ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-1647258 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
915 Disc Drive Scotts Valley, CA | 95066 |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | ||
Unaudited Condensed Consolidated Balance Sheets as of September 28, 2018 and December 29, 2017 | ||
Unaudited Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 28, 2018 and September 29, 2017 | ||
Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 28, 2018 and September 29, 2017 | ||
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2018 and September 29, 2017 | ||
Notes to Unaudited Condensed Consolidated Financial Statements | ||
As of | As of | ||||||
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 32,832 | $ | 35,947 | |||
Accounts receivable (net of allowances of $848 and $676 at September 28, 2018 and December 29, 2017, respectively) | 84,867 | 61,060 | |||||
Inventory | 104,831 | 84,841 | |||||
Prepaids and other current assets | 20,661 | 21,100 | |||||
Total current assets | 243,191 | 202,948 | |||||
Property, plant and equipment, net | 57,471 | 43,636 | |||||
Deferred tax assets | 8,674 | 2,669 | |||||
Goodwill | 88,659 | 88,438 | |||||
Intangibles, net | 85,474 | 90,044 | |||||
Other assets | 405 | 551 | |||||
Total assets | $ | 483,874 | $ | 428,286 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 75,802 | $ | 40,813 | |||
Accrued expenses | 32,955 | 32,608 | |||||
Reserve for uncertain tax positions | 1,540 | 7,787 | |||||
Current portion of long-term debt | 5,514 | 5,038 | |||||
Total current liabilities | 115,811 | 86,246 | |||||
Line of credit | — | 35,585 | |||||
Long-term debt, less current portion | 53,883 | 58,020 | |||||
Deferred rent | 514 | 645 | |||||
Total liabilities | 170,208 | 180,496 | |||||
Commitments and contingencies (Refer to Note 7 - Commitments and Contingencies) | |||||||
Redeemable non-controlling interest | 14,852 | 12,955 | |||||
Stockholders’ equity | |||||||
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of September 28, 2018 and December 29, 2017 | — | — | |||||
Common stock, $0.001 par value — 90,000 authorized; 38,878 shares issued and 37,988 outstanding as of September 28, 2018; 38,497 shares issued and 37,607 outstanding as of December 29, 2017 | 38 | 38 | |||||
Additional paid-in capital | 113,599 | 112,793 | |||||
Treasury stock, at cost; 890 common shares as of September 28, 2018 and December 29, 2017 | (13,754 | ) | (13,754 | ) | |||
Accumulated other comprehensive loss | (620 | ) | (168 | ) | |||
Retained earnings | 199,551 | 135,926 | |||||
Total stockholders’ equity | 298,814 | 234,835 | |||||
Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ | 483,874 | $ | 428,286 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, | September 29, | September 28, | September 29, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Sales | $ | 175,798 | $ | 127,399 | $ | 462,415 | $ | 354,540 | |||||||
Cost of sales | 115,312 | 84,802 | 307,872 | 239,172 | |||||||||||
Gross profit | 60,486 | 42,597 | 154,543 | 115,368 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 9,606 | 6,914 | 28,142 | 20,574 | |||||||||||
Research and development | 6,765 | 5,547 | 19,019 | 15,011 | |||||||||||
General and administrative | 11,164 | 9,061 | 31,137 | 25,263 | |||||||||||
Amortization of purchased intangibles | 1,499 | 697 | 4,567 | 2,089 | |||||||||||
Fair value adjustment of contingent consideration and acquisition-related compensation | — | — | — | 1,447 | |||||||||||
Total operating expenses | 29,034 | 22,219 | 82,865 | 64,384 | |||||||||||
Income from operations | 31,452 | 20,378 | 71,678 | 50,984 | |||||||||||
Other expense, net: | |||||||||||||||
Interest expense | 748 | 602 | 2,379 | 1,696 | |||||||||||
Other expense (income) | 180 | (181 | ) | 380 | 285 | ||||||||||
Other expense, net | 928 | 421 | 2,759 | 1,981 | |||||||||||
Income before income taxes | 30,524 | 19,957 | 68,919 | 49,003 | |||||||||||
Provision for income taxes | 5,788 | 3,885 | 3,919 | 8,677 | |||||||||||
Net income | 24,736 | 16,072 | 65,000 | 40,326 | |||||||||||
Less: net income attributable to non-controlling interest | 424 | — | 1,094 | — | |||||||||||
Net income attributable to FOX stockholders | $ | 24,312 | $ | 16,072 | $ | 63,906 | $ | 40,326 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.64 | $ | 0.43 | $ | 1.69 | $ | 1.08 | |||||||
Diluted | $ | 0.62 | $ | 0.41 | $ | 1.64 | $ | 1.04 | |||||||
Weighted average shares used to compute earnings per share: | |||||||||||||||
Basic | 37,886 | 37,474 | 37,743 | 37,312 | |||||||||||
Diluted | 39,052 | 38,817 | 38,913 | 38,700 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, | September 29, | September 28, | September 29, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 24,736 | $ | 16,072 | $ | 65,000 | $ | 40,326 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustments, net of tax effects | 401 | 345 | (452 | ) | 1,561 | ||||||||||
Other comprehensive income (loss) | 401 | 345 | (452 | ) | 1,561 | ||||||||||
Comprehensive income | 25,137 | 16,417 | 64,548 | 41,887 | |||||||||||
Less: comprehensive income attributable to non-controlling interest | 424 | — | 1,094 | — | |||||||||||
Comprehensive income attributable to FOX stockholders | $ | 24,713 | $ | 16,417 | $ | 63,454 | $ | 41,887 |
For the nine months ended | |||||||
September 28, 2018 | September 29, 2017 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 65,000 | $ | 40,326 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 10,911 | 7,325 | |||||
Stock-based compensation | 5,649 | 6,600 | |||||
Deferred taxes and uncertain tax positions | (12,258 | ) | (7,135 | ) | |||
Change in fair value of contingent consideration | — | (150 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (24,760 | ) | (6,531 | ) | |||
Inventory | (20,403 | ) | (19,844 | ) | |||
Income taxes payable | (1,328 | ) | 3,791 | ||||
Prepaids and other assets | 80 | (2,981 | ) | ||||
Accounts payable | 35,717 | 10,128 | |||||
Accrued expenses | 2,144 | (9,498 | ) | ||||
Net cash provided by operating activities | 60,752 | 22,031 | |||||
INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (20,412 | ) | (10,141 | ) | |||
Purchase of intangible assets | — | (84 | ) | ||||
Net cash used in investing activities | (20,412 | ) | (10,225 | ) | |||
FINANCING ACTIVITIES: | |||||||
Payments on line of credit | (35,585 | ) | — | ||||
Payment of contingent consideration liability | — | (5,382 | ) | ||||
Repayment of debt | (3,750 | ) | (2,812 | ) | |||
Repurchases from stock compensation program, net | (4,041 | ) | (2,854 | ) | |||
Net cash used in financing activities | (43,376 | ) | (11,048 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (79 | ) | 725 | ||||
CHANGE IN CASH AND CASH EQUIVALENTS | (3,115 | ) | 1,483 | ||||
CASH AND CASH EQUIVALENTS—Beginning of period | 35,947 | 35,280 | |||||
CASH AND CASH EQUIVALENTS—End of period | $ | 32,832 | $ | 36,763 | |||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||
Cash paid during the period for: | |||||||
Income taxes | $ | 17,664 | $ | 11,946 | |||
Interest | $ | 2,223 | $ | 1,485 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
Powered Vehicles | $ | 94,891 | $ | 60,568 | $ | 249,272 | $ | 170,662 | |||||||
Specialty Sports | 80,907 | 66,831 | 213,143 | 183,878 | |||||||||||
Total sales | $ | 175,798 | $ | 127,399 | $ | 462,415 | $ | 354,540 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
OEM | $ | 106,834 | $ | 80,217 | $ | 266,886 | $ | 213,954 | |||||||
Aftermarket | 68,964 | 47,182 | 195,529 | 140,586 | |||||||||||
Total sales | $ | 175,798 | $ | 127,399 | $ | 462,415 | $ | 354,540 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
North America | $ | 108,140 | $ | 75,170 | $ | 289,875 | $ | 212,157 | |||||||
Asia | 34,058 | 27,081 | 86,228 | 77,177 | |||||||||||
Europe | 28,351 | 22,812 | 77,759 | 59,554 | |||||||||||
Rest of the world | 5,249 | 2,336 | 8,553 | 5,652 | |||||||||||
Total sales | $ | 175,798 | $ | 127,399 | $ | 462,415 | $ | 354,540 |
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
Raw materials | $ | 70,369 | $ | 51,371 | |||
Work-in-process | 9,225 | 1,233 | |||||
Finished goods | 25,237 | 32,237 | |||||
Total inventory | $ | 104,831 | $ | 84,841 |
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
Machinery and manufacturing equipment | $ | 35,552 | $ | 33,664 | |||
Leasehold improvements | 10,192 | 9,919 | |||||
Internal-use computer software | 12,770 | 7,819 | |||||
Building and land | 17,803 | 8,811 | |||||
Information systems, office equipment and furniture | 7,329 | 7,715 | |||||
Transportation equipment | 3,892 | 3,325 | |||||
Total | 87,538 | 71,253 | |||||
Less: accumulated depreciation and amortization | (30,067 | ) | (27,617 | ) | |||
Property, plant and equipment, net | $ | 57,471 | $ | 43,636 |
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
United States | $ | 52,071 | $ | 38,450 | |||
International | 5,400 | 5,186 | |||||
Total long-lived assets | $ | 57,471 | $ | 43,636 |
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
Payroll and related expenses | $ | 13,423 | $ | 13,211 | |||
Warranty | 6,422 | 6,481 | |||||
Income tax payable | 4,923 | 6,562 | |||||
Other accrued expenses | 8,187 | 6,354 | |||||
Total | $ | 32,955 | $ | 32,608 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
Beginning warranty liability | $ | 6,142 | $ | 5,077 | $ | 6,481 | $ | 4,593 | |||||||
Charge to cost of sales | 1,587 | 992 | 3,418 | 4,045 | |||||||||||
Costs incurred | (1,307 | ) | (936 | ) | (3,477 | ) | (3,505 | ) | |||||||
