Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 28, 2019 | Jul. 28, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36040 | |
Entity Registrant Name | Fox Factory Holding Corp. | |
Entity Central Index Key | 0001424929 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --01-03 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1647258 | |
Entity Address, Address Line One | 6634 Hwy 53 | |
Entity Address, City or Town | Braselton | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30517 | |
City Area Code | 831 | |
Local Phone Number | 274-6500 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | FOXF | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,425,119 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 39,021 | $ 27,958 |
Accounts receivable (net of allowances of $404 and $600 at June 28, 2019 and December 28, 2018, respectively) | 95,738 | 78,882 |
Inventory | 136,005 | 107,140 |
Prepaids and other current assets | 18,742 | 17,967 |
Total current assets | 289,506 | 231,947 |
Property, plant and equipment, net | 95,097 | 64,788 |
Deferred tax assets | 16,083 | 15,328 |
Goodwill | 91,661 | 88,850 |
Intangibles, net | 86,924 | 83,974 |
Other assets | 502 | 367 |
Total assets | 579,773 | 485,254 |
Current liabilities: | ||
Accounts payable | 70,602 | 55,086 |
Accrued expenses | 34,302 | 33,607 |
Reserve for uncertain tax positions | 1,120 | 1,169 |
Current portion of long-term debt | 0 | 6,923 |
Total current liabilities | 106,024 | 96,785 |
Line of credit | 77,553 | 0 |
Long-term debt, less current portion | 0 | 52,503 |
Other liabilities | 11,994 | 479 |
Total liabilities | 195,571 | 149,767 |
Commitments and contingencies (Refer to Note 8 - Commitments and Contingencies) | ||
Redeemable non-controlling interest | 15,022 | 14,282 |
Stockholders’ equity | ||
Preferred stock, $0.001 par value — 10,000 authorized and no shares issued or outstanding as of June 28, 2019 and December 28, 2018 | 0 | 0 |
Common stock, $0.001 par value — 90,000 authorized; 39,274 shares issued and 38,384 outstanding as of June 28, 2019; 38,881 shares issued and 37,991 outstanding as of December 28, 2018 | 38 | 38 |
Additional paid-in capital | 123,043 | 116,019 |
Treasury stock, at cost; 890 common shares as of June 28, 2019 and December 28, 2018 | (13,754) | (13,754) |
Accumulated other comprehensive loss | (629) | (784) |
Retained earnings | 260,482 | 219,686 |
Total stockholders’ equity | 369,180 | 321,205 |
Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ 579,773 | $ 485,254 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 404 | $ 600 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 39,274,000 | 38,881,000 |
Common stock, shares outstanding | 38,384,000 | 37,991,000 |
Treasury stock, shares | 890 | 890 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Sales | $ 192,122 | $ 156,825 | $ 353,822 | $ 286,617 |
Cost of sales | 129,902 | 104,412 | 240,545 | 192,561 |
Gross profit | 62,220 | 52,413 | 113,277 | 94,056 |
Operating expenses: | ||||
Sales and marketing | 11,264 | 9,802 | 20,526 | 18,535 |
Research and development | 7,763 | 6,058 | 15,066 | 12,254 |
General and administrative | 12,158 | 10,779 | 23,338 | 19,973 |
Amortization of purchased intangibles | 1,564 | 1,499 | 3,057 | 3,068 |
Total operating expenses | 32,749 | 28,138 | 61,987 | 53,830 |
Income from operations | 29,471 | 24,275 | 51,290 | 40,226 |
Other expense, net: | ||||
Interest expense | 1,005 | 832 | 1,834 | 1,631 |
Other expense (income) | 582 | (81) | 569 | 200 |
Other expense, net | 1,587 | 751 | 2,403 | 1,831 |
Income before income taxes | 27,884 | 23,524 | 48,887 | 38,395 |
Provision for (benefit of) income taxes | 4,522 | 4,711 | 7,123 | (1,868) |
Net income | 23,362 | 18,813 | 41,764 | 40,263 |
Less: net income attributable to non-controlling interest | 441 | 444 | 740 | 670 |
Net income attributable to FOX stockholders | $ 22,921 | $ 18,369 | $ 41,024 | $ 39,593 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.60 | $ 0.49 | $ 1.07 | $ 1.05 |
Diluted (in dollars per share) | $ 0.59 | $ 0.47 | $ 1.05 | $ 1.02 |
Weighted average shares used to compute earnings per share: | ||||
Basic (in shares) | 38,286 | 37,722 | 38,164 | 37,674 |
Diluted (in shares) | 39,181 | 38,856 | 39,140 | 38,846 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 23,362 | $ 18,813 | $ 41,764 | $ 40,263 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax effects | 314 | (1,328) | 155 | (853) |
Other comprehensive income (loss) | 314 | (1,328) | 155 | (853) |
Comprehensive income | 23,676 | 17,485 | 41,919 | 39,410 |
Less: comprehensive income attributable to non-controlling interest | 441 | 444 | 740 | 670 |
