SCOTTS VALLEY—Sales for high-end mountain bike and vehicle shocks continue to grow and Fox Factory Holding Corp. managed to beat earnings expectations for the third quarter.
The topline increased about 18 percent to $106.2 million, said Larry Enterline, Fox chief executive officer.
On a conference call with investors and analysts, he said the company saw double digit growth in sales related to bikes and vehicles. Bike products were up about 16 percent. Powered vehicle sales reflected higher sales to OEMs or companies that include Fox shocks in their products.
“After a tough year last year, we’re on track,” Enterline said. “It’s meeting our expectations. We believe, we will be up in the model year over last year and we feel pretty good about that.”
The company reported third quarter net income of $10.6 million compared to $10.3 million a year ago. Earnings per diluted share were 28 cents, up from 27 cents a year ago. Since the beginning of the year, sales have climbed 16.5 percent to $271.1 million, compared to the first nine months of 2014.
“It’s great to see the positive response to our strong product lineups in both our bike and powered vehicle segments,” Enterline said.
It is unclear how worldwide macroeconomic conditions, such as an economic slowdown in China and Western Europe, and the strengthening dollar, which is making US. products more expensive overseas, will affect sales in the coming quarter.
“We believe that because of our unique brand position, our business has continued to perform well, in spite of softness in China and certain European markets,” Enterline said, adding that current conditions are expected to persist well into 2016. “It’s obviously something we keep an eye out. I think we continue to do pretty well in spite of that environment.”
Executives said they hoped to soon show their relatively new business with Indian motorcycle would grow.
“I wouldn’t say we’re expecting a sea change suddenly in our motorcycle business, but I think it’s something that we full well expect to continue to improve every year here ongoing,” Enterline said. “I think that helps validate what we can do for a large V-Twin onroad motorcycle.”
The company announced last month that it was buying the assets of Marzocchi’s mountain bike line. Executives called it “a highly complementary transaction” that will allow for increased growth.
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: Founded by Robert C. Fox Jr., an engineer and motocross racer, in 1975. The company was first incorporated in California in 1978, and again in Delaware in 2007 before it was acquired in 2008 by Compass Group Diversified Holdings LLC. The company’s public offering was August 2013.
LEADERSHIP: Larry L. Enterline, chief executive officer, and Mario Galasso, president.
EMPLOYEES: As of Sept. 30, Fox employed about 1,500 full-time employees worldwide, mostly in manufacturing.
STOCK: Shares trading on the NASDAQ as FOXF closed Thursday at $17.99, up 84 cents. In the past year, shares have traded from $13.35 to $18.98.
EQUITY INVESTMENT: Compass Diversified Holdings, which used to own Fox, announced this week that its 41 percent equity investment in FOX was valued at $254.7 million as of the end of September.
FINANCIALS: Third quarter sales were $106.71 million compared to $90.15 million. Net income was $10.6 million, compared to $10.3 million a year ago. Earnings per diluted share were 28 cents compared to 27 cents a year ago. The company reported cash on hand of $5.1 million and total debt of $59.9 million.
GUIDANCE: The company declined to offer guidance for 2016, other than to say it should be better than 2015.
This article first appeared in the Santa Cruz Sentinel.