Ending warranty liability | $ | 6,422 | $ | 5,133 | $ | 6,422 | $ | 5,133 |
September 28, | December 29, | ||||||
2018 | 2017 | ||||||
Amount outstanding | $ | — | $ | 35,000 | |||
Standby letter of credit | $ | 5,000 | $ | 5,000 | |||
Available borrowing capacity | $ | 95,000 | $ | 60,000 | |||
Maximum borrowing capacity | $ | 100,000 | $ | 100,000 | |||
Maturity date | May 11, 2021 |
For fiscal year: | |||
2018 (remaining three months) | $ | 1,406 | |
2019 | 5,625 | ||
2020 | 7,031 | ||
2021 | 45,625 | ||
Total term debt | 59,687 | ||
Debt issuance cost | (290 | ) | |
Long-term debt, net of issuance cost | 59,397 | ||
Less: current portion | (5,514 | ) | |
Long-term debt less current portion | $ | 53,883 |
September 28, 2018 | December 29, 2017 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Credit facility | $ | — | $ | 59,397 | $ | — | $ | 59,397 | $ | — | $ | 63,058 | $ | — | $ | 63,058 | |||||||||||||||
Non-controlling interest subject to put provisions | — | — | 14,852 | 14,852 | — | — | 12,955 | 12,955 | |||||||||||||||||||||||
Total liabilities measured at fair value | $ | — | $ | 59,397 | $ | 14,852 | $ | 74,249 | $ | — | $ | 63,058 | $ | 12,955 | $ | 76,013 |
Redeemable Non-Controlling Interest (level 3 measurement) | |||
Balance at December 29, 2017 | $ | 12,955 | |
Net income attributable to non-controlling interest | 1,094 | ||
Change in fair value | 803 | ||
Balance at September 28, 2018 | $ | 14,852 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
Cost of sales | $ | 124 | $ | 99 | $ | 356 | $ | 278 | |||||||
Sales and marketing | 128 | 151 | 428 | 420 | |||||||||||
Research and development | 174 | 127 | 470 | 305 | |||||||||||
General and administrative | 1,392 | 1,934 | 4,395 | 5,597 | |||||||||||
Total | $ | 1,818 | $ | 2,311 | $ | 5,649 | $ | 6,600 |
Unvested RSUs | ||||||
Number of shares outstanding | Weighted-average grant date fair value | |||||
Unvested at December 29, 2017 | 800 | $ | 23.91 | |||
Granted | 210 | $ | 36.25 | |||
Canceled | (9 | ) | $ | 19.35 | ||
Vested | (334 | ) | $ | 21.92 | ||
Unvested at September 28, 2018 | 667 | $ | 28.87 |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
Provision for income taxes | $ | 5,788 | $ | 3,885 | $ | 3,919 | $ | 8,677 | |||||||
Effective tax rates | 19.0 | % | 19.5 | % | 5.7 | % | 17.7 | % |
For the three months ended | For the nine months ended | ||||||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||||||
Net income attributable to FOX stockholders | $ | 24,312 | $ | 16,072 | $ | 63,906 | $ | 40,326 | |||||||
Weighted average shares used to compute basic EPS | 37,886 | 37,474 | 37,743 | 37,312 | |||||||||||
Dilutive effect of employee stock plans | 1,166 | 1,343 | 1,170 | 1,388 | |||||||||||
Weighted average shares used to compute diluted EPS | 39,052 | 38,817 | 38,913 | 38,700 | |||||||||||
EPS: | |||||||||||||||
Basic | $ | 0.64 | $ | 0.43 | $ | 1.69 | $ | 1.08 | |||||||
Diluted | $ | 0.62 | $ | 0.41 | $ | 1.64 | $ | 1.04 |
• | our ability to develop new and innovative products in our current end-markets; |
• | our ability to leverage our technologies and brand to expand into new categories and end-markets; |
• | our ability to increase our aftermarket penetration; |
• | our ability to accelerate international growth; |
• | our exposure to exchange rate fluctuations; |
• | the loss of key customers; |
• | our ability to improve operating and supply chain efficiencies; |
• | our ability to enforce our intellectual property rights; |
• | our future financial performance, including our sales, cost of sales, gross profit or gross margins, operating expenses, ability to generate positive cash flow and ability to maintain our profitability; |
• | our ability to maintain our premium brand image and high-performance products; |
• | our ability to maintain relationships with the professional athletes and race teams we sponsor; |
• | our ability to selectively add additional dealers and distributors in certain geographic markets; |
• | the growth of the markets in which we compete, our expectations regarding consumer preferences and our ability to respond to changes in consumer preferences; |
• | changes in demand for high-end suspension and ride dynamics products; |
• | the loss of key personnel, management and skilled engineers; |
• | our ability to successfully identify, evaluate and manage potential acquisitions and to benefit from such acquisitions; |
• | the outcome of pending litigation; |
• | future disruptions in the operations of our manufacturing facilities; |
• | our ability to adapt our business model to mitigate the impact of certain changes in tax laws including those enacted in the U.S. in December 2017; |
• | changes in tariffs, quotas, trade barriers and other similar restrictions on sales; |
• | changes in the relative proportion of profit earned in the numerous jurisdictions in which we do business and in tax legislation, case law and other authoritative guidance in those jurisdictions; |
• | product recalls and product liability claims; and |
• | future economic or market conditions. |
For the three months ended | For the nine months ended | ||||||||||||||
(in thousands) | September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | |||||||||||
Sales | $ | 175,798 | $ | 127,399 | $ | 462,415 | $ | 354,540 | |||||||
Cost of sales | 115,312 | 84,802 | 307,872 | 239,172 | |||||||||||
Gross profit | 60,486 | 42,597 | 154,543 | 115,368 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 9,606 | 6,914 | 28,142 | 20,574 | |||||||||||
Research and development | 6,765 | 5,547 | 19,019 | 15,011 | |||||||||||
General and administrative | 11,164 | 9,061 | 31,137 | 25,263 | |||||||||||
Amortization of purchased intangibles | 1,499 | 697 | 4,567 | 2,089 | |||||||||||
Fair value adjustment of contingent consideration and acquisition-related compensation | — | — | — | 1,447 | |||||||||||
Total operating expenses | 29,034 | 22,219 | 82,865 | 64,384 | |||||||||||
Income from operations | 31,452 | 20,378 | 71,678 | 50,984 | |||||||||||
Other expense, net: | |||||||||||||||
Interest expense | 748 | 602 | 2,379 | 1,696 | |||||||||||
Other expense (income) | 180 | (181 | ) | 380 | 285 | ||||||||||
Other expense, net | 928 | 421 | 2,759 | 1,981 | |||||||||||
Income before income taxes | 30,524 | 19,957 | 68,919 | 49,003 | |||||||||||
Provision for income taxes | 5,788 | 3,885 | 3,919 | 8,677 | |||||||||||
Net income | 24,736 | 16,072 | 65,000 | 40,326 | |||||||||||
Less: net income attributable to non-controlling interest | 424 | — | 1,094 | — | |||||||||||
Net income attributable to FOX stockholders | $ | 24,312 | $ | 16,072 | $ | 63,906 | $ | 40,326 |
For the three months ended | For the nine months ended | ||||||||||
September 28, 2018 | September 29, 2017 | September 28, 2018 | September 29, 2017 | ||||||||
Sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of sales | 65.6 | 66.6 | 66.6 | 67.5 | |||||||
Gross profit | 34.4 | 33.4 | 33.4 | 32.5 | |||||||
Operating expenses: | |||||||||||
Sales and marketing | 5.5 | 5.4 | 6.1 | 5.8 | |||||||
Research and development | 3.8 | 4.4 | 4.1 | 4.2 | |||||||
General and administrative | 6.4 | 7.1 | 6.7 | 7.1 | |||||||
Amortization of purchased intangibles | 0.9 | 0.5 | 1.0 | 0.6 | |||||||
Fair value adjustment of contingent consideration and acquisition-related compensation | — | — | — | 0.4 | |||||||
Total operating expenses | 16.6 | 17.4 | 17.9 | 18.1 | |||||||
Income from operations | 17.8 | 16.0 | 15.5 | 14.4 | |||||||
Other expense, net: | |||||||||||
Interest expense | 0.4 | 0.5 | 0.5 | 0.5 | |||||||
Other expense (income) | 0.1 | (0.1 | ) | 0.1 | 0.1 | ||||||
Other expense, net | 0.5 | 0.4 | 0.6 | 0.6 | |||||||
Income before income taxes | 17.3 | 15.6 | 14.9 | 13.8 | |||||||
Provision for income taxes | 3.3 | 3.0 | 0.8 | 2.4 | |||||||
Net income | 14.0 | 12.6 | 14.1 | 11.4 | |||||||
Less: net income attributable to non-controlling interest | 0.2 | — | 0.2 | — | |||||||
Net income attributable to FOX stockholders | 13.8 | % | 12.6 | % | 13.9 | % | 11.4 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Powered Vehicle products | $ | 94.9 | $ | 60.6 | $ | 34.3 | 56.6 | % | ||||||
Specialty Sports products | 80.9 | 66.8 | 14.1 | 21.1 | ||||||||||
Total sales | $ | 175.8 | $ | 127.4 | $ | 48.4 | 38.0 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Cost of sales | $ | 115.3 | $ | 84.8 | $ | 30.5 | 36.0 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Operating expenses: | ||||||||||||||
Sales and marketing | $ | 9.6 | $ | 6.9 | $ | 2.7 | 39.1 | % | ||||||
Research and development | 6.8 | 5.5 | 1.3 | 23.6 | ||||||||||
General and administrative | 11.2 | 9.1 | 2.1 | 23.1 | ||||||||||
Amortization of purchased intangibles | 1.5 | 0.7 | 0.8 | 114.3 | ||||||||||
Total operating expenses | $ | 29.1 | $ | 22.2 | $ | 6.9 | 31.1 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Income from operations | $ | 31.5 | $ | 20.4 | $ | 11.1 | 54.4 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Other expense, net: | ||||||||||||||
Interest expense | $ | 0.7 | $ | 0.6 | $ | 0.1 | 16.7 | % | ||||||
Other expense (income), net | 0.2 | (0.2 | ) | 0.4 | (200.0 | ) | ||||||||
Other expense, net | $ | 0.9 | $ | 0.4 | $ | 0.5 | 125.0 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Provision for income taxes | $ | 5.8 | $ | 3.9 | $ | 1.9 | 48.7 | % |
For the three months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Net income | $ | 24.7 | $ | 16.1 | $ | 8.6 | 53.4 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Powered Vehicle products | $ | 249.3 | $ | 170.7 | $ | 78.6 | 46.0 | % | ||||||
