3% compared to 34.1% in the same period last fiscal year
  • Net income was $53.5 million, or 13.2% of sales and $1.26 of earnings per diluted share, compared to $44.3 million, or 13.5% of sales and $1.05 of earnings per diluted share in the same period last fiscal year
  • Non-GAAP adjusted net income was $58.6 million, or $1.38 of non-GAAP adjusted earnings per diluted share, compared to $51.0 million, or $1.20 of non-GAAP adjusted earnings per diluted share in the same period last fiscal year
  • Adjusted EBITDA was $88.1 million, or 21.7% of sales, compared to $69.7 million, or 21.2% of sales in the same period last fiscal year

"We are pleased to report another quarter of record revenue and profitability in an increasingly complex and challenging macro business environment. Not only did we surpass the $400.0 million quarterly revenue mark for the first time, but we also delivered record gross margin, EBITDA, and net income," commented Mike Dennison, FOX’s Chief Executive Officer. “We are still seeing healthy demand across most of our diversified portfolio for the balance of the year. However, the ongoing macroeconomic and geopolitical volatility have caused us to slow both hiring and spending in an effort to stay in front of what will most likely be turbulent months ahead."

Sales for the second quarter of fiscal 2022 were $406.7 million, an increase of 23.9% as compared to sales of $328.2 million in the second quarter of fiscal 2021. This increase reflects a 28.1% increase in Specialty Sports Group sales and a 20.9% increase in Powered Vehicles Group sales. The increase in Specialty Sports Group sales is driven by continued strong demand in the original equipment manufacturer ("OEM") channel. The increase in Powered Vehicles Group sales is primarily due to strong performance in our upfitting product lines.

Gross margin was 35.1% for the second quarter of fiscal 2022, a 120 basis point increase from gross margin of 33.9% in the second quarter of fiscal 2021. Non-GAAP adjusted gross margin increased 120 basis points to 35.3% from the same prior fiscal year period, excluding the effects of strategic transformation costs. The increase in gross margin was primarily driven by favorable product mix and improved factory efficiencies. A reconciliation of gross profit to non-GAAP adjusted gross profit and the resulting non-GAAP adjusted gross margin is provided at the end of this press release.

Total operating expenses were $72.5 million for the second quarter of fiscal 2022, compared to $58.4 million in the second quarter of fiscal 2021. Operating expenses increased by $14.1 million primarily due to higher employee related costs, higher insurance and facility-related expenses, and higher commission costs. As a percentage of sales, operating expenses for the second quarter of fiscal 2022 remained unchanged at 17.8%, when compared to the second quarter of fiscal 2021. Non-GAAP operating expenses were $66.5 million, or 16.3% of sales in the second quarter of fiscal 2022, compared to $51.4 million, or 15.7% of sales, in the second quarter of the prior fiscal year. Reconciliations of operating expense to non-GAAP operating expense are provided at the end of this press release.

The Company’s effective tax rate was 18.9% in the second quarter of fiscal 2022, compared to 13.3% in the second quarter of fiscal 2021. The increase in the Company’s effective tax rate was primarily due to the impact of recently finalized U.S. tax regulations which limit the amount of newly generated foreign taxes that are creditable against U.S. income taxes and resulted in an increase in the impact of foreign withholding taxes, net of foreign tax credits; as well as decreased benefits from the effects of stock-based compensation. These increases were partially offset by a lower tax rate on foreign derived intangible income.

Net income in the second quarter of fiscal 2022 was $53.5 million, compared to $44.3 million in the second quarter of the prior fiscal year. Earnings per diluted share for the second quarter of fiscal 2022 were $1.26, compared to earnings per diluted share of $1.05 for the second quarter of fiscal 2021.

Non-GAAP adjusted net income in the second quarter of fiscal 2022 was $58.6 million, or $1.38 of adjusted earnings per diluted share, compared to adjusted net income of $51.0 million, or $1.20 of adjusted earnings per diluted share, in the same period of the prior fiscal year. Reconciliations of net income as compared to non-GAAP adjusted net income and the calculation of non-GAAP adjusted earnings per diluted share are provided at the end of this press release.

