Cover
Cover - shares | 9 Months Ended | ||
Oct. 02, 2020 | Nov. 06, 2020 | Jan. 03, 2020 | |
Cover [Abstract] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | Oct. 2, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-36040 | ||
Entity Registrant Name | Fox Factory Holding Corp. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-1647258 | ||
Entity Address, Address Line One | 6634 Hwy 53 | ||
Entity Address, City or Town | Braselton | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30517 | ||
City Area Code | 831 | ||
Local Phone Number | 274-6500 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | FOXF | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Common stock, shares outstanding (in shares) | 41,712 | 38,559 | |
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q3 | ||
Entity Central Index Key | 0001424929 | ||
Current Fiscal Year End Date | --01-01 | ||
Entity Common Stock, Shares Outstanding | 41,715,243 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 278,246 | $ 43,736 |
Accounts receivable (net of allowances of $837 and $810 at October 2, 2020 and January 3, 2020, respectively) | 114,097 | 91,632 |
Inventory | 135,687 | 128,505 |
Prepaids and other current assets | 31,605 | 17,940 |
Total current assets | 559,635 | 281,813 |
Property, plant and equipment, net | 156,819 | 108,379 |
Lease right-of-use assets | 25,695 | 17,472 |
Deferred tax assets | 18,525 | 25,725 |
Goodwill | 287,113 | 93,527 |
Intangibles, net | 209,590 | 81,949 |
Other assets | 3,149 | 451 |
Total assets | 1,260,526 | 609,316 |
Current liabilities: | ||
Accounts payable | 101,439 | 55,144 |
Accrued expenses | 61,393 | 35,744 |
Reserve for uncertain tax positions | 1,055 | 925 |
Current portion of long-term debt | 10,000 | 0 |
Total current liabilities | 173,887 | 91,813 |
Line of credit | 0 | 68,000 |
Long-term debt, less current portion | 379,242 | 0 |
Other liabilities | 23,470 | 11,584 |
Total liabilities | 576,599 | 171,397 |
Commitments and contingencies (Refer to Note 9 - Commitments and Contingencies) | ||
Redeemable non-controlling interest | 0 | 15,719 |
Stockholders’ equity | ||
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of October 2, 2020 and January 3, 2020 | 0 | 0 |
Common stock, $0.001 par value — 90,000 authorized; 42,601 shares issued and 41,712 outstanding as of October 2, 2020; 39,448 shares issued and 38,559 outstanding as of January 3, 2020 | 42 | 39 |
Additional paid-in capital | 334,486 | 123,274 |
Treasury stock, at cost; 890 common shares as of October 2, 2020 and January 3, 2020 | (13,754) | (13,754) |
Accumulated other comprehensive (loss) income | (32) | 150 |
Retained earnings | 363,185 | 312,491 |
Total stockholders’ equity | 683,927 | 422,200 |
Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ 1,260,526 | $ 609,316 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 837 | $ 810 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 42,601 | 39,448 |
Common stock, shares outstanding (in shares) | 41,712 | 38,559 |
Treasury stock, shares (in shares) | 890 | 890 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Sales | $ 260,700 | $ 211,317 | $ 628,163 | $ 565,139 |
Cost of sales | 171,226 | 141,500 | 422,088 | 382,045 |
Gross profit | 89,474 | 69,817 | 206,075 | 183,094 |
Operating expenses: | ||||
Sales and marketing | 13,667 | 11,660 | 38,291 | 32,186 |
Research and development | 8,514 | 8,376 | 24,779 | 23,442 |
General and administrative | 16,463 | 12,727 | 53,443 | 36,065 |
Amortization of purchased intangibles | 5,277 | 1,694 | 13,084 | 4,751 |
Total operating expenses | 43,921 | 34,457 | 129,597 | 96,444 |
Income from operations | 45,553 | 35,360 | 76,478 | 86,650 |
Other expense, net: | ||||
Interest expense | 2,291 | 748 | 7,030 | 2,582 |
Other (income) expense | (189) | (37) | (57) | 532 |
Other expense, net | 2,102 | 711 | 6,973 | 3,114 |
Income before income taxes | 43,451 | 34,649 | 69,505 | 83,536 |
Provision for income taxes | 5,431 | 4,473 | 9,555 | 11,596 |
Net income | 38,020 | 30,176 | 59,950 | 71,940 |
Less: net income attributable to non-controlling interest | 0 | 689 | 1,429 | |
Net income attributable to FOX stockholders | $ 38,020 | $ 29,487 | $ 58,878 | $ 70,511 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.91 | $ 0.77 | $ 1.48 | $ 1.84 |
Diluted (in dollars per share) | $ 0.90 | $ 0.75 | $ 1.46 | $ 1.80 |
Weighted-average shares used to compute earnings per share: | ||||
Basic (in shares) | 41,616 | 38,451 | 39,726 | 38,259 |
Diluted (in shares) | 42,206 | 39,174 | 40,314 | 39,151 |
Level 3 | ||||
Other expense, net: | ||||
Less: net income attributable to non-controlling interest | $ 1,072 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 38,020 | $ 30,176 | $ 59,950 | $ 71,940 |
Other comprehensive (loss) income | ||||
Interest rate swap, net of tax effects | (801) | 0 | (801) | 0 |
Foreign currency translation adjustments, net of tax effects | 636 | (352) | 619 | (197) |
Other comprehensive (loss) income | (165) | (352) | (182) | (197) |
Comprehensive income | 37,855 | 29,824 | 59,768 | 71,743 |
Less: comprehensive income attributable to non-controlling interest | 0 | 689 | 1,072 | 1,429 |
Comprehensive income attributable to FOX stockholders | $ 37,855 | $ 29,135 | $ 58,696 | $ 70,314 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity and Redeemable Non-controlling Interest - USD ($) $ in Thousands | Total | Scenario, Adjustment | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury | Additional paid-in capital | Accumulated other comprehensive (loss) income | Retained earnings | Retained earningsScenario, Adjustment | Retained earningsCumulative Effect, Period of Adoption, Adjustment |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | $ 321,205 | $ (228) | $ 38 | $ (13,754) | $ 116,019 | $ (784) | $ 219,686 | $ (228) | ||
Adoption of new accounting standard, net of taxes | 321,205 | (228) | $ 38 | $ (13,754) | 116,019 | (784) | 219,686 | (228) | ||
Beginning Balance (in shares) at Dec. 28, 2018 | 38,881,000 | 890,000 | ||||||||
Beginning balance at Dec. 28, 2018 | 321,205 | (228) | $ 38 | $ (13,754) | 116,019 | (784) | 219,686 | (228) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 180,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (1,229) | (1,229) | ||||||||
Adjustment to the fair value of non-controlling interest | 339,421 | (228) | $ 38 | (13,754) | 116,519 | (943) | 237,561 | (228) | ||
Stock-based compensation expense | 1,729 | 1,729 | ||||||||
Other comprehensive (loss) income | (159) | (159) | ||||||||
Adoption of new accounting standard, net of taxes | 339,421 | (228) | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 | (228) | ||
Net income | 18,103 | 18,103 | ||||||||
Ending Balance (in shares) at Mar. 29, 2019 | 39,061,000 | 890,000 | ||||||||
Ending balance at Mar. 29, 2019 | 339,421 | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 | ||||
Beginning Balance at Dec. 28, 2018 | 14,282 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Net Income | 299 | |||||||||
Ending Balance at Mar. 29, 2019 | 14,581 | |||||||||
Beginning Balance (in shares) at Dec. 28, 2018 | 38,881,000 | 890,000 | ||||||||
Beginning balance at Dec. 28, 2018 | 321,205 | (228) | $ 38 | $ (13,754) | 116,019 | (784) | 219,686 | (228) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 396,620 | (228) | 38 | (13,754) | 121,348 | (981) | 289,969 | (228) | ||
Other comprehensive (loss) income | (197) | |||||||||
Adoption of new accounting standard, net of taxes | 396,620 | $ (228) | $ 38 | $ (13,754) | 121,348 | (981) | 289,969 | $ (228) | ||
Net income | 70,511 | |||||||||
Ending Balance (in shares) at Sep. 27, 2019 | 39,414,000 | 890,000 | ||||||||
Ending balance at Sep. 27, 2019 | 396,620 | $ 38 | $ (13,754) | 121,348 | (981) | 289,969 | ||||
Beginning Balance at Dec. 28, 2018 | 14,282 | |||||||||
Ending Balance at Sep. 27, 2019 | 15,711 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 339,421 | 38 | (13,754) | 116,519 | (943) | 237,561 | ||||
Adoption of new accounting standard, net of taxes | 339,421 | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 | ||||
Beginning Balance (in shares) at Mar. 29, 2019 | 39,061,000 | 890,000 | ||||||||
Beginning balance at Mar. 29, 2019 | 339,421 | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 115,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (2,264) | (2,264) | ||||||||
Issuance of stock for business acquisition (in shares) | 98,000 | |||||||||
Issuance of stock for business acquisition | 7,167 | 7,167 | ||||||||
Adjustment to the fair value of non-controlling interest | 369,180 | $ 38 | (13,754) | 123,043 | (629) | 260,482 | ||||
Stock-based compensation expense | 1,621 | 1,621 | ||||||||
Other comprehensive (loss) income | 314 | 314 | ||||||||
Adoption of new accounting standard, net of taxes | 369,180 | $ 38 | $ (13,754) | 123,043 | (629) | 260,482 | ||||
Net income | 22,921 | 22,921 | ||||||||
Ending Balance (in shares) at Jun. 28, 2019 | 39,274,000 | 890,000 | ||||||||
Ending balance at Jun. 28, 2019 | 369,180 | $ 38 | $ (13,754) | 123,043 | (629) | 260,482 | ||||
Beginning Balance at Mar. 29, 2019 | 14,581 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Net Income | 441 | |||||||||
Ending Balance at Jun. 28, 2019 | 15,022 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 369,180 | 38 | (13,754) | 123,043 | (629) | 260,482 | ||||
Adoption of new accounting standard, net of taxes | 369,180 | $ 38 | (13,754) | 123,043 | (629) | 260,482 | ||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 140,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (3,300) | (3,300) | ||||||||
Adjustment to the fair value of non-controlling interest | 396,620 | $ 38 | (13,754) | 121,348 | (981) | 289,969 | ||||
Stock-based compensation expense | 1,605 | 1,605 | ||||||||
Other comprehensive (loss) income | (352) | (352) | ||||||||
Adoption of new accounting standard, net of taxes | 396,620 | $ 38 | $ (13,754) | 121,348 | (981) | 289,969 | ||||
Net income | 29,487 | 29,487 | ||||||||
Ending Balance (in shares) at Sep. 27, 2019 | 39,414,000 | 890,000 | ||||||||
Ending balance at Sep. 27, 2019 | 396,620 | $ 38 | $ (13,754) | 121,348 | (981) | 289,969 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Net Income | 689 | |||||||||
Ending Balance at Sep. 27, 2019 | 15,711 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 396,620 | 38 | (13,754) | 121,348 | (981) | 289,969 | ||||
Adoption of new accounting standard, net of taxes | 396,620 | 38 | (13,754) | 121,348 | (981) | 289,969 | ||||
Adjustment to the fair value of non-controlling interest | 422,200 | 39 | (13,754) | 123,274 | 150 | 312,491 | ||||
Adoption of new accounting standard, net of taxes | $ 422,200 | $ 39 | $ (13,754) | 123,274 | 150 | 312,491 | ||||
Beginning Balance (in shares) at Jan. 03, 2020 | 38,559 | 39,448,000 | 890,000 | |||||||
Beginning balance at Jan. 03, 2020 | $ 422,200 | $ 39 | $ (13,754) | 123,274 | 150 | 312,491 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 45,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (2,047) | (2,047) | ||||||||
Adjustment to the fair value of non-controlling interest | 429,706 | $ 39 | (13,754) | 123,470 | (790) | 320,741 | ||||
Stock-based compensation expense | 1,921 | 1,921 | ||||||||
Other comprehensive (loss) income | (940) | (940) | ||||||||
Adoption of new accounting standard, net of taxes | 429,706 | $ 39 | $ (13,754) | 123,470 | (790) | 320,741 | ||||
Net income | 8,250 | 8,250 | ||||||||
