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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
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26-1647258
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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|
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915 Disc Drive
Scotts Valley, CA
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95066
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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||
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Condensed Consolidated Balance Sheets as of April 1, 2016 (unaudited) and December 31, 2015
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|
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Unaudited Condensed Consolidated Statements of Income for the Three Months Ended April 1, 2016 and March 31, 2015
|
|
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Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended April 1, 2016 and March 31, 2015
|
|
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Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 1, 2016 and March 31, 2015
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|
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Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
|
|
|
||
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|
|
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As of
|
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As of
|
||||
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April 1,
|
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December 31,
|
||||
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2016
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2015
|
||||
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(Unaudited)
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|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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9,264
|
|
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$
|
6,944
|
|
Accounts receivable (net of allowances of $483 and $407 at April 1, 2016 and December 31, 2015, respectively)
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33,874
|
|
|
43,660
|
|
||
Inventory
|
74,988
|
|
|
68,202
|
|
||
Prepaids and other current assets
|
14,586
|
|
|
13,135
|
|
||
Total current assets
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132,712
|
|
|
131,941
|
|
||
Property, plant and equipment, net
|
29,319
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|
|
26,094
|
|
||
Deferred tax assets
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2,545
|
|
|
1,065
|
|
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Goodwill
|
57,678
|
|
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57,653
|
|
||
Intangibles, net
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60,146
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|
|
60,849
|
|
||
Other assets
|
—
|
|
|
114
|
|
||
Total assets
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$
|
282,400
|
|
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$
|
277,716
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
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40,449
|
|
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$
|
32,072
|
|
Accrued expenses
|
12,801
|
|
|
23,234
|
|
||
Reserve for uncertain tax positions
|
8,528
|
|
|
8,924
|
|
||
Current portion of long-term debt
|
3,142
|
|
|
2,790
|
|
||
Current portion of contingent consideration
|
6,889
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|
|
6,950
|
|
||
Total current liabilities
|
71,809
|
|
|
73,970
|
|
||
Line of credit
|
11,500
|
|
|
1,500
|
|
||
Long-term debt, less current portion
|
42,580
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|
