Fox Factory Holding Corp. (NASDAQ: FOXF) (“FOX” or the “Company”)
today reported financial results for the first quarter ended April
3, 2020.
First Quarter Fiscal 2020 Highlights
- Sales increased 14.0% to $184.4 million, compared to $161.7
million in the same period last fiscal year
- Gross margin decreased 90 basis points to 30.7%, compared to
31.6% in the same period last fiscal year; Non-GAAP adjusted gross
margin decreased 80 basis points compared to the same period last
fiscal year
- Net income attributable to FOX stockholders was $8.3 million,
or 4.5% of sales and $0.21 of earnings per diluted share, compared
to $18.1 million, or 11.3% of sales and $0.46 of earnings per
diluted share in the same period last fiscal year
- Non-GAAP adjusted net income was $20.5 million, or $0.52 of
adjusted earnings per diluted share, compared to $21.6 million, or
$0.55 of adjusted earnings per diluted share in the same period
last fiscal year
- Adjusted EBITDA was $31.3 million, or 17.0% of sales, compared
to $30.1 million, or 18.6% of sales in the same period last fiscal
year
“In an unprecedented operating environment, our
global team has done a tremendous job to come together and support
the needs of our customers,” commented Mike Dennison, FOX’s Chief
Executive Officer. “The health and safety of our employees remains
our number one priority, and we believe we are well positioned with
our diversified business model to manage through these challenging
times and emerge stronger. The resilience of our people, the power
of the FOX brand and our performance-defining ride dynamics
products combined with the strength of our valued OEM partners will
continue to provide competitive advantages in the market as we move
forward.”
Sales for the first quarter of fiscal 2020 were
$184.4 million, an increase of 14.0% as compared to sales of $161.7
million in the first quarter of fiscal 2019. This increase in sales
reflects a 24.6% increase in Powered Vehicles Group sales and a
1.8% decrease in Specialty Sports Group sales. The increase in
Powered Vehicles Group products is primarily due to the Ridetech
and SCA acquisitions, and the continued success of its broad
product lineup. The decrease in Specialty Sports Group products is
due to a shift in timing of OEM orders.
Gross margin was 30.7% for the first quarter of
fiscal 2020, a 90 basis point decrease from gross margin of 31.6%
in the first quarter of fiscal 2019. Non-GAAP adjusted gross margin
decreased 80 basis points to 30.9% from the same prior fiscal year
period. The decrease in gross margin was primarily due to
approximately $1.8 million of factory costs incurred during
mandated closures in response to COVID-19 that are not added back
to adjusted gross margin. 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 $45.0 million for
the first quarter of fiscal 2020 compared to $29.2 million in the
first quarter of fiscal 2019. The increase in operating expenses is
primarily due to acquisition-related costs associated with SCA of
$10.9 million, as well as the inclusion of SCA's operating costs
and amortization expense. The Company’s expenses for the first
quarter of fiscal 2020 also include operating costs related to
Ridetech which was acquired in the second quarter of fiscal 2019,
as well as increases in line with business growth. These increases
were partially offset by lower patent litigation related costs.
As a percentage of sales, operating expenses
were 24.4% for the first quarter of fiscal 2020, compared to 18.1%
in the first quarter of fiscal 2019. Non-GAAP operating expenses
were $30.9 million, or 16.7% of sales in the first quarter of
fiscal 2020, compared to $25.5 million, or 15.7% of sales in the
first 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 9.5% in the
first quarter of fiscal 2020, compared to an effective tax rate of
12.4% in the first quarter of fiscal 2019.
Net income attributable to FOX stockholders in
the first quarter of fiscal 2020 was $8.3 million, compared to
$18.1 million in the first quarter of the prior fiscal year.
Earnings per diluted share for the first quarter of fiscal 2020 was
$0.21, compared to earnings per diluted share of $0.46 for the
first quarter of fiscal 2019.
Non-GAAP adjusted net income was $20.5 million,
or $0.52 of adjusted earnings per diluted share, compared to
adjusted net income of $21.6 million, or $0.55 of adjusted earnings
per diluted share in the same period of the prior fiscal year.
