FOX FACTORY HOLDING CORP

Previous 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;

Current wording

•changes in general economic conditions, including, among others, market and macro-economic disruptions resulting from escalating tensions between China and Taiwan, the continuing conflicts and instability in the Middle East, 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 ability to execute our cost optimization efforts and identify and capitalize on other strategic initiatives, including possible divestitures, sales, or related transactions involving one or more of our businesses or assets and any other actions we take related to our strategic review of our portfolio;

Current wording

•our ability to execute our cost optimization efforts and identify and capitalize on other strategic initiatives, which has included and may include possible divestitures, sales, or related transactions involving one or more of our businesses or assets and any other actions we take related to our strategic review of our portfolio;

Previous wording

Total net sales for the three months ended July 3, 2026 decreased $16.8 million, or 4.5%, compared to the three months ended July 4, 2025. The decrease in net sales is driven by OEMs, distributors and dealers reducing inventory levels in response to market-wide economic conditions and lost revenues from divested businesses, offset by strengthening demand across powersports and AAG products.

Current wording

Total net sales for the three months ended October 2, 2026 decreased $38.0 million, or 10.1%, compared to the three months ended October 3, 2025. The decrease in net sales is driven by limited chassis availability for our upfit businesses, macroeconomic conditions impacting dealers and consumers, order timing, and channel destocking in response to market-wide economic conditions, and lost revenues from divested businesses, partially offset by strengthening demand across powersports products.

Previous wording

Cost of sales for the three months ended July 3, 2026 decreased $9.5 million, or 3.7%, compared to the three months ended July 4, 2025. The decrease in cost of sales is mainly due to lower sales and our optimization efforts. Our gross margin decreased 60 basis points to 30.6% for the three months ended July 3, 2026, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix.

Current wording

Cost of sales for the three months ended October 2, 2026 decreased $30.1 million, or 11.5%, compared to the three months ended October 3, 2025. The decrease in cost of sales is mainly due to lower sales and our optimization efforts. Our gross margin increased 110 basis points to 31.5% for the three months ended October 2, 2026, as compared to the same prior fiscal year period, primarily due to tariff refunds, partially offset by shifts in our product line mix and higher external input costs, including freight, commodities and fuel.

Previous wording

Total operating expenses for the three months ended July 3, 2026 were $92.2 million, compared to $98.5 million for the three months ended July 4, 2025. General and administrative expenses decreased $4.8 million and sales and marketing expenses decreased by $1.8 million mainly due to our strategic optimization initiatives.

Current wording

Total operating expenses for the three months ended October 2, 2026 were $205.2 million, compared to $99.4 million for the three months ended October 3, 2025. During the three months ended October 2, 2026, we completed the sales of Marucci and Outside Van, and recognized $121.3 million in losses on divestitures. General and administrative expenses decreased $5.5 million and sales and marketing expenses decreased by $5.8 million mainly due to our optimization initiative, including lower general and administrative expense and reduced discretionary spending.

Previous wording

As a result of the factors discussed above, income from operations for the six months ended July 3, 2026 increased $255.6 million, or 110.1%, compared to loss from operations for the six months ended July 4, 2025.

Current wording

As a result of the factors discussed above, income from operations for the three months ended October 2, 2026 decreased $113.7 million, to a loss of $98.6 million, compared to income from operations of $15.1 million for the three months ended October 3, 2025.

Previous wording

Interest and other expense, net for the three months ended July 3, 2026 decreased by $1.8 million to $11.2 million, compared to $13.0 million for the three months ended July 4, 2025 driven by lower interest rates.

Current wording

Interest and other expense, net for the three months ended October 2, 2026 decreased by $3.9 million to $9.6 million, compared to $13.5 million for the three months ended October 3, 2025 driven by lower outstanding debt.

Previous wording

The effective tax rates were 36.0% and 50.9% for the three months ended July 3, 2026 and July 4, 2025, respectively.

Current wording

The effective tax rates were (1.4)% and 140.8% for the three months ended October 2, 2026 and October 3, 2025, respectively.

Previous wording

For the three months ended July 3, 2026, the difference between the Company’s effective tax rate of 36.0% 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 October 2, 2026, the difference between the Company’s effective tax rate of (1.4)% 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 divestiture transactions recorded during the period.