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43,591
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|
||
Deferred rent
|
686
|
|
|
695
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|
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Contingent consideration, less current portion
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6,000
|
|
|
5,700
|
|
||
Total liabilities
|
132,575
|
|
|
125,456
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of April 1, 2016 and December 31, 2015
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—
|
|
|
—
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|
||
Common stock, $0.001 par value — 90,000 authorized; 37,422 shares issued and 36,532 outstanding as of April 1, 2016; 37,415 shares issued and 37,025 outstanding as of December 31, 2015
|
37
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|
|
37
|
|
||
Additional paid-in capital
|
104,276
|
|
|
102,860
|
|
||
Treasury stock, at cost; 890 common shares as of April 1, 2016 and 390 common shares as of December 31, 2015
|
(13,754
|
)
|
|
(5,807
|
)
|
||
Accumulated other comprehensive loss
|
(1,119
|
)
|
|
(1,953
|
)
|
||
Retained earnings
|
60,385
|
|
|
57,123
|
|
||
Total stockholders’ equity
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149,825
|
|
|
152,260
|
|
||
Total liabilities and stockholders’ equity
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$
|
282,400
|
|
|
$
|
277,716
|
|
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For the three months ended
|
||||||
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April 1, 2016
|
|
March 31, 2015
|
||||
Sales
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$
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80,217
|
|
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$
|
67,788
|
|
Cost of sales
|
55,099
|
|
|
49,005
|
|
||
Gross profit
|
25,118
|
|
|
18,783
|
|
||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
6,553
|
|
|
5,297
|
|
||
Research and development
|
4,392
|
|
|
3,402
|
|
||
General and administrative
|
5,921
|
|
|
4,641
|
|
||
Amortization of purchased intangibles
|
795
|
|
|
1,840
|
|
||
Fair value adjustment of contingent consideration and acquisition related compensation
|
1,763
|
|
|
2,064
|
|
||
Total operating expenses
|
19,424
|
|
|
17,244
|
|
||
Income from operations
|
5,694
|
|
|
1,539
|
|
||
Other expense, net:
|
|
|
|
||||
Interest expense
|
383
|
|
|
330
|
|
||
Other expense (income), net
|
904
|
|
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(15
|
)
|
||
Other expense, net
|
1,287
|
|
|
315
|
|
||
Income before income taxes
|
4,407
|
|
|
1,224
|
|
||
Provision for income taxes
|
1,145
|
|
|
454
|
|
||
Net income
|
$
|
3,262
|
|
|
$
|
770
|
|
Earnings per share:
|
|
|
|
||||
Basic
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$
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0.09
|
|
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$
|
0.02
|
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Diluted
|
$
|
0.09
|
|
|
$
|
0.02
|
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Weighted average shares used to compute earnings per share:
|
|
|
|
||||
Basic
|
36,935
|
|
|
37,052
|
|
||
Diluted
|
37,859
|
|
|
37,941
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Net income
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$
|
3,262
|
|
|
$
|
770
|
|
Other comprehensive loss:
|
|
|
|
||||
Foreign currency translation adjustments, net of tax effects
|
834
|
|
|
(66
|
)
|
||
Other comprehensive loss
|
834
|
|
|
(66
|
)
|
||
Comprehensive income
|
$
|
4,096
|
|
|
$
|
704
|
|
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For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
3,262
|
|
|
$
|
770
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,027
|
|
|
2,867
|
|
||
Cost of goods on acquired inventory step up
|
53
|
|
|
1,084
|
|
||