Adjusted EBITDA in the second quarter of fiscal 2022 was $88.1 million, compared to $69.7 million in the second quarter of fiscal 2021. Adjusted EBITDA margin in the second quarter of fiscal 2022 was 21.7%, compared to 21.2% in the second quarter of fiscal 2021. Reconciliations of net income to adjusted EBITDA and the calculation of adjusted EBITDA margin are provided at the end of this press release.

First Six Months Fiscal 2022 Results

Sales for the six months ended July 1, 2022 were $784.7 million, an increase of 28.8% compared to the first six months in fiscal 2021. Sales of Specialty Sports and Powered Vehicle products increased 35.2% and 24.1%, respectively, for the first six months of fiscal 2022 compared to the prior year fiscal period.

Gross margin was 33.5% in the first six months of fiscal 2022, a 80 basis point decrease, compared to gross margin of 34.3% in the first six months of fiscal 2021. On a non-GAAP basis, adjusted gross margin was 33.8% in the first six months of fiscal 2022, a 70 basis point decrease, compared to 34.5% in the first six months of fiscal 2021, excluding the effects of strategic transformation costs. The decrease in gross margin for the first six months of fiscal 2022 was primarily driven by continued increases in supply chain related costs, including increased prices for raw materials and freight. Additionally, the completion of the planned shutdown of our Watsonville, California facility and transition of those production lines resulted in inefficiencies as we ramp up our Gainesville, Georgia facility. A reconciliation of gross profit to non-GAAP adjusted gross profit and the resulting non-GAAP adjusted gross margin is provided at the end of this press release.

Net income attributable to FOX stockholders in the first six months of fiscal 2022 was $101.5 million, compared to $82.3 million in the first six months of the prior fiscal year. Earnings per diluted share for the first six months of fiscal 2022 was $2.40, compared to $1.94 in the same period of fiscal 2021.

Non-GAAP adjusted net income in the first six months of fiscal 2022 was $114.4 million, or $2.70 of adjusted earnings per diluted share, compared to $95.5 million, or $2.25 of adjusted earnings per diluted share in the same period of the prior fiscal year. Reconciliations of net income attributable to FOX stockholders to non-GAAP adjusted net income and the calculation of non-GAAP adjusted earnings per share are provided at the end of this press release.

Adjusted EBITDA increased to $159.9 million in the first six months of fiscal 2022, compared to $130.1 million in the first six months of fiscal 2021. Adjusted EBITDA margin decreased to 20.4% in the first six months of fiscal 2022, compared to 21.3% in the first six months of fiscal 2021. Reconciliations of net income to adjusted EBITDA and the calculation of non-GAAP adjusted EBITDA margin are provided at the end of this press release.

Balance Sheet Highlights

As of July 1, 2022, the Company had cash and cash equivalents of $108.6 million compared to $179.7 million as of December 31, 2021. Inventory was $349.1 million as of July 1, 2022, compared to $279.8 million as of December 31, 2021. As of July 1, 2022, accounts receivable and accounts payable were $195.4 million and $161.6 million, respectively, compared to $142.0 million and $100.0 million, respectively, as of December 31, 2021. Prepaids and other current assets were $267.7 million as of July 1, 2022, compared to $123.1 million as of December 31, 2021. The decrease in cash and cash equivalents and increase in prepaids and other assets are primarily due to increased chassis deposits as we work to secure supply for the remainder of the year for our upfitting business. The increase in inventory is due to several factors, including receipt of long lead time items that had been delayed, higher levels of safety stock to mitigate uncertainty, and natural growth to meet anticipated demand. The increases in accounts receivable and accounts payable reflect business growth as well as the timing of vendor payments. Total debt was $410.0 million as of July 1, 2022, compared to $378.5 million as of December 31, 2021, due to increases in working capital.

Fiscal 2022 Guidance

For the third quarter of fiscal 2022, the Company expects sales in the range of $385 million to $405 million and non-GAAP adjusted earnings per diluted share in the range of $1.15 to $1.35.

For the fiscal year 2022, the Company expects sales in the range of $1,535 million to $1,565 million and non-GAAP adjusted earnings per diluted share in the range of $5.00 to $5.30. For purposes of our fiscal 2022 guidance, we expect our full year effective tax rate to be within the range of 11% to 15%.

