FOX FACTORY HOLDING CORP

Previous wording

•changes in general economic conditions, including market and macro-economic disruptions resulting from escalating tensions between China and Taiwan, the on-going Russian war in Ukraine, the Israel-Palestine conflict, or rising tension in the Middle East, or due to growing inflation or higher interest rates, or tariffs;

Current wording

•changes in general economic conditions, including, among others, market and macro-economic disruptions resulting from escalating tensions between China and Taiwan, the war in Iran, or similar events, due to inflation, higher interest rates, or tariffs, or due to the spread of infectious or contagious disease or public health issues;

Previous wording

•our dependency on a limited number of suppliers for materials, product parts, and vehicle chassis could lead to an increase in material costs, disruptions in our supply chain, or reputational costs;

Current wording

•our dependency on a limited number of suppliers for materials, component parts, and product could lead to an increase in material costs, disruptions in our supply chain, or reputational costs;

Previous wording

•our exposure to exchange rate fluctuations;

Current wording

•our exposure to currency exchange rate fluctuations;

Previous wording

•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;

Current wording

•our future financial performance, including our net sales, cost of sales, gross profit or gross margins, operating expenses, ability to generate positive cash flow, ability to maintain our profitability, and ability to remain in compliance with financial covenants;

Previous wording

•our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, and international trade policies, including regulations or orders related to the import and export of industry products;

Current wording

•our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, international trade policies, and other regulatory matters;

Previous wording

You should not rely upon forward-looking statements as predictions of future events. We based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects and the outcomes of any of the events described in any forward-looking statements are subject to risks, uncertainties, and other factors. In addition to the risks, uncertainties, and other factors discussed above and elsewhere in this Quarterly Report on Form 10-Q, the risks, uncertainties, and other factors expressed or implied in Part I, Item 1A. “Risk Factors” of our 2024 Annual Report on Form 10-K, as filed with the SEC on February 28, 2025, could cause or contribute to actual results differing materially from those set forth in any forward-looking statement. Moreover, we operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur and you should not place undue reliance on our forward-looking statements. Actual results, events, or circumstances could differ materially from those contemplated by, set forth in, or underlying any forward-looking statements. For all of these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act and Section 21E of the Exchange Act.

Current wording

You should not rely upon forward-looking statements as predictions of future events. We based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects and the outcomes of any of the events described in any forward-looking statements are subject to risks, uncertainties, and other factors. In addition to the risks, uncertainties, and other factors discussed above and elsewhere in this Quarterly Report on Form 10-Q, the risks, uncertainties, and other factors expressed or implied in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 2, 2026, as filed with the SEC on February 27, 2026, could cause or contribute to actual results differing materially from those set forth in any forward-looking statement. Moreover, we operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur and you should not place undue reliance on our forward-looking statements. Actual results, events, or circumstances could differ materially from those contemplated by, set forth in, or underlying any forward-looking statements. For all of these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act and Section 21E of the Exchange Act.

Previous wording

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make or choose not to make.

Current wording

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, the occurrence of unanticipated events or otherwise, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make or choose not to make.

Previous wording

There have been no changes to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended January 3, 2025, as filed with the SEC on February 28, 2025, that had a material impact on our unaudited condensed consolidated financial statements and related notes, except as described below.

Current wording

There have been no changes to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended January 2, 2026, as filed with the SEC on February 27, 2026, that had a material impact on our unaudited condensed consolidated financial statements and related notes.

Previous wording

Total net sales for the three months ended October 3, 2025 increased $17.3 million, or 4.8%, compared to the three months ended September 27, 2024. The increase in net sales is driven by increased demand for aftermarket products, strategic customer program launches, and market share gains in motorcycle business, which more than offset lower industry demand in the automotive OE product lines and reduced inventory levels by OEMs, distributors, and dealers in response to market-wide economic conditions. Although net sales increased, high interest rates impacting industry and consumer demand, high vehicle costs, and macro-economic conditions remain headwinds.

Current wording

Total net sales for the three months ended April 3, 2026 increased $13.7 million, or 3.9%, compared to the three months ended April 4, 2025. The increase in net sales is driven by strengthening demand across powersports, automotive aftermarket, and upfitting product lines, as well as stable aftermarket product sales, which more than offset distributors and dealers reducing inventory levels in response to market-wide economic conditions.

