FOXF - Earnings call transcript Q1 2024 | Fox Factory Holding Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Fox Factory Holding Corporation's First Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. time, Merchant, like Fox Chief Corporation. this over turn Factory at Toby to Legal now I to would things Holding And Officer at go Please sir. ahead,

Toby D. Merchant,

XXXX to you. Mike by and Executive Schemm, Factory's Thank Treasurer. and Dennis Chief Call. welcome and Financial afternoon, First joined Good Dennison, Quarter Chief Earnings Officer; today Conference I'm Fox Officer

before the will First, quarterly results the for Dennis will then some By should Mike provide review now, will up afternoon. which provide the have business updates out we closing questions. your access remarks outlook. earlier this call earnings then Mike open went and everyone and release, to

investor.ridefox.com. had the company. throughout this Please If not a you to on to call, we it's Investor will review have Factory the of the or refer as portion Fox available at note release, Relations Fox that chance website our

other herein, events information, company's no Commission. laws, company in statements of result additional cause risks forward-looking required Investors the company's of your contain such Before whether by report statements reliance number meaning quarterly any annual of would prepared place as we except begin, company's involve the questions. I detailed security future remarks management Securities to remind on the statements Form contribute the and reports response within with a to the statements that in and everyone may that XX-Q forward-looking Such like federal forward-looking and XX-K, are make unknown a can should and performance statements. future and known or the or performance achievements are update of Exchange or to the the factors by or achievements in Important or from as differ results, cause otherwise. latest on could undue differences to statements materially results, each and obligation on or control undertakes company's expressed uncertainties, outside the forward-looking Form forward-looking which implied risks and statements, many new and such law, to not filed

remarks better company's we core appropriate in evaluate our operating and business, in margin, to to investors allow share, per income, directly margin that, their financial as non-GAAP to to where also has the earnings GAAP profit, release, evaluate within we metrics included adjusted and certain today's adjusted our to earnings gross useful expenses my EBITDA posted which In earnings operating measures comparable adjusted website. understand net to refer gross Dennison. addition, the of on that CEO, adjusted including our over is prepared And call Reconciliations release, diluted trends. measures and performance adjusted are adjusted adjusted non-GAAP financial been these our measures believe financial with Mike and these will most turn are EBITDA today's pleasure it

Michael Dennison

Thanks, today. is afternoon, key industry you resiliency, important and a during more Toby. all is Good cyclicality. everyone, element period of Diversification thank the for the and joining building us it in

only which and creation growth portfolio, our the market avenues ability Our expansion and all markets. with of us across This headwinds turn, spans through a diversified multiple diversification is drives in testament for sectors product but navigate stakeholders. our mitigates of also to to current future multiple the value risk, strength provides not and for

consistent we per plan. XXXX, which exceeded share first with of earnings adjusted $X.XX, expectations $XXX.X of of delivered was quarter the For million and our revenue, which our

to coming and that see we our growth confident are our ultimately business over results margins rates returning strong will the can deliver. quarters, We operating improvement in sequential the

inventory already to forces, challenges specifically be bike, continue we OEMs and results the ongoing near premium our are to more recalibration and helps seeing While in model the dealer and mix levels we continues believe unique issues and challenged from serve face primarily the our direction. be In changeover business SSG, power term. that are sports and However, by believe innovation our the continue OEMs. being inventory impacted this back macroeconomic year to in positioning signs in In trending impacted we by mitigate positive right PBG, by in QX is AAG, upfits

consumers laser-focused we fatigue we our Despite inventory with in extended control, to addition, management is seeing businesses. and resulting which This and given innovation can OEMs. OEM at we is defining of discretionary of In are duration high and a long-term spending of share this which is our of ongoing impacting headwinds, interest set levels on which consumer of the through to central what dealerships rates, remain commitment the cautious delivering with confluence tenet value uncompromising map partners, strategy. our of exceptional value growth our continued diversified is product focus our performance products speaks across road and

our recognize on we near we costs. term, tight also While and eye close products, focused on that remain keep must control a we

have Although workforce and continuously in we targets. conjunction and a work company-wide workforce consistently we our executed not reduction, with productivity have optimization refined

focus one lean We even be have done also as run and ensure to reduced spending clear, or and jobs our every day. periodic tactic we management this about the To and Fox, possible. is we but think at investments as way not a

