Fox Factory Sees 16.1% Boost in Q2 Sales

Compass Diversified Holdings, parent company of action sports manufacturer Fox Factory, announced today its consolidated operating results for the three and six months ended June 30, 2010.

Second Quarter 2010 Highlights

Net sales

Net sales for the three months ended June 30, 2010 increased $4.8 million or 16.1% compared to the corresponding three months ended June 30, 2009. The increase in net sales is primarily attributable to increases in sales in the powered vehicles sector. Sales increases in the powered vehicles sector were largely due to increases in sales of suspension products to Ford Motor Company for use in its F-150 Raptor off-road pickup, and sales to ATV OEMs.

Cost of sales

Cost of sales for the three months ended June 30, 2010 increased approximately $3.4 million compared to the corresponding period in 2009. The increase in cost of sales is primarily attributable to the increase in net sales for the same period. Gross profit as a percentage of sales was fairly flat during the three months ended June 30, 2010 (28.5% at June 30, 2010 vs. 28.4% at June 30, 2009) as efficiencies achieved associated with the increase in volume were offset in part by an unfavorable channel mix in 2010 as a larger proportion of total net sales were in the OEM category, which typically carries lower margins than Aftermarket sales.

Selling, general and administrative expense

Selling, general and administrative expense for the three months ended June 30, 2010 increased $0.4 million over the corresponding three month period in 2009. This increase is the result of increases in engineering, sales and marketing costs to support the sales growth.

Income from operations

Income from operations for the three months ended June 30, 2010 increased approximately $1.0 million compared to the corresponding period in 2009 based principally on the increase in net sales and other factors described above.