Ending Balance (in shares) at Apr. 03, 2020 | 39,493,000 | 890,000 | ||||||||
Ending balance at Apr. 03, 2020 | 429,706 | $ 39 | $ (13,754) | 123,470 | (790) | 320,741 | ||||
Beginning Balance at Jan. 03, 2020 | 15,719 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Net Income | 488 | |||||||||
Ending Balance at Apr. 03, 2020 | $ 16,207 | |||||||||
Beginning Balance (in shares) at Jan. 03, 2020 | 38,559 | 39,448,000 | 890,000 | |||||||
Beginning balance at Jan. 03, 2020 | $ 422,200 | $ 39 | $ (13,754) | 123,274 | 150 | 312,491 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | $ 683,927 | $ (8,184) | 42 | (13,754) | 334,486 | (32) | 363,185 | $ (8,184) | ||
Redeemable non-controlling interest (in shares) | 136,000,000 | |||||||||
Other comprehensive (loss) income | $ (182) | |||||||||
Adoption of new accounting standard, net of taxes | 683,927 | (8,184) | $ 42 | $ (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Net income | $ 58,878 | |||||||||
Ending Balance (in shares) at Oct. 02, 2020 | 41,712 | 42,601,000 | 890,000 | |||||||
Ending balance at Oct. 02, 2020 | $ 683,927 | (8,184) | $ 42 | $ (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Beginning Balance at Jan. 03, 2020 | 15,719 | |||||||||
Ending Balance at Oct. 02, 2020 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 429,706 | 39 | (13,754) | 123,470 | (790) | 320,741 | ||||
Adoption of new accounting standard, net of taxes | 429,706 | $ 39 | $ (13,754) | 123,470 | (790) | 320,741 | ||||
Beginning Balance (in shares) at Apr. 03, 2020 | 39,493,000 | 890,000 | ||||||||
Beginning balance at Apr. 03, 2020 | 429,706 | $ 39 | $ (13,754) | 123,470 | (790) | 320,741 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 74,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (2,301) | (2,301) | ||||||||
Issuance of common stock, net (in shares) | 2,760,000 | |||||||||
Issuance of common stock, net | 198,236 | $ 2 | 198,234 | |||||||
Adjustment to the fair value of non-controlling interest | 633,064 | 41 | (13,754) | 321,479 | 133 | 325,165 | ||||
Stock-based compensation expense | 2,076 | 2,076 | ||||||||
Other comprehensive (loss) income | 923 | 923 | ||||||||
Adoption of new accounting standard, net of taxes | 633,064 | $ 41 | $ (13,754) | 321,479 | 133 | 325,165 | ||||
Net income | 12,608 | 12,608 | ||||||||
Ending Balance (in shares) at Jul. 03, 2020 | 42,327,000 | 890,000 | ||||||||
Ending balance at Jul. 03, 2020 | 633,064 | $ 41 | $ (13,754) | 321,479 | 133 | 325,165 | ||||
Beginning Balance at Apr. 03, 2020 | 16,207 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Net Income | 584 | |||||||||
Ending Balance at Jul. 03, 2020 | 24,975 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 633,064 | 41 | (13,754) | 321,479 | 133 | 325,165 | ||||
Adoption of new accounting standard, net of taxes | 633,064 | $ 41 | (13,754) | 321,479 | 133 | 325,165 | ||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 138,000 | |||||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (253) | $ 1 | (254) | |||||||
Adjustment to the fair value of non-controlling interest | $ 683,927 | (8,184) | 42 | (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Redeemable non-controlling interest (in shares) | 136,000 | |||||||||
Redeemable non-controlling interest | $ 11,169 | 11,169 | ||||||||
Stock-based compensation expense | 2,092 | 2,092 | ||||||||
Other comprehensive (loss) income | (165) | (165) | ||||||||
Adoption of new accounting standard, net of taxes | 683,927 | (8,184) | $ 42 | $ (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Net income | $ 38,020 | 38,020 | ||||||||
Ending Balance (in shares) at Oct. 02, 2020 | 41,712 | 42,601,000 | 890,000 | |||||||
Ending balance at Oct. 02, 2020 | $ 683,927 | (8,184) | $ 42 | $ (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Redeemable non-controlling interest | (24,975) | |||||||||
Ending Balance at Oct. 02, 2020 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Adjustment to the fair value of non-controlling interest | 683,927 | (8,184) | 42 | (13,754) | 334,486 | (32) | 363,185 | (8,184) | ||
Adoption of new accounting standard, net of taxes | $ 683,927 | (8,184) | $ 42 | $ (13,754) | $ 334,486 | $ (32) | $ 363,185 | $ (8,184) | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Temporary Equity, Adjustment to fair value of non-controlling interest | $ 8,184 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows $ in Thousands | 9 Months Ended | |
Oct. 02, 2020USD ($) | Sep. 27, 2019USD ($) | |
OPERATING ACTIVITIES: | ||
Net income | $ 59,950 | $ 71,940 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 24,762 | 12,821 |
Stock-based compensation | 6,360 | 4,955 |
Deferred taxes and uncertain tax positions | (11,857) | (5,503) |
Amortization of loan fees | 1,129 | 146 |
Loss on extinguishment of debt | 0 | 516 |
Changes in operating assets and liabilities, net of effects of acquisition of business: | ||
Accounts receivable | (12,610) | (28,257) |
Inventory | (579) | (20,339) |
Income taxes | 3,218 | (7,339) |
Prepaids and other assets | (14,737) | (7,577) |
Accounts payable | 36,712 | 9,797 |
Accrued expenses and other liabilities | 7,453 | (236) |
Net cash provided by operating activities | 99,801 | 30,924 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (45,983) | (25,903) |
Acquisition of businesses, net of cash acquired | (329,176) | (6,804) |
Acquisition of other assets | (250) | 0 |
Net cash used in investing activities | (375,409) | (32,707) |
FINANCING ACTIVITIES: | ||
Proceeds from line of credit | 204,131 | 67,500 |
Payments on line of credit | (272,131) | (52,053) |
Proceeds from issuance of debt, net of origination fees of $7,615 | 392,385 | 0 |
Capital Expenditures Incurred but Not yet Paid | 6,530 | 868 |
Noncash Or Part Noncash Acquisition, Noncontrolling Interest for Exchange of Equity | 21,975 | 0 |
Repayment of debt | (5,000) | (2,813) |
Installment on purchase of non-controlling interest | (3,000) | 0 |
Proceeds from sale of common stock, net | 198,236 | 0 |
Repurchases from stock compensation program, net | (4,602) | (6,793) |
Net cash provided by financing activities | 510,019 | 5,841 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 99 | (37) |
CHANGE IN CASH AND CASH EQUIVALENTS | 234,510 | 4,021 |
CASH AND CASH EQUIVALENTS—Beginning of period | 43,736 | 27,958 |
CASH AND CASH EQUIVALENTS—End of period | 278,246 | 31,979 |
Interest and Income Taxes Paid [Abstract] | ||
Income Taxes Paid | 17,484 | 24,402 |
Interest Paid, Excluding Capitalized Interest, Operating Activities | 5,946 | 1,971 |
Operating Lease, Payments | 5,267 | 4,476 |
Noncash or Part Noncash, Refinancing of Credit Facilities | 0 | 88,875 |
Cash Flow, Noncash Operating Activities Disclosure [Abstract] | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 12,293 | 8,565 |
Acquisition of business in exchange for equity | 0 | $ 7,167 |
Debt issuance costs | $ 7,615 |
Description of the Business, Ba
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 02, 2020 | |
Accounting Policies [Abstract] | |
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies | Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies - Fox Factory Holding Corp. (the "Company") designs, engineers, manufactures, and markets performance-defining products and systems for customers worldwide. Our premium brand, performance-defining products and systems are used primarily for bicycles ("bikes"), side-by-side vehicles ("Side-by-Sides"), on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles ("ATVs"), snowmobiles, specialty vehicles and applications, motorcycles and commercial trucks. Some of our products are specifically designed and marketed to the leading cycling and powered vehicle original equipment manufacturers ("OEMs"), while others are distributed to consumers through a global network of dealers and distributors. Throughout this Form 10-Q, unless stated otherwise or as the context otherwise requires, the "Company," "FOX," "Fox Factory," "we," "us," "our," and "ours" refer to Fox Factory Holding Corp. and its operating subsidiaries on a consolidated basis. Basis of Presentation - The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America ("U.S." or "United States") and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended January 3, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 3, 2020. In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. The Company operates on a 52-53 week fiscal calendar. For 2020 and 2019, the Company's fiscal year will end or has ended on January 1, 2021 and January 3, 2020, respectively. The twelve month periods ended January 1, 2021 and January 3, 2020, will include or have included 52 and 53 weeks, respectively. The three and nine month periods ended October 2, 2020 and September 27, 2019 each included 13 weeks and 39 weeks, respectively. Principles of Consolidation - These condensed consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Summary of Significant Accounting Policies - There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended January 3, 2020, as filed with the SEC on March 3, 2020 that have had a material impact on our condensed consolidated financial statements and related notes. Revenue Recognition - Revenues are generated from the sale of performance-defining products and systems to customers worldwide. The Company’s performance-defining products and systems are solutions that improve performance of powered vehicles and bikes. Powered vehicles include Side-by-Sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, ATVs, snowmobiles, specialty vehicles and applications, and motorcycles. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer, generally at the time of shipment. Contracts are generally in the form of purchase orders and are governed by standard terms and conditions. For larger OEMs, the Company may also enter into master agreements. Revenues exclude sales tax. Provisions for discounts, rebates, sales incentives, returns, and other adjustments are generally provided for in the period the related sales are recorded, based on management’s assessment of historical trends and projection of future results. Certain pricing provisions that provide the customer with future discounts are considered a material right. Such material rights result in the deferral of revenue that are recognized when the rights are exercised by the customer. Measuring the material rights requires judgments including forecasts of future sales and product mix. At January 3, 2020, the balance of deferred revenue related to pricing provisions was $172 which was recognized as revenue during the nine months ended October 2, 2020. Segments - The Company has determined that it has a single operating and reportable segment. The Company considers an operating segment to be a component of the Company for which separate financial information is available, that is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Use of Estimates - The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. Certain Significant Risks and Uncertainties - The Company is subject to those risks common in manufacturing-driven markets, including, but not limited to, competitive forces, dependence on key personnel, customer demand for its products, the successful protection of its proprietary technologies, compliance with government regulations, and the possibility of not being able to obtain additional financing when needed. Additionally, the Company has been impacted by the recent