Provision for doubtful accounts
|
70
|
|
|
12
|
|
||
Stock-based compensation
|
1,381
|
|
|
1,052
|
|
||
Excess tax benefit from exercise of stock options
|
—
|
|
|
(188
|
)
|
||
(Gain) loss on disposal of property and equipment
|
—
|
|
|
(6
|
)
|
||
Deferred taxes
|
(1,476
|
)
|
|
(193
|
)
|
||
Amortization of loan fees
|
49
|
|
|
49
|
|
||
Change in fair value of contingent consideration
|
239
|
|
|
52
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
9,999
|
|
|
7,871
|
|
||
Inventory
|
(6,403
|
)
|
|
(12,425
|
)
|
||
Income taxes payable
|
(2,070
|
)
|
|
(468
|
)
|
||
Prepaids and other assets
|
(946
|
)
|
|
(834
|
)
|
||
Accounts payable
|
7,853
|
|
|
10,397
|
|
||
Accrued expenses
|
(8,832
|
)
|
|
(434
|
)
|
||
Deferred rent
|
(10
|
)
|
|
(7
|
)
|
||
Net cash provided by operating activities
|
5,196
|
|
|
9,599
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Acquisition of businesses
|
—
|
|
|
(765
|
)
|
||
Purchases of property and equipment
|
(4,354
|
)
|
|
(1,548
|
)
|
||
Proceeds from sale of property and equipment
|
—
|
|
|
6
|
|
||
Net cash used in investing activities
|
(4,354
|
)
|
|
(2,307
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from line of credit
|
16,000
|
|
|
6,000
|
|
||
Payments on line of credit
|
(6,000
|
)
|
|
(6,000
|
)
|
||
Repurchase of common stock
|
(7,948
|
)
|
|
(3,733
|
)
|
||
Repayment of debt
|
(709
|
)
|
|
(709
|
)
|
||
Proceeds from stock compensation, net
|
36
|
|
|
117
|
|
||
Excess tax benefit from exercise of stock options
|
—
|
|
|
188
|
|
||
Net cash provided by (used in) financing activities
|
1,379
|
|
|
(4,137
|
)
|
||
|
|
|
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
99
|
|
|
(163
|
)
|
||
CHANGE IN CASH AND CASH EQUIVALENTS
|
2,320
|
|
|
2,992
|
|
||
CASH AND CASH EQUIVALENTS—Beginning of period
|
6,944
|
|
|
4,212
|
|
||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
9,264
|
|
|
$
|
7,204
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Income taxes
|
$
|
4,300
|
|
|
$
|
1,085
|
|
Interest
|
$
|
310
|
|
|
$
|
275
|
|
|
As of
April 1,
|
|
As of
December 31, |
||||
|
2016
|
|
2015
|
||||
Raw materials
|
$
|
48,259
|
|
|
$
|
43,468
|
|
Work-in-process
|
2,068
|
|
|
1,921
|
|
||
Finished goods
|
24,661
|
|
|
22,813
|
|
||
Total inventory
|
$
|
74,988
|
|
|
$
|
68,202
|
|
|
As of
April 1,
|
|
As of
December 31, |
||||
|
2016
|
|
2015
|
||||
Machinery and manufacturing equipment
|
$
|
24,403
|
|
|
$
|
22,488
|
|
Information systems, office equipment and furniture
|
11,038
|
|
|
9,829
|
|
||
Transportation equipment
|
2,307
|
|
|
2,243
|
|
||
Building and land
|
4,358
|
|
|
3,469
|
|
||
Leasehold improvements
|
7,388
|
|
|
6,970
|
|
||
Total
|
49,494
|
|
|
44,999
|
|
||
Less: accumulated depreciation and amortization
|
(20,175
|
)
|
|
(18,905
|
)
|
||
Property, plant and equipment, net
|
$
|
29,319
|
|
|
$
|
26,094
|
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
|
Weighted
average life
(years)
|
||||||
April 1, 2016:
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
39,021
|
|
|
$
|
(13,655
|
)
|
|
$
|
25,366
|
|
|
13
|
Core technology
|
33,400
|
|
|
(32,599
|
)
|
|
801
|
|
|
8
|
|||
Other
|
1,335
|
|
|
(1,008
|
)
|
|
327
|
|
|
4
|
|||
Total
|
$
|
73,756
|
|
|
$
|
(47,262
|
)
|
|
26,494
|
|
|
|
|
Trademarks and brands, not subject to amortization
|
|
|
|
|
33,652
|
|
|
|
|||||
Total
|
|
|
|
|
$
|
60,146
|
|
|
|
||||
December 31, 2015:
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
39,004
|
|
|
$
|
(13,013
|
)
|
|
$
|
25,991
|
|
|
13
|
Core technology
|
33,400
|
|
|
(32,559
|
)
|
|
841
|
|
|
8
|
|||
Other
|
1,335
|
|
|
(889
|
)
|
|
446
|
|
|
4
|
|||
Total
|
$
|
73,739
|
|
|
$
|
(46,461
|
)
|
|
27,278
|
|
|
|
|
Trademarks and brands, not subject to amortization
|
|
|
|
|
33,571
|
|
|
|
|||||
Total
|
|
|
|
|
$
|
60,849
|
|
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Amortization of intangibles
|
$