Previous wording

Cost of sales for the three months ended October 3, 2025 increased $10.3 million, or 4.1%, compared to the three months ended September 27, 2024. The increase in cost of sales is mainly due to our increased sales and impact of tariffs. Our gross margin increased 50 basis points to 30.4% for the three months ended October 3, 2025, as compared to the same prior fiscal year period, primarily due to our product mix.

Current wording

Cost of sales for the three months ended April 3, 2026 increased $16.9 million, or 6.9%, compared to the three months ended April 4, 2025. The increase in cost of sales is mainly due to our increased sales and impact of tariffs. Our gross margin decreased 200 basis points to 28.9% for the three months ended April 3, 2026, as compared to the same prior fiscal year period, primarily due to the net impact of tariffs and shifts in our product line mix.

Previous wording

Total operating expenses for the three months ended October 3, 2025 were $99.4 million, compared to $88.7 million for the three months ended September 27, 2024. General and administrative expenses increased $5.2 million driven by our organizational restructuring initiatives. Sales and marketing expenses and research and development expenses increased $3.6 million and $2.5 million, respectively, mainly due to investments to support strategic customer launches and product innovation.

Current wording

Total operating expenses for the three months ended April 3, 2026 were $100.4 million, compared to $360.3 million for the three months ended April 4, 2025. During the three months ended April 4, 2025, we recognized an impairment charge of $262.1 million as a result of a quantitative assessment on goodwill. Research and development expenses increased $1.4 million, mainly due to investments to support product innovation. General and administrative expenses increased $1.3 million driven by our strategic transformation initiatives.

Previous wording

As a result of the factors discussed above, income from operations for the three months ended October 3, 2025 decreased $3.7 million, or 19.7%, compared to income from operations for the three months ended September 27, 2024.

Current wording

As a result of the factors discussed above, income from operations for the three months ended April 3, 2026 increased $256.6 million, or 102.4%, compared to loss from operations for the three months ended April 4, 2025.

Previous wording

Interest and other expense, net for the three months ended October 3, 2025 decreased by $0.2 million to $13.5 million, compared to $13.7 million for the three months ended September 27, 2024.

Current wording

Interest and other expense, net for the three months ended April 3, 2026 increased by $8.8 million to $21.5 million, compared to $12.7 million for the three months ended April 4, 2025 mainly due to a loss on divestiture of $10.0 million.

Previous wording

The effective tax rates were 140.8% and 5.0% for the three months ended October 3, 2025 and September 27, 2024, respectively.

Current wording

The effective tax rates were 3.9% and 1.4% for the three months ended April 3, 2026 and April 4, 2025, respectively.

Previous wording

For the three months ended October 3, 2025, the difference between the Company’s effective tax rate of 140.8% and the 21% federal statutory rate was primarily due to unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

Current wording

For the three months ended April 3, 2026, the difference between the Company’s effective tax rate of 3.9% and the 21% federal statutory rate was primarily due to lower pre‑tax earnings for the quarter and the tax effects recognized in connection with the sale of our Phoenix, Arizona AAG operations, including Shock Therapy, Upfit UTV, and Geiser businesses.

Previous wording

For the nine months ended October 3, 2025, the difference between the Company’s effective tax rate of (0.6)% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

Current wording

For the three months ended April 4, 2025, the difference between our effective tax rate of 1.4% and the 21% federal statutory rate was due to the impairment impact of the non-deductible goodwill recognized during the same period.

Previous wording

As a result of the factors described above, our net income decreased $5.5 million, or 114.6%, to a net loss of $0.7 million in the three months ended October 3, 2025 from net income of $4.8 million for the three months ended September 27, 2024.

Current wording

As a result of the factors described above, our net loss decreased $244.7 million, or 94.2%, to $15.0 million in the three months ended April 3, 2026 from $259.7 million for the three months ended April 4, 2025.

Previous wording

Specialty Sports Group net sales decreased by $16.8 million, or 11.2%, primarily due to OEMs, distributors, and dealers reducing inventory levels in response to market-wide economic conditions.

