Achieves Record Quarterly Sales of
Reports Record Earnings per Diluted Share of
Reports Record Non-GAAP Adjusted Earnings per Diluted Share of
First Quarter Fiscal 2022 Highlights
- Sales increased 34.4% to
$378.0 million , compared to$281.1 million in the same period last fiscal year - Gross profit increased 22.8% to
$120.3 million , compared to$97.9 million in the same period last fiscal year. Gross margin percentage decreased 300 basis points to 31.8%, compared to 34.8% in the same period last fiscal year; non-GAAP adjusted gross margin percentage decreased 270 basis points to 32.3% compared to 35.0% in the same period last fiscal year - Net income was
$48.1 million , or 12.7% of sales and$1.13 of earnings per diluted share, compared to$38.0 million , or 13.5% of sales and$0.90 of earnings per diluted share in the same period last fiscal year - Non-GAAP adjusted net income was
$55.8 million , or$1.32 of non-GAAP adjusted earnings per diluted share, compared to$44.5 million , or$1.05 of non-GAAP adjusted earnings per diluted share in the same period last fiscal year - Adjusted EBITDA was
$71.8 million , or 19.0% of sales, compared to$60.4 million , or 21.5% of sales in the same period last fiscal year
“We are pleased to report record revenue and profitability in the first quarter of 2022. This accomplishment reflects the focus and continued execution of our people and FOX’s strategic initiatives while responding to various ongoing macro challenges," commented
Sales for the first quarter of fiscal 2022 were
Gross margin was 31.8% for the first quarter of fiscal 2022, a 300 basis point decrease from gross margin of 34.8% in the first quarter of fiscal 2021. Non-GAAP adjusted gross margin decreased 270 basis points to 32.3% from the same prior fiscal year period, excluding the effects of strategic transformation costs. The decrease in gross margin was primarily driven by continued increases in supply chain related costs, including increased prices for raw materials and freight. Additionally, the completion of the planned shutdown of our
Total operating expenses were
The Company’s effective tax rate was 4.8% in the first quarter of fiscal 2022, compared to 9.5% in the first quarter of fiscal 2021. The decrease in the Company’s effective tax rate was primarily due to the impact of recently finalized
Net income in the first quarter of fiscal 2022 was
Non-GAAP adjusted net income in the first quarter of fiscal 2022 was
Adjusted EBITDA in the first quarter of fiscal 2022 was
Balance Sheet Highlights
As of
Fiscal 2022 Guidance
For the second quarter of fiscal 2022, the Company expects sales in the range of
For the fiscal year 2022, the Company expects sales in the range of
Non-GAAP adjusted earnings per diluted share exclude the following items net of applicable tax: amortization of purchased intangibles, patent litigation-related expenses, acquisition and integration-related expenses, and strategic transformation costs. A quantitative reconciliation of non-GAAP adjusted earnings per diluted share for the second quarter and full fiscal year 2022 is not available without unreasonable efforts because management cannot predict, with sufficient certainty, all of the elements necessary to provide such a reconciliation.
Conference Call & Webcast
The Company will hold an investor conference call today at
About
Non-GAAP Financial Measures
In addition to reporting financial measures in accordance with generally accepted accounting principles (“GAAP”),
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
As of | As of | ||||||
2022 | 2021 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 68,773 | $ | 179,686 | |||
Accounts receivable (net of allowances of | 177,858 | 142,040 | |||||
Inventory | 314,971 | 279,837 | |||||
Prepaids and other current assets | 293,927 | 123,107 | |||||
Total current assets | 855,529 | 724,670 | |||||
Property, plant and equipment, net | 193,609 | 192,003 | |||||
Lease right-of-use assets | 44,122 | 38,752 | |||||
Deferred tax assets | 43,351 | 34,998 | |||||
323,283 | 323,299 | ||||||
Intangibles, net | 191,716 | 197,021 | |||||
Other assets | 12,405 | 4,986 | |||||
Total assets | $ | 1,664,015 | $ | 1,515,729 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 157,015 | $ | 99,984 | |||
Accrued expenses | 103,792 | 112,378 | |||||