in powersports primarily to $XXX Group, is OEM million due XXXX performance. now were down be modestly with will quarter, Vehicle net demand expects At lower products. dealer to versus the from In dealers. the major the our automotive our near to retail $XXX In million, which space, they prior year in to we approach XXXX, in term. impact model sales In driving balance to to industry see done produce strong distributor powersports. as which management among level, demand segment the OEMs results Turning conservative our inventory from the XX Powered OEMs curtail continue to Powersports response, continue continue supply to year a the production demand,

issues our growth interest have within us are these the remain to from significant believe this business. elsewhere. production limited impacted is PBG rate As that mainly business strategy our long-term We of insulated we vehicles, portion committed

developing leaders took products. we cost are who actions volume most deliberate reductions, reduction engineers our we commensurate critical more to were technologically prudent advanced our and Higitraine in to maintaining of While

this decision profitability, over ensuring is essential long as growth the conditions we to While term is near-term improve. it support can industry impacting that

development we'll introductions the as able our and seeing from the market show through to this We're power both we continue million Echo behind excited quarter. which and given increase The spec are our results and to prior million share, in benefits portfolio. our cycle team with Dynamics, our and OEMs sales from product growth product differentiation India new to win by AAG, year $XXX We model changeover demonstrating Polaris were by the sales in the believe be new compared [indiscernible] lower In for Sierra delayed the and Upfit OEMs, driven our year leadership. by upfitting brand kits. net challenges was product of offset were sales and lip year tires due aftermarket $XXX mix unique in wheels, strong launches. to lower model business, existing

to impacts behind second be exit largely these us the we as quarter. expect We

that of redesigned who the Additionally, year. we are priced progress balance a good in release are are continue with reducing moderately expected. to vehicles, which the launch throughout of Despite existing ahead model of seeing finance rate environment, consumers a the dealers interest than to expected macro slowdown higher challenged new aged of inventory make in persisting the generally lower is environment sales updates purchases these in as

SSG, see we present to these before, trucks, first best-in-class off-road branded end quarters. to performance a growth was products in due on brands, and state-of-the-art reduction baseball exemplify a packages significant higher said sales more vehicles, destocking create we engineered in Morici, of developing was these Xx thrilled partially the planned we've the Notably, the value discussing was OEM truck above our we We a future. year. strong opportunity by a This the inventory fueled new skins, at heavily upfit been goods, worth demand quarter the have net interest. to in last for upfit, of In our sales product offset within box lineup is that class Morici with high-performance As and success across in contented vehicles. announced that primarily million collaborate in $XX despite vehicles new were million result soft to UTVs. by great the all were the in March, Victus our continued strong upfit Hinterhus. business declines upfitted launch. latest a OE $XXX and having With of the to as models. in To launch bike The the which decline work encouraged making changeovers us million as $XXX high-performance to bike and not point, last company's a upfitted International introducing softball, Wizard revenue significantly premium which accretive We're and compared partners diverse for to product covering of the remain our several new a the consumer average our of upfitted introduce together factory

in the also attractive margin of by our our key the a role performance demonstrated bolstering results, As to line the given relative March resiliency bottom played segment profile average.

is their product for second the As are bike and and gearing our new our strengthening. quarter forecast. expanding we of factored to OEs half the offerings, back are ahead year look up segment year, model rest launches into which

that and growth which brand fuel relationships, The of These research and occurred maintaining long-term e-bike continues seeing of challenged strong gains elements that are balance product growth. experience but of we addressable include robust the broader riders, we will of brand Additionally, category investing or year. a dilution via avoiding our product as well, on market. only demographic attract face in our focus growing industry-wide brand long define and expansion multiple in this elements development short-term launches, and not to growth believe drive key firmly remains In e-bikes history with throughout results, the to the development. excellence also

new our business. first, Our R&D investment we e-commerce are XXXX with and will innovative higher-margin components, with aftermarket which twofold: are expand recently where expanded also of releases, year share on second, model support gaining our the of capitalizing OEM traction market; launches significant objectives