Current wording

Specialty Sports Group net sales decreased by $10.5 million, or 8.7%, primarily due to distributors and dealers reducing inventory levels in response to market-wide economic conditions.

Previous wording

Specialty Sports Group adjusted EBITDA decreased by $9.0 million, or 24.7%, primarily due to a decrease in gross profit.

Current wording

Specialty Sports Group adjusted EBITDA decreased by $5.9 million, or 25.2%, primarily due to a decrease in gross profit driven by unfavorable tariff impacts.

Previous wording

As of October 3, 2025, we held $12.7 million of our $65.4 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Current wording

As of April 3, 2026, we held $9.8 million of our $53.9 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Previous wording

In the nine months ended October 3, 2025, net cash provided by operating activities was $42.8 million. Our investment in operating assets and liabilities is mainly a result of an increase in accounts receivable of $30.7 million, a decrease in accrued expenses and other liabilities of $8.5 million, an increase in inventory of $4.9 million, and a decrease in income taxes payable of $4.8 million, partially offset by a decrease in prepaids and other assets of $0.6 million, excluding the impact of foreign currency translation. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in income taxes payable is mainly due to our income tax payments. The decrease in accrued expenses and other liabilities is driven by a reduction in warranty reserve. On a reported currency basis, inventory increased primarily due to planned inventory builds to support anticipated demand, the impact from higher tariffs, and foreign currency translation, partially offset by our efforts to optimize inventory levels.

Current wording

In the three months ended April 3, 2026, net cash used in operating activities was $16.1 million. Our investment in operating assets and liabilities is mainly a result of an increase in accounts receivable of $23.1 million, an increase in inventory of $7.9 million, and a decrease in accrued expenses and other liabilities of $7.0 million, partially offset by a an increase in accounts payable of $2.5 million, excluding the impact of divestiture. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. Inventory increased primarily due to planned inventory builds to support anticipated demand. The decrease in accrued expenses and other liabilities is driven by lower payroll accruals mainly due to timing of payroll and a decrease in headcount. The change in accounts payable reflects the timing of vendor payments.

Previous wording

In the nine months ended September 27, 2024, net cash provided by operating activities was $50.1 million. Our investment in operating assets and liabilities is a result of an increase in inventory of $29.0 million, a decrease in income taxes payable of $25.3 million, and an increase in accounts receivable of $21.8 million, partially offset by an increase in accounts payable of $24.2 million, an increase in accrued expenses and other liabilities of $11.3 million, and a decrease in prepaids and other assets of $7.8 million. The decrease in income taxes payable is mainly due to lower income tax expense and our income tax payments. The increase in inventory is mainly due to timing and some seasonal inventory. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in prepaids and other assets is primarily due to lower chassis deposits as we worked to sell through model year 2024. The increase in accrued expenses and other liabilities is mainly due to additional leases. The change in our accounts payable is driven by timing of inventory purchases and vendor payments.

Current wording

In the three months ended April 4, 2025, net cash provided by operating activities was $0.7 million. Our investment in operating assets and liabilities is a result of a decrease in accrued expenses and other liabilities of $17.2 million, a decrease in accounts payable of $16.9 million, an increase in accounts receivable of $11.3 million, an increase in inventory of $4.9 million, and a decrease in income taxes payable of $1.9 million partially offset by a decrease in prepaids and other assets of $25.7 million. The change in our accounts payable is driven by timing of inventory purchases and vendor payments. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in accrued expenses and other liabilities is mainly due to a decrease in warranty reserve, a decrease in lease liabilities due to lease terminations, and payments for various accruals. The decrease in income taxes payable is mainly due to our income tax payments. The decrease in prepaids and other assets is primarily due to lower chassis deposits driven by working capital optimization efforts.

Previous wording

In the nine months ended October 3, 2025 and September 27, 2024, net cash used in investing activities was $27.2 million and $42.5 million, respectively. Investing activities for the nine months ended October 3, 2025 consisted of $27.2 million of property and equipment additions. Investing activities for the nine months ended September 27, 2024 consisted of $32.1 million of property and equipment additions, $5.3 million of cash consideration for our purchase of other assets, and $5.0 million of cash consideration for our acquisitions.