coronavirus (“COVID-19”) pandemic. The global outbreak of COVID-19 has negatively affected the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. The Company’s manufacturing facilities in North America have been affected by local and state “shelter-in-place” orders including the temporary suspension of non-essential operations in certain facilities. The Company took actions to manage costs during this time by enacting temporary executive pay cuts and furloughs, curtailing non-essential capital expenditures, and reducing expenses. Despite the Company’s efforts to manage and remedy these impacts to the Company, the ultimate impact and the extent to which the COVID-19 pandemic will continue to affect the business, results of operation and financial condition is difficult to predict and depends on numerous evolving factors outside of the Company’s control, including: the duration and scope of the pandemic; government, social, business and other actions that have been and will be taken in response to the pandemic; and the effect of the pandemic on short and long-term general economic conditions. Fair Value Measurements and Financial Instruments - The Financial Accounting Standards Board ("FASB") has issued Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, that requires the valuation of assets and liabilities required or permitted to be either recorded or disclosed at fair value based on hierarchy of available inputs as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The carrying amounts of the Company's financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. Amounts owed under the Company's First Amended and Restated Credit Facility (as defined in Note 8 - Debt below) approximate fair value due to the variable interest rate features embedded in both the line of credit and the term debt. Recent Accounting Pronouncements - In February 2016, the FASB issued accounting standards update ("ASU") 2016-02, Leases, which supersedes the existing guidance for lease accounting. To meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases, this ASU requires lessees to recognize most leases on the balance sheet as right-of-use assets and lease liabilities. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2019, with a cumulative effect adjustment to the opening balance of retained earnings at December 28, 2018 with no restatement of comparative periods’ financial information ("current-period adjustment method"). Additionally, the Company adopted this guidance using practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all of its leases and elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. The Company did not use the hindsight practical expedient to adopt this guidance. The Company recorded a cumulative effect adjustment of $13,637 to operating lease right-of-use assets, $13,937 to operating lease liabilities, and $300 gross ($228 net of taxes) to the opening balance of the Company's retained earnings to reflect the cumulative effect of the adoption of the standard. This standard did not have a material impact on our consolidated income statements. In June 2016, the FASB issue ASU 2016-13, Financial Instruments: Credit Losses, which adds an impairment model that is based on expected losses rather than incurred losses. Under this standard, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The Company adopted ASU 2016-13 effective in the first quarter of fiscal year 2020 using the aging method, which calculates the allowance based on how long a receivable has been outstanding, taking into account the historical credit loss rate and adjusting for both current conditions and forecasts of economic conditions into that expected credit loss rate. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation of certain transactions, including but not limited to contingent consideration payments made after a business combination and debt prepayment and extinguishment costs in the cash flow statement. The Company adopted ASU 2016-15 effective in the first quarter of fiscal year 2019. The adoption of ASU 2016-15 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, which modifies the disclosure requirements of fair value measurements in Topic 820. This standard is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2018-13 effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other: Internal-Use Software, which helps simplify how entities evaluate the accounting for costs paid by a customer in a cloud computing arrangement that is a service contract. This standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company adopted ASU 2018-15 effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-15 did not have a material impact on the Company's consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which helps simplify how entities account for income taxes by removing various exceptions related to the recognition of deferred tax liabilities and updating other tax computation requirements. This standard is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues
Revenues | 9 Months Ended |
Oct. 02, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The following table summarizes total sales by product category: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Powered Vehicles $ 153,031 $ 130,022 $ 372,081 $ 341,976 Specialty Sports 107,669 81,295 256,082 223,163 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 The following table summarizes total sales by sales channel: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 OEM $ 143,687 $ 131,678 $ 335,295 $ 349,504 Aftermarket 117,013 79,639 292,868 215,635 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 The following table summarizes total sales generated by geographic location of the customer: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 North America $ 175,486 $ 142,624 $ 423,078 $ 383,414 Asia 41,609 37,521 97,872 88,888 Europe 41,004 29,024 101,223 87,074 Rest of the world 2,601 2,148 5,990 5,763 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 |
Inventory
Inventory | 9 Months Ended |
Oct. 02, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following: October 2, January 3 2020 2020 Raw materials $ 90,674 $ 87,779 Work-in-process 11,656 7,075 Finished goods 33,357 33,651 Total inventory $ 135,687 $ 128,505 |
Prepaids and Other Assets
Prepaids and Other Assets | 9 Months Ended |
Oct. 02, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaids and Other Current Assets | Prepaids and Other Current Assets Prepaids and other current assets consisted of the following: October 2, January 3 2020 2020 Prepaid chassis deposits $ 12,424 $ 6,701 Advanced payments and prepaid contracts 8,374 5,774 Current portion of acquisition-related compensation held in escrow 4,765 — Other current assets 6,042 5,465 Total $ 31,605 $ 17,940 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Oct. 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: October 2, January 3 2020 2020 Building and building improvements $ 74,434 $ 42,343 Information systems, office equipment and furniture 13,241 10,102 Internal-use computer software 19,370 16,860 Land 8,171 5,414 Leasehold improvements 13,082 13,841 Machinery and manufacturing equipment 76,564 57,331 Transportation equipment 5,933 5,006 Total 210,795 150,897 Less: accumulated depreciation and amortization (53,976) (42,518) Property, plant and equipment, net $ 156,819 $ 108,379 The Company’s long-lived assets by geographic location are as follows: October 2, January 3 2020 2020 United States $ 142,369 $ 100,508 International 14,450 7,871 Total long-lived assets $ 156,819 $ 108,379 |
Leases
Leases | 9 Months Ended |
Oct. 02, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has operating lease agreements for administrative, research and development, manufacturing, and sales and marketing facilities. These leases have remaining lease terms ranging from 1 to 8 years, some of which include options to extend the lease term for up to 5 years, and some of which include options to terminate the leases within 1 year. Certain leases are subject to annual escalations as specified in the lease agreements. The Company considered these options in determining the lease term used to establish its right-of-use assets and lease liabilities. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of the Company's leases do not provide an interest rate, the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted-average remaining lease term for the Company's operating leases was 4.71 years and the weighted-average incremental borrowing rate was 3.24% as of October 2, 2020. Operating lease costs consisted of the following: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Operating lease cost $ 1,835 $ 1,581 $ 5,209 $ 4,550 Other lease costs (1) 214 338 733 763 Total $ 2,049 $ 1,919 $ 5,942 $ 5,313 (1) Includes short-term leases and variable lease costs. The Company elected a policy permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. Supplemental balance sheet information related to the Company's operating leases is as follows: Balance Sheet Classification October 2, 2020 Operating lease right-of-use assets Lease right-of-use assets $ 25,695 Current lease liabilities Accrued expenses $ 6,518 Non-current lease liabilities Other liabilities $ 18,832 Maturities of lease liabilities by fiscal year for the Company's operating leases are as follows: For fiscal year Total future payments 2020 (excluding the 9 months ended October 2, 2020) $ 1,856 2021 7,109 2022 5,807 2023 4,705 2024 3,031 Thereafter 4,875 Total lease payments 27,383 Less: imputed interest (2,033) Present value of lease liabilities 25,350 Less: current portion (6,518) Lease liabilities less current portion $ 18,832 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Oct. 02, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: October 2, January 3 2020 2020 Payroll and related expenses $ 17,442 $ 14,595 Current portion of lease liabilities 6,518 6,242 Warranty 9,485 5,649 Income tax payable 9,573 4,295 Current portion of non-controlling interest buyout liability 7,206 — Other accrued expenses 11,169 4,963 Total $ 61,393 $ 35,744 Activity related to warranties is as follows: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Beginning warranty liability $ 8,915 $ 6,208 $ 5,649 $ 6,433 Charge to cost of sales 2,181 1,054 4,987 3,204 Fair value of warranty assumed in acquisition — — 3,158 100 Costs incurred (1,611) (1,116) (4,309) (3,591) Ending warranty liability $ 9,485 $ 6,146 $ 9,485 $ 6,146 |
Debt
Debt | 9 Months Ended |