Now outlook of balance on our for XXXX. the for some comments

We down being the first expect quarter. with the continue year-over-year to be XXXX of quarter to the first stronger sequentially half than second

remains his with consistent for plan. is and our guidance the more quarter to second in will remarks. second expectation quarter speak unchanged our Our Dennis

weighted releases. predicated continuing launches continues lift mix its and inventory and across and back dealer and Marucci's our improvement and to improvement, OEM's upfit the wheel kit availability guidance new business. product new chassis model half year be continued year Powersports to full on channel improve and to diversified following: launches. portfolio Our within bike's growth product the inventory 'XX

of timing QX, assumptions an within the so assumes improved full intact year interest pressures While outlook relief. macro far our guidance rate and those remain positive also driven and consumer signs show easing by

prudently recently the Fed we signaling expect we to second the bottom that solid our are the our With Thus, half back to half, growth longer, year catalyst be half to a higher have likely for narrowed our we FY have removed the 'XX XXXX in for as previous remain while we full that continue rates positive positive of about thesis. the to range. In closing, of outlook year. continue

of share eagerly innovation, product year. We place. drive robust have spec market business. half And across of segments with terms we In a product are new upcoming anticipate in the products, our confident are growth the of in in OEM map we launches, second that all will happening these the X which our our gains coupled road

focused deliver to advanced structure. As and cash our our unwavering call over innovation moat free we cycle, while deep to include our share opportunistic of cycle, repurchases And Dennis. is which the on with by I'll improved through growth the we of balanced business turn allows remain commitment the to through to which capital technological that can managing a our navigate strengths, playing that, flow for ability and the control, we this that diversification, elements management

Dennis Schemm

sales discussing capital sheet and Thanks, flows, structure wrap everyone. begin afternoon, and then net move sales a versus $XXX.X and balance XX.X% I'll Mike, fiscal in up strategy $XXX.X quarter decrease of our with first quarter and by our good fiscal then cash first of to financial XXXX quarter our of results million, of XXXX. a review in the the consolidated Total guidance. were first million of

the performance we challenges various to the serve. continues unique Our reflect industries and within exist that temporary

by same in XX.X% quarter first same XX.X% gross of The our year. XXXX product prior operating of in quarter which versus million expenses fiscal or in to reduced in of XX.X% million quarter was on shifts acquired gross XXXX in and sales by inventory percentage of margin, the and the leverage volumes were operating in mix facilities year. our was to a and year. the as partially XXXX our margin excludes quarter margin lower operating our intangibles. expenses was $XX.X across acquisitions; last Marucci gross Adjusted the controls. North Custom decreased at the to increased the operating sales of decrease segments, $XX.X driven quarter in and primarily to in compared amortization XX.X% cost expenses in attributed last fiscal first of The of Our the increase offset effects X wheelhouse valuation fiscal first net acquired from the amortization the compared XX.X% American inclusion net efficiencies or XX.X% of sales Total markup of line of

impacting and in to quarter quarter XX.X% the various first are of in million in XXXX to facilities. with net XX XXXX. compared XX.X% first Adjusted XX.X% or quarter continuous our year. is improvement decrease company's per fixed our organic margin increased $X.X tax income first $XX.X $X.X of share temporary base tax for compared income in adjusted decrease control quarter XXXX. diluted XXXX of a The of year. $X.XX to quarter with on same percentage in expenses XXXX shifts Sequentially, quarter cost operating diluted which expense million our growth, compared decreased volumes compared include $X.XX Adjusted to XX.X% acquisitions, or of million, by cost challenges million year. XX.X% mix $XX.X loss $X.X XXXX by our compared last compared that offset was EBITDA million share due increases partially first a to of the expenses same last the unique benefit in improvement. adjusted per these in coupled to The the in of million initiatives. quarter continuous income, diluted diluted in last the the associated improvement or aftermarket share net the period adjusted of to sales point and across measures and tax The industries EBITDA onetime million our our drivers the credit in at facilities $XX to million of per same by first first and adjustment. or first fiscal foreign the fiscal in in cost EBITDA was pretax Excluding Other of Adjusted of fiscal customers performance quarter approximately fiscal was fiscal the million margin fiscal in the was facing, to $X.XX EBITDA in reflects portfolio the sales absorption as $X.XX was XXXX expansion a per $X.X cost the $XX.X driven controls cost operating our we of support primarily to EBITDA our strength tax margin delivered quarter share And was first a quarter $XX.X benefit year. basis and Net margin control measures. last a and

balance flows. the and to Moving sheet cash

PBG. optimize underpins inventory sheet continuous Fox to strength balance allocation driven by Our our quarter, reduce of able In XXXX, capital to improvement organization, $XX.X levels strong within be of year-end continues were X% for efforts million to the our the or execution source compared a by particularly first across to strategy. we and inventory

is with Our X.Xx and net-net in leverage end line quarter expectations. our as of

pay providing us shares. in repurchase capital marketing down sales optionality flexible the debt through CapEx growth Our and ability to gives structure the while R&D, and invest and to