|
795
|
|
|
$
|
1,840
|
|
For the fiscal years ending,
|
Amortization Expense
|
||
2016 (remaining nine months)
|
$
|
2,198
|
|
2017
|
2,801
|
|
|
2018
|
2,776
|
|
|
2019
|
2,715
|
|
|
2020
|
2,015
|
|
|
Thereafter
|
13,989
|
|
|
Total expected future amortization
|
$
|
26,494
|
|
|
As of
April 1,
|
|
As of
December 31, |
||||
|
2016
|
|
2015
|
||||
Payroll and related expenses
|
$
|
4,262
|
|
|
$
|
8,143
|
|
Management earn-out
|
2,162
|
|
|
7,242
|
|
||
Warranty
|
3,868
|
|
|
3,914
|
|
||
Income tax payable
|
333
|
|
|
1,949
|
|
||
Other accrued expenses
|
2,176
|
|
|
1,986
|
|
||
Total
|
$
|
12,801
|
|
|
$
|
23,234
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Beginning warranty liability
|
$
|
3,914
|
|
|
$
|
4,215
|
|
Charge to cost of sales
|
858
|
|
|
830
|
|
||
Costs incurred
|
(904
|
)
|
|
(875
|
)
|
||
Ending warranty liability
|
$
|
3,868
|
|
|
$
|
4,170
|
|
|
As of
April 1,
|
||
|
2016
|
||
Amount outstanding
|
$
|
11,500
|
|
Available borrowing capacity
|
$
|
48,500
|
|
Maximum borrowing capacity
|
$
|
60,000
|
|
Interest rate at April 1, 2016
|
3.52
|
%
|
|
Maturity date
|
December 12, 2019
|
||
|
|
Fiscal Year
|
|
||
2016 (remaining nine months)
|
$
|
2,128
|
|
2017
|
4,256
|
|
|
2018
|
4,256
|
|
|
2019
|
35,813
|
|
|
Total
|
46,453
|
|
|
Debt issuance cost
|
(731
|
)
|
|
Long-term debt, net of issuance cost
|
45,722
|
|
|
Less: current portion
|
(3,142
|
)
|
|
Long-term debt less current portion
|
$
|
42,580
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Cost of sales
|
$
|
31
|
|
|
$
|
11
|
|
Sales and marketing
|
126
|
|
|
82
|
|
||
Research and development
|
70
|
|
|
23
|
|
||
General and administrative
|
1,154
|
|
|
936
|
|
||
Total
|
$
|
1,381
|
|
|
$
|
1,052
|
|
|
Unvested RSUs
|
|||||
|
Number of shares outstanding
|
|
Weighted-average grant date fair value
|
|||
Unvested at December 31, 2015
|
773
|
|
|
$
|
17.07
|
|
Granted
|
226
|
|
|
$
|
14.41
|
|
Forfeited
|
(3
|
)
|
|
$
|
16.80
|
|
Unvested at April 1, 2016
|
996
|
|
|
$
|
16.47
|
|
|
Contingent consideration liability (level 3 measurement)
|
||
Balance at December 31, 2015
|
$
|
12,650
|
|
Change in fair value
|
239
|
|
|
Balance at April 1, 2016
|
$
|
12,889
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Provision for income taxes
|
$
|
1,145
|
|
|
$
|
454
|
|
Effective tax rates
|
26.0
|
%
|
|
37.1
|
%
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
Net income
|
$
|
3,262
|
|
|
$
|
770
|
|
Weighted average shares used to compute basic earnings per share
|
36,935
|
|
|
37,052
|
|
||
Dilutive effect of employee stock plans
|
924
|
|
|
889
|
|
||
Weighted average shares used to compute diluted earnings per share
|
37,859
|
|
|
37,941
|
|
||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
0.09
|
|
|
$
|
0.02
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.02
|
|
|
For the three months ended
|
||||||
|
April 1, 2016
|
|
March 31, 2015
|
||||
United States
|
$
|
44,176
|
|
|
$
|
32,793
|
|
Asia
|
15,637
|
|
|
12,345
|
|
||
Europe
|
19,644
|
|
|
15,065
|
|
||
Rest of the world
|
760
|
|
|
7,585
|
|
||
Total sales
|
$
|
80,217
|
|
|
$
|
67,788
|
|
|
As of
April 1,
|
|
As of
December 31, |
||||
|
2016
|
|
2015
|
||||
United States
|
$
|
26,440
|
|
|
$
|
23,241
|
|
International
|
2,879
|
|
|
2,853
|
|
||
Total long-lived assets
|
$
|
29,319
|
|
|
$
|
26,094
|
|
•
|
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 ability to improve operating and supply chain efficiencies;
|
•
|
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 transition of the majority of our mountain bike manufacturing operations to Taiwan and our expectations related to such transition;
|
•
|
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;
|
•
|
our ability to successfully identify, evaluate and manage potential acquisitions and to benefit from such acquisitions; and
|
•
|
future economic or market conditions.
