Post on 07-Aug-2018
transcript
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
1/31
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
2/31
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements within the meaning ofthe federal securities laws, which statements involve substantial risks anduncertainties. Forward-looking statements generally relate to future eventsor our future financial or operating performance. In some cases, you can
identify forward-looking statements because they contain words such as“may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,”“intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,”“likely,” “potential” or “continue” or the negative of these words or othersimilar terms or expressions that concern our expectations, strategy, plansor intentions.
These forward-looking statements are necessarily based upon estimatesand assumptions that, while considered reasonable by the Company and itsmanagement, are inherently uncertain. Factors that may cause actualresults to differ materially from current expectations include, but are not
limited to, those factors identified in the Company’s prospectus in thesections titled “Risk factors,” “Special note regarding forward-lookingstatements” and “Management’s discussion and analysis of financialcondition and results of operations.”
Nothing in this presentation should be regarded as a representation by anyperson that the forward-looking statements set forth herein will be achievedor that any of the contemplated results of such forward-looking statementswill be achieved. You should not place undue reliance on forward-lookingstatements, which speak only as of the date they are made. The Companyundertakes no duty to update these forward-looking statements.
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
3/31
MANAGEMENT PRESENTERS
Zvi GlasmanCFO
Larry EnterlineCEO
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
4/31
INTRODUCTION TO FOX
Global, aspirational, performance-based brand
Multiple attractive end markets Powerful customer relationships:
More than 150 global OEM customers
Global aftermarket network of more than 3,000 retail dealers and distributors
Highly-engineered products sold into multiple end markets
Relentless focus on innovation with an active patent program
Strong track record of profitability
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
5/31
1991
Entered the mountainbike rear suspension market
1987
Snowmobiles startgetting the benefits ofFOX suspension
1974
Bob Fox sets out toredefine motorcycleride dynamics
First production militaryvehicle, GMV 1.1
2001
Entered the mofront suspensio
Sport Truck USAacquisition
OVER 40 YEARS OF REDEFINING RIDE DYNAMIC
2008
Entered the SxSand utility quadmarkets
Race Face / Eastonacquisition
2009
Spec’d on the2010 Ford F-150SVT Raptor
2014
http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=polaris+2008+rzr&source=images&cd=&cad=rja&docid=MJD1XDKxu5xN4M&tbnid=Wop0qXUXUL8KiM:&ved=0CAUQjRw&url=http://www.off-road.com/atv/tech/full-specifications-2008-polaris-rzr-side-by-side-23552.html&ei=E5fQUc71BcifyQGOu4GwBg&bvm=bv.48572450,d.aWc&psig=AFQjCNEl--RXpFXztiFX8-QlPCcDR1tVgw&ust=1372711044306359http://www.google.com/url?sa=i&rct=j&q=polaris+2008+rzr&source=images&cd=&cad=rja&docid=MJD1XDKxu5xN4M&tbnid=Wop0qXUXUL8KiM:&ved=0CAUQjRw&url=http://www.off-road.com/atv/tech/full-specifications-2008-polaris-rzr-side-by-side-23552.html&ei=E5fQUc71BcifyQGOu4GwBg&bvm=bv.48572450,d.aWc&psig=AFQjCNEl--RXpFXztiFX8-QlPCcDR1tVgw&ust=1372711044306359http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
6/31
FOX’S FORMULA FOR SUCCESS
FORD Raptor
Transportable model across vehicle categories and end markets
POLARIS RZR XP1000 FOX Edition
- Aftermarket satisfies existing market with an appetite for performance
OEMs look for brands that add authenticity to the vehicles in the marketplace
YETI INFI
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
7/31
REDEFINE YOUR LIMITS
Jason PulleHarley Freesty
We redefine our athletes’ limits
Laurie Greenland2015 Downhill World Champion
Rachel Atherton2015 Downhill WorldChampion
Rob MacCachren2014 & 2015 BAJA 1000 Champion
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
8/31
FOX ENABLES ENHANCED RIDE DYNAMICS
High-performance suspension enables riders to harness power and speed
OPTIMIZED TECHNOLOGIES(Uniquely Tuned for Specific Applications)
2017 FORD RAPTOR
(First Internal BypassOEM automotive application)
POLARIS RZR XP1(First Internal Bypas
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
9/31
OVERVIEW OF BIKE PRODUCT OFFERING
_____________________(1) Sales breakdown represents FY 2014 performance on a pro forma basis after giving effect to the Sport Truck USA and Race Face / Easton acquisitions.(2) Management estimates; assumes typical $3,000 retail mountain bike.