Current portion of long-term debt | 20,000 | 17,500 | |||||
Total current liabilities | 280,807 | 229,862 | |||||
Line of credit | 42,852 | — | |||||
Long-term debt, less current portion | 356,288 | 360,953 | |||||
Other liabilities | 34,984 | 30,832 | |||||
Total liabilities | 714,931 | 621,647 | |||||
Stockholders’ equity | |||||||
Preferred stock, | — | — | |||||
Common stock, | 42 | 42 | |||||
Additional paid-in capital | 346,328 | 344,119 | |||||
(13,754 | ) | (13,754 | ) | ||||
Accumulated other comprehensive income | 9,619 | 4,876 | |||||
Retained earnings | 606,849 | 558,799 | |||||
Total stockholders’ equity | 949,084 | 894,082 | |||||
Total liabilities and stockholders’ equity | $ | 1,664,015 | $ | 1,515,729 | |||
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
For the three months ended | |||||||
2022 | 2021 | ||||||
Sales | $ | 377,977 | $ | 281,136 | |||
Cost of sales | 257,717 | 183,212 | |||||
Gross profit | 120,260 | 97,924 | |||||
Operating expenses: | |||||||
Sales and marketing | 22,589 | 16,858 | |||||
Research and development | 12,642 | 9,876 | |||||
General and administrative | 25,567 | 20,369 | |||||
Amortization of purchased intangibles | 5,307 | 4,965 | |||||
Total operating expenses | 66,105 | 52,068 | |||||
Income from operations | 54,155 | 45,856 | |||||
Interest and other expense, net: | |||||||
Interest expense | 1,977 | 2,904 | |||||
Other expense, net | 1,692 | 959 | |||||
Interest and other expense, net | 3,669 | 3,863 | |||||
Income before income taxes | 50,486 | 41,993 | |||||
Provision for income taxes | 2,436 | 4,007 | |||||
Net income | $ | 48,050 | $ | 37,986 | |||
Earnings per share: | |||||||
Basic | $ | 1.14 | $ | 0.91 | |||
Diluted | $ | 1.13 | $ | 0.90 | |||
Weighted-average shares used to compute earnings per share: | |||||||
Basic | 42,144 | 41,851 | |||||
Diluted | 42,381 | 42,343 | |||||
NET INCOME TO NON-GAAP ADJUSTED NET INCOME RECONCILIATION
AND CALCULATION OF NON-GAAP ADJUSTED EARNINGS PER SHARE
(In thousands, except per share data)
(Unaudited)
The following table provides a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to non-GAAP adjusted net income (a non-GAAP measure), and the calculation of non-GAAP adjusted earnings per share (a non-GAAP measure) for the three months ended
For the three months ended | |||||||
2022 | 2021 | ||||||
Net income | $ | 48,050 | $ | 37,986 | |||
Amortization of purchased intangibles | 5,307 | 4,965 | |||||
Patent litigation-related expenses | 69 | 310 | |||||
Other acquisition and integration-related expenses (1) | 1,088 | 1,415 | |||||
Strategic transformation costs (2) | 1,676 | 508 | |||||
Tax impacts of reconciling items above (3) | (393 | ) | (687 | ) | |||
Non-GAAP adjusted net income | $ | 55,797 | $ | 44,497 | |||
Non-GAAP adjusted EPS | |||||||
Basic | $ | 1.32 | $ | 1.06 | |||
Diluted | $ | 1.32 | $ | 1.05 | |||
Weighted average shares used to compute non-GAAP adjusted EPS | |||||||
Basic | 42,144 | 41,851 | |||||
Diluted | 42,381 | 42,343 | |||||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations.
(2) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations.
(3) Tax impact calculated based on the respective year to date effective tax rate.
NET INCOME TO ADJUSTED EBITDA RECONCILIATION AND
CALCULATION OF NET INCOME MARGIN AND ADJUSTED EBITDA MARGIN
(In thousands)
(Unaudited)
The following tables provide a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to adjusted EBITDA (a non-GAAP measure), and the calculations of net income margin and adjusted EBITDA margin (a non-GAAP measure) for the three months ended
For the three months ended | |||||||
2022 | 2021 | ||||||
Net income | $ | 48,050 | $ | 37,986 | |||
Provision for income taxes | 2,436 | 4,007 | |||||
Depreciation and amortization | 11,847 | 9,969 | |||||
Non-cash stock-based compensation | 3,029 | 2,494 | |||||
Patent litigation-related expenses | 69 | 310 | |||||
Other acquisition and integration-related expenses (1) | 974 | 1,255 | |||||
Strategic transformation costs (2) | 1,676 | 508 | |||||
Interest and other expense, net | 3,669 | 3,863 | |||||
Adjusted EBITDA | $ | 71,750 | $ | 60,392 | |||
Net Income Margin | 12.7 | % | 13.5 | % | |||
Adjusted EBITDA Margin | 19.0 | % | 21.5 | % | |||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations, excluding
(2) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations.