Reconciliations of net income attributable to FOX stockholders 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 first quarter of fiscal
2020 was $31.3 million, compared to $30.1 million in the first
quarter of fiscal 2019. Adjusted EBITDA margin in the first quarter
of fiscal 2020 was 17.0%, compared to 18.6% in the first quarter of
fiscal 2019. Reconciliations of net income to adjusted EBITDA and
the calculation of adjusted EBITDA margin are provided at the end
of this press release.
Balance Sheet Highlights
As of April 3, 2020, the Company had cash
and cash equivalents of $76.2 million compared to $43.7 million as
of January 3, 2020. Inventory was $156.6 million as of
April 3, 2020, compared to $128.5 million as of
January 3, 2020. As of April 3, 2020, accounts receivable
and accounts payable were $85.7 million and $88.6 million,
respectively, compared to $91.6 million and $55.1 million,
respectively, as of January 3, 2020. The changes in accounts
receivable, inventory and accounts payable reflect the SCA
acquisition and the impacts of the COVID-19 pandemic on the
Company's shipment, collection and payment cycles. Prepaids and
other current assets increased to $75.8 million as of April 3,
2020, compared to $17.9 million as of January 3, 2020,
primarily due to SCA-related items including vehicle chassis
deposits and contingent retention incentives held in escrow.
Property, plant and equipment, net was $127.6
million as of April 3, 2020, compared to $108.4 million as of
January 3, 2020 reflecting capital expenditures of $12.8
million as well as the acquisition of SCA.
Total debt was $479.2 million, compared to $68.0
million as of January 3, 2020. The increase is primarily due
to the acquisition of SCA in the quarter, as well as additional
draws on the Company's line of credit to increase cash on hand.
Fiscal 2020 Guidance
The Company previously issued its fiscal year
2020 guidance on March 3, 2020. However, due to the rapidly
evolving market conditions domestically and internationally in
response to the continued spread of COVID-19, full fiscal year 2020
guidance remains suspended as previously reported on April 9, 2020
and the Company does not intend to provide quarterly guidance until
further notice. The Company continues to expect to maintain
compliance with its amended and restated credit facility.
Conference Call &
Webcast
The Company will hold an investor conference
call today at 1:30 p.m. Pacific time (4:30 p.m. Eastern Time). The
conference call dial-in number for North America listeners is (877)
425-9470, and international listeners may dial (201) 389-0878; the
conference ID is 13702378. 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 original
equipment manufacturers ("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
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 margin as
gross profit margin adjusted for certain strategic transformation
costs and the amortization of acquired inventory valuation markup.
FOX defines non-GAAP operating expense as operating expense
adjusted for amortization of purchased intangibles, patent
litigation-related expenses, acquisition and integration-related
expenses, strategic transformation costs and costs related to tax
restructuring initiatives. FOX defines non-GAAP adjusted net income
as net income attributable to FOX Stockholders adjusted for
amortization of purchased intangibles, patent litigation-related
expenses, acquisition and integration-related expenses, strategic
transformation costs, and costs related to tax restructuring
initiatives, 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, strategic transformation costs, and costs related to tax
restructuring initiatives 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 operating
expense, non-GAAP adjusted net income and adjusted EBITDA (and