Current wording

In the three months ended April 3, 2026 and April 4, 2025, net cash used in investing activities was $0.4 million and $7.2 million, respectively. Investing activities for the three months ended April 3, 2026 consisted of $5.4 million of property and equipment additions, partially offset by $5.0 million proceed from a divestiture. Investing activities for the three months ended April 4, 2025 consisted of $7.2 million of property and equipment additions.

Previous wording

In the nine months ended October 3, 2025, net cash used in financing activities was $21.5 million, and consisted of the proceeds from our Credit Agreement revolver of $77.0 million that were used to support our working capital, offset by payments of $79.0 million to reduce the revolver borrowings, $18.2 million repayments on our term loans, and payments of $1.3 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Current wording

In the three months ended April 3, 2026, net cash provided by financing activities was $13.1 million, and consisted of the proceeds from our Credit Agreement revolver of $67.0 million that were used to support our working capital, offset by payments of $41.0 million to reduce the revolver borrowings, $11.7 million repayments on our term loans, and payments of $1.2 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Previous wording

In the nine months ended September 27, 2024, net cash used in financing activities was $1.7 million, and consisted of the proceeds from our Credit Agreement revolver of $169.0 million and draw from the Delayed Draw Term Loan of $200.0 million that were used to support our working capital, offset by payments of $329.0 million to reduce the revolver borrowings, $13.2 million quarterly repayment on our Term A Loan, $25.0 million to repurchase shares of our common stock for retirement, and payments of $2.6 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Current wording

In the three months ended April 4, 2025, net cash provided by financing activities was $3.3 million, and consisted of the proceeds from our Credit Agreement revolver of $37.0 million that were used to support our working capital, offset by payments of $27.0 million to reduce the revolver borrowings, $6.1 million quarterly repayment on our Term A Loan, and payments of $0.6 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Previous wording

The Company may borrow, prepay, and re-borrow principal under the Credit Agreement during its term. Advances under the Credit Agreement can be either Adjusted Term SOFR loans or base rate loans. SOFR rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to Term SOFR for such calculation plus 0.10% plus a margin ranging from 1.00% to 2.25%. Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the lender as its “prime rate”, and (iii) Adjusted Term SOFR rate for a one-month tenor plus 1.00%, subject to the interest rate floors set forth therein, plus a margin ranging from 0.00% to 1.00%. At October 3, 2025, the one-month SOFR and three-month SOFR rates were 4.29% and 4.34%, respectively. At October 3, 2025, our weighted-average interest rate on outstanding borrowing was 6.28%.

Current wording

The Company may borrow, prepay, and re-borrow principal under the Credit Agreement during its term. Advances under the Credit Agreement can be either Adjusted Term SOFR loans or base rate loans. SOFR rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to Term SOFR for such calculation plus 0.10% plus a margin ranging from 1.00% to 2.25%. Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the lender as its “prime rate”, and (iii) Adjusted Term SOFR rate for a one-month tenor plus 1.00%, subject to the interest rate floors set forth therein, plus a margin ranging from 0.00% to 1.00%. At April 3, 2026, the one-month SOFR and three-month SOFR rates were 3.65% and 3.67%, respectively. At April 3, 2026, our weighted-average interest rate on outstanding borrowing was 6.04%.

Previous wording

On November 14, 2023, in connection and concurrently with the closing of the Marucci acquisition, the Company entered into the First Incremental Facility Amendment (the “First Amendment”) amending the Credit Agreement. The Fist Amendment provided the Company with the Incremental Term A Loan in an amount of $400.0 million and the Delayed Draw Term Loan in an amount of $200.0 million, each of which are permitted under the Credit Agreement, subject to satisfaction of certain conditions. The Incremental Term A Loan was fully funded on November 14, 2023 and used to fund a portion of the consideration owed under the Marucci acquisition. The Delayed Draw Term Loan was available to the Company for up to six months commencing on December 6, 2023, until the earlier of (a) May 14, 2024 and (b) the date on which the Delayed Draw Term commitments have been terminated. Each Incremental Term Loan is subject to quarterly amortization payments of principal at a rate of 5.00% per annum. The Incremental Term Loans are in the form of term SOFR loans and base rate loans, at the option of the Company, and have an applicable margin ranging from 0.50% to 1.50% for base rate loans and 1.50% to 2.50% for term SOFR loans, subject to adjustment provisions. Each Incremental Term Loan has a maturity date of April 5, 2027, consistent with the Credit Agreement.