Oct. 02, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Former Second Amended and Restated Credit Facility In August 2013, the Company entered into a credit facility with SunTrust Bank, N.A. and other named lenders, which was periodically amended and restated (the "Second Amended and Restated Credit Facility"). The Company paid off the Second Amended and Restated Credit Facility in June 2019 upon entering into the new credit facility with Bank of America, N.A. ("Bank of America"). First Amended and Restated Credit Facility In June 2019, the Company entered into a credit facility with Bank of America and other named lenders, which was amended and restated on March 11, 2020 and June 19, 2020 (as most recently amended and restated as the "First Amended and Restated Credit Facility"). The First Amended and Restated Credit Facility, which matures on March 11, 2025, provides a senior secured revolving line of credit with a borrowing capacity of $250,000 and a term loan of $400,000. The term loan is subject to quarterly amortization payments. The Company paid $7,615 in debt issuance costs, of which $6,458 were allocated to the term debt and $1,157 were allocated to the line of credit. Additionally, the Company had $434 of remaining unamortized debt issuance costs. The Company expensed $277 of the remaining unamortized debt issuance costs, which are included in other expense, net in the condensed consolidated statements of income for the nine months ended October 2, 2020. The remaining $157 were allocated to the line of credit. Loan fees allocated to the term debt will be amortized using the interest method and loan fees allocated to the line of credit will be amortized on a straight-line basis over the term of the First Amended and Restated Credit Facility. The First Amended and Restated Credit Facility provides for interest at a rate either based on the London Interbank Offered Rate, or LIBOR, plus a margin ranging from 1.00% to 2.25%, with a floor rate of 0.50%, or based on the base rate offered by Bank of America plus a margin ranging from 0.00% to 1.25%. At October 2, 2020, the one-month LIBOR and prime rates were 0.14% and 3.25%, respectively. At October 2, 2020, our weighted-average interest rate on outstanding borrowing was 1.87%. The First Amended and Restated Credit Facility is secured by substantially all of the Company’s assets, restricts the Company's ability to make certain payments and engage in certain transactions, and requires that the Company satisfy customary financial ratios. The Company was in compliance with the covenants as of October 2, 2020. In August 2020, the Company entered into an interest rate swap agreement to hedge the variability of cash flows in interest payments associated with $200,000 of its variable rate term debt. Refer to Note 10 - Derivatives and Hedging for further details of this agreement. The First Amended and Restated Credit Facility permits up to $25,000 of the aggregate revolving commitment to be used by the Company for issuance of letters of credit, of which $15,000 was outstanding at October 2, 2020. The following table summarizes the line of credit under the First Amended and Restated Credit Facility: October 2, 2020 Amount outstanding $ — Standby letters of credit 15,000 Available borrowing capacity 235,000 Total borrowing capacity $ 250,000 Maturity date March 11, 2025 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 02, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnification Agreements - In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise due to their status or service as directors, officers or employees. While the outcome of these matters cannot be predicted with certainty, the Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on the Company’s results of operations, financial position or liquidity. Legal Proceedings - A lawsuit was filed on December 17, 2015 by SRAM Corporation (“SRAM”) in the U.S. District Court, Northern District of Illinois, against the Company’s wholly-owned subsidiary, RFE Canada Holding Corp. (“RFE Canada”). The lawsuit alleges patent infringement of U.S. Patent number 9,182,027 ("027 Patent") and violation of the Lanham Act. SRAM filed a second lawsuit in the same court against RFE Canada on May 16, 2016, alleging patent infringement of U.S Patent number 9,291,250 ("'250 Patent"). The Company believes that the lawsuits are without merit and intends vigorously to defend itself. As such, the Company has filed, before the U. S. Patent and Trademark Appeals Board ("PTAB"), for Interparties Reviews ("IPR") of the '027 Patent and separately the same for the '250 Patent. In April 2018, the PTAB issued opinions in the ‘027 Patent petition cases stating that the Company has not shown the claims of the ‘027 Patent to be obvious. Regarding the PTAB ‘027 opinions, the Company has filed an Appeal to the Court of Appeals for the Federal Circuit ("CAFC"). The CAFC found in favor of the Company and has vacated and remanded all of the PTAB findings with the exception of their finding that the ‘027 patent met the prima facia test for obviousness, which was affirmed. The CAFC has declined to rehear the case and has issued the final remand order sending the case back to the PTAB. SRAM filed ‘027 writ of certiorari before the Supreme Court of the United States, the writ of certiorari was denied and the case is before the PTAB on remand. The PTAB has issued an opinion in the ‘250 Patent case stating that the Company has not shown the claims of the ‘250 Patent to be obvious. The Company has appealed that PTAB opinion to the CAFC and the CAFC has affirmed the PTAB opinion. The U.S. District Court, Northern District of Illinois, has again stayed the SRAM lawsuits against the Company pending outcome of the remanded ‘027 PTAB issue. In a separate action, the Company filed a lawsuit on January 29, 2016 in the U.S. District Court, Northern District of California against SRAM. That lawsuit alleges SRAM’s infringement of two separate Company owned patents, specifically U.S. Patent numbers 6,135,434 and 6,557,674. The Company filed a second lawsuit on July 1, 2016 in the U.S. District Court, Northern District of California against SRAM alleging infringement of the Company’s U.S. Patent numbers 8,226,172 and 8,974,009. These lawsuits have been moved to U.S. District Court, District of Colorado and are otherwise proceeding. Due to the inherent uncertainties of litigation, the Company is not able to predict either the outcome or a range of reasonably possible losses, if any, at this time. Accordingly, no amounts have been recorded in the consolidated financial statements for the settlement of these matters. Were an unfavorable ruling to occur, or if factors indicate that a loss is probable and reasonably estimable, the Company's business, financial condition or results of operations could be materially and adversely affected. The Company is involved in other legal matters that arise in the ordinary course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company's financial condition, results of operations or cash flows. Other Commitments - On November 30, 2017, the Company through FF US Holding Corp., acquired the assets of Flagship, Inc. d/b/a Tuscany and issued a 20% interest in FF US Holding Corp. to Flagship, Inc. A stockholders' agreement with Flagship, Inc. provided the Company with a call option (the "Call Option") to acquire the remaining 20% of FF US Holding Corp. at any time from November 30, 2019 through November 30, 2024 at a value that approximates fair market value. On July 22, 2020, the Company exercised the Call Option and, pursuant to a stock purchase agreement with Flagship, Inc., the Company purchased the remaining 20% interest for $24,975 payable in a combination of stock and cash. The cash portion will be settled in quarterly installment payments through July 2022, which amount to $6,556, $4,550 and $2,700 in 2020, 2021 and 2022, respectively. The Company paid $3,000 during the nine months ended October 2, 2020. The stock portion of 136 shares held in escrow will be released quarterly starting January 2021 through July 2022. The exercise of the Call Option effectively canceled the put option held by Flagship, Inc. Other Contingencies - On June 21, 2018, the U.S. Supreme Court (the “Court”) decided South Dakota v. Wayfair, Inc., et al., holding that internet retailers do not have to maintain a physical presence in a state in order to be required to collect the state’s sales and use tax. As a result of the Court’s decision, most states enacted legislation to require sellers who meet economic nexus thresholds to register, collect and remit sales and use taxes on transactions with out-of-state customers. The Company believes that it is possible that it will incur a liability for uncollected sales tax on some portion of its e-commerce sales through October 2, 2020. Based on information currently available, any retroactively imposed liability is not expected to be material to the Company’s results of operations or financial position because direct end-user sales in states where the Company is not registered comprise a small portion of total revenues. |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Oct. 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging On August 17, 2020 the Company entered into a Swap to mitigate the cash flow risk associated with changes in interest rates on $200,000 of its variable rate debt. Refer to Note 8 - Debt for further details of the Company's variable rate debt. The Swap matures on March 11, 2025. The Company pays a base fixed rate of 0.73% and in return receives the greater of (1) 1-month LIBOR, or (2) 0.50%. The Company accounts for interest rate swap contracts in accordance with ASC 815, Derivatives and Hedging, which requires all derivatives, including derivatives designated as accounting hedges, to be recorded on the balance sheet at fair value. The swap has been designated and accounted for as a cash flow hedge of the forecasted interest payments on the Company’s debt. As long as the swap continues to be a highly effective hedge of the designated interest rate risk, changes in the fair value of the swap are recorded in accumulated other comprehensive income (loss), a component of equity. Any ineffective portion of a change in the fair value of a hedge is recorded in earnings. The fair value of the Swap on October 2, 2020 was a liability of $1,038. Refer to Note 11 - Fair Value Measurement s and Finan cial Instruments for information on determining the fair value. The liability is included in other liabilities in the consolidated balance sheets. At both the inception of the Swap and at October 2, 2020, the interest rate swap was considered highly effective and accordingly, the $1,038 change in fair value incurred from inception was deferred and recorded in other comprehensive income (loss), net of taxes. As required under ASC 815, the Swap’s effectiveness will be assessed on a quarterly basis. The Company’s derivative counterparty is an investment grade financial institution. The Company does not have any collateral arrangements with its derivative counterparty and the derivative contract does not contain credit risk related contingent features. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 9 Months Ended |