GROSS PROFIT TO NON-GAAP ADJUSTED GROSS PROFIT RECONCILIATION AND
CALCULATION OF GROSS MARGIN AND NON-GAAP ADJUSTED GROSS MARGIN
(In thousands)
(Unaudited)
The following table provides a reconciliation of gross profit to non-GAAP adjusted gross profit (a non-GAAP measure) for the three months ended
For the three months ended | |||||||
2022 | 2021 | ||||||
Sales | $ | 377,977 | $ | 281,136 | |||
Gross Profit | $ | 120,260 | $ | 97,924 | |||
Strategic transformation costs (1) | 1,676 | 508 | |||||
Non-GAAP Adjusted Gross Profit | $ | 121,936 | $ | 98,432 | |||
Gross Margin | 31.8 | % | 34.8 | % | |||
Non-GAAP Adjusted Gross Margin | 32.3 | % | 35.0 | % | |||
(1) Represents costs associated with various strategic initiatives including the expansion of the Powered Vehicles Group’s manufacturing operations.
OPERATING EXPENSE TO NON-GAAP OPERATING EXPENSE RECONCILIATION AND
CALCULATION OF OPERATING EXPENSE AND NON-GAAP OPERATING EXPENSE AS A PERCENTAGE OF SALES
(In thousands)
(Unaudited)
The following tables provide a reconciliation of operating expense to non-GAAP operating expense (a non-GAAP measure) and the calculations of operating expense as a percentage of sales and non-GAAP operating expense as a percentage of sales (a non-GAAP measure), for the three months ended
For the three months ended | |||||||
2022 | 2021 | ||||||
Sales | $ | 377,977 | $ | 281,136 | |||
Operating Expense | $ | 66,105 | $ | 52,068 | |||
Amortization of purchased intangibles | (5,307 | ) | (4,965 | ) | |||
Patent litigation-related expenses | (69 | ) | (310 | ) | |||
Other acquisition and integration-related expenses (1) | (1,088 | ) | (1,415 | ) | |||
Non-GAAP operating expense | $ | 59,641 | $ | 45,378 | |||
Operating expense as a percentage of sales | 17.5 | % | 18.5 | % | |||
Non-GAAP operating expense as a percentage of sales | 15.8 | % | 16.1 | % | |||
(1) Represents various acquisition-related costs and expenses incurred to integrate acquired entities into the Company’s operations.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release including earnings guidance may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends that all such statements be subject to the “safe-harbor” provisions contained in those sections. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential” or “continue” or other similar terms or expressions and such forward-looking statements include, but are not limited to, statements about the impact of the global outbreak of COVID-19 on the Company’s business and operations; the Company’s continued growing demand for its products; the Company’s execution on its strategy to improve operating efficiencies; the Company’s optimism about its operating results and future growth prospects; the Company’s expected future sales and future non-GAAP adjusted earnings per diluted share; and any other statements in this press release that are not of a historical nature. Many important factors may cause the Company’s actual results, events or circumstances to differ materially from those discussed in any such forward-looking statements, including but not limited to: the Company’s ability to complete any acquisition and/or incorporate any acquired assets into its business; the Company’s ability to maintain its suppliers for materials, product parts and vehicle chassis without significant supply chain disruptions; the Company’s ability to improve operating and supply chain efficiencies; the Company’s ability to enforce its intellectual property rights; the Company’s future financial performance, including its sales, cost of sales, gross profit or gross margin, operating expenses, ability to generate positive cash flow and ability to maintain profitability; the Company’s ability to adapt its business model to mitigate the impact of certain changes in tax laws; changes in the relative proportion of profit earned in the numerous jurisdictions in which the Company does business and in tax legislation, case law and other authoritative guidance in those jurisdictions; factors which impact the calculation of the weighted average number of diluted shares of common stock outstanding, including the market price of the Company’s common stock, grants of equity-based awards and the vesting schedules of equity-based awards; the Company’s ability to develop new and innovative products in its current end-markets and to leverage its technologies and brand to expand into new categories and end-markets; the Company’s ability to increase its aftermarket penetration; the Company’s exposure to exchange rate fluctuations; the loss of key customers; strategic transformation costs; the outcome of pending litigation; the possibility that the Company may not be able to accelerate its international growth; the Company’s ability to maintain its premium brand image and high-performance products; the Company’s ability to maintain relationships with the professional athletes and race teams that it sponsors; the possibility that the Company may not be able to selectively add additional dealers and distributors in certain geographic markets; the overall growth of the markets in which the Company competes; the Company’s expectations regarding consumer preferences and its ability to respond to changes in consumer preferences; changes in demand for high-end suspension and ride dynamics products; the Company’s loss of key personnel, management and skilled engineers; the Company’s ability to successfully identify, evaluate and manage potential acquisitions and to benefit from such acquisitions; product recalls and product liability claims; the impact of the Russian invasion of
CONTACT:
Sr. Director of Investor Relations and Business Development
706-471-5241
vbhakuni@ridefox.com
Source:
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