Comprehensive income attributable to FOX stockholders | $ 23,235 | $ 17,041 | $ 41,179 | $ 38,740 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity and Redeemable Non-controlling Interest - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury | Additional paid-in capital | Accumulated other comprehensive (loss) income | Retained earnings |
Beginning Balance (in shares) at Dec. 29, 2017 | 38,497 | 890 | ||||
Beginning Balance at Dec. 29, 2017 | $ 234,835 | $ 38 | $ (13,754) | $ 112,793 | $ (168) | $ 135,926 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 49 | |||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (1,375) | (1,375) | ||||
Redeemable non-controlling interest | (1,011) | (1,011) | ||||
Stock-based compensation expense | 2,046 | 2,046 | ||||
Foreign currency translation adjustment | 475 | 475 | ||||
Net Income | 21,224 | 21,224 | ||||
Ending Balance (in shares) at Mar. 30, 2018 | 38,546 | 890 | ||||
Ending Balance at Mar. 30, 2018 | 255,913 | $ 38 | $ (13,754) | 113,464 | 307 | 155,858 |
Beginning Balance at Dec. 29, 2017 | 12,955 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Redeemable non-controlling interest | 1,011 | |||||
Net Income | 226 | |||||
Ending Balance at Mar. 30, 2018 | 14,192 | |||||
Beginning Balance (in shares) at Dec. 29, 2017 | 38,497 | 890 | ||||
Beginning Balance at Dec. 29, 2017 | 234,835 | $ 38 | $ (13,754) | 112,793 | (168) | 135,926 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Foreign currency translation adjustment | (853) | |||||
Net Income | 39,593 | |||||
Ending Balance (in shares) at Jun. 29, 2018 | 38,649 | 890 | ||||
Ending Balance at Jun. 29, 2018 | 272,530 | $ 38 | $ (13,754) | 112,592 | (1,021) | 174,675 |
Beginning Balance at Dec. 29, 2017 | 12,955 | |||||
Ending Balance at Jun. 29, 2018 | 14,188 | |||||
Beginning Balance (in shares) at Mar. 30, 2018 | 38,546 | 890 | ||||
Beginning Balance at Mar. 30, 2018 | 255,913 | $ 38 | $ (13,754) | 113,464 | 307 | 155,858 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 103 | |||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (2,657) | (2,657) | ||||
Redeemable non-controlling interest | 448 | 448 | ||||
Stock-based compensation expense | 1,785 | 1,785 | ||||
Foreign currency translation adjustment | (1,328) | (1,328) | ||||
Net Income | 18,369 | 18,369 | ||||
Ending Balance (in shares) at Jun. 29, 2018 | 38,649 | 890 | ||||
Ending Balance at Jun. 29, 2018 | 272,530 | $ 38 | $ (13,754) | 112,592 | (1,021) | 174,675 |
Beginning Balance at Mar. 30, 2018 | 14,192 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Redeemable non-controlling interest | (448) | |||||
Net Income | 444 | |||||
Ending Balance at Jun. 29, 2018 | $ 14,188 | |||||
Beginning Balance (in shares) at Dec. 28, 2018 | 37,991 | 38,881 | 890 | |||
Beginning Balance at Dec. 28, 2018 | $ 321,205 | $ 38 | $ (13,754) | 116,019 | (784) | 219,686 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 180 | |||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (1,229) | (1,229) | ||||
Stock-based compensation expense | 1,729 | 1,729 | ||||
Foreign currency translation adjustment | (159) | (159) | ||||
Net Income | 18,103 | 18,103 | ||||
Ending Balance (in shares) at Mar. 29, 2019 | 39,061 | 890 | ||||
Ending Balance at Mar. 29, 2019 | 339,421 | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 |
Beginning Balance at Dec. 28, 2018 | 14,282 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net Income | 299 | |||||
Ending Balance at Mar. 29, 2019 | $ 14,581 | |||||
Beginning Balance (in shares) at Dec. 28, 2018 | 37,991 | 38,881 | 890 | |||
Beginning Balance at Dec. 28, 2018 | $ 321,205 | $ 38 | $ (13,754) | 116,019 | (784) | 219,686 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Foreign currency translation adjustment | 155 | |||||
Net Income | $ 41,024 | |||||
Ending Balance (in shares) at Jun. 28, 2019 | 38,384 | 39,274 | 890 | |||
Ending Balance at Jun. 28, 2019 | $ 369,180 | $ 38 | $ (13,754) | 123,043 | (629) | 260,482 |
Beginning Balance at Dec. 28, 2018 | 14,282 | |||||
Ending Balance at Jun. 28, 2019 | 15,022 | |||||
Beginning Balance (in shares) at Mar. 29, 2019 | 39,061 | 890 | ||||
Beginning Balance at Mar. 29, 2019 | 339,421 | $ 38 | $ (13,754) | 116,519 | (943) | 237,561 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding (in shares) | 115 | |||||
Issuance of common stock under equity compensation plans, net of shares repurchased for income tax withholding | (2,264) | (2,264) | ||||
Issuance of stock for business acquisition (in shares) | 98 | |||||
Issuance of stock for business acquisition | 7,167 | 7,167 | ||||
Stock-based compensation expense | 1,621 | 1,621 | ||||
Foreign currency translation adjustment | 314 | 314 | ||||
Net Income | $ 22,921 | 22,921 | ||||
Ending Balance (in shares) at Jun. 28, 2019 | 38,384 | 39,274 | 890 | |||
Ending Balance at Jun. 28, 2019 | $ 369,180 | $ 38 | $ (13,754) | $ 123,043 | $ (629) | $ 260,482 |