Oct. 02, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The following table presents the Company's hierarchy for its assets, liabilities and redeemable non-controlling interest measured at fair value on a recurring basis as of the following periods: October 2, 2020 January 3, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Credit Facility $ — $ 389,242 $ — $ 389,242 $ — $ 68,000 $ — $ 68,000 Interest Rate Swap — 1,038 — 1,038 — — — — Non-controlling interest subject to put provisions — — — — — — 15,719 15,719 Total liabilities measured at fair value $ — $ 390,280 $ — $ 390,280 $ — $ 68,000 $ 15,719 $ 83,719 There were no transfers of assets or liabilities between Level 1, Level 2, and Level 3 categories of the fair value hierarchy during the three and nine month period ended October 2, 2020. The Company used Level 2 inputs to determine the fair value of its First Amended and Restated Credit Facility. The Company believes the carrying amount of its First Amended and Restated Credit Facility approximates the fair value at October 2, 2020 because, while subject to a minimum LIBOR floor rate, the interest rate approximates current market rates of debt with similar terms and comparable credit risk. On August 17, 2020 the Company entered into an interest rate swap agreement to mitigate the cash flow risk associated with changes in interest rates on its variable rate debt. Refer to N ote 10 - Derivatives and Hedging for additional details of the agreement. In accordance with ASC 815, Derivatives and Hedging Interest rate swap contract is recognized as an asset or liability on the consolidated balance sheets and is measured at fair value. The fair value was calculated utilizing Level 2 inputs. On July 22, 2020, the Company, pursuant to a stock purchase agreement with Flagship, Inc., dated as of the same date, purchased the remaining 20% interest of FF US Holding Corp. for $24,975 payable in a combination of stock and cash. Refer to Note 9 - Commitments and Contingencies for additional details of this agreement. Prior to the consummation of the stock purchase, the non-controlling interest was measured at fair value using Level 3 inputs. The following table provides a reconciliation of the beginning and ending balances for the Company's redeemable non-controlling interest: Redeemable Non-Controlling Interest (Level 3 measurement) Balance at January 3, 2020 $ 15,719 Net income attributable to non-controlling interest 1,072 Change in fair value 8,184 Purchase of non-controlling interest (24,975) Balance at October 2, 2020 $ — |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Oct. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders' Equity Secondary Stock Offerings In June 2020, the Company completed a secondary offering whereby it sold 2,760 shares of its common stock at a price of $76.00 per share for gross proceeds of $209,760. The net proceeds to the Company after underwriters' discounts and commissions of $11,015 and $511 of offering costs was $198,234. The total shares sold included 360 shares that were sold in connection with the underwriters' option to purchase additional shares. This offering was made pursuant to the Company's registration statement on Form S-3. Equity Incentive Plans The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of income: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Cost of sales $ 191 $ 107 $ 467 350 Sales and marketing 173 136 490 375 Research and development 184 198 603 518 General and administrative 1,815 1,164 4,800 3,712 Total $ 2,363 $ 1,605 $ 6,360 4,955 The following table summarizes the activity for the Company's unvested restricted stock units ("RSU") for the nine months ended October 2, 2020: Unvested RSUs Number of shares outstanding Weighted-average grant date fair value Unvested at January 3, 2020 427 $ 44.98 Granted 257 $ 47.08 Canceled (10) $ 47.97 Vested (217) $ 37.18 Unvested at October 2, 2020 457 $ 49.81 As of October 2, 2020, the Company had approximately $19,447 of unrecognized stock-based compensation expense related to RSUs, which will be recognized over the remaining weighted-average vesting period of approximately 2.74 years. During the nine months ended October 2, 2020, 120 shares of common stock were issued due to the exercise of stock options and no options to purchase common stock expired or were forfeited. As of October 2, 2020, stock-based compensation expense related to stock options has been fully recognized. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Provision for income taxes $ 5,431 $ 4,473 $ 9,555 $ 11,596 Effective tax rates 12.5 % 12.9 % 13.7 % 13.9 % For the three and nine months ended October 2, 2020, the difference between the Company's effective tax rate and the 21% federal statutory rate resulted primarily from lower foreign tax rates, a lower tax rate on foreign derived intangible income, research and development credits, realization of foreign tax credits, and $3,107 and $3,793 in excess benefits related to stock-based compensation, respectively. For the three months ended April 3, 2020, the Company benefited from a negotiated reduction of Switzerland withholding tax on prior year earnings. These benefits were partially offset by state taxes, global low-tax intangible income tax and non-deductible expenses. For the three and nine months ended September 27, 2019, the difference between the Company's effective tax rate and the 21% federal statutory rate resulted primarily from lower foreign tax rates, lower effective federal rates on foreign derived intangible income, research and development credits, and $1,873 and $5,508 in excess benefits related to stock-based compensation, respectively. In the three months ended September 27, 2019, the Company refined its 2019 estimated deduction for foreign derived intangible income, resulting in a 4% benefit to the effective tax rate. These benefits were partially offset by state taxes, foreign withholding taxes and the impact of non-deductible expenses. We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations, or cash flows. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 02, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Agreements | Related Party Transactions On May 3, 2019, the Company acquired substantially all of the assets of Air Ride Technologies, Inc., d/b/a Ridetech, which has a building lease for its manufacturing and offices in Jasper, Indiana. The building is owned by a former owner of Ridetech, who is now an employee of the Company. The lease is effective through April 1, 2024, with monthly rent payments of $16. Rent expense under this lease was $48 and $144 for the three and nine months ended October 2, 2020. On March 11, 2020, the Company acquired 100% of the issued and outstanding stock of SCA Performance Holdings, Inc. ("SCA"), which has a building lease for its manufacturing and offices in Trussville, Alabama. The building is owned by a former owner of SCA, who is now an employee of the Company. The lease is effective through April 13, 2028, with monthly rent payments of $28. Rent expense under this lease was $84 and $196 for the three and nine months ended October 2, 2020. Refer to Note 15 - Acquisitions for further details of this acquisition. On July 22, 2020 the Company, pursuant to a stock purchase agreement with Flagship, Inc., purchased the remaining 20% interest of FF US Holding Corp. for $24,975 payable in a combination of stock and cash. The cash portion will be settled in quarterly installment payments through July 2022. Refer to Note 9 - Commitments and Contingencies for additional details of this agreement. |
Acquisitions
Acquisitions | 9 Months Ended |
Oct. 02, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On March 11, 2020, the Company, through Fox Factory, Inc., acquired 100% of the issued and outstanding stock of SCA Performance Holdings, Inc. ("SCA") from Southern Rocky Holdings, LLC for $329,531, net of cash acquired and exclusive of vehicle inventory. SCA is a leading OEM authorized specialty vehicle manufacturer for light duty trucks and SUVs with headquarters in Trussville, Alabama. SCA operates under three aftermarket brands: SCA Performance, Rocky Ridge Trucks, and Rocky Mountain Truckworks. The Company believes the acquisition will be complementary to FOX’s Tuscany business, expanding its North American geographic manufacturing footprint and broadening its product offering in a growing segment of the automotive industry. This transaction was accounted for as a business combination. The Company also agreed to an additional $10,589 of contingent retention incentives for key SCA management, of which $9,283 is cash and $1,306 is stock, to be held in escrow and payable over the next two years. The Company recognized $1,429 and $2,921 in costs associated with such retention incentives during the three and nine months ended October 2, 2020. Additionally, the Company paid $1,750 in transaction compensation to key SCA management concurrently with the closing. The purchase price of SCA has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated respective fair values as of March 11, 2020 with the excess purchase price allocated to goodwill. The Company’s allocation of the purchase price to the net tangible and intangible assets acquired and liabilities assumed is as follows: Acquisition consideration Cash consideration $ 329,209 Non-cash consideration 322 Total consideration at closing $ 329,531 Fair market values Other current assets $ 15,227 Property, plant and equipment 8,953 Lease right-of-use assets 4,027 Customer relationships 129,000 Trademarks and brand 11,500 Goodwill 193,544 Total assets acquired $ 362,251 Accounts payable and accrued expenses $ 9,454 Lease liabilities 4,027 Deferred taxes 19,239 Total liabilities assumed 32,720 Purchase price allocation $ 329,531 The Company incurred $10,582 of acquisition costs in conjunction with the SCA acquisition, including $1,750 of transaction compensation during the nine months ended October 2, 2020 and $602 of transaction costs during the three months ended January 3, 2020. These costs are classified as general and administrative expenses in the accompanying condensed consolidated statements of income. Additional debt issuance costs of $6,622 were incurred in association with financing the transaction and will be amortized over the term of the First Amended and Restated Credit Facility. Refer to Note 8 - Debt for further details. The primary areas of the preliminary purchase price allocations that have not been finalized relate to the finalization of working capital and the valuation of real estate, intangible assets and related deferred tax liabilities. Upon completion of the fair value assessment, the Company anticipates that the ultimate intangible assets may differ from the preliminary assessment outlined above. Any change in the finalization of working capital will reduce or increase the cash consideration. Any changes to the preliminary estimates of the fair value of the real estate and intangible assets will be adjusted to goodwill during the measurement period, with subsequent changes in estimates recorded in the statement of operations. The preliminarily values assigned to the identifiable intangible assets were determined by discounting the estimated future cash flows associated with these assets to their present value. The goodwill of $193,544 reflects the strategic fit of SCA with the Company’s operations. The Company will amortize the acquired customer relationships assets over their expected useful lives of 5-10 years. Trademarks, brand names and goodwill are expected to have an indefinite life, and will be subject to impairment testing. The goodwill is not deductible for income tax purposes. SCA previously purchased intangibles in asset acquisitions with a remaining net tax basis approximating $77,989, which the Company may deduct for income tax purposes. The following unaudited pro forma financial information shows the combined results of operations of the Company and SCA, as if the acquisition had occurred as of the beginning of the periods presented. The pro forma results include the effects of the amortization of purchased intangible assets and acquired inventory valuation step-up, interest expense on the term debt secured to finance the acquisition, and the net tax benefit of the above adjustments calculated at the statutory federal tax rate of 21%. SCA was operated as a C Corporation for federal taxation purposes. A pro forma adjustment has been made to reflect the income taxes that would have been recorded at the federal statutory rate based on SCA’s net income. The pro forma results for the nine months ended October 2, 2020 exclude transaction costs associated with the acquisition and the results for the nine months ended September 27, 2019 have been adjusted to include these charges. This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations or of the results that would have occurred had the acquisition taken place in the periods noted below. For the nine months ended October 2, 2020 September 27, 2019 Pro forma sales $ 647,512 $ 632,848 Pro forma net income attributable to FOX stockholders $ 66,684 $ 57,432 Pro forma basic earnings per share $ 1.68 $ 1.50 Pro forma diluted earnings per share $ 1.65 $ 1.47 Total SCA revenues included in the condensed consolidated statements of income $ 49,868 Total SCA pre-tax income included in the condensed consolidated statements of income $ 2,950 |
