Fox Factory is well on its way to shifting the bulk of its fork production to Taiwan from California in a bid to cut lead times for mountain bike manufacturers that account for the majority of its revenues, the company’s CEO disclosed last week in the company’s first earnings call since going public.
CEO Larry Enterline said he expects to complete the move by the end of 2015 in a bid to move production closer to the company's OEM customers in Taiwan. Fox earns more than 60 percent of its revenues supply suspension sub-assemblies to mountain bike manufacturers in Taiwan.
“This transition is on track and going well, with nearly 700,000 sub-assemblies having been manufactured out of this facility in 2013,” he told analysts during the company’s first conference call as a public company last week. “Once completed, in addition to the margin expansion opportunities created by this initiative, we believe this will enable us to reduce our lead time to our Taiwan-based manufacturers for building the majority of high-end mountain bikes. In addition this supports our ongoing globalization efforts as we work to facilitate adding capacity in the future, across other locations with customer lead time in mind, and of course increased operating efficiencies long term.”