$XXX XX, December XX, million as million XXXX, revolver balance Our of March versus $XXX was XXXX. as of

$XXX balance million approximately was A fees. Our loan of net term loan

on XXXX, quarter $XX revolver payments to prepaid on incurred first in by $X.X $XX support fiscal chassis, working and in debt million million of the we During which loan. of $XX million term our capital, our payments revolver on included in million our offset partially

in million our balance a approximately $XXX repurchase we repurchased on quarter, During share the million authorization. $XXX million and first we have $XX of shares, remaining

select Now I guidance. share would like to some

are While half prior of full for the XXXX narrowed rate the we our out growth relief bottom to have of half and prudence, second of the previous year our meaningful we for assumption continue XXXX, we range. tempering to expect solid interest outlook

we and expect sales of to As the year result, billion full the to adjusted $X.XX earnings XXXX fiscal now diluted range $X.XX a $X.XX share in in of billion $X.XX. per range

of Our tax full the XX%. in year range continues to XX% be to guidance income assume our rate to

sales diluted expect XXXX, ramps. $X.XX for new the underpinning year improving model improvement, to second OEs, sequential drivers and several mix quarter XXXX of to for launch per releases, $X.XX. million chassis availability the range earnings For of the of the adjusted including our $XXX There $XXX and up BIC share we in model are year gearing million and

operating which quarter a consistent guidance in before of half year-over-year beginning the Our returning of half had XXXX at second second with the of in the to plan growth is year, our the decline XXXX. first baked in

we this As revisit more will we of when previously, visibility. in second XXXX have aspirations half said the we year

at conditions to controlling our call of remains can back entire growth the aspects as With keep business focused that business positioned Factory team improve. in turn that, Mike. reaccelerate on Fox over order to to the to like I'd Our optimally industry the we

Michael Dennison

We we diversified the navigated in business industry the for have unplanned appreciate year. Thank Thank To strategic initiatives you, through your our for us and and us growth Fox. you model Dennis. interest resilient quarter, allowed headwinds to significant all some in time first joining today. and but remain recap,

our to are of We attractive growth and Marucci, profile strong performance potential about margin portfolio. long-term excited its brings the particularly it the

driven in OEM about share based like expect consequently, a and by half be Looking gains in spec map PPG.I on the and the bike growth we product open market, call for robust Marucci the product road ahead, and year we questions. now in back including to aftermarket, are strength of to AAG new would launches the optimistic Operator?

Operator

[Operator Instructions] Larry Solow to CJS We'll this first Securities. go afternoon of

Lawrence Solow

Great.

First relatively sounds like in question, on and in like I line what it sounds was it guidance, you guess, line QX in QX, the expected. with just originally

interest strictly, see of plus us, -- in just the you to And fact we that the soon. Is out? the negating indication ex everything more on anytime factor back impact there? same, half some -- just impact are Is minuses that clearly, lowering than don't does mostly feel any is So of or lowering, is biggest the trying help it X? the too. that sort spread for that And just can get other that, rates AAG

Michael Dennison

Yes, Larry, it's good a question.

For in line and perspective is launch product us, a perspective. from the back share us a market with half from

that Frankly, So of that excuse upfit is we to I we have around level does accelerator in high and probably everything in in of But half pun the the a most power is that a would given It and intended going The affect reduction in had purchasing trucks. the in us the most discretionary guide. it. think does is year, and damper AEG, the affect in back have be to is where macro that areas. the interest predominant foremost that impact consumer sports half a really for just the the rates year at been everything. have part, really on X, that your things for us difference top of X end rate And and would back to that plan. the the play interest or question, all

issue relative So interest tempered rate fully back just the that's half again, in we've kind of the what itself. to

Lawrence Solow

higher stuff. into you're that content more more And customized getting

impacted not That's... You those much rates. interest target folks by think that are the over time, necessarily as

