Investor Presentation December 2018 SAFE SAFE HARBOR HARBOR ST - - PowerPoint PPT Presentation

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Investor Presentation December 2018 SAFE SAFE HARBOR HARBOR ST - - PowerPoint PPT Presentation

Investor Presentation December 2018 SAFE SAFE HARBOR HARBOR ST STATE TEME MENT NT This presentation contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and


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Investor Presentation – December 2018

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SAFE SAFE HARBOR HARBOR ST STATE TEME MENT NT

2 This presentation contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and

  • uncertainties. Forward-looking statements generally relate to future events
  • r our 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 the negative of these words

  • r other similar terms or expressions that concern our expectations, strategy,

plans or intentions. These forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, those factors identified in the Company’s prospectus in the sections titled “Risk factors,” “Special note regarding forward-looking statements” and “Management’s discussion and analysis of financial condition and results of operations.” Nothing in this presentation should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved

  • r that any of the contemplated results of such forward-looking statements

will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no duty to update these forward-looking statements.

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MAN MANAGEMENT GEMENT PRE PRESE SENTE NTERS RS

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Dan Robbins

  • Sr. Director, Corporate Marketing & IR

Over 20 years of marketing, brand building, technology, and product experience - 9 years with FOX

Larry Enterline

CEO

Over 40 years in technology businesses - 7 years with FOX

Zvi Glasman

CFO

Over 30 years of experience; 17 years as a CFO - 10 years with FOX

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We develop purpose-built, vehicle-specific, performance defining solutions that enable

  • ur customers’vehicles to:
  • Go Faster
  • Go Farther
  • Ride Safer
  • Last Longer
  • Have Better Control

OUR OUR BUSI USINES NESS

FO FOX X IS FO FOCU CUSED D ON M MAK AKING ITS CU CUSTOMERS RS’ VE VEHICLE CLES PERFO RFORM RM BE BETTER

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ASP ASPIRA IRATIO TIONAL L BRAND BRAND

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Professional Athletes

Demand the best product for a competitive edge

Weekend Warriors & Enthusiasts

Look for the same performance as the professional athletes they admire

Diehard Brand Evangelists

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PE PERFOR RFORMA MANCE NCE DEFINI DEFINING NG PR PRODUC ODUCTS TS

THR THROU OUGH GH IN INNO NOVATIVE TIVE TEC TECHN HNOL OLOG OGIES IES

Rusty Butcher

Harley Ambassador/Flat Tracker

Live Valve Electronic Suspension

Featured on 2019 Ford F-150 Raptor and Polaris RZR XP1000

Aaron Gwin

2011, 2012, 2015, 2016 & 2017 Downhill World Cup Series Champion

Rob MacCachren

2014, 2015, & 2016 BAJA 1000

  • Champion. 2017 Mint 400 Champion.

2018 Baja 500 Champion.

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DIVE DIVERSI RSITY OF TY OF APP APPLI LICA CATI TIONS ONS AND AND MAR MARKE KETS TS

BR BROADENS ADENS OUR OUR POR PORTFOLIO TFOLIO OF OF PR PRODUCTS, ODUCTS, CUST CUSTOMERS, OMERS, AND AND GL GLOB OBAL AL REA REACH CH

7

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FOX’S S CORE CORE CONSUM CONSUMERS ERS

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Opportunity to capture a greater share of the Performance Enthusiast and General Consumer markets

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MAR MARQU QUEE EE CUST CUSTOME OMER R RELA RELATIONSHIP TIONSHIPS S

9

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A A COMP COMPANY ANY OF OF PASS ASSION IONATE E ENT ENTHUSIAS HUSIASTS TS

TECHNICAL MARKETING SPECIALIST El CAJON PRODUCTION DESIGN ENGINEER

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GR GROWTH WTH OPP OPPOR ORTUNI TUNITI TIES ES

CON ONTIN TINUE UE PENETRA PENETRATIO TION N IN IN EX EXISTI ISTING NG VEHI EHICLE LE CATEGORIES TEGORIES

  • Round out our participation across customer

product portfolios

  • Continue to focus on growing categories
  • Innovative new product introductions
  • Capitalize on expanding aftermarket opportunity
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GR GROWTH WTH OPP OPPOR ORTUNI TUNITI TIES ES

