Fox Factory Holding Corp. generated net sales of $171.0 million for the full fiscal year ended Dec. 31, 2010, up 40.7% or nearly $50 million from a year earlier, according to the annual report released by its parent company Compass Diversified Holdings (CODI). The company, which derives 75% of its sales providing suspension and other components to the $1.56 billion mountain biking market, ended the year with a backlog of $34.7 million, up 44.0% from 2009.


International sales, which are primarily to overseas bicycle manufacturers, reached $113.6 million in 2010, or 67% of sales, compared to $84.0 million, or 69% in 2009. Sales to Taiwan totaled $49.5 million, $35.6 million and $44.8 million in 2010, 2009 and 2008, respectively.


Fox said its largest customer accounted for 11.0% of sales last year, compared to 10.8% in 2009 and that its top ten customers accounted for 53.2% of sales compared to 50.0% in 2009.
Fox had approximately $34.7 million and $24.1 million in firm backlog orders on Dec. 31, 2010 and 2009, respectively.

Cost of sales for the year ended Dec. 31, 2010 increased approximately $35.3 million, or 40.6%, compared to the corresponding period in 2009. The increase in cost of sales was attributed to the increase in net sales.


Gross profit as a percentage of sales was approximately 28.4% in each of the years 2010 and 2009. Selling, general and administrative expenses increased approximately $5.1 million over the corresponding period in 2009. The increase was attributed to increases in: marketing costs of $700,000, engineering costs of $1.3 million, and other administrative costs of $2.4 million, compared to 2009. All these increases were due principally to support the significant increase in sales. Research and development costs totaled $4.2 million, up from $3.0 million in 2009 and $2.6 million in 2008.


Operating income at Fox, reached $19.6 million, up 83% from $10.7 million in 2009. The company reported total assets of $130.8 million, compared to $120.3 million a year earlier. The growth increased Fox’s share of CODI’s net sales to 10.3% from 9.7% last year and 8.6%  in 2008, when CODI acquired an controlling interest in the Wastsonville, CA company for $80.4 million.

As of Dec. 31, 2010, the company employed approximately 436 persons, including 58 in sales, marketing and customer service, 52 in engineering and 292 in operations and IT. The remainder served in executive and administrative capacities.

Over the last three fiscal years mountain biking has represented approximately 75%, 79% and 84%, of Fox’s gross sales and powered vehicles, including snowmobiles, all terrain vehicles, motocross motorcycles and off-road vehicles, have represented the remainder of gross sales.
 

Results of Operations

The table below summarizes the results of operations for Fox for the fiscal years ending December 31, 2010, 2009 and 2008. CODI purchased a controlling interest in Fox on Jan. 4, 2008.































































































































































                         
    Year Ended December 31,  
    2010     2009     2008  
    (in thousands)    

Net sales
   $ 170,983     $ 121,519     $ 131,734  

Cost of sales
     122,373       87,038       95,844  

 
                  

Gross profit
     48,610       34,481       35,890  

Selling, general and administrative expenses
     23,317       18,231       19,182  

Management fees
     500       375       500  

Amortization of intangibles
     5,217       5,217       5,501  

 
                  

Income from operations
   $ 19,576     $ 10,658     $ 10,707