Michael Dennison

of even time Truck Yes. and launch, correct. to the that on think vehicle content, better seeing dealers, you off the you're And we're be. the us, kind directly further not it's that in through is I the to go demand going Factory which That's performance Fox

Lawrence Solow

Okay.

lastly, market. bike Just just on the

It next bit It estimated down like this seemed something you than And this you're we're had the do do around million, the over like confident side. had off kind I think maybe be than you materially you we that What kind a at just think bottom? I quarters? gives guess, the bounce like lower little thought and bottom. confidence? bottom of the we thought lower bounce of sounds few we quarter. you certainly $XX would that looks Or bottom

Michael Dennison

we which time It's for first tell had interesting. QX the were slightly So a that to effectively, forecasted a is you, above. quarter, great actually I'll is long quarter It's the but predict in above able the we what actually sign. business

QX sign gray is above Second QX. booked already has

stocks mean a and QX having because they forecast got the a talk have QX me weren't the Bookings more So We before are step lot hard in heard about forward. is us. bookings you about to bookings already accurate for follow accurate. great

launches. especially feel health of is to the team QX. the better kind the and And than [indiscernible] frankly, QX. any the We've The bike second thing, in past of the mean we've had customers been the the already given bike team really lines noticeable. Xx got in this about business a I -- And for the third in better year. just customers feel lot some is product we've customers, year attributes product that And the on positive about the is launches seeing certainly all from the step and Europe. the

the and QX we So right on back I think where it the thinking we're yes, hoping in right -- thought turning no, be. gas. we would QX, corner

Operator

Stifel. Go Duffy next Duffy Dennis Stifel. Jim at now to at

Jim Duffy

ask one due to What better I the the numbers auto the thought. year-to-year on you accurate? than decline X that guys sports. I little bit are a doing in power to to Is heard question we questions. of seems If group gross PVD OEM The business, it were you PVG correctly, the entirety was a like margin. I want I'll have focus the and on dimension well. quarter

Michael Dennison

end. immaterial, else the majorly, say And is throughout both I And beginning to powersports ones the Yes. decline. is everything but of kind quarter, the frankly, would from

a was decline it. consistent to it So

Jim Duffy

you assume quarter can with Or auto auto the any balance platforms what balance Understood. you saw new on you production then first if curious the a auto in year? the the your And there of and OEM on ramp I'm just in for year. in existing the guide for help front the is OEM production consideration visibility OEM just us platforms? of schedules, on the then

Michael Dennison

fundamentally Yes, play. Jim, our what's guide already is in

to As you design there's get know, production. long-duration cycles to

that can advance. years see in we So

have And have of deal vehicles pretty look year from very has Frankly, good automotive launches the business today. a from what this so we product will consistent. we play we like our and stayed

of the As winded you that pool storm materialize and seen tend on series know, forecast in we're Raptor production vehicles of the And kind runner to with we've well. and [indiscernible]. Those the vehicles actual their very material.

that pretty feels for now. So good us right

Jim Duffy

we And cost how its within What big much some normalization? weight considering its is gross did on be I'm pretty to then is Or about regular the get compression with the regular ask as pressure, with margins contribution, to business. think gross arms the mix Good. much something report margin how margins, then assuming I fixed implies my the else of wanted wage we accretive margins try trying to of to pressure? gross route in Okay. that And versus that deleverage? the should there is on respect thing organic Dennis, around

Dennis Schemm

Yes.

X things So here.

product board, to exactly the Their delivered business on be. impress. one, Marucci they in strength continues where new the would thought Across we of margins So right track. launches, place,

in from plants to down back standards. then down It comes back leverage, it volume. we're Marucci, the OpEx both operating and the to So on so all business, those to comes base getting

it's pretty plants. these all how do were coming much optimize in we forecast, So right line and we about

seeing. going we year them see the And going cost bust-out volume QX lag heard our we been that start were so in, think to very to that a cost to declines commentary, way back through you help volume commentary, to have continuing And Mike's in my see in in to because and continue will structure you improvements delighted we it big that look to heard the we're we for these those up seeing. in to offset we're be come ramp growth as we're

because year. turn progress and it So serve to us is actually a too through all around business we slight The tailwind in deep will up. as the for cut this of this back expect trick not ramp to as we

want And the so we good on really people. hold to to

decision what at we've a or been they're looking they're absolutely to to when backfill. to do can generated ask revenue-generating, going leaves, they somebody. generating? really until to And what somebody not, they are is hold going we're we're non-revenue so doing see If revenue we If are it's off to necessary take

been And cost so the we've absolutely front. militate on

Jim Duffy

then Okay. a question. clarification Helpful. And final

think remarks, Or your related to to inventories? about there understand this a inventories. PVG comment Is I that prepared it. the on I'm in was trying books? inventories more is relating to channel