B
FOX is focused on the premium segment of performance bike market
40 Float
FRONTSUSPENSION
REARSUSPENSION
FLOAT – CTD
NON-SUSPENSIONCOMPONENTS
SEAT POST AND
CRANKSET32 Float
Pro Forma FY 2014Sales Breakdown (1)
WHEELS
EASTON HAVEN
CARBON
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
10/31
OVERVIEW OF POWERED VEHICLES
PRODUCT OFFERING
PRICERANGE
RETAILPRICE
SIDE-BY-SIDE
$1,100 – $1,495(set of 2)
2.5 PODIUM-X
$1,495(set of 2)
SNOWMOBILE
$695 – $1,595(set of 2)
FLOAT X EVOL
$1,495(set of 2)
ATV
$695 – $1,595(set of 2)
PODIUM XPIGGYBACK
$995
MOTORC
$ 649 – $
PODIU
FOX is focused on the premium performance segment of powered vehicles
TRUCK
$127 – $1,250
2.0 SERIES
$127
Pro Forma FY 2014Sales Breakdown (1)
_____________________(1) Sales breakdown represents FY 2014 performance on a pro forma basis after giving effect to the Sport Truck USA and Race Face / Easton acquisitions.
$79(set o
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
11/31
COMPANY HIGHLIGHTS
1. Multiple Attractive End Markets
2. Relentless Approach to Innovation
3. Authentic Brand Driving Consumer Demand and Loyalty
4. Powerful OEM Relationships
5. Expanding Global Presence
6. Experienced Management Team Leading a Company of Enthus
7. Multifaceted Growth Strategy
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
12/31
Performance benefits from
increases in horsepower limited bystandard suspension
Further improvements in vehicleperformance require improved ridedynamics technologies
Growing need forsuspension performance Growing demand for higher
performing products
More rapid adoption cycles
Mountain bike – evolving wheel/tire sizesand electronic technologies
Side-by-Side – more capable andpowerful stock models
Preference for authentic, aspirational brands
Shifting consumer preferences
Advanced technCustomized soldifferentiation
Recognizable bdrawing power
Scale and sophneed for other s
Fulfilling OEpremium ridofferings
Santa Cruz Bronson Carbon 27.5 equipped with ouraward-winning Factory Series 36 FLOAT Fork
Yamaha YXZ1000
suspension introdu
1. MULTIPLE ATTRACTIVE END MARKETS
Ford’s 2017 F -150 Raptor with InternalBypass suspension
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
13/31
2. RELENTLESS APPROACH TO INNOVATION
Approximate # of annualraces attended globally
50
2015 DH World Champions(Women’s Elite & Jr. Men’s)
Active Patent Program Helps Build a Robust Pipeline of New and Enhan
2015 BAJA 1000 Champions(Trophy Truck & UTV)
RECENT
CHAMPIONSHIPS
2015 EWS Champions
(Men’s & Women’s)
2015 Super Dirt Week(Syracuse 200 & Sportsmen Mod)
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
14/31
3. AUTHENTIC BRAND DRIVING CONSUMER
DEMAND AND LOYALTY
Professional AthletesDemand the best product for acompetitive edge
Weekend Warriors & EnthusiastsLook for the same performance as theprofessional athletes they admire
Diehard
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
15/31
4. POWERFUL OEM RELATIONSHIPS
BIKE POWERED VE
Select OEM Relationships
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
16/31
Scotts Valley, CACorporate HQSalesR&DManufacturing
El Cajon, CAManufacturing
SalesServiceR&D
Baxter, MNSalesService
TaiMaSal
Bern, SwitzerlandSales
Watsonville, CAManufacturingServiceDistributionWarehousing
FOX HEADQUARTERS MANUFACTURING MARKETS OF INTERESTSALES
Rodalben, GermanySales
Service
ChileMarket of Interest
ArgentinaMarket of Interest
BrazilMarket of Interest
AustraliaMarket of Interest
Global Infrastructure to Supply International OEMs and Provide Afterm
Coldwater, MI
Manufacturing(Sport Truck)
Vancouver, B.C.Race Face / Easton
5. EXPANDING GLOBAL PRESENCE
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
17/31
6. EXPERIENCED MANAGEMENT TEAM…
LARRY ENTERLINE CEO
BSEE / MBA, 41 years in technology businesses. 5 years with FOX.