Non-GAAP adjusted earnings per diluted share exclude the following items net of applicable tax: amortization of purchased intangibles, patent litigation-related expenses, acquisition and integration-related expenses, and strategic transformation costs. A quantitative reconciliation of non-GAAP adjusted earnings per diluted share for the third quarter and full fiscal year 2022 is not available without unreasonable efforts because management cannot predict, with sufficient certainty, all of the elements necessary to provide such a reconciliation.

Conference Call & Webcast

The Company will hold an investor conference call today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call dial-in number for North America listeners is (800) 459-5346, and international listeners may dial (203) 518-9544; the conference ID is FOXFQ222 or 36937222. Live audio of the conference call will be simultaneously webcast in the Investor Relations section of the Company's website at http://www.ridefox.com. The webcast of the teleconference will be archived and available on the Company’s website.

About Fox Factory Holding Corp. (NASDAQ: FOXF)

Fox Factory Holding Corp. designs and manufactures performance-defining ride dynamics products primarily for bicycles, on-road and off-road vehicles and trucks, side-by-side vehicles, all-terrain vehicles, snowmobiles, specialty vehicles and applications, motorcycles, and commercial trucks. The Company is a direct supplier to leading powered vehicle OEMs. Additionally, the Company supplies top bicycle OEMs and their contract manufacturers, and provides aftermarket products to retailers and distributors.

FOX is a registered trademark of Fox Factory, Inc. NASDAQ Global Select Market is a registered trademark of The NASDAQ OMX Group, Inc. All rights reserved.

Non-GAAP Financial Measures

In addition to reporting financial measures in accordance with generally accepted accounting principles (“GAAP”), FOX is including in this press release “non-GAAP adjusted gross profit,” “non-GAAP adjusted gross margin,” “non-GAAP operating expense,” “non-GAAP adjusted net income,” “non-GAAP adjusted earnings per diluted share,” “adjusted EBITDA,” and “adjusted EBITDA margin,” all of which are non-GAAP financial measures. FOX defines non-GAAP adjusted gross profit as gross profit margin adjusted for certain strategic transformation costs. Non-GAAP adjusted gross margin is defined as non-GAAP adjusted gross profit divided by total sales. FOX defines non-GAAP operating expense as operating expense adjusted for amortization of purchased intangibles, patent litigation-related expenses, acquisition and integration-related expenses, and strategic transformation costs. FOX defines non-GAAP adjusted net income as net income adjusted for amortization of purchased intangibles, patent litigation-related expenses, acquisition and integration-related expenses, and strategic transformation costs, all net of applicable tax. These adjustments are more fully described in the tables included at the end of this press release. Non-GAAP adjusted earnings per diluted share is defined as non-GAAP adjusted net income divided by the weighted average number of diluted shares of common stock outstanding during the period. FOX defines adjusted EBITDA as net income adjusted for interest expense, net other expense, income taxes, amortization of purchased intangibles, depreciation, stock-based compensation, patent litigation-related expenses, acquisition and integration-related expenses, and strategic transformation costs that are more fully described in the tables included at the end of this press release. Adjusted EBITDA margin is defined as adjusted EBITDA divided by sales.

FOX includes these non-GAAP financial measures because it believes they allow investors to understand and evaluate the Company’s core operating performance and trends. In particular, the exclusion of certain items in calculating non-GAAP adjusted gross profit, non-GAAP operating expense, non-GAAP adjusted net income and adjusted EBITDA (and accordingly, non-GAAP adjusted gross margin, non-GAAP adjusted earnings per diluted share and adjusted EBITDA margin) can provide a useful measure for period-to-period comparisons of the Company’s core business. These non-GAAP financial measures have limitations as analytical tools, including the fact that such non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies because other companies may calculate non-GAAP adjusted gross profit, non-GAAP adjusted gross margin, non-GAAP operating expense, non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, adjusted EBITDA and adjusted EBITDA margin differently than FOX does. For more information regarding these non-GAAP financial measures, see the tables included at the end of this press release.