Dennis Schemm

twofold. Yes,

section, commensurate the decline be improvements taking to So and us in that if the about it make it with my were continuing within in in under reducing business. inventory PVG, would and we're absolutely out inventory

capital working extremely the managing we're well. So

manage this like it to of BRP in dealers on if there's inventory. helping and that were demand then as of lot with side, powersports talking the channel, which a cleared the challenges think Polaris get up and by expect we're there, likes year-end I the on inventory about we focus

it points inventories. X you heard have where been could So

Operator

Anna at We now Riley. Glaessgen B. go to next

Anna Glaessgen

half have I'd expectations the we first Between launches. like 'XX to on the implied touch a model Clearly, pretty back year a guidance improvement are half the been second back bit the in in half, big expecting see bikes. to to to much through back how fluid as need for meet channel improvement inventories the expectations stand this do works half? today? channel business you in to in see the this industry inventories. really the where Can And speak you as segment

Michael Dennison

job have OEMs. board The specifically and is this manufacturers, more Yes. boutique challenges, within quickly mixed fairly done the bike bike European the across manufacturers going inventory smaller And or all the hard. they're through the there melt and inventory in improvement a pretty bike pushing great

little some inventory, some be. working are of clear away. ways Other some is which close bigger, some through and so a current nice beyond That's it, getting the clean. inventory us OEMs chasing place our to pretty are we're are pushing fact, larger and In levels, still pretty and really

that our customers started So again, mixed taking do We're last at it's And pretty our different to was actually of they guide of all this haircut collaborate end or forecast we've kind a taking a do. would significant helped think a bit bag. what those aggregation this year, of us and year. that And a look into into we OEMs of whole and what to forecast in QX. give from them for

comment, right above said delivered I earlier we plan for QX. an had As in actually the QX we

and important is us. team So getting to conference to that business the to really the back ability plan the

and QX. that's think for sure I happening happening So in

Anna Glaessgen

I is year, a has you I dynamic is particularly, in to XXXX? of it know that say last last-minute cancellations. bit dealing a with And fair were -- that eased guess lot

Michael Dennison

be orders That place has. a whole to Yes, to purchase chasing meet the we're a that for bit great little is has further demand inventory out And be. again, place again. us starting to

early. positive that some seen the it's of we've So is system on pressure wood. still too in We're really still pressure, good. the

in positivity have teams been and not seeing our that really positivity seeing the strong great. customers the we're So product market been but so calling we far. victory And the just, the again, the on bike, wrap has launches in

Anna Glaessgen

the your on low disclosures. based grew CODI's just in single on quarter Marucci, the in prior Great. digits I And think

you that growth on X update Now so, opportunity little be bit an the there. business for can the months go-forward should or owned you've a give of what

Michael Dennison

us. product And little get double-digit at in balance or Frankly, for had this launches, plan plan of again, the mean, business is we a a year. the above bit we growth think this above the delivered balance to the plan the year they the solid for Yes. I QX.

We've somewhere we're So going unlock lot now. low some frankly, in business. kind will the it got coming of park and that we new create a think side And exciting we the of things And doors organically. of business Marucci the do on digits. you opportunities some from double to should

Dennis Schemm

We're both Marucci there, excited and about the growth Victus.

as to Victu's could profile of And that delighted as the So continue part an with more composition not important be well just see. is again, well. EBITDA the we

Operator

Bret Next now Jefferies. to Jordan at

Bret Jordan

integrate cost those them I Custom businesses? out you take look is and Or overhead? from addition synergy the to run overhead, you the you there are incremental guess, The if going available wheelhouse or year-over-year much as with to at Marucci,

Michael Dennison

the opportunity some opportunities supply Bret, of acquisition Where chain. we management integration, of had. think is I've the about that in how But where the there's can think about to long-term fringe, vertical structure, be projects of still front office, design, I think lies in We're the in talked those more office. more that part now, of not back Marucci material the think them on past, some really there those synergies 'XX. never starting for and some probably some planned on early in not 'XX. significant. with factory the the we there's -- And we business we synergies in that's the do that some work