ZVI GLASMAN CFO
Bachelors Finance, 28 years of experience. 15 years as a CFO. 8 years with FOX.
MARIO GALASSO PRESIDENT
BSME, 24 years of vehicle dynamics and suspension industry experience. 13 years with FOX.
WES ALLINGER VP & GM, BIKE
BSME, 26 years of experience. 23 years of suspension industry experience. 15 years with FOX.
JOHN MARKING CORPORATE VP, BUSINESS INNOVATION
28 years of suspension industry experience. 25 years with FOX.
TOM WITTENSCHLAEGER
VP & GM, POWERED VEHICLES
BSEE, 17 years in executive roles. Holds multiple patents. 30+ years technology experience. Joined FOX in 2015.
JOHN BOULTON Senior Vice President
BSEE, 29 years of manufacturing experience. 15 years in senior executive role. 5 years with FOX.
DAVID HAUGEN GENERAL COUNSEL
BSME, JD, 20 years of patent law experience. 9 years with FOX.
BILL KATHERMAN SVP, GLOBAL OPERATIONS
Bachelors Business Administration, 35 years of management experience. 3 years with FOX.
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
18/31
Create productsenhance ride dy
Avid users of F
Actively engageaspects of proddesign, developand testing
Keen observersand new marke
…LEADING A COMPANY OF ENTHUSIASTS
Our Employees Support a Culture of Continuous Innovation and Quality
JOHN MARKING
CORPORATE VP, BUSINESS INNOVATION
CODY RAHDERS
EL CAJON PRODUCTION
RYAN GREENINGPOWERSPORTS RACE TECHNICIAN
LARRY ROESELEROFFROAD TUNING TECHNICIAN
ARIEL LINDSLEYTECHNICAL MARKETINGSPECIALIST
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
19/31
Continue Penetration in Existing Vehicle Categories
Penetrate New Vehicle Categories
Exploit International Opportunities
Expand FOX Brand Into Relevant Adjacencies
7. MULTIFACETED GROWTH STRATEGY
A
B
C
D
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
20/31
Existing OEMs – round out our participation across customer product portfolios
Continue to focus on growing categories
New products in the pipeline
Capitalize on expanding aftermarket opportunity
CONTINUE PENETRATION IN
EXISTING VEHICLE CATEGORIES
A
FOX / Sport Truck Aftermarket Prod
Purpose-built. BDS lift kit and FOX s Chosen by Shelby America for their
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
21/31
PENETRATE NEW VEHICLE CATEGORIES
Large Potential White Spac
RECENTLY ENTERED MARKETS IDENTIFIED FUTURE CATE
Ride Dynamics play a critical role in numerous large end markets
B
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
22/31
EXPLOIT INTERNATIONAL OPPORTUNITIES
_____________________Source: McKinsey & Company, Winning the $30 trillion decathlon: Going for gold i
_____________________Source: 2014 Management estimates after giving effect to the Sport Truck USA and Race Face / Easton
acquisitions.
