Fox Factory, Inc. had net sales of $42.8 million in the first quarter ended March 31, up 31.0 percent from $32.7 million in the year earlier quarter, according to the 10K filed by its parent company Compass Holdings Inc.
OEM sales increased $8.4 million to $34.0 million during the quarter, compared to $25.6 million for the same period in 2010. The increase in OEM net sales is attributable to increases in sales of suspension systems to mountain bike manufacturers totaling $3.9 million (18.2%) and increases in sales in the powered vehicles sector totaling approximately $4.5 million (107%).
The significant increase in OEM sales to the powered vehicle sector during the three-months ended March 31, 2011 is the result of an increase in sales to Ford Motor Company for use in its F-150 Raptor Off-road pickup truck and increases in sales of suspension components to the ATV market.
Aftermarket sales increased approximately $1.8 million to $8.9 million during the three months ended March 31, 2011 compared to $7.1 million in the same period in 2010. This increase is attributable to increases in Aftermarket net sales in the powered vehicles sector totaling approximately $1.0 million and the mountain biking sector totaling approximately $800,000.
International OEM and Aftermarket sales were $27.9 million during the three-months ended March 31, 2011 compared to $21.4 million during the same period in 2010, an increase of $6.5 million or 30.4%.
Cost of sales
Cost of sales increased approximately $6.6 million, or 28.6%, compared to the corresponding period in 2010. The increase in cost of sales is attributable to the increase in net sales for the same period.
Gross profit as a percentage of sales was approximately 30.3% for the three-months ended March 31, 2011 compared to 28.9% for the same period in 2010. The 140 basis point increase in gross profit as a percentage of sales is attributable to positive leverage achieved due to the increased production volume as well as a favorable product sales mix in the first quarter of 2011 compared to the 2010 quarter.
SG&A
Selling, general and administrative expense increased approximately $1.3 million during the three-months ended March 31, 2011 compared to the same period in 2010. This increase is the result of increases in marketing costs of $300,000), engineering costs of $500,000, and other administrative costs of $500,000 compared to 2010, principally to support the significant increase in sales.
Income from operations
Income from operations increased approximately $2.2 million to $5.0 million compared to the corresponding period in 2010, based principally on the significant increase in net sales, offset in part by the increases in selling, general and administrative costs.
Compass HOldings acquired a 68.1 percent controlling stake in the company in January 2009.
| Three-months ended | ||||||||
| (in thousands) | March 31, 2011 | March 31, 2010 | ||||||
Net sales | $ | 42,880 | $ | 32,732 | ||||
Cost of sales | 29,903 | 23,258 | ||||||
Gross profit | 12,977 | 9,474 | ||||||
Selling, general and administrative expense | 6,524 | 5,183 | ||||||
Fees to manager | 125 | 125 | ||||||
Amortization of intangibles | 1,304 | 1,304 | ||||||
Income from operations | $ | 5,024 | $ | 2,862 | ||||