Current wording

On November 14, 2023, in connection and concurrently with the closing of the Marucci acquisition, the Company entered into the First Incremental Facility Amendment (the “First Amendment”) amending the Credit Agreement. The First Amendment provided the Company with the Incremental Term A Loan in an amount of $400.0 million and the Delayed Draw Term Loan in an amount of $200.0 million, each of which are permitted under the Credit Agreement, subject to satisfaction of certain conditions. The Incremental Term A Loan was fully funded on November 14, 2023 and used to fund a portion of the consideration owed under the Marucci acquisition. The Delayed Draw Term Loan was available to the Company for up to six months commencing on December 6, 2023, until the earlier of (a) May 14, 2024 and (b) the date on which the Delayed Draw Term commitments have been terminated. Each Incremental Term Loan is subject to quarterly amortization payments of principal at a rate of 5.00% per annum. The Incremental Term Loans are in the form of term SOFR loans and base rate loans, at the option of the Company, and have an applicable margin ranging from 0.50% to 1.50% for base rate loans and 1.50% to 2.50% for term SOFR loans, subject to adjustment provisions. Each Incremental Term Loan has a maturity date of April 5, 2027, consistent with the Credit Agreement.

Previous wording

On October 24, 2025, the Company entered into the Fifth Amendment to the Credit Agreement and Second Amendment to Guaranty and Security Agreement among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as administrative agent, swingline lender and L/C issuer (the “Agent”), and a group of lenders party thereto. Refer to Note 16. Subsequent Events for further information.

Current wording

On October 24, 2025, the Company entered into the Fifth Amendment among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as administrative agent, swingline lender and L/C issuer, and certain lenders named therein. The Fifth Amendment amends the Credit Agreement, dated as of April 5, 2022, and the Guaranty and Security Agreement, dated as of April 5, 2022, as amended prior to the Fifth Amendment, which secures the obligations under the Credit Agreement in favor of the Agent for the benefit of the lenders and other secured parties. Terms not otherwise defined below will have the meaning as set forth in the Amended Credit Agreement.

Previous wording

The Credit Agreement 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 requires that the Company satisfy customary financial ratios. The Company was in compliance with the covenants as of October 3, 2025.

Current wording

The Amended Credit Agreement 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 requires that the Company satisfy customary financial ratios. The Company was in compliance with the covenants as of April 3, 2026.

Previous wording

Global Trade Actions and Tariffs -New and expanded tariffs announced under the Trump administration and triggered retaliatory actions by certain affected countries, and other foreign governments have introduced additional costs and uncertainty into our supply chain, which may impact our cost structure and working capital needs in the near term. We are evaluating the potential effect on our supply chain and sourcing strategies, and while we expect some volatility in cash flows as we adjust, we believe our existing liquidity and access to the Credit Agreement provide sufficient flexibility to manage these developments. Please read “U.S. policies related to global trade and tariffs could have a material adverse effect on our results of operations” within Item 1A. Risk Factors of this Quarterly Report on Form 10-Q.

Current wording

Global Trade Actions and Tariffs -New and expanded tariffs announced under the Trump administration and triggered retaliatory actions by certain affected countries, and other foreign governments have introduced additional costs and uncertainty into our supply chain, which may impact our cost structure and working capital needs. In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the Trump administration were unlawful, and U.S. Customs and Border Protection has subsequently implemented a process through which eligible importers may apply for refunds of tariffs previously paid. While we are evaluating our eligibility and the potential recoverability and timing of any such refunds, the process is subject to administrative requirements and uncertainty, and any refunds are not assured. We continue to assess the potential effects of these developments on our supply chain and sourcing strategies as well as our future operating results, cash flows, and working capital. Although we may experience volatility in cash flows as trade policies and refund mechanisms evolve, we believe our existing liquidity and access to the Amended Credit Agreement provide sufficient flexibility to manage these developments.