(billions of people)
Capturing the World’s
Eme
Middle Class
1990
FOX Sales by End-Destination
North America56%
Europe35%
Asia7%
South America
2%
The rise of the
Emerging Market
Middle Class9%
Increasing global demand for authentic American brands and performance products
1
2
3
4
5
* Forecast
C
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
23/31
EXPAND FOX BRAND INTO
RELEVANT ADJACENCIES
HIGH-PERFORMANCE WHEELS
Enter adjacent categories organically or by way of acquisition
POWERED VEHICLES
HIGH-PERFORMANCE BRAK
WHEELS & OTHER COMPONENTS(RACE FACE/EASTON ACQUISITION)
Acquisition Closed: 12/12/2014Purchase Price: $30mm (plus a maximum earn-out of $16.9mm)2014 Sales: $23.6mm (unaudited)2014 Adj. EBITDA: $4.3mm (unaudited)
D
LIGHT BARS
DOORS
5-POINT BELTS
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
24/31
PROVEN TRACKRECORD OFPERFORMANCE
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
25/31
PROVEN TRACK RECORD OF PERFORMANCE
$137 $158
$181 $179
97 112
61
78
92
128
136
159
1
$198$236
$273$307
$233$271
2011 2012 2013 2014 YTD Q3-
2014
YTD Q3 -
2015
($ in millions)
SALES
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
26/31
$57$63
$80
$94
$73 $83
2011 2012 2013 2014 YTD Q3-
2014
YTD Q3-
2015
PROVEN TRACK RECORD OF PERFORMANCE CON
(1) FOX defines adjusted EBITDA as net income adjusted for interest expense, net other expense, income taxes, amortization of purchased intangibles, depreciation, stock-
expense, contingent consideration valuation adjustments, and certain other acquisition related or non-recurring items that are more fully described in the appendix
(2) Non-GAAP gross margin is adjusted to exclude the effect of finished goods inventory valuation adjustments associated with the company’s acquisition which are include
footnote 3 of the adjusted EBITDA reconciliation found in the appendix
GROSS PROFIT($ in millions)
ADJUSTED EBITDA (1)
($ in millions)
28.8% 26.6% 29.4% 31.1% 31.5% 31.1% 15.5% 15.4% 18.2% 18.1
$31$36
$50$56
2011 2012 2013 2014
NON-GAAP GROSS MARGIN (2) ADJUSTED EBITDA MARGIN
MARGIN GROWTH THROUGH STRATEGIC AND
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
27/31
OPERATIONAL EFFICIENCY INITIATIVES
Key project: Shift of mountamanufacturing to Taiwan
Expect transition to be c
Reduces production leachain efficiencies and recosts
Shortens supply chain b
We expect substantial mthis project
Dedicated teams working on
improvement initiatives in sumanufacturability, and otherimprovements targeted at im
_____________________Source: 2017 gross margin is estimated by management on legacy FOX business excluding acquisitions.
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
28/31
WRAP UP
Multiple Attractive End Markets
Relentless Approach to Innovation
Authentic Brand Driving Consumer Demandand Loyalty
Powerful OEM Relationships
Expanding Global Presence
Experienced Management Team Leading aCompany of Enthusiasts
Multifaceted Growth Strategy
SUSTAINA
COMPETITIVE AD
TO ENABLE FUTUR
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
29/31
Q&A
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
30/31
APPENDIX
8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation
31/31
ADJUSTED EBITDA RECONCILIATION
(1) Represents non-cash stock-based compensation.(2) Represents the amortization or accrual of a portion of the acquisitions’ purchase price classified as compensation expense and the periodic revaluation of the
consideration associated with the acquisition of Sport truck based on actual performance, current assumptions regarding volatility, interest rates, and forecas(3) Represents various acquisition related costs and expenses incurred to integrate acquired entities into the Company’s operations and the impact of finished g
adjustments.(4) Represents costs and expenses incurred related to the shelf registration filed in March 2015.(5) Other expense, net includes interest expense, foreign currency transaction gain or loss, gain or loss on the disposal of fixed assets, and other miscellaneous(6) Represents management fees paid to an affiliate of the Company’s majority stockholder pursuant to a management services agreement that t erminated upo
Company’s initial public offering.
($ in Millions) YT
2011 2012 2013 2014
Net Income 13.5$ $14.2 $24.1 $27.7 $
Depreciation & Amortization 6.6 7.2 7.8 9.7
Stock-Based Compensation (1) 1.0 2.1 2.5 4.1Fair Value Adjustment of Contingent Consideration and
Acquisition Related Compensation (2) 0.0 0.0 0.0 2.2
Other Acquisition and Integration Related Expenses (3) 0.0 0.0 0.3 4.2
Offering Expense (4) 0.0 0.0 0.0 0.5
Provision for Income Taxes 7.1 8.2 10.6 6.6
Costs Associated with Tax Benefit 0.0 0.0 0.0 0.2
Other Expense, Net (5) 2.0 3.8 4.0 0.3
Management Fees (Related Party) (6) 0.5 0.5 0.3 0.0 Adjusted EBITDA 30.7$ 36.0$ 49.6$ 55.5$ $
Year Ended December 31,