Specialty Sports products | 213.1 | 183.8 | 29.3 | 15.9 | ||||||||||
Total sales | $ | 462.4 | $ | 354.5 | $ | 107.9 | 30.4 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Cost of sales | $ | 307.9 | $ | 239.2 | $ | 68.7 | 28.7 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Operating expenses: | ||||||||||||||
Sales and marketing | $ | 28.1 | $ | 20.6 | $ | 7.5 | 36.4 | % | ||||||
Research and development | 19.0 | 15.0 | 4.0 | 26.7 | ||||||||||
General and administrative | 31.1 | 25.3 | 5.8 | 22.9 | ||||||||||
Amortization of purchased intangibles | 4.6 | 2.1 | 2.5 | 119.0 | ||||||||||
Fair value adjustment of contingent consideration and acquisition-related compensation | — | 1.4 | (1.4 | ) | (100.0 | ) | ||||||||
Total operating expenses | $ | 82.8 | $ | 64.4 | $ | 18.4 | 28.6 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Income from operations | $ | 71.7 | $ | 51.0 | $ | 20.7 | 40.6 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Other expense, net: | ||||||||||||||
Interest expense | $ | 2.4 | $ | 1.7 | $ | 0.7 | 41.2 | % | ||||||
Other expense | 0.4 | 0.3 | 0.1 | 33.3 | ||||||||||
Other expense, net | $ | 2.8 | $ | 2.0 | $ | 0.8 | 40.0 | % |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Provision for income taxes | $ | 3.9 | $ | 8.7 | $ | (4.8 | ) | (55.2 | )% |
For the nine months ended | ||||||||||||||
(in millions) | September 28, 2018 | September 29, 2017 | Change ($) | Change (%) | ||||||||||
Net income | $ | 65.0 | $ | 40.3 | $ | 24.7 | 61.3 | % |
For the nine months ended | |||||||
(in thousands) | September 28, 2018 | September 29, 2017 | |||||
Net cash provided by operating activities | $ | 60,752 | $ | 22,031 | |||
Net cash used in investing activities | (20,412 | ) | (10,225 | ) | |||
Net cash used in financing activities | (43,376 | ) | (11,048 | ) | |||
Effect of exchange rate changes on cash | (79 | ) | 725 | ||||
(Decrease) increase in cash and cash equivalents | $ | (3,115 | ) | $ | 1,483 |
• | failure to develop new products that are innovative, performance and reliable; |
• | internal product quality control issues; |
• | product quality issues on the bikes and powered vehicles on which our products are installed; |
• | product recalls; |
• | high profile component failures (such as a component failure during a race on a mountain bike ridden by an athlete that we sponsor); |
• | negative publicity regarding our sponsored athletes; |
• | high profile injury or death to one of our sponsored athletes; |
• | inconsistent uses of our brand and our other intellectual property assets, as well as failure to protect our intellectual property; and |
• | changes in consumer trends and perceptions. |
• | difficulty in transporting materials internationally, including labor disputes at West Coast ports, which handle a large amount of our products; |
• | increased difficulty in protecting our intellectual property rights and trade secrets; |
• | changes in tax laws and the interpretation of those laws; |
• | exposure to local economic conditions; |
• | unexpected government action or changes in legal or regulatory requirements; |
• | geopolitical regional conflicts, terrorist activity, political unrest, civil strife, acts of war and other political uncertainty; |
• | changes in tariffs, quotas, trade barriers and other similar restrictions on sales; |
• | the effects of any anti-American sentiments on our brands or sales of our products; |
• | increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions, including but not limited to the U.S. Foreign Corrupt Practices Act, local international environmental, health and safety laws, and increasingly complex regulations relating to the conduct of international commerce; |
• | increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for our foreign operations; and |
• | increased difficulty in staffing and managing foreign operations or international sales. |
• | pay dividends or make distributions to our stockholders or redeem our stock; |
• | incur additional indebtedness or permit additional encumbrances on our assets; and |
• | make acquisitions or complete mergers or sales of assets, or engage in new businesses. |
• | requiring us to dedicate a substantial portion of our cash flows from operations to payments on our debt; |
• | limiting our ability to obtain future financing for working capital, capital expenditures, acquisitions, debt obligations and other general corporate requirements; |
• | making us more vulnerable to adverse conditions in the general economy or our industry and to fluctuations in our operating results, including affecting our ability to comply with and maintain any financial tests and ratios required under our indebtedness; |
• | limiting our flexibility to engage in certain transactions or to plan for, or react to, changes in our business and industry; |
• | putting us at a disadvantage compared to competitors that have less relative and/or less restrictive debt; and |
• | subjecting us to additional restrictive financial and other covenants. |
• | earthquake, fire, flood, hurricane and other natural disasters; |
• | power loss, computer systems failure, internet and telecommunications or data network failure; and |
• | hackers, computer viruses, software bugs or glitches. |
• | the timing of new product releases or other significant announcements by us or our competitors; |
• | new advertising initiatives; |
• | fluctuations in raw materials and component costs; and |
• | changes in our practices with respect to building inventory. |
• | variations in our operating results or those of our competitors; |
• | new product or other significant announcements by us or our competitors; |
• | changes in our product mix; |
• | changes in consumer preferences; |
• | fluctuations in currency exchange rates; |
• | the gain or loss of significant customers; |
• | recruitment or departure of key personnel; |
• | changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock; |
• | changes in general economic conditions as well as conditions affecting our industry in particular; and |
• | sales of our common stock by us, our significant stockholders or our directors or executive officers. |
• | authorize the issuance of "blank check" preferred stock that could be issued by our Board of Directors to discourage a takeover attempt; |
• | establish a classified Board of Directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election; |
• | require that directors be removed from office only for cause; |
• | provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office; |
• | provide that no action be taken by stockholders by written consent; |
• | provide that special meetings of our stockholders may be called only by our Board of Directors, our Chairperson of the Board of Directors, our Lead Director (if we do not have a Chairperson or the Chairperson is disabled), our Chief Executive Officer or our President (in the absence of a Chief Executive Officer); |
• | require supermajority stockholder voting for our stockholders to effect certain amendments to our Charter Documents; and |
• | establish advance notice requirements for nominations for elections to our Board of Directors or for proposing other matters that can be acted upon by stockholders at stockholder meetings. |
Period | Total Number of Shares Purchased (1) | Weighted Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | |||||||
6/30 - 8/3 | 12,588 | $ | 50.24 | — | ||||||
8/4 - 8/31 | 2,726 | $ | 64.35 | — | ||||||
9/1 - 9/28 | 246 | $ | 68.00 | — | ||||||
Total | 15,560 | $ | 53.00 | — | ||||||
(1) Shares acquired from holders of restricted stock unit awards to satisfy tax withholding obligations. |
Incorporated by Reference | |||||
Exhibit Number | Exhibit Description | Form | File No. | Filing Date | Filed Herewith |
Amended and Restated Certificate of Incorporation | 10-Q | 001-36040 | September 19, 2013 | ||
Amended and Restated Bylaws | 10-Q | 001-36040 | September 19, 2013 | ||
Form of Indemnification Agreement | X | ||||
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | X | ||||
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | X | ||||
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | X | ||||
101.INS | XBRL Instance Document | X | |||
101.SCH | XBRL Taxonomy Extension Schema | X | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase | X | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X |
* | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act. |
FOX FACTORY HOLDING CORP. | ||
By: | /s/ Zvi Glasman | |
October 31, 2018 | Zvi Glasman, Chief Financial Officer and Treasurer | |
(Principal Financial and Accounting Officer) |
FOX FACTORY HOLDING CORP., | INDEMNITEE | |||||||
a Delaware Corporation | ||||||||
By: | ||||||||
Name: | Name: | |||||||
Office: | Address: | |||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Fox Factory Holding Corp.: |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
October 31, 2018 |
/s/ Larry L. Enterline |
Larry L. Enterline |
Chief Executive Officer |
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Fox Factory Holding Corp.: |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
October 31, 2018 |
/s/ Zvi Glasman |
Zvi Glasman |
Chief Financial Officer and Treasurer |
(Principal Financial Officer and Treasurer) |
October 31, 2018 |
/s/ Larry L. Enterline |
Larry L. Enterline |
Chief Executive Officer |
(Principal Executive Officer) |
/s/ Zvi Glasman |