Description of the Business, _2
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 02, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America ("U.S." or "United States") and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended January 3, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 3, 2020. In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. |
Fiscal Year | The Company operates on a 52-53 week fiscal calendar. For 2020 and 2019, the Company's fiscal year will end or has ended on January 1, 2021 and January 3, 2020, respectively. The twelve month periods ended January 1, 2021 and January 3, 2020, will include or have included 52 and 53 weeks, respectively. The three and nine month periods ended October 2, 2020 and September 27, 2019 each included 13 weeks and 39 weeks, respectively. |
Principles of Consolidation | Principles of Consolidation - These condensed consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition - Revenues are generated from the sale of performance-defining products and systems to customers worldwide. The Company’s performance-defining products and systems are solutions that improve performance of powered vehicles and bikes. Powered vehicles include Side-by-Sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, ATVs, snowmobiles, specialty vehicles and applications, and motorcycles. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer, generally at the time of shipment. Contracts are generally in the form of purchase orders and are governed by standard terms and conditions. For larger OEMs, the Company may also enter into master agreements. Revenues exclude sales tax. |
Segments | Segments - The Company has determined that it has a single operating and reportable segment. The Company considers an operating segment to be a component of the Company for which separate financial information is available, that is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. |
Use of Estimates | Use of Estimates - The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties - The Company is subject to those risks common in manufacturing-driven markets, including, but not limited to, competitive forces, dependence on key personnel, customer demand for its products, the successful protection of its proprietary technologies, compliance with government regulations, and the possibility of not being able to obtain additional financing when needed. Additionally, the Company has been impacted by the recent coronavirus (“COVID-19”) pandemic. The global outbreak of COVID-19 has negatively affected the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. The Company’s manufacturing facilities in North America have been affected by local and state “shelter-in-place” orders including the temporary suspension of non-essential operations in certain facilities. The Company took actions to manage costs during this time by enacting temporary executive pay cuts and furloughs, curtailing non-essential capital expenditures, and reducing expenses. Despite the Company’s efforts to manage and remedy these impacts to the Company, the ultimate impact and the extent to which the COVID-19 pandemic will continue to affect the business, results of operation and financial condition is difficult to predict and depends on numerous evolving factors outside of the Company’s control, including: the duration and scope of the pandemic; government, social, business and other actions that have been and will be taken in response to the pandemic; and the effect of the pandemic on short and long-term general economic conditions. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments - The Financial Accounting Standards Board ("FASB") has issued Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, that requires the valuation of assets and liabilities required or permitted to be either recorded or disclosed at fair value based on hierarchy of available inputs as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In February 2016, the FASB issued accounting standards update ("ASU") 2016-02, Leases, which supersedes the existing guidance for lease accounting. To meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases, this ASU requires lessees to recognize most leases on the balance sheet as right-of-use assets and lease liabilities. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2019, with a cumulative effect adjustment to the opening balance of retained earnings at December 28, 2018 with no restatement of comparative periods’ financial information ("current-period adjustment method"). Additionally, the Company adopted this guidance using practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all of its leases and elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. The Company did not use the hindsight practical expedient to adopt this guidance. The Company recorded a cumulative effect adjustment of $13,637 to operating lease right-of-use assets, $13,937 to operating lease liabilities, and $300 gross ($228 net of taxes) to the opening balance of the Company's retained earnings to reflect the cumulative effect of the adoption of the standard. This standard did not have a material impact on our consolidated income statements. In June 2016, the FASB issue ASU 2016-13, Financial Instruments: Credit Losses, which adds an impairment model that is based on expected losses rather than incurred losses. Under this standard, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The Company adopted ASU 2016-13 effective in the first quarter of fiscal year 2020 using the aging method, which calculates the allowance based on how long a receivable has been outstanding, taking into account the historical credit loss rate and adjusting for both current conditions and forecasts of economic conditions into that expected credit loss rate. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation of certain transactions, including but not limited to contingent consideration payments made after a business combination and debt prepayment and extinguishment costs in the cash flow statement. The Company adopted ASU 2016-15 effective in the first quarter of fiscal year 2019. The adoption of ASU 2016-15 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, which modifies the disclosure requirements of fair value measurements in Topic 820. This standard is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2018-13 effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other: Internal-Use Software, which helps simplify how entities evaluate the accounting for costs paid by a customer in a cloud computing arrangement that is a service contract. This standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company adopted ASU 2018-15 effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-15 did not have a material impact on the Company's consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which helps simplify how entities account for income taxes by removing various exceptions related to the recognition of deferred tax liabilities and updating other tax computation requirements. This standard is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | The following table summarizes total sales by product category: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Powered Vehicles $ 153,031 $ 130,022 $ 372,081 $ 341,976 Specialty Sports 107,669 81,295 256,082 223,163 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 The following table summarizes total sales by sales channel: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 OEM $ 143,687 $ 131,678 $ 335,295 $ 349,504 Aftermarket 117,013 79,639 292,868 215,635 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 The following table summarizes total sales generated by geographic location of the customer: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 North America $ 175,486 $ 142,624 $ 423,078 $ 383,414 Asia 41,609 37,521 97,872 88,888 Europe 41,004 29,024 101,223 87,074 Rest of the world 2,601 2,148 5,990 5,763 Total sales $ 260,700 $ 211,317 $ 628,163 $ 565,139 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consisted of the following: October 2, January 3 2020 2020 Raw materials $ 90,674 $ 87,779 Work-in-process 11,656 7,075 Finished goods 33,357 33,651 Total inventory $ 135,687 $ 128,505 |
Prepaids and Other Current Asse
Prepaids and Other Current Assets (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: October 2, January 3 2020 2020 Payroll and related expenses $ 17,442 $ 14,595 Current portion of lease liabilities 6,518 6,242 Warranty 9,485 5,649 Income tax payable 9,573 4,295 Current portion of non-controlling interest buyout liability 7,206 — Other accrued expenses 11,169 4,963 Total $ 61,393 $ 35,744 |
Schedule of Accrued Expenses | Prepaids and other current assets consisted of the following: October 2, January 3 2020 2020 Prepaid chassis deposits $ 12,424 $ 6,701 Advanced payments and prepaid contracts 8,374 5,774 Current portion of acquisition-related compensation held in escrow 4,765 — Other current assets 6,042 5,465 Total $ 31,605 $ 17,940 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, plant and equipment, net consisted of the following: October 2, January 3 2020 2020 Building and building improvements $ 74,434 $ 42,343 Information systems, office equipment and furniture 13,241 10,102 Internal-use computer software 19,370 16,860 Land 8,171 5,414 Leasehold improvements 13,082 13,841 Machinery and manufacturing equipment 76,564 57,331 Transportation equipment 5,933 5,006 Total 210,795 150,897 Less: accumulated depreciation and amortization (53,976) (42,518) Property, plant and equipment, net $ 156,819 $ 108,379 |
Long-lived Assets by Geographic Location | The Company’s long-lived assets by geographic location are as follows: October 2, January 3 2020 2020 United States $ 142,369 $ 100,508 International 14,450 7,871 Total long-lived assets $ 156,819 $ 108,379 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Leases [Abstract] | |
Lease Costs | Operating lease costs consisted of the following: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Operating lease cost $ 1,835 $ 1,581 $ 5,209 $ 4,550 Other lease costs (1) 214 338 733 763 Total $ 2,049 $ 1,919 $ 5,942 $ 5,313 (1) Includes short-term leases and variable lease costs. The Company elected a policy permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. |