|
|
For the three months ended
|
||||||
(in thousands)
|
April 1, 2016
|
|
March 31, 2015
|
||||
Sales
|
$
|
80,217
|
|
|
$
|
67,788
|
|
Cost of sales
|
55,099
|
|
|
49,005
|
|
||
Gross profit
|
25,118
|
|
|
18,783
|
|
||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
6,553
|
|
|
5,297
|
|
||
Research and development
|
4,392
|
|
|
3,402
|
|
||
General and administrative
|
5,921
|
|
|
4,641
|
|
||
Amortization of purchased intangibles
|
795
|
|
|
1,840
|
|
||
Fair value adjustment of contingent consideration and acquisition related compensation
|
1,763
|
|
|
2,064
|
|
||
Total operating expenses
|
19,424
|
|
|
17,244
|
|
||
Income from operations
|
5,694
|
|
|
1,539
|
|
||
Other expense, net:
|
|
|
|
||||
Interest expense
|
383
|
|
|
330
|
|
||
Other expense (income), net
|
904
|
|
|
(15
|
)
|
||
Other expense, net
|
1,287
|
|
|
315
|
|
||
Income before income taxes
|
4,407
|
|
|
1,224
|
|
||
Provision for income taxes
|
1,145
|
|
|
454
|
|
||
Net income
|
$
|
3,262
|
|
|
$
|
770
|
|
|
For the three months ended
|
||||
|
April 1, 2016
|
|
March 31, 2015
|
||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
68.7
|
|
|
72.3
|
|
Gross profit
|
31.3
|
|
|
27.7
|
|
Operating expenses:
|
|
|
|
||
Sales and marketing
|
8.2
|
|
|
7.8
|
|
Research and development
|
5.5
|
|
|
5.0
|
|
General and administrative
|
7.4
|
|
|
6.8
|
|
Amortization of purchased intangibles
|
1.0
|
|
|
2.7
|
|
Fair value adjustment of contingent consideration and acquisition related compensation
|
2.2
|
|
|
3.0
|
|
Total operating expenses
|
24.3
|
|
|
25.3
|
|
Income from operations
|
7.0
|
|
|
2.4
|
|
Other expense, net:
|
|
|
|
||
Interest expense
|
0.5
|
|
|
0.5
|
|
Other income, net
|
1.1
|
|
|
—
|
|
Other expense, net
|
1.6
|
|
|
0.5
|
|
Income before income taxes
|
5.4
|
|
|
1.9
|
|
Provision for income taxes
|
1.4
|
|
|
0.7
|
|
Net income
|
4.0
|
%
|
|
1.2
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Bikes
|
$
|
45.1
|
|
|
$
|
35.6
|
|
|
$
|
9.5
|
|
|
26.7
|
%
|
Power Vehicles
|
35.1
|
|
|
32.2
|
|
|
2.9
|
|
|
9.0
|
|
|||
Total sales
|
$
|
80.2
|
|
|
$
|
67.8
|
|
|
$
|
12.4
|
|
|
18.3
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Cost of sales
|
$
|
55.1
|
|
|
$
|
49.0
|
|
|
$
|
6.1
|
|
|
12.4
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
$
|
6.5
|
|
|
$
|
5.3
|
|
|
$
|
1.2
|
|
|
22.6
|
%
|
Research and development
|
4.4
|
|
|
3.4
|
|
|
1.0
|
|
|
29.4
|
|
|||
General and administrative
|
5.9
|
|
|
4.6
|
|
|
1.3
|
|
|
28.3
|
|
|||
Amortization of purchased intangibles
|
0.8
|
|
|
1.8
|
|
|
(1.0
|
)
|
|
(55.6
|
)
|
|||
Fair value adjustment of contingent consideration and acquisition related compensation
|
1.8
|
|
|
2.1
|
|
|
(0.3
|
)
|
|
(14.3
|
)
|
|||
Total operating expenses
|
$
|
19.4
|
|
|
$
|
17.2
|
|
|
$
|
2.2
|
|
|
12.8
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Income from operations
|
$
|
5.7
|
|
|
$
|
1.5
|
|
|
$
|
4.2
|
|
|
280.0
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Other expense, net:
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
33.3
|
%
|
Other expense (income), net
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
NA
|
|
|||
Other expense, net
|
$
|