accordingly, 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 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 |
| |
April 3, |
|
January 3 |
| |
2020 |
|
2020 |
| |
|
|
|
| |
(Unaudited) |
|
|
|
Assets |
|
|
|
| Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ |
76,182 |
|
|
$ |
43,736 |
|
|
Accounts receivable (net of allowances of $1,205 and $810 at
April 3, 2020 and January 3, 2020, respectively) |
85,652 |
|
|
91,632 |
|
|
Inventory |
156,553 |
|
|
128,505 |
|
|
Prepaids and other current assets |
75,799 |
|
|
17,940 |
|
|
Total current assets |
394,186 |
|
|
281,813 |
|
|
Property, plant and equipment, net |
127,633 |
|
|
108,379 |
|
| Lease
right-of-use assets |
20,632 |
|
|
17,472 |
|
| Deferred
tax assets |
15,161 |
|
|
25,725 |
|
|
Goodwill |
285,723 |
|
|
93,527 |
|
|
Intangibles, net |
219,906 |
|
|
81,949 |
|
| Other
assets |
5,458 |
|
|
451 |
|
|
Total assets |
$ |
1,068,699 |
|
|
$ |
609,316 |
|
|
Liabilities and stockholders’ equity |
|
|
|
| Current
liabilities: |
|
|
|
|
Accounts payable |
$ |
88,613 |
|
|
$ |
55,144 |
|
|
Accrued expenses |
40,285 |
|
|
35,744 |
|
|
Reserve for uncertain tax positions |
957 |
|
|
925 |
|
|
Current portion of long-term debt |
8,818 |
|
|
— |
|
|
Total current liabilities |
138,673 |
|
|
91,813 |
|
| Line of
credit |
85,000 |
|
|
68,000 |
|
|
Long-term debt, less current portion |
385,404 |
|
|
— |
|
| Other
liabilities |
13,709 |
|
|
11,584 |
|
|
Total liabilities |
622,786 |
|
|
171,397 |
|
|
Redeemable non-controlling interest |
16,207 |
|
|
15,719 |
|
|
Stockholders’ equity |
|
|
|
|
Preferred stock, $0.001 par value — 10,000 authorized and no shares
issued or outstanding as of April 3, 2020 and January 3,
2020 |
— |
|
|
— |
|
|
Common stock, $0.001 par value — 90,000 authorized; 39,493 shares
issued and 38,603 outstanding as of April 3, 2020; 39,448
shares issued and 38,559 outstanding as of January 3,
2020 |
39 |
|
|
39 |
|
|
Additional paid-in capital |
123,470 |
|
|
123,274 |
|
|
Treasury stock, at cost; 890 common shares as of April 3, 2020
and January 3, 2020 |
(13,754 |
) |
|
(13,754 |
) |
|
Accumulated other comprehensive (loss) income |
(790 |
) |
|
150 |
|
|
Retained earnings |
320,741 |
|
|
312,491 |
|
|
Total stockholders’ equity |
429,706 |
|
|
422,200 |
|
|
Total liabilities, redeemable non-controlling interest and
stockholders’ equity |
$ |
1,068,699 |
|
|
$ |
609,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FOX FACTORY HOLDING CORP. |
|
Condensed Consolidated Statements of Income |
|
(In thousands, except per share data) |
|
(Unaudited) |
|
|
| |
For the three months ended |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Sales |
$ |
184,361 |
|
|
$ |
161,700 |
|
| Cost of
sales |
127,746 |
|
|
110,643 |
|
|
Gross profit |
56,615 |
|
|
51,057 |
|
|
Operating expenses: |
|
|
|
|
Sales and marketing |
12,063 |
|
|
9,262 |
|
|
Research and development |
8,029 |
|
|
7,303 |
|
|
General and administrative |
22,413 |
|
|
11,180 |
|
|
Amortization of purchased intangibles |
2,543 |
|
|
1,493 |
|
| Total
operating expenses |
45,048 |
|
|
29,238 |
|
| Income
from operations |
11,567 |
|
|
21,819 |
|
| Other
expense, net: |
|
|
|
|
Interest expense |
1,847 |
|
|
829 |
|
|
Other expense (income) |
62 |
|
|
(13 |
) |
| Other
expense, net |
1,909 |
|
|
816 |
|
| Income
before income taxes |
9,658 |
|
|
21,003 |
|
|
Provision for income taxes |
920 |
|
|
2,601 |
|
| Net
income |
8,738 |
|
|
18,402 |
|
| Less:
net income attributable to non-controlling interest |
488 |
|
|
299 |
|
| Net
income attributable to FOX stockholders |
$ |
8,250 |
|
|
$ |
18,103 |
|
| Earnings
per share: |
|
|
|
|
Basic |
$ |
0.21 |
|
|
$ |
0.48 |
|
|
Diluted |
$ |
0.21 |
|
|
$ |
0.46 |
|
| Weighted
average shares used to compute earnings per share: |
|
|
|
|
Basic |
38,571 |
|
|
38,041 |
|
|
Diluted |
39,151 |
|
|
39,097 |
|
|
|
|
|
|
|
|
FOX FACTORY HOLDING CORP.