Zvi Glasman |
Chief Financial Officer and Treasurer |
(Principal Financial Officer and Treasurer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 28, 2018 |
Oct. 28, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 28, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FOXF | |
Entity Registrant Name | Fox Factory Holding Corp | |
Entity Central Index Key | 0001424929 | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 37,988,059 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Dec. 29, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 848 | $ 676 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 38,878,000 | 38,497,000 |
Common stock, shares outstanding | 37,988,000 | 37,607,000 |
Treasury stock, shares | 890 | 890 |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Sales | $ 175,798 | $ 127,399 | $ 462,415 | $ 354,540 |
Cost of sales | 115,312 | 84,802 | 307,872 | 239,172 |
Gross profit | 60,486 | 42,597 | 154,543 | 115,368 |
Operating expenses: | ||||
Sales and marketing | 9,606 | 6,914 | 28,142 | 20,574 |
Research and development | 6,765 | 5,547 | 19,019 | 15,011 |
General and administrative | 11,164 | 9,061 | 31,137 | 25,263 |
Amortization of purchased intangibles | 1,499 | 697 | 4,567 | 2,089 |
Fair value adjustment of contingent consideration and acquisition-related compensation | 0 | 0 | 0 | 1,447 |
Total operating expenses | 29,034 | 22,219 | 82,865 | 64,384 |
Income from operations | 31,452 | 20,378 | 71,678 | 50,984 |
Other expense, net: | ||||
Interest expense | 748 | 602 | 2,379 | 1,696 |
Other expense (income) | 180 | (181) | 380 | 285 |
Other expense, net | 928 | 421 | 2,759 | 1,981 |
Income before income taxes | 30,524 | 19,957 | 68,919 | 49,003 |
Provision for income taxes | 5,788 | 3,885 | 3,919 | 8,677 |
Net income | 24,736 | 16,072 | 65,000 | 40,326 |
Less: net income attributable to non-controlling interest | 424 | 0 | 1,094 | 0 |
Net income attributable to FOX stockholders | $ 24,312 | $ 16,072 | $ 63,906 | $ 40,326 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.64 | $ 0.43 | $ 1.69 | $ 1.08 |
Diluted (in dollars per share) | $ 0.62 | $ 0.41 | $ 1.64 | $ 1.04 |
Weighted average shares used to compute earnings per share: | ||||
Basic (in shares) | 37,886 | 37,474 | 37,743 | 37,312 |
Diluted (in shares) | 39,052 | 38,817 | 38,913 | 38,700 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 24,736 | $ 16,072 | $ 65,000 | $ 40,326 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax effects | 401 | 345 | (452) | 1,561 |
Other comprehensive income (loss) | 401 | 345 | (452) | 1,561 |
Comprehensive income | 25,137 | 16,417 | 64,548 | 41,887 |
Less: comprehensive income attributable to non-controlling interest | 424 | 0 | 1,094 | 0 |
Comprehensive income attributable to FOX stockholders | $ 24,713 | $ 16,417 | $ 63,454 | $ 41,887 |
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 28, 2018 | |
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 ride dynamics products for customers worldwide. In the powered vehicle category, the Company offers premium products for Side-by-Sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, ATVs, snowmobiles, specialty vehicles and applications, and motorcycles. The Company is a direct supplier to action sports and automotive original equipment manufacturers ("OEMs") and provides aftermarket products to retailers, dealerships, and distributors. The specialty sports category (formerly referred to as “bike”), includes a wide range of suspension products designed for cross-country, trail, all-mountain, free-ride and downhill riding, as well as wheels and other performance cycling components utilizing the Company's carbon technology. The Company supplies top bicycle OEMs and their contract manufacturers, and provides aftermarket products to retailers 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.") 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 U.S. 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 December 29, 2017 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 27, 2018. 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 2018 and 2017, the Company's fiscal year will end or has ended on December 28, 2018 and December 29, 2017, respectively. The three and nine month periods ended September 28, 2018 and September 29, 2017 each included 13 weeks and 39 weeks. 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 - Beginning the first quarter of fiscal year 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), as updated by ASU 2016-20. There have been no other changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 29, 2017, as filed with the SEC on February 27, 2018, that have had a material impact on our condensed consolidated financial statements and related notes. Revenue Recognition - Revenues are generated from the sale of ride dynamics products to customers worldwide. The Company’s ride dynamics products 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 over 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. 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 September 28, 2018, the balance of deferred revenue related to pricing provisions was $215. These amounts are expected to be recognized over the next 12 months. Segments - The Company has determined that it has a single operating and reportable segment. The Company considers operating segments to be components 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 and the impact of government regulations including tariffs, and the possibility of not being able to obtain additional financing when needed. Fair Value Measurements - The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements using a three tiered approach and fair value measurement be classified and disclosed by the Company in one of the following three categories: 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 amount of the Company's financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. Recent Accounting Pronouncements - In May 2014, the FASB and International Accounting Standards Board issued their converged standard on revenue recognition, ASU 2014-09, updated December 2016 with the release of ASU 2016-20. This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2018, using the modified retrospective implementation method. The Company applied the guidance to all open contracts at the date of initial application. The primary impact of adopting the standard resulted from certain pricing provisions within contracts that provide the customer with a material right. Under the new standard, revenue attributed to such pricing provisions is deferred and recognized when the right is exercised by the customer. The Company recorded a cumulative effect adjustment of $368 gross and $279 net of taxes, to the opening balance of retained earnings to reflect the cumulative effect of the adoption of the standard. In February 2016, the FASB issued ASU 2016-02, Leases, which will supersede the existing guidance for lease accounting. This ASU will require lessees to recognize leases with durations greater than 12 months on the balance sheet. This guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2018 and early adoption is permitted. The Company plans to adopt the new standard on December 29, 2018 with a cumulative-effect adjustment to the opening balance of retained earnings at that date with no restatement of comparative periods’ financial information ("current-period adjustment method"), as recently allowed by the FASB. Additionally, the Company expects to adopt practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases, and does not plan to adopt the hindsight practical expedient. The Company is in the process of identifying the appropriate changes to our accounting policies, business processes, and related internal controls to support the recognition and disclosure of this requirement. The Company expects that it will record right-of-use operating lease assets and operating lease liabilities on the consolidated balance sheet which approximate the present value of operating lease commitments disclosed in Note 8 of the Company’s Annual Report on Form 10-K for the year ended December 29, 2017. The Company does not expect that the adoption of ASU 2016-02 will have a material impact on its results of operations or cash flows. 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. This standard will be effective for fiscal years, and interim periods within those years, beginning the first quarter of fiscal year 2019. Early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfer of Assets Other Than Inventory, which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The Company adopted ASU 2016-16 effective in the first quarter of fiscal year 2018. The adoption of ASU 2016-16 did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business, which provides more guidance to an entity when they are assessing if transactions should be accounted for as acquisitions of assets or businesses. The clarification of the definition of a business impacts various areas of accounting such as acquisitions, disposals, goodwill, and consolidations. The Company adopted ASU 2017-01 effective in the first quarter of fiscal year 2018. The adoption of ASU 2017-01 did not have a material impact on the Company's consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Non-employee Share-Based Payment Accounting, which removes some of the unique requirements related to accounting for share-based payment awards issued to non-employees for non-financing transactions. The Company adopted ASU 2018-07 in the second quarter of fiscal year 2018. The adoption of ASU 2018-07 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 will be effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues The following table summarizes total sales by product category:
The following table summarizes total sales by sales channel:
The following table summarizes total sales generated by geographic location of the customer:
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Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Inventory consisted of the following:
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Property, Plant and Equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following:
The Company’s long-lived assets by geographic location are as follows:
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Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following:
Activity related to warranties is as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Second Amended and Restated Credit Facility In August 2013, the Company entered into a credit facility with Sun Trust Bank and other named lenders which has been periodically amended and restated; the last restatement occurred on May 11, 2016 and was further amended on August 11, 2016, June 12, 2017 and November 30, 2017 (as most recently amended and restated and as further amended, the “Second Amended and Restated Credit Facility”). The Second Amended and Restated Credit Facility, which matures on May 11, 2021, provides a revolving line of credit and a maturing secured term loan with a refinanced principal balance of $75,000. The term loan is subject to quarterly amortization payments. The Second Amended and Restated Credit Facility provides for interest at either a rate based on the London Interbank Offered Rate, or LIBOR, plus a margin ranging from 1.50% to 2.50%, or based on the prime rate offered by SunTrust Bank plus a margin ranging from 0.50% to 1.50%. At September 28, 2018, the one-month LIBOR and prime rates were 2.26% and 5.25%, respectively. At September 28, 2018, our weighted average interest rate on outstanding borrowing was 3.68%. The Second 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 also requires that the Company satisfy customary financial ratios. The Company was in compliance with the covenants as of September 28, 2018. Additionally, the existing credit facility permits up to $15,000 of the aggregate revolving commitment to be used by the Company for issuance of letters of credit. As of September 28, 2018, the Company utilized $5,000 in the form of a standby letter of credit in support of subsidiary operations. The letter of credit expires in November 2018. The following table summarizes the line of credit under the Second Amended and Restated Credit Facility:
As of September 28, 2018, future principal payments for long-term debt, including the current portion, are summarized as follows:
Other Indebtedness The Company had $585 outstanding under a vendor associated line of credit as of December 29, 2017. As of September 28, 2018, the Company had no outstanding balance under this vendor associated line of credit. |
Commitments and Contingencies |
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Sep. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases - The Company has operating lease agreements for administrative, research and development, manufacturing and sales and marketing facilities and equipment that expire at various dates. The Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. See Note 12 - Related Party Agreements for additional information on related party operating leases. 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 by reason of 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 the lawsuits are without merit and intends to vigorously 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 a Notice of Appeal to the Court of Appeals ("CAFC") for the Federal Circuit. Regarding that appeal the Company has further moved the CAFC for remand of the ‘027 IPR to the PTAB. The IPR for the ‘250 patent is pending in the PTAB and the PTAB has stayed the ex-parte re-exam of the ‘250 patent. 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. A second lawsuit was filed by the Company 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. The stay of the SRAM lawsuits against the Company has been lifted by the U.S. District Court, Northern District of Illinois. The Company filed and SRAM filed lawsuits are now moving forward in the respective courts. 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 an 80% interest in the business of Flagship, Inc. ("Tuscany"). The stockholders' agreement provides the Company with a call option (the "Call Option") to acquire the remaining 20% of Tuscany any time from November 30, 2019 through November 30, 2024 at a value which approximates fair market value. In addition, if the Call Option has not been exercised as of November 30, 2024, the non-controlling owners shall be entitled to exercise a put option on November 30, 2024 and for a 180 day period thereafter, which would require the Company to purchase all of the remaining shares held by the non-controlling owners at a price that approximates fair market value. 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. Ultimately, the Court remanded the case to the South Dakota Supreme Court on the question of “whether some other principle in the Court’s Commerce Clause doctrine might invalidate the Act,” which may delay federal legislation on the issue. However, as a result of the Court’s decision, additional states may now begin requiring all remote sellers, primarily those engaged in e-commerce, to register, collect and remit sales and use taxes on transactions with in-state customers. Numerous states have either enacted legislation or informally indicated that they will not assert liability for uncollected taxes on a retroactive basis. Nevertheless, 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 September 28, 2018. 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. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods:
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 September 28, 2018. The Company used Level 2 inputs to determine the fair value of its Second Amended and Restated Credit Facility. As of September 28, 2018 and December 29, 2017, the carrying amount of the principal under the Company’s Second Amended and Restated Credit Facility approximates fair value because it has a variable interest rate that reflects market changes in interest rates and changes in the Company’s net leverage ratio. The Company has potential obligations to purchase non-controlling interests held by third parties in the Tuscany subsidiary. These obligations are in the form of put provisions and are exercisable at the third-party owners' discretion within the specified periods outlined in the put provision within the Tuscany stockholders' agreement. If these put provisions were exercised, the Company would be required to purchase the third-party owners' non-controlling interests at the appraised fair value. The Company measured the fair value of the non-controlling interests using Level 3 unobservable inputs, including the expected growth rate, income tax rate, and discount factor applied to forecasted results. The estimated fair values of the non-controlling interests can fluctuate and the amount at which these obligations may ultimately be settled could vary significantly from our future estimates depending upon market conditions. Changes in fair value measurement of the non-controlling interests are recognized as adjustments to additional paid-in capital on the consolidated balance sheet. The following table provides a reconciliation of the beginning and ending balances for the Company's liability measured at fair value using Level 3 inputs:
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Stockholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Share Repurchase Program and Secondary Stock Offerings In February 2016, the Company's Board of Directors authorized the Company's 2016 share repurchase program (the "2016 Repurchase Program"), permitting repurchases of up to an aggregate of $40,000 in shares of common stock. The plan expired on December 31, 2017. The Company repurchased 890 shares for a total of $13,754 under both the 2016 Repurchase Program and the prior repurchase program of the Company, which expired on December 31, 2015. Shares of common stock repurchased under such programs are accounted for as treasury stock under the cost method. In March 2017, the Company closed a secondary offering, whereby the selling stockholders sold an additional 5,574 shares of the Company's common stock at a price of $26.65 per share, less underwriting discounts and commissions. The total shares sold included 466 shares, which were also sold by certain selling stockholders, in connection with the underwriters' option to purchase additional shares. The Company did not sell shares or receive any proceeds from the sales of shares by the selling stockholders. As a result of the March 2017 secondary offering, Compass Group Diversified Holdings LLC ("Compass") no longer holds any equity interest in the Company. The Company incurred approximately $113 of expenses in connection with the secondary offering during the nine months ended September 29, 2017. Equity Incentive Plans The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of income:
The following table summarizes the activity for the Company's unvested restricted stock units ("RSU") for the nine months ended September 28, 2018.
As of September 28, 2018, the Company had approximately $15,077 of unrecognized stock-based compensation expense related to RSUs, which will be recognized over the remaining weighted-average vesting period of approximately 2.75 years. During the nine months ended September 28, 2018, 167 shares of common stock were issued due to the exercise of stock options, resulting in proceeds of $875. No options to purchase common stock were expired or forfeited during the nine months ended September 28, 2018. As of September 28, 2018, stock-based compensation expense related to stock options has been fully recognized. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes
The Tax Cuts and Jobs Act (the "TCJA") was enacted on December 22, 2017. The TCJA reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on unremitted earnings of certain foreign subsidiaries, creates a new minimum tax on certain foreign earnings, and provides incentives for U.S. companies to sell and license goods and services abroad, among other changes. Effective January 1, 2016, the Company sold the net assets of its Taiwan branch operations and its shares of Fox Factory IP Holding Corp. to Fox Factory Switzerland GmbH. The Company’s Taiwan operations were as a result, organized as a branch of the Swiss entity (together, "Fox Switzerland"). Fox Switzerland owns or licenses some of the Company’s non-U.S. intangible property and generates earnings that, prior to the enactment of the TCJA, were not subject to payment of U.S. income taxes or accrual of deferred tax expense because the Company asserted that such earnings were permanently invested outside the U.S. The unremitted earnings of Fox Switzerland through 2017 became subject to U.S. tax as a result of the one-time transition tax provided for by the TCJA. As a result of the change in U.S. taxation, the Company no longer considers the unremitted earnings of Fox Switzerland to be permanently reinvested, and, as such, has accrued foreign withholding tax due upon remittance of dividends from Fox Switzerland, including a cumulative adjustment of $2,026 in the fourth quarter of the fiscal year 2017. As permitted by the SEC's Staff Accounting Bulletin 118 ("SAB 118"), the Company made reasonable estimates of the effects the TCJA where uncertainty existed, recognizing provisional amounts for all items for which it is able to determine a reasonable estimate. In cases where a reasonable estimate was not possible, the Company continued to apply its existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to the enactment. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. The impact of the TCJA may differ from estimates during the one-year measurement period permitted by SAB 118 due to, among other things, further refinement of the Company's calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take. After the conclusion of the one-year measurement period, the Company's estimates may continue to be affected as interpretations of the law through regulations and common practice emerge. Provisional amounts Deferred Tax Assets and Liabilities: In the fourth quarter of fiscal year 2017, the Company remeasured its U.S. deferred tax assets and liabilities that give rise to future tax deductions based on the enacted tax rates in effect for the periods in which the deductions are expected to be taken. However, it was recognized that certain aspects of the TCJA could potentially affect the measurement of these balances or give rise to new deferred tax amounts. The most significant uncertainty surrounds the impact of grandfathering on limitations of deductibility of executive compensation. The provisional amount recorded in the fourth quarter of fiscal year 2017 related to the remeasurement of our deferred tax balance was a net benefit of $2,448. In August 2018, the U.S. Internal Revenue Service ("IRS") issued a notice (the "IRS Notice") regarding the provisionally accounted for grandfathering provisions on limitations of executive compensation. The IRS Notice is expected to be incorporated into final clarifying regulations that have yet to be proposed. In the three months ended September 28, 2018, the Company reduced its deferred tax asset by $552 for pre-2018 stock-based compensation expense, the deductibility of which is uncertain based on the guidance in the IRS Notice. One-Time Transition Tax: The one-time transition tax was based on the total post-1986 earnings and profits on which U.S. tax were previously deferred, taxed at rates that differed based on the amount of those earnings held in cash and other specified assets. In the fourth quarter of fiscal year 2017, the Company recorded a provisional amount as an increase in income tax expense related to the one-time transition tax of $3,706. The calculation was finalized in October 2018 and did not differ materially from the estimate. For the three months ended September 28, 2018, the difference between the Company's effective tax rate of 19.0% 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 $2,090 from excess benefits related to the vesting of RSUs and exercise of stock options. These benefits were partially offset by $1,374 related to loss of deductibility as a result of the IRS Notice, state taxes, foreign withholding taxes and the impact of non-deductible expenses. For the nine months ended September 28, 2018, the difference between the Company's effective tax rate of 5.7% and the 21% federal statutory rate resulted primarily from a $9,838 impact of the favorable conclusion of the 2015 IRS audit and the recognition of related tax positions with respect to the deductibility of amortization and depreciation expense resulting from the acquisition of the Company in 2008. The benefit of the deductions was not recognized in accounting for the acquisition due to uncertainty about whether the tax position would withstand audit. The results of the audit provided basis for the Company to conclude during the first quarter of 2018 that the amortization and depreciation will likely be deductible for all open tax years. In May 2018, the Company and the IRS entered into a closing agreement that definitively resolved the deductibility and confirmed the Company's prior conclusion on the matter. In addition, the effective tax rate benefited from $3,207 of excess benefits related to the vesting of RSUs and exercise of stock options, lower foreign tax rates, lower effective federal rates on foreign derived intangible income, and research and development credits. These benefits were partially offset by $1,374 related to loss of deductibility as a result of the IRS Notice, state taxes, foreign withholding taxes and the impact of non-deductible expenses. For the three and nine months ended September 29, 2017, the difference between the Company's effective tax rate and the 35% federal statutory rate resulted primarily from lower foreign tax rates on permanently reinvested earnings of the Company's foreign subsidiaries and $1,190 and $5,212, respectively, from excess benefits related to the exercise of stock options and vesting of RSUs. These benefits were partially offset by state taxes and the impact of non-deductible costs. The Company's federal tax returns for 2016 and forward, state tax returns for 2013 forward, and foreign tax returns from 2014 forward are subject to examination by tax authorities. The Company has obtained tax incentives in Switzerland that are effective through March 2019 that result in a rate reduction provided that the Company meets specified criteria. Upon expiration, the Company may renew the arrangement on demand, as long as the applicable law and operating criteria remain in place. The effect of the tax incentives were not material to the Company's income tax provision for the three and nine months ended September 28, 2018 and September 29, 2017. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") amounts are computed by dividing net income attributable to stockholders of the Company for the period by the weighted average number of common shares outstanding during the period. Diluted EPS amounts are computed by dividing net income attributable to stockholders of the Company for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include shares issuable upon the exercise of outstanding stock options and vesting of RSUs, which are reflected in diluted EPS by application of the treasury stock method. The following table presents the calculation of basic and diluted EPS:
Anti-dilutive shares excluded from the calculation of diluted EPS for the three and nine months ended September 28, 2018 and September 29, 2017 were not material. |
Related Party Agreements |
9 Months Ended |
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Sep. 28, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Agreements | Related Party Agreements Fox Factory, Inc. has a triple-net building lease for its manufacturing and office facilities in Watsonville, California. The building is owned by a former member of our Board of Directors who retired on August 28, 2018. Rent expense under this lease was $179 and $536 for the three and nine months ended September 28, 2018 and September 29, 2017, respectively. The lease was amended effective April 2016 to extend the term through June 30, 2020, with monthly rental payments of $60, which are adjusted annually for a cost-of-living increase based upon the consumer price index. On September 28, 2018, the Company purchased Tuscany's facilities from certain non-controlling interest stockholders who are also employees of the Company. The total purchase price was $3,750. These properties were leased by the Company prior to being purchased. Rent expense under these leases was $86 and $257 for the three and nine months ended September 28, 2018, respectively. |