Previous wording

For the three months ended July 4, 2025, the difference between our effective tax rate of 50.9% and the 21% federal statutory rate was due to the unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

Current wording

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

Previous wording

As a result of the factors described above, our net income increased $1.3 million, or 48.1%, to $4.0 million for the three months ended July 3, 2026 from $2.7 million for the three months ended July 4, 2025.

Current wording

As a result of the factors described above, our net loss increased $109.0 million, to $109.7 million for the three months ended October 2, 2026 from $0.7 million for the three months ended October 3, 2025.

Previous wording

Powered Vehicles Group net sales increased by $0.7 million, or 0.6%, mainly due to strengthening demand in powersports.

Current wording

Powered Vehicles Group net sales increased by $5.1 million, or 4.1%, mainly due to strengthening demand in powersports.

Previous wording

Powered Vehicles Group adjusted EBITDA decreased by $0.6 million, or 3.7%, primarily due to lower gross profit driven by shifts in product line mix.

Current wording

Powered Vehicles Group adjusted EBITDA decreased by $3.9 million, or 20.6%, primarily due to lower gross profit, partially offset by decreases in operating expenses.

Previous wording

Six months ended July 3, 2026 compared to six months ended July 4, 2025

Current wording

Nine months ended October 2, 2026 compared to nine months ended October 3, 2025

Previous wording

Cost of sales for the six months ended July 3, 2026 increased $7.5 million, or 1.5%, compared to the six months ended July 4, 2025. The increase in cost of sales is primarily due to impacts of tariffs. Our gross margin decreased by 140 basis points to 29.7% for the six months ended July 3, 2026, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix and the impact of tariffs.

Current wording

Cost of sales for the nine months ended October 2, 2026 decreased $22.6 million, or 3.0%, compared to the nine months ended October 3, 2025. The decrease in cost of sales is primarily due to lower sales and our optimization efforts. Our gross margin decreased by 50 basis points to 30.3% for the nine months ended October 2, 2026, as compared to the same prior fiscal year period, primarily due to higher external input costs, including freight, commodities and fuel, and shifts in our product line mix, partially offset by cost savings realization and net tariff impact.

Previous wording

Total operating expenses for the six months ended July 3, 2026 were $192.6 million, compared to $458.7 million for the six months ended July 4, 2025. During the six months ended July 4, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S. tariff policies, new and expanded tariffs enacted by the current presidential administration, and resulting sustained decline in our stock price. General and administrative and sales and marketing expenses decreased $3.6 million and $1.3 million, respectively, primarily on our strategic optimization initiatives. Research and development increased $2.2 million, due to our investments to support future growth and product innovation.

Current wording

Total operating expenses for the nine months ended October 2, 2026 were $408.4 million, compared to $558.1 million for the nine months ended October 3, 2025. During the nine months ended October 2, 2026, we recognized losses on divestitures of $131.9 million. During the nine months ended October 3, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S. tariff policies, new and expanded tariffs enacted by the current presidential administration, and resulting sustained decline in our stock price. General and administrative, and sales and marketing expenses decreased $9.0 million and $7.1 million, respectively, primarily on our strategic optimization initiatives.

Previous wording

As a result of the factors discussed above, income from operations for the three months ended July 3, 2026 decreased $1.0 million, or 5.4%, compared to loss from operations for the three months ended July 4, 2025.

Current wording

As a result of the factors discussed above, loss from operations for the nine months ended October 2, 2026 decreased $131.2 million, or 60.5%, compared to loss from operations for the nine months ended October 3, 2025.

Previous wording

Interest and other expense, net for the six months ended July 3, 2026 increased by $7.0 million to $32.8 million, compared to $25.8 million for the six months ended July 4, 2025, mainly due to a loss on divestiture of $10.6 million, partially offset by lower interest rates.

Current wording

Interest and other expense, net for the nine months ended October 2, 2026 decreased by $7.5 million to $31.7 million, compared to $39.2 million for the nine months ended October 3, 2025, mainly due to lower outstanding debt.

Previous wording

The effective tax rates were (17.8)% and 0.3% for the six months ended July 3, 2026 and July 4, 2025, respectively.