FOX FACTORY HOLDING CORP.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)

  As of   As of
  July 1,   December 31
    2022       2021  
       
  (unaudited)    
Assets      
Current assets:      
Cash and cash equivalents $ 108,637     $ 179,686  
Accounts receivable (net of allowances of $322 and $410 at July 1, 2022 and December 31, 2021, respectively)   195,449       142,040  
Inventory   349,050       279,837  
Prepaids and other current assets   267,723       123,107  
Total current assets   920,859       724,670  
Property, plant and equipment, net   194,601       192,003  
Lease right-of-use assets   42,606       38,752  
Deferred tax assets   44,176       34,998  
Goodwill   323,965       323,299  
Intangibles, net   186,074       197,021  
Other assets   5,942       4,986  
Total assets $ 1,718,223     $ 1,515,729  
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 161,614     $ 99,984  
Accrued expenses   110,846       112,378  
Current portion of long-term debt         17,500  
Total current liabilities   272,460       229,862  
Line of credit   410,000        
Long-term debt, less current portion         360,953  
Other liabilities   33,836       30,832  
Total liabilities   716,296       621,647  
Stockholders’ equity      
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of July 1, 2022 and December 31, 2021          
Common stock, $0.001 par value — 90,000 authorized; 43,153 shares issued and 42,263 outstanding as of July 1, 2022; 43,010 shares issued and 42,120 outstanding as of December 31, 2021   42       42  
Additional paid-in capital   347,439       344,119  
Treasury stock, at cost; 890 common shares as of July 1, 2022 and December 31, 2021   (13,754 )     (13,754 )
Accumulated other comprehensive income   7,853       4,876  
Retained earnings   660,347       558,799  
Total stockholders’ equity   1,001,927       894,082  
Total liabilities and stockholders’ equity $ 1,718,223     $ 1,515,729  

FOX FACTORY HOLDING CORP.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited) 

  For the three months ended   For the six months ended
  July 1,   July 2,   July 1,   July 2,
  2022   2021   2022   2021
Sales $ 406,705   $ 328,164   $ 784,682   $ 609,300
Cost of sales   263,761     217,076     521,478     400,288
Gross profit   142,944     111,088     263,204     209,012
Operating expenses:              
Sales and marketing   24,175     17,840     46,764     34,698
Research and development   14,214     11,216     26,856     21,092
General and administrative   28,444     24,226     54,011     44,595
Amortization of purchased intangibles   5,636     5,083     10,943     10,048
Total operating expenses   72,469     58,365     138,574     110,433
Income from operations   70,475     52,723     124,630     98,579
Interest and other expense, net:              
Interest expense   1,697     1,598     3,674     4,502
Other expense, net   2,816     83     4,508     1,042
Interest and other expense, net   4,513     1,681     8,182     5,544
Income before income taxes   65,962     51,042     116,448     93,035
Provision for income taxes   12,464     6,767     14,900     10,774
Net income $ 53,498   $ 44,275   $ 101,548   $ 82,261
Earnings per share:              
Basic $ 1.27   $ 1.05   $ 2.41   $ 1.96
Diluted $ 1.26   $ 1.05   $ 2.40   $ 1.94
Weighted-average shares used to compute earnings per share:              
Basic   42,218     42,028     42,181     41,940
Diluted   42,352     42,367     42,367     42,355

FOX FACTORY HOLDING CORP.
NET INCOME TO NON-GAAP ADJUSTED NET INCOME RECONCILIATION
AND CALCULATION OF NON-GAAP ADJUSTED EARNINGS PER SHARE
(In thousands, except per share data)
(Unaudited)

The following table provides a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to non-GAAP adjusted net income (a non-GAAP measure), and the calculation of non-GAAP adjusted earnings per share (a non-GAAP measure) for the three and six months ended July 1, 2022 and July 2, 2021. These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.

  For the three months ended   For the six months ended
  July 1,   July 2,   July 1,   July 2,
    2022       2021       2022       2021  
Net income $ 53,498     $ 44,275     $ 101,548     $ 82,261  
Amortization of purchased intangibles   5,636       5,083       10,943       10,048  
Patent litigation-related expenses   132       158       201       468  
Other acquisition and integration-related expenses (1)   210       1,737       1,298       3,152  
Strategic transformation costs (2)   663       781       2,339       1,289  
Tax impacts of reconciling items above (3)   (1,498 )     (1,045 )     (1,891 )     (1,732 )
Non-GAAP adjusted net income $ 58,641     $ 50,989     $ 114,438     $ 95,486  
               
Non-GAAP adjusted EPS              
Basic $ 1.39     $ 1.21     $ 2.71     $ 2.28  
Diluted $ 1.38     $ 1.20     $ 2.70     $ 2.25  
               
Weighted average shares used to compute non-GAAP adjusted EPS              
Basic   42,218       42,028       42,181       41,940  
Diluted   42,352       42,367       42,367       42,355  

(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations.