NET INCOME TO NON-GAAP ADJUSTED NET INCOME
RECONCILIATIONAND CALCULATION OF NON-GAAP ADJUSTED
EARNINGS PER SHARE (In thousands, except per
share data) (Unaudited)
The following table provides a reconciliation of
net income attributable to FOX stockholders, 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 months ended April 3, 2020 and
March 29, 2019. 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 |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Net income attributable to FOX stockholders |
$ |
8,250 |
|
|
$ |
18,103 |
|
| Amortization of purchased
intangibles |
2,543 |
|
|
1,493 |
|
| Patent litigation-related
expenses |
436 |
|
|
2,043 |
|
| Other acquisition and
integration-related expenses (1) |
10,952 |
|
|
110 |
|
| Strategic transformation costs
(2) |
601 |
|
|
230 |
|
| Tax reform implementation
costs |
— |
|
|
132 |
|
| Tax impacts of reconciling
items above (3) |
(2,252 |
) |
|
(494 |
) |
| Non-GAAP adjusted net
income |
$ |
20,530 |
|
|
$ |
21,617 |
|
| |
|
|
|
| Non-GAAP adjusted
EPS |
|
|
|
| Basic |
$ |
0.53 |
|
|
$ |
0.57 |
|
| Diluted |
$ |
0.52 |
|
|
$ |
0.55 |
|
| |
|
|
|
| Weighted average
shares used to compute non-GAAP adjusted EPS |
|
|
|
| Basic |
38,571 |
|
|
38,041 |
|
| Diluted |
39,151 |
|
|
39,097 |
|
| |
|
|
|
|
|
(1) Represents various acquisition-related costs
and expenses incurred to integrate acquired entities into the
Company’s operations and the impact of the finished goods inventory
valuation adjustment recorded in connection with the purchase of
acquired assets, per period as follows:
| |
|
|
|
| |
For the three months ended |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Acquisition related costs and expenses |
$ |
10,892 |
|
|
$ |
110 |
|
| Finished goods inventory
valuation adjustment |
60 |
|
|
— |
|
| Other acquisition and
integration-related expenses |
$ |
10,952 |
|
|
$ |
110 |
|
| |
|
|
|
|
|
|
|
(2) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations. For the three month
period ended April 3, 2020, $314 is classified as operating
expense, and $287 is classified as cost of sales, respectively. For
the three month period ended March 29, 2019, $230 is
classified as cost of sales.
(3) Tax impact calculated based on the
respective year to date effective tax rate, including the full year
impact of non-deductible transaction costs.
FOX FACTORY HOLDING CORP.
NET INCOME TO ADJUSTED EBITDA RECONCILIATION
ANDCALCULATION 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 months ended April 3, 2020 and March 29, 2019.