Current wording

The effective tax rates were (2.7)% and (0.6)% for the nine months ended October 2, 2026 and October 3, 2025, respectively.

Previous wording

For the six months ended July 3, 2026, the difference between the Company’s effective tax rate of (17.8)% and the 21% federal statutory rate was due to the lower pre‑tax earnings for the quarter and the tax effects of discrete items recognized in connection with the sale of the Arizona entities.

Current wording

For the nine months ended October 2, 2026, the difference between the Company’s effective tax rate of (2.7)% and the 21% federal statutory rate was primarily due to lower pre‑tax earnings and the tax effects of discrete items recognized in connection with the divestiture of entities.

Previous wording

For the six months ended July 4, 2025, the difference between our effective tax rate of 0.3% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

Current wording

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

Previous wording

As a result of the factors described above, our net loss decreased $246.0 million to a net loss of $11.0 million for the six months ended July 3, 2026 from a net loss of $257.0 million for the six months ended July 4, 2025.

Current wording

As a result of the factors described above, our net loss decreased $137.0 million to $120.7 million for the nine months ended October 2, 2026 from $257.7 million for the nine months ended October 3, 2025.

Previous wording

Powered Vehicles Group net sales increased by $22.0 million, or 9.0%, primarily due to strengthening demand in powersports.

Current wording

Powered Vehicles Group net sales increased by $27.1 million, or 7.3%, primarily due to strengthening demand in powersports.

Previous wording

Specialty Sports Group net sales decreased by $23.4 million, or 9.1%, mainly attributable to OEMs, distributors and dealers reducing inventory levels in response to market-wide economic conditions.

Current wording

Specialty Sports Group net sales decreased by $42.4 million, or 10.8%, mainly attributable to order timing and channel destocking in response to market-wide economic conditions.

Previous wording

As of July 3, 2026, we held $9.9 million of our $61.3 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Current wording

As of October 2, 2026, we held $8.3 million of our $45.4 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Previous wording

In the six months ended July 3, 2026, net cash provided by operating activities was $13.2 million. Our investment in operating assets and liabilities is mainly a result of an increase in inventory of $17.4 million, an increase in accounts receivable of $13.0 million, a decrease in accounts payable of $5.9 million, and a decrease in accrued expenses and other liabilities of $4.3 million, partially offset by a decrease in prepaids and other assets of $3.9 million, net of the impact of the divestiture. Inventory increased primarily due to planned inventory builds to support anticipated demand. The change in our accounts receivable reflects the timing of customer collections. The change in accounts payable reflects the timing of vendor payments. The decrease in accrued expenses and other liabilities is driven by amortization of lease liabilities. Prepaids and other assets decreased primarily due to lower prepaid insurance.

Current wording

In the nine months ended October 2, 2026, net cash provided by operating activities was $74.7 million. Our investment in operating assets and liabilities is mainly a result of an increase in inventory of $38.4 million, an increase in accounts receivable of $9.5 million, a decrease in accounts payable of $8.3 million, and a decrease in accrued expenses and other liabilities of $7.4 million, partially offset by a decrease in prepaids and other assets of $52.3 million, net of the impact of the divestitures. Inventory increased primarily due to planned inventory builds to support anticipated demand. The change in our accounts receivable reflects the timing of customer collections. The change in accounts payable reflects the timing of vendor payments. The decrease in accrued expenses and other liabilities is driven by amortization of lease liabilities. Prepaids and other assets decreased primarily due to lower prepaid chassis.

Previous wording

In the six months ended July 4, 2025, net cash provided by operating activities was $37.5 million. Our investment in operating assets and liabilities is a result of an increase in accounts receivable of $15.4 million, a decrease in accounts payable of $11.1 million, a decrease in accrued expenses and other liabilities of $8.6 million, a decrease in income taxes payable of $4.0 million, and an increase in inventory of $2.1 million, partially offset by a decrease in prepaids and other assets of $19.8 million. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The change in our accounts payable is driven by timing of inventory purchases and vendor payments. 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. 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. The decrease in prepaids and other assets is primarily due to lower chassis deposits driven by working capital optimization efforts.