(2) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations. For the three and six month periods ended July 1, 2022, $663 and $2,339 is classified as costs of sales, respectively. For the three and six month periods ended July 2, 2021, $781 and $1,289 is classified as cost of sales, respectively.

(3) Tax impact calculated based on the respective year to date effective tax rate.

FOX FACTORY HOLDING CORP.
NET INCOME TO ADJUSTED EBITDA RECONCILIATION AND
CALCULATION OF NET INCOME MARGIN AND ADJUSTED EBITDA MARGIN
(In thousands)
(Unaudited)

The following tables provide a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to adjusted EBITDA (a non-GAAP measure), and the calculations of net income margin and adjusted EBITDA margin (a non-GAAP measure) for the three and six months ended July 1, 2022 and July 2, 2021. These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.

  For the three months ended   For the six months ended
  July 1,   July 2,   July 1,   July 2,
    2022       2021       2022       2021  
Net income $ 53,498     $ 44,275     $ 101,548     $ 82,261  
Provision for income taxes   12,464       6,767       14,900       10,774  
Depreciation and amortization   12,563       11,062       24,410       21,031  
Non-cash stock-based compensation   4,061       3,374       7,090       5,868  
Patent litigation-related expenses   132       158       201       468  
Other acquisition and integration-related expenses (1)   210       1,576       1,184       2,831  
Strategic transformation costs (2)   663       781       2,339       1,289  
Interest and other expense, net   4,513       1,681       8,182       5,544  
Adjusted EBITDA $ 88,104     $ 69,674     $ 159,854     $ 130,066  
               
Net Income Margin   13.2 %     13.5 %     12.9 %     13.5 %
               
Adjusted EBITDA Margin   21.7 %     21.2 %     20.4 %     21.3 %

(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations, excluding $114 in stock-based compensation for the six month period ended July 1, 2022, and $161 and $321 of stock-based compensation for the three and six month periods ended July 2, 2021, respectively.

(2) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations. For the three and six month periods ended July 1, 2022, $663 and $2,339 is classified as costs of sales, respectively. For the three and six month periods ended July 2, 2021, $781 and $1,289 is classified as cost of sales, respectively.

FOX FACTORY HOLDING CORP.
GROSS PROFIT TO NON-GAAP ADJUSTED GROSS PROFIT RECONCILIATION AND
CALCULATION OF GROSS MARGIN AND NON-GAAP ADJUSTED GROSS MARGIN
(In thousands)
(Unaudited)

The following table provides a reconciliation of gross profit to non-GAAP adjusted gross profit (a non-GAAP measure) for the three and six months ended July 1, 2022 and July 2, 2021, and the calculation of gross margin and non-GAAP adjusted gross margin (a non-GAAP measure). These non-GAAP financial measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.

  For the three months ended   For the six months ended
  July 1,   July 2,   July 1,   July 2,
    2022       2021       2022       2021  
Sales $ 406,705     $ 328,164     $ 784,682     $ 609,300  
               
Gross Profit $ 142,944     $ 111,088     $ 263,204     $ 209,012  
Strategic transformation costs (1)   663       781       2,339       1,289  
Non-GAAP Adjusted Gross Profit $ 143,607     $ 111,869     $ 265,543     $ 210,301  
               
Gross Margin   35.1 %     33.9 %     33.5 %     34.3 %
               
Non-GAAP Adjusted Gross Margin   35.3 %     34.1 %     33.8 %     34.5 %

(1) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations.

FOX FACTORY HOLDING CORP.
OPERATING EXPENSE TO NON-GAAP OPERATING EXPENSE RECONCILIATION AND
CALCULATION OF OPERATING EXPENSE AND NON-GAAP OPERATING EXPENSE AS A PERCENTAGE OF SALES
(In thousands)
(Unaudited)

The following tables provide a reconciliation of operating expense to non-GAAP operating expense (a non-GAAP measure) and the calculations of operating expense as a percentage of sales and non-GAAP operating expense as a percentage of sales (a non-GAAP measure), for the three and six months ended July 1, 2022 and July 2, 2021. These non-GAAP financial measures are provided in addition to, and not as an alternative for, the Company’s reported GAAP results.