Supplemental Balance Sheet Disclosure | Supplemental balance sheet information related to the Company's operating leases is as follows: Balance Sheet Classification October 2, 2020 Operating lease right-of-use assets Lease right-of-use assets $ 25,695 Current lease liabilities Accrued expenses $ 6,518 Non-current lease liabilities Other liabilities $ 18,832 |
Maturity of Lease Liabilities | Maturities of lease liabilities by fiscal year for the Company's operating leases are as follows: For fiscal year Total future payments 2020 (excluding the 9 months ended October 2, 2020) $ 1,856 2021 7,109 2022 5,807 2023 4,705 2024 3,031 Thereafter 4,875 Total lease payments 27,383 Less: imputed interest (2,033) Present value of lease liabilities 25,350 Less: current portion (6,518) Lease liabilities less current portion $ 18,832 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: October 2, January 3 2020 2020 Payroll and related expenses $ 17,442 $ 14,595 Current portion of lease liabilities 6,518 6,242 Warranty 9,485 5,649 Income tax payable 9,573 4,295 Current portion of non-controlling interest buyout liability 7,206 — Other accrued expenses 11,169 4,963 Total $ 61,393 $ 35,744 |
Activity Related to Warranties | Activity related to warranties is as follows: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Beginning warranty liability $ 8,915 $ 6,208 $ 5,649 $ 6,433 Charge to cost of sales 2,181 1,054 4,987 3,204 Fair value of warranty assumed in acquisition — — 3,158 100 Costs incurred (1,611) (1,116) (4,309) (3,591) Ending warranty liability $ 9,485 $ 6,146 $ 9,485 $ 6,146 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Second Amended and Restated Credit Facility | The following table summarizes the line of credit under the First Amended and Restated Credit Facility: October 2, 2020 Amount outstanding $ — Standby letters of credit 15,000 Available borrowing capacity 235,000 Total borrowing capacity $ 250,000 Maturity date March 11, 2025 |
Schedule of Future Principal Payments | As of October 2, 2020, future principal payments for long-term debt, including the current portion, as summarized as follows: October 2, 2020 For fiscal year 2020 (remaining three months) $ 2,500 2021 10,000 2022 17,500 2023 20,000 2024 20,000 Thereafter 325,000 Total 395,000 Debt issuance cost (5,758) Long-term debt, net of issuance cost 389,242 Less: current portion (10,000) Long-term debt less current portion $ 379,242 |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Fair Value Disclosures [Abstract] | |
Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company's hierarchy for its assets, liabilities and redeemable non-controlling interest measured at fair value on a recurring basis as of the following periods: October 2, 2020 January 3, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Credit Facility $ — $ 389,242 $ — $ 389,242 $ — $ 68,000 $ — $ 68,000 Interest Rate Swap — 1,038 — 1,038 — — — — Non-controlling interest subject to put provisions — — — — — — 15,719 15,719 Total liabilities measured at fair value $ — $ 390,280 $ — $ 390,280 $ — $ 68,000 $ 15,719 $ 83,719 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balances for the Company's redeemable non-controlling interest: Redeemable Non-Controlling Interest (Level 3 measurement) Balance at January 3, 2020 $ 15,719 Net income attributable to non-controlling interest 1,072 Change in fair value 8,184 Purchase of non-controlling interest (24,975) Balance at October 2, 2020 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of income: For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Cost of sales $ 191 $ 107 $ 467 350 Sales and marketing 173 136 490 375 Research and development 184 198 603 518 General and administrative 1,815 1,164 4,800 3,712 Total $ 2,363 $ 1,605 $ 6,360 4,955 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity for the Company's unvested restricted stock units ("RSU") for the nine months ended October 2, 2020: Unvested RSUs Number of shares outstanding Weighted-average grant date fair value Unvested at January 3, 2020 427 $ 44.98 Granted 257 $ 47.08 Canceled (10) $ 47.97 Vested (217) $ 37.18 Unvested at October 2, 2020 457 $ 49.81 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | For the three months ended For the nine months ended October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Provision for income taxes $ 5,431 $ 4,473 $ 9,555 $ 11,596 Effective tax rates 12.5 % 12.9 % 13.7 % 13.9 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Oct. 02, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The Company’s allocation of the purchase price to the net tangible and intangible assets acquired and liabilities assumed is as follows: Acquisition consideration Cash consideration $ 329,209 Non-cash consideration 322 Total consideration at closing $ 329,531 Fair market values Other current assets $ 15,227 Property, plant and equipment 8,953 Lease right-of-use assets 4,027 Customer relationships 129,000 Trademarks and brand 11,500 Goodwill 193,544 Total assets acquired $ 362,251 Accounts payable and accrued expenses $ 9,454 Lease liabilities 4,027 Deferred taxes 19,239 Total liabilities assumed 32,720 Purchase price allocation $ 329,531 |
Description of the Business, _3
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | Oct. 02, 2020USD ($) |
Accounting Policies [Abstract] | |
Deferred revenue | $ 172 |
Description of the Business, _4
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jul. 03, 2020 | Apr. 03, 2020 | Jan. 03, 2020 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 29, 2018 | Dec. 28, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Adoption of new accounting standard, net of taxes | $ (683,927) | $ (633,064) | $ (429,706) | $ (422,200) | $ (396,620) | $ (369,180) | $ (339,421) | $ (321,205) | |
Operating lease right-of-use assets | 25,695 | 17,472 | |||||||
Operating lease liabilities | 25,350 | ||||||||
Retained earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Adoption of new accounting standard, net of taxes | $ (363,185) | $ (325,165) | $ (320,741) | $ (312,491) | $ (289,969) | $ (260,482) | $ (237,561) | (219,686) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Adoption of new accounting standard, net of taxes | 228 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Adoption of new accounting standard, net of taxes | $ 228 | ||||||||
ASU 2016-02 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Operating lease right-of-use assets | $ 13,637 | ||||||||
Operating lease liabilities | 13,937 | ||||||||
ASU 2016-02 | Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Adoption of new accounting standard, before taxes | $ 300 |
Revenues - Sales by Product Cat
Revenues - Sales by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 260,700 | $ 211,317 | $ 628,163 | $ 565,139 |
Powered Vehicles | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 153,031 | 130,022 | 372,081 | 341,976 |
Specialty Sports | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 107,669 | $ 81,295 | $ 256,082 | $ 223,163 |
Revenues - Sales by Sales Chann
Revenues - Sales by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 260,700 | $ 211,317 | $ 628,163 | $ 565,139 |
OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 143,687 | 131,678 | 335,295 | 349,504 |
Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 117,013 | $ 79,639 | $ 292,868 | $ 215,635 |
Revenues - Sales by Geographic
Revenues - Sales by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 260,700 | $ 211,317 | $ 628,163 | $ 565,139 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 175,486 | 142,624 | 423,078 | 383,414 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 41,609 | 37,521 | 97,872 | 88,888 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 41,004 | 29,024 | 101,223 | 87,074 |
Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 2,601 | $ 2,148 | $ 5,990 | $ 5,763 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 90,674 | $ 87,779 |
Work-in-process | 11,656 | 7,075 |
Finished goods | 33,357 | 33,651 |
Total inventory | $ 135,687 | $ 128,505 |
Prepaids and Other Current As_2
Prepaids and Other Current Assets (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid chassis deposits | $ 12,424 | $ 6,701 |
Advanced payments and prepaid contracts | 8,374 | 5,774 |
Current portion of acquisition-related compensation held in escrow | 4,765 | 0 |
Other current assets | 6,042 | 5,465 |
Total | $ 31,605 | $ 17,940 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 210,795 | $ 150,897 |
Less: accumulated depreciation and amortization | (53,976) | (42,518) |
Property, plant and equipment, net | 156,819 | 108,379 |
Building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 74,434 | 42,343 |
Information systems, office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 13,241 | 10,102 |
Internal-use computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 19,370 | 16,860 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 8,171 | 5,414 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 13,082 | 13,841 |
Machinery and manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 76,564 | 57,331 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 5,933 | $ 5,006 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net (Long-lived Assets by Geographic Location) (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 156,819 | $ 108,379 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | 142,369 | 100,508 |
International | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 14,450 | $ 7,871 |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Oct. 02, 2020 | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 5 years |
Option to terminate, term | 1 year |
Weighted-average remaining lease term | 4 years 8 months 15 days |
Weighted-average incremental borrowing rate | 3.24% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Contract term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Contract term | 8 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,835 | $ 1,581 | $ 5,209 | $ 4,550 |
Other lease costs | 214 | 338 | 733 | 763 |
Total | $ 2,049 | $ 1,919 | $ 5,942 | $ 5,313 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 25,695 | $ 17,472 |
Current lease liabilities | 6,518 | $ 6,242 |
Non-current lease liabilities | $ 18,832 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Leases [Abstract] | ||
2020 (excluding the 9 months ended October 2, 2020) | $ 1,856 | |
2021 | 7,109 | |
2022 | 5,807 | |
2023 | 4,705 | |
2024 | 3,031 | |
Thereafter | 4,875 | |
Total lease payments | 27,383 | |
Less: imputed interest | (2,033) | |
Present value of lease liabilities | 25,350 | |
Less: current portion | (6,518) | $ (6,242) |
Lease liabilities less current portion | $ 18,832 |
Accrued Expenses - Components (
Accrued Expenses - Components (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jul. 03, 2020 | Jan. 03, 2020 | Sep. 27, 2019 | Jun. 28, 2019 | Dec. 28, 2018 |
Payables and Accruals [Abstract] | ||||||
Payroll and related expenses | $ 17,442 | $ 14,595 | ||||
Current portion of lease liabilities | 6,518 | 6,242 | ||||
Warranty | 9,485 | $ 8,915 | 5,649 | $ 6,146 | $ 6,208 | $ 6,433 |
Income tax payable | 9,573 | 4,295 | ||||
Current portion of non-controlling interest buyout liability | 7,206 | 0 | ||||
Other accrued expenses | 11,169 | 4,963 | ||||
Accrued expenses | $ 61,393 | $ 35,744 |
Accrued Expenses - Activity Rel
Accrued Expenses - Activity Related to Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | $ 8,915 | $ 6,208 | $ 5,649 | $ 6,433 |
Charge to cost of sales | 2,181 | 1,054 | 4,987 | 3,204 |