Dennis Schemm

delivering are businesses, these this businesses, we talked long about that, Wheelhouse, we year, with In acquisitions on some being they CapEx acquisitions talked but light about haven't last and being case, add both to Custom and CapEx And on are OpEx-heavy heavy in light. a more right time, Marucci track. this OpEx these particular

very, we pleased are very companies. we models with the there have both with that So

Bret Jordan

Okay. about rates we Or all maybe powersports? and And picking level the of talk you're at seeing quarter and -- headwinds. soft Are clearing cadence but is consumer seeing could the at conversion are up? level getting demand of sort in softer progressed as and what the you the it you still channel inventory given

Michael Dennison

still it's up say I wouldn't think I soft. yet. picking it's

it's seasonal on think I the product as depending well.

had we a snow obviously, season. So bad

season so. soft off. soft, next for pro depending of this be say but bit So it and a We've side upcoming a But it's a it's new some [indiscernible] side, the I'd with year, expecting it is mix, by quarters. to site this if sales were way and we're launch may got better, so in

Dennis Schemm

is order pulling because pulling a They with in point and PowerWorks great it first did what down. just quarter, order see? pulling kept books. And it it throughout came this books back, hard we strong that back, And

strategically a us different why the and important diversification comments so that has It's to It's because high it And Mike that's complacency and Marucci why us. makes create into gives love what exert is markets. that put all for diversification advantage it's this does in ability his so aftermarket Mike opening the so talked in to and new be And is relevant, about model control, of margin, heavily we diversification, difference. why this industry And us place. disruptive. takes

Michael Dennison

store kind seeing of of Polaris did middle space our on seeing. business in own it's in about in conjunction point Bret, that And started talk resilient side-by-side that And what the lower-cost in we type side, the actually [indiscernible] more And automotive, business with vehicles strength interestingly content is is power that where we is that and end enough, a that market in affluent pricing vehicle we're we upfit and others. in premium virus.

think product on So around I and really high and these rate delivering with content, some that do a the get. of of some want are willing premium interest land get corner challenge people have stand can you to and of performance the by to to softness

Operator

going Truist. to of to Mike now And Swartz we're

Michael Swartz

it And Just weeks past want the has color the months start or another quarter, visibility those out the side. better back to couple third first supplier, the you bottoming start second but your bottom thinking commentary XX any and talking between thought Is it level, would about X visibility any discrepancies to into tie quarter. or called that go you're quarter Shimano more think industry biggest wanted growth a been other sounds -- like does ago, to colors. is the of if on had at but back It challenge. months, quarter, return over I have in public that X in than to we fourth maybe they now frame I thoughts sound might bike to did like the just a you something high

Michael Dennison

look our think closely, end. so bike high in they're statements Shimano general, can different. the are. comes probably when be out. market pretty same Yes, it And their we accurate. at overall I in space pretty Mike, different they're we comments than at premium understand niche. Again, the a that very we calling look We're We're very business, it think to are I When you

off And I quarter end. the which they're mean, do. quarters a by only sit not a but versus the in be of so reflection or line just I in well, the as they're of in or high bikes, where entire where they high couple of market X, think we a just end you're the might

-- So looking go I the park is in But difference. to not QX not out be that's number comfortable -- don't that. mind. again, and the we about and turnaround start projected, I that we're to a to think get that's feeling looking we're And feel predictable the the be going my And going we'll the that hit to we're to it to into of QX. knock we quarter, in

Michael Swartz

made I is in something then add right up question release, the model margins of the can pertains you there the to -- the picked Okay. commentary the just to percentage the second to how you comment older that your year. on prepaid versus of inventory prepaid. any wondering about or prepaid back model just chassis. challenges older impact in about as model it I Great. press has chassis think And if that half of or But any think to risk that's new potential The being now. is a one I'm

Dennis Schemm

associated board. coming Yes. with Any right balance on be would now newer models of prepaid type

no risk So there. real

is we in the those season mentioned to sense? that hit prepaids actually we this about I just the us. increase make when status Does because free an flow a have talk think working But billed. we because for that is and prepaid cash capital our that

Michael Dennison

year this too, across think that their I vehicle of thing a with dealers new we thing about inventory lot, is think to getting think Mike, had we as off kind to the the lot. get into want our sure no And work QX, changes. their moving we constant we aging years and there, to is is that -- incentivize in make to is about Yes.

of that was make a vehicles. function deals to solarize pressure some QX us us those helping of in So those

that's just and happened think over of year kind what QX, in I around model really this through change QX it.