Current 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 a result of an increase in accounts receivable of $30.7 million, a decrease in accrued expenses and other liabilities of $16.8 million, an increase in inventory of $4.9 million, a decrease in income taxes payable of $4.8 million, partially offset by an increase in accounts payable of $8.3 million and a decrease in prepaids and other assets of $3.9 million. 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 driven by a reduction 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. 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. The change in our accounts payable is driven by timing of inventory purchases and vendor 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 six months ended July 3, 2026 and July 4, 2025, net cash provided by investing activities was $0.7 million and net cash used by investing activities was $19.4 million, respectively. Investing activities for the six months ended July 3, 2026 consisted of $7.4 million proceeds from a divestiture and $2.8 million proceeds from sales of assets, partially offset by $9.5 million of property and equipment additions. Investing activities for the six months ended July 4, 2025 consisted of $19.6 million of property and equipment additions and $0.2 million proceeds from sales of assets.

Current wording

In the nine months ended October 2, 2026 and October 3, 2025, net cash provided by investing activities was $193.9 million and net cash used by investing activities was $27.2 million, respectively. Investing activities for the nine months ended October 2, 2026 consisted of $204.9 million net proceeds from the divestitures and $3.1 million proceeds from sales of assets, partially offset by $14.1 million of property and equipment additions. Investing activities for the nine months ended October 3, 2025 consisted of $28.0 million of property and equipment additions and $0.8 million proceeds from sales of assets.

Previous wording

In the six months ended July 3, 2026, net cash used in financing activities was $9.5 million, and consisted of $18.4 million repayments on our term loan, payments of $94.0 million to reduce the revolver borrowings, offset by proceeds from our revolver of $107.0 million that were used to support our working capital, $2.4 million debt modification costs, and payments of $1.7 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Current wording

In the nine months ended October 2, 2026, net cash used in financing activities was $280.2 million, and consisted of $231.2 million repayments on our term loan, payments of $152.0 million to reduce the revolver borrowings, offset by proceeds from our revolver of $107.0 million that were used to support our working capital, $2.4 million debt modification costs, and payments of $1.6 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Previous wording

In the six months ended July 4, 2025, net cash used in financing activities was $9.4 million, and consisted of payments of $53.0 million to reduce the revolver borrowings, offset by proceeds from our Credit Agreement revolver of $57.0 million that were used to support our working capital, $12.1 million quarterly repayment 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 nine months ended October 3, 2025, net cash used in financing activities was $21.5 million, and consisted of payments of $79.0 million to reduce the revolver borrowings, partially offset by proceeds from the revolver of $77.0 million that were used to support our working capital, $18.2 million quarterly 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.

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 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 from and including 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. On May 13, 2024, the Company borrowed the full amount of $200.0 million of the Delayed Draw Term Loan.

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 from and including December 6, 2023, until the earlier of (i) May 14, 2024 and (ii) 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. On May 13, 2024, the Company borrowed the full amount of $200.0 million of the Delayed Draw Term Loan.

Previous wording

On October 24, 2025, the Company entered into the Fifth Amendment to the Credit Agreement, which amended the Credit Agreement, dated as of April 5, 2022, as previously amended.

Current wording

On October 24, 2025, the Company entered into the Fifth Amendment to the Credit Agreement dated as of April 5, 2022, as previously amended.

Previous wording

At July 3, 2026, the one-month SOFR and three-month SOFR rates were 3.63% and 3.63%, respectively. At July 3, 2026, our weighted-average interest rate on outstanding borrowing was 6.05%.

Current wording

At October 2, 2026, the one-month SOFR and three-month SOFR rates were 3.76% and 3.69%, respectively. At October 2, 2026, our weighted-average interest rate on outstanding borrowing was 5.87%.

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 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. In July 2026, the administration announced new tariffs ranging from 10% to 12.5 % for over sixty countries, citing that the tariffs target countries with forced labor practices. Some countries hit by the new tariffs have objected to unfounded labor claims and the enforceability of the tariffs is still to be determined. 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.

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. In July 2026, the administration announced new tariffs ranging from 10% to 12.5 % for over sixty countries, citing that the tariffs target countries with forced labor practices. Some countries hit by the new tariffs have objected to labor claims and the ultimate outcome of any legal challenges to the tariffs is still to be determined. 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 Sixth Amended Credit Agreement provide sufficient flexibility to manage these developments.