Fair value of warranty assumed in acquisition | 0 | 0 | 3,158 | 100 |
Costs incurred | (1,611) | (1,116) | (4,309) | (3,591) |
Ending warranty liability | $ 9,485 | $ 6,146 | $ 9,485 | $ 6,146 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | May 11, 2016 | Oct. 02, 2020 | Aug. 17, 2020 | Jun. 19, 2020 | Mar. 11, 2020 |
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 7,615 | ||||
Unamortized debt issuance costs | $ 434 | ||||
Weighted average interest rate on outstanding borrowings | 1.87% | ||||
Interest rate swap | |||||
Debt Instrument [Line Items] | |||||
Amount of interest rate swap | $ 200,000 | ||||
Other Expense | |||||
Debt Instrument [Line Items] | |||||
Unamortized debt issuance costs | $ 277 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility | 25,000 | $ 250,000 | |||
Debt issuance costs | 1,157 | ||||
Unamortized debt issuance costs | 157 | ||||
Standby letters of credit | $ 15,000 | ||||
LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 0.14% | ||||
LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 1.00% | ||||
LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 2.25% | ||||
Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 3.25% | ||||
Prime Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 0.00% | ||||
Prime Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 1.25% | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Term loan amount | $ 400,000 | ||||
Debt issuance costs | $ 6,458 |
Debt - Summary of Amended and R
Debt - Summary of Amended and Restated Credit Facility (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Debt Disclosure [Abstract] | ||
Amount outstanding | $ 0 | $ 68,000 |
Available borrowing capacity | $ 235,000 |
Debt - Future Payments for Long
Debt - Future Payments for Long-term Debt (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jan. 03, 2020 |
Debt Disclosure [Abstract] | ||
2020 (remaining three months) | $ 2,500 | |
2021 | 10,000 | |
2022 | 17,500 | |
2023 | 20,000 | |
2024 | 20,000 | |
Thereafter | 325,000 | |
Total | 395,000 | |
Debt issuance cost | (5,758) | |
Long-term debt, net of issuance cost | 389,242 | |
Less: current portion | (10,000) | $ 0 |
Long-term debt less current portion | $ 379,242 | $ 0 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Thousands | Mar. 11, 2020 | Oct. 02, 2020 | Oct. 02, 2020 | Sep. 27, 2019 | Jul. 22, 2020 | Nov. 30, 2017 |
Loss Contingencies [Line Items] | ||||||
Installment payment, 2020 | $ 6,556 | |||||
Installment payment, 2021 | 4,550 | |||||
Installment payment, 2022 | 2,700 | |||||
Payments for Repurchase of Redeemable Noncontrolling Interest | $ 3,000 | $ 0 | ||||
Shares held in escrow (in shares) | 136,000 | 136,000,000 | ||||
SCA | ||||||
Loss Contingencies [Line Items] | ||||||
Call option to acquire remaining interest | 20.00% | 20.00% | ||||
Total consideration at closing | $ 329,531 |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Aug. 17, 2020 | Jan. 03, 2020 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Fair value of interest rate swap | $ 1,038 | $ 0 | |
Interest rate swap | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of interest rate swap | $ 200,000 | ||
Base fixed rate, payment | 0.73% | ||
Return rate | 0.50% | ||
Fair value of interest rate swap | $ 1,038 |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Liabilities at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Oct. 02, 2020 | Jul. 03, 2020 | Apr. 03, 2020 | Jan. 03, 2020 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 28, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Credit Facility | $ 389,242 | $ 68,000 | ||||||
Interest Rate Swap | 1,038 | 0 | ||||||
Non-controlling interest subject to put provisions | 0 | $ 24,975 | $ 16,207 | 15,719 | $ 15,711 | $ 15,022 | $ 14,581 | $ 14,282 |
Total liabilities measured at fair value | 390,280 | 83,719 | ||||||
Level 1 | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Credit Facility | 0 | 0 | ||||||
Interest Rate Swap | 0 | 0 | ||||||
Non-controlling interest subject to put provisions | 0 | 0 | ||||||
Total liabilities measured at fair value | 0 | 0 | ||||||
Level 2 | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Credit Facility | 389,242 | 68,000 | ||||||
Interest Rate Swap | 1,038 | 0 | ||||||
Non-controlling interest subject to put provisions | 0 | 0 | ||||||
Total liabilities measured at fair value | 390,280 | 68,000 | ||||||
Level 3 | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Credit Facility | 0 | 0 | ||||||
Interest Rate Swap | 0 | 0 | ||||||
Non-controlling interest subject to put provisions | 0 | 15,719 | ||||||
Total liabilities measured at fair value | $ 0 | $ 15,719 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Reconciliation of Contingent Consideration (Details) $ in Thousands | 9 Months Ended |
Oct. 02, 2020USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Net income attributable to non-controlling interest | $ 1,072 |
Level 3 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at January 3, 2020 | 15,719 |
Change in fair value | 8,184 |
Balance at October 2, 2020 | $ 0 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Additional Information (Details) - SCA - USD ($) $ in Thousands | Mar. 11, 2020 | Jul. 22, 2020 | Nov. 30, 2017 |
Business Acquisition [Line Items] | |||
Call option to acquire remaining interest | 20.00% | 20.00% | |
Total consideration at closing | $ 329,531 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2020 | Oct. 02, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Underwriters commission | $ 511 | |
Number of stock options exercised (in shares) | 120,000 | |
Number of stock options expires (in shares) | 0 | |
Secondary Stock Offering [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued (in shares) | 2,760,000 | |
Purchase price (in dollars per share) | $ 76 | |
Proceeds from issuance of common stock | $ 209,760 | |
Underwriters discounts | $ 11,015 | |
Over-Allotment Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued (in shares) | 360,000 | |
Net proceeds from issuance of common stock | $ 198,234 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense related to RSUs | $ 19,447 | |
Period for recognition of unrecognized stock-based compensation expense | 2 years 8 months 26 days |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 2,363 | $ 1,605 | $ 6,360 | $ 4,955 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 191 | 107 | 467 | 350 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 173 | 136 | 490 | 375 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 184 | 198 | 603 | 518 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 1,815 | $ 1,164 | $ 4,800 | $ 3,712 |
Stockholders' Equity - Unvested
Stockholders' Equity - Unvested RSU Activity (Details) | 9 Months Ended |
Oct. 02, 2020$ / sharesshares | |
Number of shares outstanding | |
Granted (in shares) | shares | 257,000 |
Canceled (in shares) | shares | (10,000) |
Vested (in shares) | shares | (217,000) |
Unvested at end of period (in shares) | shares | 457,000 |
Weighted-average grant date fair value | |
Granted (in usd per share) | $ / shares | $ 47.08 |
Forfeited (in usd per share) | $ / shares | 47.97 |
Vested (in usd per share) | $ / shares | 37.18 |
Unvested at end of period (in usd per share) | $ / shares | $ 49.81 |
RSUs | |
Number of shares outstanding | |
Unvested at beginning of period (in shares) | shares | 427,000 |
Weighted-average grant date fair value | |
Unvested at beginning of period (in usd per share) | $ / shares | $ 44.98 |
Income Taxes - Components (Deta
Income Taxes - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 5,431 | $ 4,473 | $ 9,555 | $ 11,596 |
Effective tax rates | 12.50% | 12.90% | 13.70% | 13.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 | |
Income Tax Contingency [Line Items] | ||||
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Excess benefits related to exercise of awards | $ 3,107 | $ 1,873 | $ 3,793 | $ 5,508 |
Benefit to effective tax rate | 4.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Jul. 22, 2020 | Oct. 02, 2020 | Oct. 02, 2020 |
Rental of Buildings | |||
Related Party Transaction [Line Items] | |||
Payments made under lease | $ 16 | ||
Purchase of Properties | Employees | |||
Related Party Transaction [Line Items] | |||
Payments made under lease | 28 | ||
Founder and Minority Stockholder | |||
Related Party Transaction [Line Items] | |||
Payments made under lease | $ 48 | 144 | |
SCA | |||
Related Party Transaction [Line Items] | |||
Total consideration at closing | $ 24,975 | ||
Call option to acquire remaining interest | 20.00% | ||
SCA | Employees | |||
Related Party Transaction [Line Items] | |||
Payments made under lease | $ 196 | $ 84 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Mar. 11, 2020 | Oct. 02, 2020 | Sep. 27, 2019 | Oct. 02, 2020 | Sep. 27, 2019 |
Business Acquisition [Line Items] | |||||
Ownership interest acquired (as a percent) | 100.00% | ||||
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | |
Minimum | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years | ||||
Maximum | |||||
Business Acquisition [Line Items] | |||||
Useful life | 10 years | ||||
SCA | |||||
Business Acquisition [Line Items] | |||||
Total consideration at closing | $ 329,531 | ||||
Performance-based retention incentives | 10,589 | ||||
Cash performance-based retention incentive | 9,283 | ||||
Stock performance-based retention incentives | 1,306 | ||||
Business acquisition, executive compensation of acquiree management | $ 1,750 | ||||
Costs associated with performance-based incentives | $ 1,429 | 2,921 | |||
Acquisition cost | 10,582 | ||||
Transaction cost | $ 602 | $ 602 | |||
Business acquisition, additional financing costs | 6,622 | ||||
Goodwill | 193,544 | ||||
Remaining net tax basis | $ 77,989 |
Acquisitions - Allocation of Pu
Acquisitions - Allocation of Purchase Price (Details) - SCA $ in Thousands | Mar. 11, 2020USD ($) |
Acquisition consideration | |
Cash consideration | $ 329,209 |
Non-cash consideration | 322 |
Total consideration at closing | 329,531 |
Fair market values | |
Other current assets | 15,227 |
Property, plant and equipment | 8,953 |
Lease right-of-use assets | 4,027 |
Goodwill | 193,544 |
Total assets acquired | 362,251 |
Accounts payable and accrued expenses | 9,454 |
Lease liabilities | 4,027 |
Deferred taxes | 19,239 |
Total liabilities assumed | 32,720 |
Purchase price allocation | 329,531 |
Customer relationships | |
Fair market values | |
Finite-lived intangible assets | 129,000 |
Trademarks and brand | |
Fair market values | |
Finite-lived intangible assets | $ 11,500 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Business Acquisition [Line Items] | ||
Pro forma sales | $ 647,512 | $ 632,848 |
Pro forma net income attributable to FOX stockholders | $ 66,684 | $ 57,432 |
Pro forma basic earnings per share (in USD per share) | $ 1.68 | $ 1.50 |
Pro forma diluted earnings per share (in USD per share) | $ 1.65 | $ 1.47 |
Total SCA pre-tax income included in the condensed consolidated statements of income | $ 2,950 | |
SCA | ||
Business Acquisition [Line Items] | ||
Pro forma sales | $ 49,868 |
Uncategorized Items - foxf-2020
Label | Element | Value |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | us-gaap_BusinessAcquisitionEquityInterestIssuedOrIssuableValueAssigned | $ 322,000 |
Additional Paid-in Capital [Member] | ||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | us-gaap_BusinessAcquisitionEquityInterestIssuedOrIssuableValueAssigned | $ 322,000 |