  For the three months ended   For the six months ended
  July 1,   July 2,   July 1,   July 2,
    2022       2021       2022       2021  
Sales $ 406,705     $ 328,164     $ 784,682     $ 609,300  
               
Operating Expense $ 72,469     $ 58,365     $ 138,574     $ 110,433  
Amortization of purchased intangibles   (5,636 )     (5,083 )     (10,943 )     (10,048 )
Patent litigation-related expenses   (132 )     (158 )     (201 )     (468 )
Other acquisition and integration-related expenses (1)   (210 )     (1,737 )     (1,298 )     (3,152 )
Non-GAAP operating expense $ 66,491     $ 51,387     $ 126,132     $ 96,765  
               
Operating expense as a percentage of sales   17.8 %     17.8 %     17.7 %     18.1 %
               
Non-GAAP operating expense as a percentage of sales   16.3 %     15.7 %     16.1 %     15.9 %

(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release including earnings guidance may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends that all such statements be subject to the “safe-harbor” provisions contained in those sections. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential” or “continue” or other similar terms or expressions and such forward-looking statements include, but are not limited to, statements about the impact of the global outbreak of COVID-19 on the Company’s business and operations; the Company’s continued growing demand for its products; the Company’s execution on its strategy to improve operating efficiencies; the Company’s optimism about its operating results and future growth prospects; the Company’s expected future sales and future non-GAAP adjusted earnings per diluted share; and any other statements in this press release that are not of a historical nature. Many important factors may cause the Company’s actual results, events or circumstances to differ materially from those discussed in any such forward-looking statements, including but not limited to: the Company’s ability to complete any acquisition and/or incorporate any acquired assets into its business; the Company’s ability to maintain its suppliers for materials, product parts and vehicle chassis without significant supply chain disruptions; the Company’s ability to improve operating and supply chain efficiencies; the Company’s ability to enforce its intellectual property rights; the Company’s future financial performance, including its sales, cost of sales, gross profit or gross margin, operating expenses, ability to generate positive cash flow and ability to maintain profitability; the Company’s ability to adapt its business model to mitigate the impact of certain changes in tax laws; changes in the relative proportion of profit earned in the numerous jurisdictions in which the Company does business and in tax legislation, case law and other authoritative guidance in those jurisdictions; factors which impact the calculation of the weighted average number of diluted shares of common stock outstanding, including the market price of the Company’s common stock, grants of equity-based awards and the vesting schedules of equity-based awards; the Company’s ability to develop new and innovative products in its current end-markets and to leverage its technologies and brand to expand into new categories and end-markets; the Company’s ability to increase its aftermarket penetration; the Company’s exposure to exchange rate fluctuations; the loss of key customers; strategic transformation costs; the outcome of pending litigation; the possibility that the Company may not be able to accelerate its international growth; the Company’s ability to maintain its premium brand image and high-performance products; the Company’s ability to maintain relationships with the professional athletes and race teams that it sponsors; the possibility that the Company may not be able to selectively add additional dealers and distributors in certain geographic markets; the overall growth of the markets in which the Company competes; the Company’s expectations regarding consumer preferences and its ability to respond to changes in consumer preferences; changes in demand for high-end suspension and ride dynamics products; the Company’s loss of key personnel, management and skilled engineers; the Company’s ability to successfully identify, evaluate and manage potential acquisitions and to benefit from such acquisitions; product recalls and product liability claims; the impact of change in China-Taiwan relations on our business, our operations or our supply chain, the impact of the Russian invasion of Ukraine on the global economy, energy supplies and raw materials; future economic or market conditions; and the other risks and uncertainties described in “Risk Factors” contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and filed with the Securities and Exchange Commission on February 24, 2022, or Quarterly Reports on Form 10-Q or otherwise described in the Company’s other filings with the Securities and Exchange Commission. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company’s forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CONTACT:

Fox Factory Holding Corp.

Vivek Bhakuni

Sr. Director of Investor Relations and Business Development

706-471-5241

vbhakuni@ridefox.com


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Source: Fox Factory Holding Corp.
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