Business Combinations |
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Sep. 28, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations On November 30, 2017, the Company acquired an 80% interest in Tuscany, a designer, manufacturer and distributor of premium aftermarket powered vehicle performance packages in an asset purchase accounted for as a business combination. The purchase price of Tuscany was allocated to the assets acquired and liabilities assumed based on their estimated respective fair values as of November 30, 2017, with the excess purchase price allocated to goodwill. The allocation of the purchase price is preliminary, subject to the completion of the Company's validation of working capital and completion of its intangible valuation procedures, with the assistance of specialists. The financial results of this subsidiary have been included in our consolidated financial statements since the date of acquisition. The Company incurred $463 in transaction costs in conjunction with this acquisition during the nine months ended September 28, 2018, which is included in general and administrative expense in the accompanying consolidated statement of income. The Company incurred no transactions costs in conjunction with this acquisition during the three months ended September 28, 2018. |
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Sep. 28, 2018 | |
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.") 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 U.S. 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 December 29, 2017 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 27, 2018. 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 2018 and 2017, the Company's fiscal year will end or has ended on December 28, 2018 and December 29, 2017, respectively. The three and nine month periods ended September 28, 2018 and September 29, 2017 each included 13 weeks and 39 weeks. |
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 ride dynamics products to customers worldwide. The Company’s ride dynamics products 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 over 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. 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 September 28, 2018, the balance of deferred revenue related to pricing provisions was $215. These amounts are expected to be recognized over the next 12 months. |
Segments | Segments - The Company has determined that it has a single operating and reportable segment. The Company considers operating segments to be components 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 and the impact of government regulations including tariffs, and the possibility of not being able to obtain additional financing when needed. |
Fair Value Measurements | Fair Value Measurements - The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements using a three tiered approach and fair value measurement be classified and disclosed by the Company in one of the following three categories: 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 amount of the Company's financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In May 2014, the FASB and International Accounting Standards Board issued their converged standard on revenue recognition, ASU 2014-09, updated December 2016 with the release of ASU 2016-20. This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2018, using the modified retrospective implementation method. The Company applied the guidance to all open contracts at the date of initial application. The primary impact of adopting the standard resulted from certain pricing provisions within contracts that provide the customer with a material right. Under the new standard, revenue attributed to such pricing provisions is deferred and recognized when the right is exercised by the customer. The Company recorded a cumulative effect adjustment of $368 gross and $279 net of taxes, to the opening balance of retained earnings to reflect the cumulative effect of the adoption of the standard. In February 2016, the FASB issued ASU 2016-02, Leases, which will supersede the existing guidance for lease accounting. This ASU will require lessees to recognize leases with durations greater than 12 months on the balance sheet. This guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2018 and early adoption is permitted. The Company plans to adopt the new standard on December 29, 2018 with a cumulative-effect adjustment to the opening balance of retained earnings at that date with no restatement of comparative periods’ financial information ("current-period adjustment method"), as recently allowed by the FASB. Additionally, the Company expects to adopt practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases, and does not plan to adopt the hindsight practical expedient. The Company is in the process of identifying the appropriate changes to our accounting policies, business processes, and related internal controls to support the recognition and disclosure of this requirement. The Company expects that it will record right-of-use operating lease assets and operating lease liabilities on the consolidated balance sheet which approximate the present value of operating lease commitments disclosed in Note 8 of the Company’s Annual Report on Form 10-K for the year ended December 29, 2017. The Company does not expect that the adoption of ASU 2016-02 will have a material impact on its results of operations or cash flows. 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. This standard will be effective for fiscal years, and interim periods within those years, beginning the first quarter of fiscal year 2019. Early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfer of Assets Other Than Inventory, which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The Company adopted ASU 2016-16 effective in the first quarter of fiscal year 2018. The adoption of ASU 2016-16 did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business, which provides more guidance to an entity when they are assessing if transactions should be accounted for as acquisitions of assets or businesses. The clarification of the definition of a business impacts various areas of accounting such as acquisitions, disposals, goodwill, and consolidations. The Company adopted ASU 2017-01 effective in the first quarter of fiscal year 2018. The adoption of ASU 2017-01 did not have a material impact on the Company's consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Non-employee Share-Based Payment Accounting, which removes some of the unique requirements related to accounting for share-based payment awards issued to non-employees for non-financing transactions. The Company adopted ASU 2018-07 in the second quarter of fiscal year 2018. The adoption of ASU 2018-07 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 will be effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenues | The following table summarizes total sales by product category:
The following table summarizes total sales by sales channel:
The following table summarizes total sales generated by geographic location of the customer:
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Inventory (Tables) |
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Inventory | Inventory consisted of the following:
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Property, Plant and Equipment, net (Tables) |
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Property, Plant and Equipment, net | Property, plant and equipment, net consisted of the following:
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Long-lived Assets by Geographic Location | The Company’s long-lived assets by geographic location are as follows:
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Accrued Expenses (Tables) |
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Accrued Expenses | Accrued expenses consisted of the following:
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Activity Related to Warranties | Activity related to warranties is as follows:
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Debt (Tables) |
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Summary of Amended & Restated 2013 Credit Facility | The following table summarizes the line of credit under the Second Amended and Restated Credit Facility:
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Schedule of Future Principal Payments | As of September 28, 2018, future principal payments for long-term debt, including the current portion, are summarized as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods:
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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 liability measured at fair value using Level 3 inputs:
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Stockholders' Equity (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [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:
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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 September 28, 2018.