EXP XPAN AND BRAN BRAND INTO RELEV RELEVANT ANT PE PERFORMANCE DEFI RFORMANCE DEFINING NING ADJ ADJACEN CENCI CIES ES

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Tuscany Acquisition Closed: 12/01/2017 Race Face/Easton Acquisition Closed: 12/12/2014 Sport Truck USA Acquisition Closed: 3/31/2014

  • LIFT KITS
  • BRAKES
  • WHEELS
  • OTHERS
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GR GROWTH WTH OPP OPPOR ORTUNI TUNITI TIES ES

NEW VEHICLES • NEW CUSTOMERS • EXPANDED GEOGRAPHIES

WHITE SPACE

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FO FOX FACTOR ORY DELIV LIVERED STRON ONG G 20 2017 17 RESUL ULTS

Sales Adjusted Net Income Adjusted EBITDA

Full Year 2017 Financial Highlights

$476M

+18%

$62M

+32%

$94M

+32%

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$307 $367 $403 $476 $355 $462 2014 2015 2016 2017 Q3'17 YTD Q3'18 YTD

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STRON ONG G SALE LES GR GROWT WTH H FUE FUELE LED BY PR PROD ODUC UCT LE LEADERSHI HIP AND ND NEW NEW MA MARKET KETS

$ in millions

Sales Growth – Consolidated 3 Year CAGR of 16% 2017 YoY Growth of 18% Sales Growth – By Major Market 3 Year CAGR (2014-2017) Bike 3-year CAGR of 11% Powered Vehicles 3-year CAGR of 22%

Strong sales growth has often exceeded our long term targets.

2018 YTD +30%

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$128 $155 $176 $230 $171 $249 2014 2015 2016 2017 Q3'17 YTD Q3'18 YTD $179 $212 $227 $246 $184 $213 2014 2015 2016 2017 Q3'17 YTD Q3'18 YTD

SALES SALES BR BREAKDO EAKDOWN WN BY BY MA MAJOR JOR MA MARKET RKET

$ in millions

16 Solid growth in existing premium mountain bike product lines coupled with product line expansion has enabled FOX to exceed our mid to high single digit long term growth target

Sales Growth – Bike 3 Year CAGR of 11% 2017 YoY Growth of 8% Sales Growth –Powered Vehicles 3 Year CAGR of 22% 2017 YoY Growth of 31%

Strong growth in Off-Road capable On-Road markets further strengthened by Off-Road sport / recreational markets and acquisitions has enabled FOX to exceed our low double digit long term growth target

2018 YTD +16% 2018 YTD +46%

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LE LEVER VERGI GING NG ST STRENG RENGTH TH IN IN T THE HE AFT AFTERMARKET ERMARKET TO O DRIVE DRIVE OEM SPE OEM SPEC C GR GROWTH WTH AND AND EXP EXPAND AND CUST CUSTOM OMER B ER BASE ASE

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  • FOX typically enters new markets in the

aftermarket channel to drive end-consumer adoption and brand value which often leads to OEM spec wins

  • Recent acquisitions have been targeted more

towards the aftermarket channel as we expand into, and build up new markets to broaden our customer base

  • Focused on maintaining a healthy balance

between the two channels to sustain long term growth and competitive advantage

  • Fluctuations between quarters and years

based on seasonality and timing of product introductions are typical

YTD 2018 58% 42%

OEM AM

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IMPR IMPROVIN ING G PROFIT OFITABILITY ILITY THR HROU OUGH GH STRATEGI GIC IN INITIA ITIATIV IVES

$ in millions

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Opportunity exists to achieve a 20+% Adjusted EBITDA margin over next few years through continued improvement initiatives Adjusted EBITDA (1)

Initiatives Include:

  • Further optimizing bike production in Taichung,

Taiwan facility

  • Powered vehicle production and supply chain
  • ptimization in North America
  • Other process related efficiency initiatives

including a new ERP system Adjusted EBITDA Growth 3 Year CAGR of 19% 2017 YoY Growth of 32% 2017 Adjusted EBITDA Margin of 19.7% 2018 YTD Growth 35%

(1) See appendix for definition.

