Scotts Valley, CA, USA - Fox Factory Holding Corp. has reported its financial results for the second quarter ended June 29, 2018. Second quarter sales increased 29.8% to $156.8 million compared to $120.8 million in the same period last fiscal year. Gross margin increased 110 basis points to 33.4% compared to 32.3% in the same period last fiscal year. Net income to FOX was $18.4 million, or 11.7% of sales and $0.47 of earnings per diluted share, compared to $13.7 million, or 11.5% of sales and $0.35 of earnings per diluted share in the same period last fiscal year. Non-GAAP adjusted net income was $21.9 million, or $0.56 of adjusted earnings per diluted share, compared to $15.0 million, or $0.39 of adjusted earnings per diluted share in the same period last fiscal year. Adjusted EBITDA was $32.4 million, or 20.7% of sales, compared to $24.0 million, or 19.9% of sales in the same period last fiscal year

“Our differentiated bike and powered vehicle market positions fueled broad-based strength across our product portfolio, resulting in record second-quarter sales and profitability, both of which exceeded our expectations,” commented Larry L. Enterline, FOX's Chief Executive Officer. “We are pleased with our team’s continued execution as we further expand into new and existing end markets building upon our core bike and powered vehicle category capabilities with compelling product innovation. We believe we remain well positioned for future growth and based on these strong operational and financial results as well as our outlook for the remainder of the year, we are raising our annual guidance.”

First-half 2018
Sales for the six months ended June 29, 2018, were $286.6 million, an increase of 26.2% compared to the same period in 2017. Sales of powered vehicle and bike products increased 40.2% and 13.0%, respectively, for the first six months of 2018 compared to the prior year period. Gross margin was 32.8% in the first six months of fiscal 2018, an 80 basis point increase, compared to gross margin of 32.0% in the first six months of fiscal 2017. The year-to-date gross margin improved primarily due to increased operating leverage on higher volume and improved manufacturing efficiencies.

Pre-tax income in the first six months of fiscal 2018 was $38.4 million, compared to $29.0 million in the first six months of fiscal 2017. Adjusted EBITDA increased to $55.5 million in the first six months of fiscal 2018, compared to $43.3 million in the first six months of fiscal 2017. Adjusted EBITDA margin in the first six months of fiscal 2018 was 19.3%, compared to 19.0% in the first six months of fiscal 2017. Reconciliations of pre-tax income to adjusted EBITDA and the calculation of non-GAAP adjusted EBITDA margin are provided at the end of this press release.

2018 Outlook
For the third quarter of fiscal 2018, the Company expects sales in the range of $166 million to $176 million and non-GAAP adjusted earnings per diluted share in the range of $0.59 to $0.67.

For the fiscal year 2018, the Company expects sales in the range of $596 million to $614 million and non-GAAP adjusted earnings per diluted share in the range of $1.96 to $2.12 The Company’s full-year 2018 guidance assumes a non-GAAP tax rate of 19% to 21%.