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) |
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Earnings Per Share | The following table presents the calculation of basic and diluted EPS:
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Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands |
Sep. 28, 2018
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
Deferred revenue | $ 215 |
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - ASU 2014-09 $ in Thousands |
9 Months Ended |
---|---|
Sep. 28, 2018
USD ($)
| |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect on retained earnings, before tax | $ 368 |
Cumulative effect on retained earnings, net of tax | $ 279 |
Revenues - Sales by Product Category (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 175,798 | $ 127,399 | $ 462,415 | $ 354,540 |
Powered Vehicles | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 94,891 | 60,568 | 249,272 | 170,662 |
Specialty Sports | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 80,907 | $ 66,831 | $ 213,143 | $ 183,878 |
Revenues - Sales by Sales Channel (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 175,798 | $ 127,399 | $ 462,415 | $ 354,540 |
OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 106,834 | 80,217 | 266,886 | 213,954 |
Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 68,964 | $ 47,182 | $ 195,529 | $ 140,586 |
Revenues - Sales by Geographic Location (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 175,798 | $ 127,399 | $ 462,415 | $ 354,540 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 108,140 | 75,170 | 289,875 | 212,157 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 34,058 | 27,081 | 86,228 | 77,177 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 28,351 | 22,812 | 77,759 | 59,554 |
Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 5,249 | $ 2,336 | $ 8,553 | $ 5,652 |
Inventory (Details) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Dec. 29, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 70,369 | $ 51,371 |
Work-in-process | 9,225 | 1,233 |
Finished goods | 25,237 | 32,237 |
Total inventory | $ 104,831 | $ 84,841 |
Property, Plant and Equipment, net (Long-lived Assets by Geographic Location) (Details) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Dec. 29, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 57,471 | $ 43,636 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | 52,071 | 38,450 |
International | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 5,400 | $ 5,186 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Jun. 29, 2018 |
Dec. 29, 2017 |
Sep. 29, 2017 |
Jun. 30, 2017 |
Dec. 30, 2016 |
---|---|---|---|---|---|---|
Payables and Accruals [Abstract] | ||||||
Payroll and related expenses | $ 13,423 | $ 13,211 | ||||
Warranty | 6,422 | $ 6,142 | 6,481 | $ 5,133 | $ 5,077 | $ 4,593 |
Income tax payable | 4,923 | 6,562 | ||||
Other accrued expenses | 8,187 | 6,354 | ||||
Total | $ 32,955 | $ 32,608 |
Accrued Expenses (Activity Related to Warranties) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | $ 6,142 | $ 5,077 | $ 6,481 | $ 4,593 |
Charge to cost of sales | 1,587 | 992 | 3,418 | 4,045 |
Costs incurred | (1,307) | (936) | (3,477) | (3,505) |
Ending warranty liability | $ 6,422 | $ 5,133 | $ 6,422 | $ 5,133 |
Debt - Summary of Amended and Restated Credit Facility (Details) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Dec. 29, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
Amount outstanding | $ 0 | $ 35,000 |
Standby letter of credit | 5,000 | 5,000 |
Available borrowing capacity | 95,000 | 60,000 |
Maximum borrowing capacity | $ 100,000 | $ 100,000 |
Debt - Future Payments for Long-term Debt (Details) - USD ($) $ in Thousands |
Sep. 28, 2018 |
Dec. 29, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2018 (remaining three months) | $ 1,406 | |
2019 | 5,625 | |
2020 | 7,031 | |
2021 | 45,625 | |
Total term debt | 59,687 | |
Debt issuance cost | (290) | |
Long-term debt, net of issuance cost | 59,397 | |
Less: current portion | (5,514) | $ (5,038) |
Long-term debt less current portion | $ 53,883 | $ 58,020 |
Commitment and Contingencies (Details) - Tuscany |
Nov. 30, 2017 |
---|---|
Loss Contingencies [Line Items] | |
Ownership interest acquired (as a percent) | 80.00% |
Call option to acquire remaining interest (as a percent) | 20.00% |
Period to exercise put option | 180 days |
Fair Value Measurements - Reconciliation of Contingent Consideration (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 28, 2018
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 29, 2017 | $ 12,955 |
Net income attributable to non-controlling interest | 1,094 |
Change in fair value | 803 |
Balance at September 28, 2018 | $ 14,852 |
Stockholders' Equity - Share Repurchase Program and Secondary Offerings (Details) - USD ($) $ / shares in Units, shares in Thousands |
1 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Mar. 31, 2017 |
Sep. 29, 2017 |
Dec. 29, 2017 |
Feb. 28, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share repurchase program, authorized amount | $ 40,000,000 | |||
Stock issuance costs incurred during period | $ 113,000 | |||
Class of Stock [Line Items] | ||||
Shares issued during period | 5,574 | |||
Share price (in dollars per share) | $ 26.65 | |||
Underwriters' Option | ||||
Class of Stock [Line Items] | ||||
Shares issued during period | 466 | |||
2016 Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Shares repurchased during period (in shares) | 890 | |||
Shares repurchased during period, amount | $ 13,754,000 |
Stockholders' Equity - Unvested RSU Activity (Details) - Restricted Stock Units shares in Thousands |
9 Months Ended |
---|---|
Sep. 28, 2018
$ / shares
shares
| |
Number of shares outstanding | |
Unvested at beginning of period (in shares) | shares | 800 |
Granted (in shares) | shares | 210 |
Forfeited (in shares) | shares | (9) |
Vested (in shares) | shares | (334) |
Unvested at end of period (in shares) | shares | 667 |
Weighted-average grant date fair value | |
Unvested at beginning of period (in usd per share) | $ / shares | $ 23.91 |
Granted (in usd per share) | $ / shares | 36.25 |
Forfeited (in usd per share) | $ / shares | 19.35 |
Vested (in usd per share) | $ / shares | 21.92 |
Unvested at end of period (in usd per share) | $ / shares | $ 28.87 |
Stockholders' Equity - Equity Incentive Plans, Additional Information (Details) shares in Thousands, $ in Thousands |
9 Months Ended |
---|---|
Sep. 28, 2018
USD ($)
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock options exercised (in shares) | shares | 167 |
Proceeds from exercise of stock options | $ 875 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense related to RSUs | $ 15,077 |
Period for recognition of unrecognized stock-based compensation expense | 2 years 9 months |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 5,788 | $ 3,885 | $ 3,919 | $ 8,677 |
Effective tax rates | 19.00% | 19.50% | 5.70% | 17.70% |
Earnings Per Share (Calculation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income attributable to FOX stockholders | $ 24,312 | $ 16,072 | $ 63,906 | $ 40,326 |
Weighted average shares used to compute basic earnings per share (in shares) | 37,886 | 37,474 | 37,743 | 37,312 |
Dilutive effect of employee stock plans (in shares) | 1,166 | 1,343 | 1,170 | 1,388 |
Weighted average shares used to compute diluted earnings per share (in shares) | 39,052 | 38,817 | 38,913 | 38,700 |
Basic (in dollars per share) | $ 0.64 | $ 0.43 | $ 1.69 | $ 1.08 |
Diluted (in dollars per share) | $ 0.62 | $ 0.41 | $ 1.64 | $ 1.04 |
Earnings Per Share (Additional Information) (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Earnings Per Share [Abstract] | ||||
Anti-dilutive shares excluded from calculation of diluted earnings per share | 0 | 0 | 0 | 0 |
Related Party Agreements (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 28, 2018 |
Sep. 28, 2018 |
Sep. 29, 2017 |
Sep. 28, 2018 |
Sep. 29, 2017 |
|
Founder and Minority Stockholder | Related Party Transactions | |||||
Related Party Transaction [Line Items] | |||||
Payments made under lease | $ 179 | $ 536 | $ 179 | $ 536 | |
Monthly rental payments | 60 | ||||
Beneficial Owner | Purchase of Properties | Employees | |||||
Related Party Transaction [Line Items] | |||||
Amount of related party transaction | $ 3,750 | ||||
Beneficial Owner | Rental of Buildings | Employees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | $ 86 | $ 257 |
Business Combinations (Details) - Tuscany - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 28, 2018 |
Sep. 28, 2018 |
Nov. 30, 2017 |
|
Business Acquisition [Line Items] | |||
Ownership interest acquired (as a percent) | 80.00% | ||
Transaction costs | $ 0 | $ 463,000 |
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