SCOTTS VALLEY—Executives at high-end shock maker Fox Factory celebrated a 5.3 percent second quarter revenue jump from a year ago and lifted their guidance for 2016. Net income for the company experienced a 31.8 percent jump from a year ago.
“In general, we’re doing a good job executing,” said Mario Galasso, president.
The company’s previous guidance for the quarter was for sales of $95 million to $101 million. Sales were actually $102.3 million.
“The strength of our diversified portfolio drove our financial performance,” said Larry Enterline, chief executive officer. On a conference call with investors and analysts he said both sales and profitability were higher than expected.
The company, which started more than 40 years ago as a high performance shock maker for mountain bike racers and extreme sport racers, has broadened its reach into the powered vehicle market and saw, second quarter, a 10.3 percent jump in sales in that market. It was primarily due to continued higher demand for on and off-road suspension products, Enterline said.
The bike industry overall has experienced “headwinds,” but the company saw a 2.4 percent increase in sales of bike products. Executives said the high performance market was still growing, in part due to new products.
“We continue to monitor these problems and the macro economic environment to ascertain any potential impact on our business,” including ongoing issues in Britain and Europe, Enterline said.
Companywide efficiencies also played a role in greater margins, Enterline said, noting that now that bike manufacturing work has moved from Watsonville to Taiwan, the Watsonville facility can focus primarily on power sports production. Another facility in El Cajon focuses on automotive and military production.
Shipments of the company’s 2017 bicycle products have begun, including a new lower-priced fork.
Although the company predicts a slowdown in the third quarter, it should pick up in the fourth quarter, according to Zvi Glasman, chief financial officer. He pointed to this year’s growth and said, “our view has gotten better over the course of the year. We’ve raised guidance and tightened it and that’s in a challenging economic environment.”
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. During 2014, sale of suspension products for high-end bikes made up about 58 percent of sales.
HEADQUARTERS: 915 Disc Drive, Scotts Valley. The company also has manufacturing facilities in Scotts Valley, Watsonville, El Cajon, Michigan, Taiwan and Canada.
INFORMATION: 831-274-6500; www.ridefox.com
HISTORY: Founded by Robert C. Fox Jr., an engineer and motocross racer, in 1975. The company’s public offering was in August 2013.
LEADERSHIP: Larry L. Enterline, chief executive officer, and Mario Galasso, president.
EMPLOYEES: As of April 1, the company employed about 1,500 full-time employees worldwide, a large percentage of whom work at manufacturing facilities.
STOCK: Shares trading on the NASDAQ as FOXF closed flat at $18.89 on Wednesday. In the last year, shares have traded between $13.85 and $19.62.
FINANCIALS: Second quarter sales were $102.3 million compared to $97.2 million in the same quarter a year ago. Net income was $8.9 million, or 24 cents per share, compared to $6.8 million, or 18 cents per share, a year ago. As of June 30, the company had cash and cash equivalents of $10.1 million. Total debt was $75.3 million.
GUIDANCE: The company expects third quarter sales to be $106 million-112 million and earnings per diluted share of 37-41 cents. For the full year, the company expects $387 million to $402 million and earnings per diluted share of $1.10-$1.19.
This article first appeared in the Santa Cruz Sentinel.