Fox Factory Holding Corp. on Thursday provided an update on its business operations and actions taken related to the COVID-19 pandemic, including executive pay cuts, furloughs and withdrawing guidance.
“The health and wellness of our employees remain a top priority as we work together with our valued customers and suppliers during this time of global uncertainty,” commented Mike Dennison, Fox’s CEO. “Across our organization, we are taking necessary safety, support and other measures to best manage our business in the current operating environment as we continue to deliver performance-defining products. Going forward, we believe we will be well-positioned for long-term growth in our diversified bike and powered vehicle businesses. However, given the near-term uncertainty, we believe it is prudent to suspend our annual outlook at this time.”
The company’s manufacturing facilities in North America have been affected by local and state “shelter in place” or “stay at home” orders including the temporary suspension of non-essential operations in certain facilities. Where local regulations permit, the company has limited its workforce to only essential production and maintenance. In addition, the company is taking the necessary precautions to ensure the safety of its employees, including the adherence to best practice guidelines from federal, state and/or local government authorities at all of the company’s locations.
In response to the manufacturing slowdown caused by these various North American “shelter in place” or “stay at home” orders, the company is taking action to manage costs by enacting executive pay cuts and temporary furloughs, curtailing non-essential capital expenditures and reducing expenses overall during this time.
For the first quarter of fiscal year 2020, the company now expects sales to be slightly above the low end of its previously provided guidance range of $182 million to $190 million. Non-GAAP adjusted earnings per diluted share are now expected to be at or near the low end of its previously provided guidance range of $0.55 to $0.60 pending the company’s evaluation of costs associated with mandated closures, net of government benefits.
Due to the rapidly evolving market conditions domestically and internationally in response to the continued spread of COVID-19, the company is suspending its full fiscal year 2020 guidance previously provided on March 3. The company currently expects to maintain compliance with its amended and restated credit agreement executed in connection with the closing of the SCA Performance Holdings, Inc. acquisition.
The company will report its first-quarter fiscal year 2020 financial results on May 6 and does not plan to provide preliminary financial results in the future other than in unique circumstances, or in the event of a material event that requires disclosure.
Photo courtesy Fox Factory