1.3
|
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
|
333.3
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Provision for income taxes
|
$
|
1.1
|
|
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
120.0
|
%
|
|
For the three months ended
|
|
|
|
|
|||||||||
(in millions)
|
April 1, 2016
|
|
March 31, 2015
|
|
Change ($)
|
|
Change (%)
|
|||||||
Net income
|
$
|
3.3
|
|
|
$
|
0.8
|
|
|
$
|
2.5
|
|
|
312.5
|
%
|
|
For the three months ended
|
||||||
(in thousands)
|
April 1, 2016
|
|
March 31, 2015
|
||||
Net cash provided by operating activities
|
$
|
5,196
|
|
|
$
|
9,599
|
|
Net cash used in investing activities
|
(4,354
|
)
|
|
(2,307
|
)
|
||
Net cash provided by (used in) financing activities
|
1,379
|
|
|
(4,137
|
)
|
||
Effect of exchange rate changes on cash
|
99
|
|
|
(163
|
)
|
||
Increase in cash and cash equivalents
|
$
|
2,320
|
|
|
$
|
2,992
|
|
•
|
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.
|
Period
|
|
Total Number of Shares Purchased
|
|
Weighted Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (1)
|
||||||
1/1 - 2/5
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
40,000,000
|
|
2/6 - 3/4
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
40,000,000
|
|
3/5 - 4/1
|
|
500,000
|
|
|
$
|
15.895
|
|
|
500,000
|
|
|
$
|
32,052,500
|
|
Total
|
|
500,000
|
|
|
$
|
15.895
|
|
|
500,000
|
|
|
$
|
32,052,500
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) On February 25, 2016, the Company's Board of Directors authorized a share repurchase program for up to $40 million of the Company’s common shares outstanding. The repurchase program expires on December 31, 2017.
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
File No.
|
Filing Date
|
Filed Herewith
|
|
|
|
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation
|
10-Q
|
001-36040
|
September 19, 2013
|
|
|
|
|
|
|
|
3.2
|
Amended and Restated Bylaws
|
10-Q
|
001-36040
|
September 19, 2013
|
|
|
|
|
|
|
|
10.1
|
Employment Agreement, dated July 22, 2013, by and between Fox Factory Holding Corp. and Wes Allinger
|
|
|
|
X
|
|
|
|
|
|
|
10.2
|
Employment Agreement, dated January 26, 2015, by and between Fox Factory Holding Corp. and Tom Wittenschlaeger
|
|
|
|
X
|
|
|
|
|
|
|
10.3
|
Amendment dated May 2, 2016 to the Lease Agreement, dated July 1, 2003, by and between Fox Factory, Inc. and Robert C. Fox, Jr.
|
|
|
|
X
|
|
|
|
|
|
|
10.4
|
Third Amendment to Amended and Restated Revolving Credit and Term Loan Agreement, by and between Fox Factory Holding Corp., Fox Factory, Inc., ST USA Holding Corp., Suntrust Bank and other parties thereto, dated March 31, 2016
|
|
|
|
X
|
|
|
|
|
|
|
10.5
|
Stock Repurchase Agreement, by and between Fox Factory Holding Corp., and Compass Group Diversified Holdings, LLC, dated March 9, 2016
|
8-K
|
001-36040
|
March 15, 2016
|
|
|
|
|
|
|
|
31.1
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
|
|
|
|
X
|
|
|
|
|
|
|
31.2
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
|
|
|
|
X
|
|
|
|
|
|
|
32.1*
|
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
|
May 4, 2016
|
|
Zvi Glasman, Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
DEFINED TERMS.