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 |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Net income |
$ |
8,738 |
|
|
$ |
18,402 |
|
| Provision for income
taxes |
920 |
|
|
2,601 |
|
| Depreciation and
amortization |
5,836 |
|
|
4,006 |
|
| Non-cash stock-based
compensation |
1,921 |
|
|
1,729 |
|
| Patent litigation-related
expenses |
436 |
|
|
2,043 |
|
| Other acquisition and
integration-related expenses (1) |
10,899 |
|
|
110 |
|
| Strategic transformation costs
(2) |
601 |
|
|
230 |
|
| Tax reform implementation
costs |
— |
|
|
132 |
|
| Other expense, net |
1,909 |
|
|
816 |
|
| Adjusted
EBITDA |
$ |
31,260 |
|
|
$ |
30,069 |
|
| |
|
|
|
| Net Income
Margin |
4.7 |
% |
|
11.4 |
% |
| |
|
|
|
| Adjusted EBITDA
Margin |
17.0 |
% |
|
18.6 |
% |
| |
|
|
|
|
|
(1) Represents various acquisition-related costs
and expenses incurred to integrate acquired entities into the
Company’s operations, excluding $53 in stock-based compensation,
and the impact of the finished goods inventory valuation adjustment
recorded in connection with the purchase of acquired assets, per
period as follows:
| |
|
|
|
| |
For the three months ended |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Acquisition related costs and expenses |
$ |
10,839 |
|
|
$ |
110 |
|
| Finished goods inventory
valuation adjustment |
60 |
|
|
— |
|
| Other acquisition and
integration-related expenses |
$ |
10,899 |
|
|
$ |
110 |
|
| |
|
|
|
|
|
|
|
(2) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations. For the three month
period ended April 3, 2020, $314 is classified as operating
expense, and $287 is classified as cost of sales, respectively. For
the three month period ended March 29, 2019, $230 is
classified as cost of sales.
FOX FACTORY HOLDING
CORP. GROSS PROFIT TO NON-GAAP ADJUSTED GROSS
PROFIT RECONCILIATION ANDCALCULATION 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 months ended April 3, 2020
and March 29, 2019, 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 |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Sales |
$ |
184,361 |
|
|
$ |
161,700 |
|
| |
|
|
|
| Gross
Profit |
$ |
56,615 |
|
|
$ |
51,057 |
|
| Strategic transformation costs
(1) |
287 |
|
|
230 |
|
| Amortization of acquired
inventory valuation markup (2) |
60 |
|
|
— |
|
| Non-GAAP Adjusted Gross
Profit |
$ |
56,962 |
|
|
$ |
51,287 |
|
| |
|
|
|
| Gross
Margin |
30.7 |
% |
|
31.6 |
% |
| |
|
|
|
| Non-GAAP Adjusted Gross
Margin |
30.9 |
% |
|
31.7 |
% |
| |
|
|
|
|
|
(1) Represents costs associated with various
strategic initiatives including the expansion of the Powered
Vehicles Group’s manufacturing operations.
(2) Represents the impact of the finished goods
inventory valuation adjustment recorded in connection with our 2020
acquisition of SCA.
FOX FACTORY HOLDING CORP.
OPERATING EXPENSE TO NON-GAAP OPERATING EXPENSE
RECONCILIATION ANDCALCULATION 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 months ended April 3, 2020
and March 29, 2019. 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 |
| |
April 3, |
|
March 29, |
| |
2020 |
|
2019 |
|
Sales |
$ |
184,361 |
|
|
|
$ |
161,700 |
|
|
| |
|
|
|
| Operating
Expense |
$ |
45,048 |
|
|
|
$ |
29,238 |
|
|
| Amortization of purchased
intangibles |
(2,543 |
) |
|
|
(1,493 |
) |
|
| Patent litigation-related
expenses |
(436 |
) |
|
|
(2,043 |
) |
|
| Other acquisition and
integration-related expenses (1) |
(10,892 |
) |
|
|
(110 |
) |
|
| Strategic transformation costs
(2) |
(314 |
) |
|
|
— |
|
|
| Tax reform implementation
costs |
— |
|
|
|
(132 |
) |
|
| Non-GAAP operating
expense |
$ |
30,863 |
|
|
|
$ |
25,460 |
|
|
| |
|
|
|
| Operating expense as a
percentage of sales |
24.4 |
|
% |
|
18.1 |
|
% |
| |
|
|
|
| Non-GAAP operating
expense as a percentage of sales |
16.7 |
|
% |
|
15.7 |
|
% |
| |
|
|
|
|
|
|
|
(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.
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
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 including those enacted in
the U.S. in December 2017; 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; future economic or market conditions; and the other risks
and uncertainties described in “Risk Factors” contained in its
Annual Report on Form 10-K 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:
ICRKatie Turner646-277-1228Katie.Turner@icrinc.com
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