Operator

And MKM. final question our today Stember we'll from of Scott Roth take

Scott Stember

of Question the products. about launch the XX bike

that done should say what did you've it than, years. than be in Xx recent You guess, I more

and bike as this the far scaled talking looking still what's at a something despite they're than and size into still Xx? you've what that guess, with knowing taking bigger and something looking be pipeline going or launch like interest I floor about as account you fact little they bit in you're we that's pre-pandemic Are What about or the back the to actual more modest. are of done dealers, plan much rates how at Given in. the market bring in inventory very cautious, I guess,

Michael Dennison

think you're Volumes. I to volume Scott, referring per...

Scott Stember

Yes. Yes. Volumes.

Michael Dennison

So question. I mean good it's

conversations will year, we up on and being deliver, product, wouldn't shows still guide in that So nature dealers pretty we're and just what is on and with of of the distributors launches the our different. kind we're these that environment described. in tell the you conservative the of new based you volume, I for seeing interesting that our what if with it's think kind this

customers to and discount it You're not want it. having

discounting so really been need just when in and relative stuff to garage. you're they people compelling it, the that they've -- it's don't you're launches got already same shelf a heavily the retrading was and They be, it. they of But for and couple it year that have last just productive pretty products. those If something just are if the because different, on exciting. on want walking new that's demand just us already and the got We've past

So our I right think on in space everything. in bike, new now differences

a can't and If new up going come you're you something have with challenge. to exciting,

So what see the that's about launch, again, product the I excited on we we they'll we'll us volume until X But on think what makes per actually do conservative the results. launches. stay product think

Scott Stember

Fox if trucks contribution individual what and can Factory in I the just us a that. more upfitting Got about it. And for you the the or your guess context and give platforms branded then of in expectations to give just will fit last side-by-side. how Maybe upfitting question are that little

Michael Dennison

Yes, absolutely states for us.

what So a vehicles. we're truck. vehicles are that creating been of those put of and thing in can to purchased a or factory class well service production there. content model. us UTV concierge the in they side-by-side, we're a different luxury because dealerships us to think exciting talking truck. That's customers the through for sell to that's that Same We get we actually you we and vehicle And kind do Fox contact out a down a it Factory of from directly space about when really directly or above kind now raise on reaching deposit have with it

Now a that in ultimately or [indiscernible] and customer that's the But truck individual to for the a environment, connection transact new us. truck thing dealer we're through direct the purchasing country. that that's getting somewhere in

we side, think create channel that, for expand and high-end grow of We So market continues vehicles expand kind vehicles. we in automotive as a those to new our in how us just and by that's exciting. pretty that and fed in both

a pretty for positive us. So step

Michael Swartz

be the you question. side, on will truck then Or this so that any up this overlap. food be And Are far is will no about last the chain the there potential worried cannibalization?

Michael Dennison

and to pretty us about far off on truck that's OEMs. said, with of like lot the brought that a launched factory something like had OEMs It to foodchain. I conversations with land the would you. cool. us doing We Pretty to "Hey, that we the actually talk actually came

high for, up in and or that kind entire in different some I but exciting else. same the market. think, doesn't the not it business interestingly pinnacle than anything enough. And pyramid open actually businesses of it's or or it's the So doors shovel that vehicles, of so It's it's

Operator

at things any closing turn Mr. back comments. sir, Dennison, for time, you, like to this I'd And to

Michael Dennison

join I updated and good everyone will soon. we tonight, for a quarter, talking to for want as the to to thank forward taking to progress look keep guys Have time we Bob. Thanks, evening. us and the we you you

Operator

a joining all again, today's Thank XXXX thanks much We conclude Quarter again, Fiscal us. Factory evening. does Goodbye. that gentlemen, And Earnings for Again, you Corporation's you wish Holding so Dennison. Call. First great and ladies Mr. Fox

Fox Factory Holding (FOXF) 2 May 242024 Q1 Earnings call transcript