Unless otherwise defined in this Amendment, defined terms shall have the meanings ascribed to them in the Lease Agreement.
|
2.
|
AMENDMENT.
|
A.
|
Salient Lease Terms item 6. (c) is hereby deleted entirely and replaced with: “Termination Date: June 30, 2020”
|
B.
|
Salient Lease Terms item 8. (a) is hereby deleted entirely and replaced with: “Minimum Monthly Rent: Fifty Nine Thousand and Six Hundred Dollars ($59,600.00)”
|
C.
|
Article 3. Is hereby deleted entirely and replaced with: “Term: The term shall commence on July 1, 2003, and shall continue for a period of seventeen (17) years, terminating on June 30, 2020”
|
D.
|
Article 5. A. is hereby deleted entirely and replaced with: “Minimum Monthly Rent: Tenant shall pay to Landlord as minimum monthly rent, without deduction, setoff, prior notice or demand, the sum of Fifty Nine Thousand and Six Hundred Dollars ($59,600.00) per month, payable in advance on the 1
st
day of each month, commencing on the commencement date and continuing during the term. Minimum monthly rent for the first (1
st
) month shall be paid upon execution of this Lease Agreement. All rent shall be paid to Landlord at the address to which notices to Landlord are given.
|
E.
|
Article 8. Is hereby deleted entirely and replaced with: “Repairs and Maintenance: Tenant agrees at all times during the term hereof and at its own cost and expense to keep, repair and maintain the demises premises and every part thereof, structural and non-structural, including without limitation, the building, landscape areas, driveways, and parking areas, in good and sanitary order and condition, reasonable wear and tear excepted. The term “repairs” shall include all such replacements, renewals, alterations, additions and betterments necessary for Tenant to properly maintain the premises in good order and condition. As part of the foregoing, and notwithstanding any immediate necessity of replacement, Tenant shall, subject to the monetary cap stated below and at a time or times during the term, as chosen by Tenant in its sole discretion, replace, or pay Landlord the cost of replacing, all of the current HVAC roof units, as needed, wherein such replacement, as opposed to necessitating unit per unit replacement, will rather result in a heating and cooling capacity of the replacement building HVAC system that is equivalent to that of the current units being replaced. Notwithstanding anything to the contrary herein, Tenant’s total liability through the Term of the Lease Agreement, for the aforementioned HVAC roof unit replacement shall in no event exceed Four Hundred and Fifty Thousand Dollars ($450,000.00). For clarity, and subject to the $450,000.00 maximum spend by Tenant, the HVAC system as a whole shall, in June of 2020, be fit for purpose and marketable with the Premises.
|
A.
|
Landlord and Tenant each acknowledges and agrees that the Lease Agreement as amended by this Amendment has been negotiated at arms-length and is fair and reasonable.
|
A.
|
Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Lease Agreement. To the extent that there are any inconsistencies between the terms of this Amendment and the remainder of the Lease Agreement, the terms of this Amendment will take precedence.
|
B.
|
Except as provided in this Amendment, the Lease Agreement shall remain unmodified and in full force and effect. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
|
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;
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5.
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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):
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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
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b)
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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.
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May 4, 2016
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/s/ Larry L. Enterline
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Larry L. Enterline
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Fox Factory Holding Corp.:
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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;
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3.
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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;
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4.
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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:
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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;
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b)
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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;
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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
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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
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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.
|
May 4, 2016
|
|
/s/ Zvi Glasman
|
Zvi Glasman
|
Chief Financial Officer
|
(Principal Accounting and Financial Officer)
|
May 4, 2016
|
|
/s/ Larry L. Enterline
|
Larry L. Enterline
|
Chief Executive Officer
|
(Principal Executive Officer)
|
|
/s/ Zvi Glasman
|
Zvi Glasman
|
Chief Financial Officer
|
(Principal Accounting and Financial Officer)
|