Fox Factory Inc. rolled through the first quarter with revenues above the company’s expectations. Sales increased 32.6 percent to $106.3 million compared to $80.2 million in the same period last fiscal year.
The increase reflects a 54 percent increase in sales of powered vehicle products and a 15.9 percent increase in sales of bike products. The increase in sales of powered vehicle products was primarily due to continued high demand for on- and off-road suspension products including increased original equipment manufacturer (OEM) sales. The increase in sales of bike products primarily reflects new product introductions and favorable model year spec placements with OEMs. Pre-tax income was $11.3 million, or 10.6 percent of sales, compared to $4.4 million, or 5.5 percent of sales in the same period last fiscal year; adjusted EBITDA was $19.3 million, or 18.1 percent of sales, compared to $11.5 million, or 14.3 percent of sales in the same period last fiscal year.
“Our product innovation has helped drive the success of product line-ups across bike and powered vehicles,” said CEO Larry Enterline in a conference call. “We continue to believe the diversification of our product offerings and end markets have helped to consistently set us apart in the industry and continue to position as well for future growth.”
Gross margin increased 40 basis points to 31.7 percent compared to 31.3 percent in the same period last fiscal year; non-GAAP adjusted gross margin increased 30 basis points to 31.7 percent compared to the same period last fiscal year.
Net income was $10.5 million, or 27 cents per diluted share, compared to $3.3 million, or 9 cents per diluted share in the same period last fiscal year.
Non-GAAP adjusted net income was $13.6 million, or 35 cents adjusted earnings per diluted share, compared to $6 million, or 16 cents adjusted earnings per diluted share in the same period last fiscal year.
Total operating expenses were $21.3 million for the first quarter of fiscal 2017 compared to $19.4 million in the first quarter of the prior fiscal year.
Due to the success of the first quarter, Fox has changed their projections for the remaining of 2017. “For the second quarter of 2017, we expect sales in the range of $113 million to $119 million and non-GAAP adjusted earnings per diluted share in the range of 32 cents to 38 cents,” said CFO Zvi Glasman. ” “For fiscal 2017, we are raising our previous guidance and now expect sales in the range of $435 million to $455 million and non-GAAP adjusted earnings per diluted share in the range of $1.36 to $1.46.”
Glasman said the company expects sales to be more evenly spread across Q2, Q3 and Q4, with both Q2 and Q3 sales slightly higher than Q4 due to powered vehicle business and the transition of bike manufacturing to Taiwan.
Photo courtesy Fox Factory
