SCOTTS VALLEY — Fox Factory, the maker of high-end shocks for bicycles and motor vehicles, said Tuesday that strong sales in both mountain bike and powered vehicle products boosted revenues more than 15 percent during the fourth fiscal quarter and the full year and demand is expected to remain strong this year.
The results reflect the company’s “ability to leverage our infrastructure across higher sales volume,” said Larry Enterline, company chief executive officer. Enterline called it “a strong financial performance,” for the company’s first half year as a public company and said new efficiencies helped boost the numbers as well.
Revenues climbed 15.3 percent in the fourth quarter compared to the same quarter a year ago and net income increased about 175 percent to $4.9 million.
For the full year, revenues grew 15.6 percent from sales in 2012 and net income grew to $4.9 million, or 69.6 percent, from 2012.
The company, which went public last year, has managed to pay its debt down to about $8 million from more than $59.3 million in August when the 39-year-old company, held its IPO.
The company will continue to grow in new vehicle categories, capitalize on international growth opportunities and expand its brand.
“We remain confident in our ability to deliver strong results in fiscal year 2014,” Enterline said.
There was double-digit growth in both mountain bike and powered vehicle product sales for the quarter and for the year.
The company also announced last week plans to buy Sport Truck USA in a $44 million deal. It will strengthen its position in the truck suspension aftermarket with the addition of lift kits, Enterline said. The deal, paid for by debt, is subject to approval by Sport Truck’s employee shareholders and is expected to be complete this month. It is expected to help the Fox’s sales this year.
“It’s a great strategic acquisition,” Enterline said, noting a synergy in engineering, an opportunity to co-market and co-brand, a gain from common suppliers and distribution networks and a strong ecommerce site.
“I’m more excited now than when we started this (acquisition process),” Enterline said. “There’s a lot of potential for this combination in the marketplace.”
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At A Glance
Fox Factory Holding Corp.
WHAT: Fox Factory Holding Corp. is the holding company of Fox Factory Inc., a designer, manufacturer and marketer of high-performance suspension products for mountain bikes, all terrain vehicles, snowmobiles and other off-road vehicles.
HEADQUARTERS: 915 Disc Drive, Scotts Valley
INFORMATION: 831-274-6500; www.ridefox.com
HISTORY: Robert C. Fox Jr., an engineer and motocross racer, developed a new kind of high-end suspension product and began producing them in 1975. The company was incorporated in California in 1978. In 2007, the company, under a new holding company, incorporated in Delaware. It was acquired in 2008 by Compass Group Diversified Holdings LLC., which remains a majority owner. The company’s public offering closed in August.
LEADERSHIP: Larry L. Enterline, chief executive officer.
EMPLOYEES: As of Dec. 31, Fox had about 670 full-time employees in the U.S., Europe and Taiwan, plus part-time employees at its manufacturing facilities to meet seasonal demands, according to documents filed Tuesday with the Securities and Exchange Commission
STOCK: Shares trading on the NASDAQ as FOXF closed Tuesday at $16.65, down 6 cents. Since the company’s IPO on Aug. 7, shares have traded between $14.33 and $20.75.
FINANCIALS: Fourth quarter sales were $65.3 million, compared to $56.6 million in the same period a year ago. Net income was $4.9 million, or 13 cents earnings per diluted share, compared to $1.8 million, or 5 cents earnings per diluted share, in the same period a year ago.
Sales for the full year were $272.75 million, compared to $235.87 million in 2012. Net income was $24.1 million, or earnings per diluted share of 68 cents, compared to $14.2 million, or earnings per share of 44 cents, in 2012.
As of Dec. 31, the company had cash and cash equivalents of $1.7 million. Total debt was $8 million, compared to $59.3 million a year ago.
GUIDANCE: For the first quarter of fiscal 2014, the company expects sales in the range of $53 million to $57 million and earnings per diluted share of 7-10 cents. For fiscal year 2014 expected net sales should be between $275 million and $295 million and earnings per diluted share in the range of 70-80 cents. The guidance excludes the after tax impact of approximately 2 cents per share of transaction costs related to the acquisition of Sport Truck, which will occur in the first quarter of 2014.