$56 $64 $71 $94 $70 $95

2014 2015 2016 2017 Q3'17 YTD Q3'18 YTD

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SOLID SOLID LIQU LIQUIDIT IDITY AND AND CAS CASH H GENE GENERA RATIO TION

Low liquidity ratios provide flexibility on capital allocation Positive cash flow provides additional flexibility

(1) 2018-19 annual capex range is expected to run between 5 - 6% of sales; higher than targeted 3.0% to 4.0% of sales due to near term capacity expansion and strategic initiatives.

0.9 0.8 0.9 1.1 0.7 0.5

  • 0.2

0.4 0.6 0.8 1.0 1.2 2014 2015 2016 2017 Q3'17 YTD Q3'18 YTD Leverage Ratio (ending)

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PR PROFIT OFITABLE ABLE BUSINE USINESS SS MODE MODEL L PR PROVID VIDES ES FUR FURTHE THER R GR GROWTH WTH OPP OPPOR ORTUN TUNITIES ITIES OR OR LEVE LEVERA RAGE GE RED REDUCTIO UCTION

Invest for Growth Solid Cash Generation Other Uses

  • Organic market growth, technology and brand
  • Ongoing Operational and Strategic initiatives
  • M&A screen for possible future acquisitions
  • Positive cash flow enables capital allocation
  • pportunities
  • Debt paydown as appropriate
  • Potential share repurchases depending on

market conditions

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WRAP WRAP UP UP

Aspirational Brand Performance Defining Products Innovative Technologies Diversity of Applications and Markets A Company of Passionate Enthusiasts Organic and Adjacent Growth Opportunities Proven Track Record of Financial Success

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SUS SUSTAIN AINAB ABLE LE COMPE COMPETI TITI TIVE VE AD ADVANT ANTAGE GE TO EN O ENAB ABLE FUT LE FUTURE GR URE GROWTH WTH

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Q&A Q&A

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APPENDIX APPENDIX

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ADJUSTE ADJUSTED D EBI EBITD TDA A REC RECONC ONCILIA ILIATI TION ON

ADJUSTED EBITDA RECONCILIATION ($ in Millions) 2014 2015 2016 2017 Q3'17 Q3'18 Net Income $27.7 $25.0 $35.7 $43.2 $40.3 $65.0 Provision for Income Taxes 6.6 9.3 7.4 21.1 8.7 3.9 Depreciation & Amortization 9.7 13.1 8.8 9.9 7.1 10.5 Stock-Based Compensation 4.0 4.9 6.2 8.7 6.6 5.6 2.9 6.9 5.9 1.4 1.4 - Patent Litigation Related Expenses

  • 2.7

4.7 3.2 5.9 Tax reform implementation costs (2)

  • 0.3

Other Acquisition and Integration Related Expenses (3) 3.6 3.0 1.0 1.9 0.8 0.8 Offering Expense (4) 0.5 0.2 0.6 0.1 0.1 - Costs Associated with tax Benefit 0.2

  • Other Expense, Net

0.3 1.1 2.5 2.8 2.0 2.8 Adjusted EBITDA $55.5 $63.5 $70.8 $93.8 $70.2 $94.8 Divided by Sales $307.0 $366.8 $403.1 $475.6 $354.5 $462.4 Adjusted EBITDA margin 18.1% 17.3% 17.6% 19.7% 19.8% 20.5%

(4) Represents costs and expenses related to the secondary offerings of common stock completed in FY 17.

Fiscal Year Year to Date Fair Value Adjustment of Contingent Consideration and Acquisition Related Compensation (1)

(1) Represents $1.6M of the acquisitions’ purchase price classified as compensation expense for Q3 FY 17 offset by $0.2M related to the periodic revaluation of the Company’s contingent consideration associated with the acquisition of Sport Truck based on actual and project performance. (2) Represents costs and expenses of $0.3M incurred in connection with the Company’s implementation of tax reform legislation and related tax restructuring initiative in Q3 FY 18. (3) Represents $0.8M for Q3 FY 17 and Q3 FY 18, respectively, of other acquisition related costs and expenses incurred to integrate acquired entities into the Company’s operations.