Beginning Balance at Mar. 29, 2019 | 14,581 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net Income | 441 | |||||
Ending Balance at Jun. 28, 2019 | $ 15,022 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 28, 2019 | Jun. 29, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ 41,764,000 | $ 40,263,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,304,000 | 7,144,000 |
Stock-based compensation | 3,350,000 | 3,831,000 |
Deferred taxes and uncertain tax positions | (816,000) | (12,269,000) |
Loss on extinguishment of debt | 516,000 | 0 |
Changes in operating assets and liabilities, net of effects of acquisition of business: | ||
Accounts receivable | (17,115,000) | (17,762,000) |
Inventory | (24,977,000) | (10,945,000) |
Income taxes | (3,411,000) | (1,037,000) |
Prepaids and other assets | (379,000) | 4,217,000 |
Accounts payable | 15,671,000 | 18,373,000 |
Accrued expenses and other liabilities | (2,483,000) | 1,040,000 |
Net cash provided by operating activities | 20,424,000 | 32,855,000 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (16,377,000) | (9,046,000) |
Acquisition of businesses | (6,804,000) | 0 |
Net cash used in investing activities | (23,181,000) | (9,046,000) |
FINANCING ACTIVITIES: | ||
Proceeds from line of credit | 45,000,000 | 0 |
Payments on line of credit | (25,000,000) | (30,476,000) |
Repayment of debt | (2,813,000) | (2,344,000) |
Repurchases from stock compensation program, net | (3,494,000) | (4,033,000) |
Net cash provided by (used in) financing activities | 13,693,000 | (36,853,000) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 127,000 | (217,000) |
CHANGE IN CASH AND CASH EQUIVALENTS | 11,063,000 | (13,261,000) |
CASH AND CASH EQUIVALENTS—Beginning of period | 27,958,000 | 35,947,000 |
CASH AND CASH EQUIVALENTS—End of period | 39,021,000 | 22,686,000 |
Cash paid during the period for: | ||
Income taxes | 14,847,000 | 11,681,000 |
Cash paid for interest, net of capitalized interest | 1,442,000 | 1,627,000 |
Cash paid for amounts included in the measurement of lease liabilities | 2,929,000 | 0 |
Non-cash operating activities: | ||
Right-of-use assets obtained in exchange for lease obligations | 6,131,000 | 0 |
Acquisition of business in exchange for equity | $ 7,167,000 | $ 0 |
Description of the Business, Ba
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies | Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies - Fox Factory Holding Corp. (the "Company") designs and manufactures performance-defining products primarily for bicycles ("bikes"), side-by-side vehicles ("Side-by-Sides"), on-road and off-road vehicles and trucks, all-terrain vehicles or ATVs, snowmobiles, specialty vehicles and applications, motorcycles and commercial trucks. The Company is a direct supplier to leading power vehicle original equipment manufacturers ("OEMs") and provides aftermarket products to retailers, dealerships, and distributors. Additionally, the Company supplies top bicycle OEMs and their current contract manufacturers, and provides aftermarket products to retailers and distributors. Throughout this Form 10-Q, unless stated otherwise or as the context otherwise requires, the "Company," "FOX," "Fox Factory," "we," "us," "our," and "ours" refer to Fox Factory Holding Corp. and its operating subsidiaries on a consolidated basis. Basis of Presentation - The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America ("U.S." or "United States") and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 28, 2018 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 26, 2019 . In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. The Company operates on a 52-53 week fiscal calendar. For 2019 and 2018 , the Company's fiscal year will end or has ended on January 3, 2020 and December 28, 2018 , respectively. The twelve month periods ended January 3, 2020 and December 28, 2018 , will include or have included 53 and 52 weeks, respectively. The three and six month periods ended June 28, 2019 and June 29, 2018 each included 13 weeks and 26 weeks, respectively. P rinciples of Consolidation - These condensed consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Summary of Significant Accounting Policies - Beginning the first quarter of fiscal year 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02, Leases ("ASU 2016-02"). There have been no other changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 28, 2018 , as filed with the SEC on February 26, 2019 , that have had a material impact on our condensed consolidated financial statements and related notes. Revenue Recognition - Revenues are generated from the sale of performance-defining products and systems to customers worldwide. The Company’s performance-defining products and systems are solutions that improve performance of powered vehicles and bikes. Powered vehicles include Side-by-Sides, on-road and off-road vehicles and trucks, all-terrain vehicles or ATVs, snowmobiles, specialty vehicles and applications, motorcycles and commercial trucks. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer, generally at the time of shipment. Contracts are generally in the form of purchase orders and are governed by standard terms and conditions. For larger OEMs, the Company may also enter into master agreements. Provisions for discounts, rebates, sales incentives, returns, and other adjustments are generally provided for in the period the related sales are recorded, based on management’s assessment of historical trends and projection of future results. Certain pricing provisions that provide the customer with future discounts are considered a material right. Such material rights result in the deferral of revenue that are subsequently recognized in the period that the customer utilizes the future discount. Measuring the material rights requires judgments including forecasts of future sales and product mix. At June 28, 2019 , the balance of deferred revenue related to pricing provisions was $162 . These amounts are expected to be recognized over the next 12 months. Revenues exclude sales tax. Segments - The Company has determined that it has a single operating and reportable segment. The Company considers operating segments to be components of the Company for which separate financial information is available, that is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Use of Estimates - The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. Certain Significant Risks and Uncertainties - The Company is subject to those risks common in manufacturing-driven markets, including, but not limited to, competitive forces, dependence on key personnel, customer demand for its products, the successful protection of its proprietary technologies, compliance with and the impact of government regulations including tariffs, and the possibility of not being able to obtain additional financing when needed. Fair Value Measurements and Financial Instruments - The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements using a three tiered approach and fair value measurement be classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The carrying amount of the Company's financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. The carrying amount of the Company's Credit Facility (as defined below) approximates its fair value, as the interest rate is set based on the movement of the underlying market rates. Recent Accounting Pronouncements - In May 2014, the FASB and International Accounting Standards Board issued their converged standard on revenue recognition, ASU 2014-09, which was updated in December 2016 with the release of ASU 2016-20. This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2018, using the modified retrospective implementation method. The Company applied the guidance to all open contracts at the date of initial application. The primary impact of adopting the standard resulted from certain pricing provisions within contracts that provide the customer with a material right. Under the new standard, revenue attributed to such pricing provisions is deferred and recognized when the right is exercised by the customer. During Q1 2018, the Company recorded a cumulative effect adjustment of $368 gross and $281 net of taxes, to the opening balance of retained earnings to reflect the cumulative effect of the adoption of the standard. In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes the existing guidance for lease accounting. To meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases, this ASU requires lessees to recognize most leases on the balance sheet as right-of-use assets and lease liabilities. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2019, with a cumulative effect adjustment to the opening balance of retained earnings at December 28, 2018 with no restatement of comparative periods’ financial information ("current-period adjustment method"). Additionally, the Company adopted this guidance using practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all of its leases and elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. The Company did not use the hindsight practical expedient to adopt this guidance. The Company recorded a cumulative effect adjustment of $13,637 to operating lease right-of-use assets, $13,937 to operating lease liabilities, and $300 gross ( $228 net of taxes) to the opening balance of the Company's retained earnings to reflect the cumulative effect of the adoption of the standard. This standard did not have a material impact on our consolidated income statements. In June 2016, the FASB issue ASU 2016-13, Financial Instruments: Credit Losses, which adds an impairment model that is based on expected losses rather than incurred losses. Under this standard, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This standard is effective for public companies for fiscal years beginning after December 15, 2019, including interim reporting periods within those years and early adoption is permitted. The Company is currently assessing the impact of this guidance. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation of certain transactions, including but not limited to contingent consideration payments made after a business combination and debt prepayment and extinguishment costs in the cash flow statement. The Company adopted ASU 2016-16 effective in the first quarter of fiscal year 2019. The adoption of ASU 2016-15 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other: Internal-Use Software, which helps simplify how entities evaluate the accounting for costs paid by a customer in a cloud computing arrangement that is a service contract. This standard will be effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues
Revenues | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The following table summarizes total sales by product category: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Powered Vehicles $ 115,245 $ 82,247 $ 211,954 $ 154,381 Specialty Sports 76,877 74,578 141,868 132,236 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 The following table summarizes total sales by sales channel: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 OEM $ 117,321 $ 86,994 $ 217,826 $ 160,052 Aftermarket 74,801 69,831 135,996 126,565 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 The following table summarizes total sales generated by geographic location of the customer: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 North America $ 131,158 $ 98,565 $ 240,790 $ 181,734 Asia 27,981 30,968 51,367 52,171 Europe 30,515 25,493 58,050 49,408 Rest of the world 2,468 1,799 3,615 3,304 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 |
Inventory
Inventory | 6 Months Ended |
Jun. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following: June 28, December 28, 2019 2018 Raw materials $ 89,049 $ 75,652 Work-in-process 13,035 5,880 Finished goods 33,921 25,608 Total inventory $ 136,005 $ 107,140 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 6 Months Ended |
Jun. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: June 28, December 28, 2019 2018 Machinery and manufacturing equipment $ 51,008 $ 41,332 Leasehold improvements 11,051 10,386 Internal-use computer software 15,626 14,416 Lease right of use assets 17,652 — Building and land 22,921 18,978 Information systems, office equipment and furniture 8,603 7,262 Transportation equipment 4,403 3,932 Total 131,264 96,306 Less: accumulated depreciation and amortization (36,167 ) (31,518 ) Property, plant and equipment, net $ 95,097 $ 64,788 The Company’s long-lived assets by geographic location are as follows: June 28, December 28, 2019 2018 United States $ 84,211 $ 59,056 International 10,886 5,732 Total long-lived assets $ 95,097 $ 64,788 |
Leases
Leases | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating lease agreements for administrative, research and development, manufacturing, and sales and marketing facilities. These leases have remaining lease terms ranging from 1 to 8 years , some of which include options to extend the lease term for up to 5 years , and some of which include options to terminate the leases within 1 year . Certain leases are subject to annual escalations as specified in the lease agreements. The Company considered these options in determining the lease term used to establish its right-of-use assets and lease liabilities. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of the Company's leases do not provide an interest rate, the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted-average remaining lease term for the Company's operating leases was 4.69 years and the weighted-average incremental borrowing rate was 3.75% as of June 28, 2019 . Operating lease costs consisted of the following: For the three months ended For the six months ended June 28, 2019 June 28, 2019 Operating lease cost $ 1,549 $ 2,969 Other lease costs (1) 242 425 Total $ 1,791 $ 3,394 (1) Includes short-term leases and variable lease costs. The Company elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. Lease costs for the three and six months ended June 29, 2018 were $1,630 and $3,326 , respectively. Supplemental balance sheet information related to the Company's operating leases is as follows: Balance Sheet Classification June 28, 2019 Operating lease right-of-use assets Property, plant and equipment $ 17,652 Current lease liabilities Accrued expenses $ 5,990 Non-current lease liabilities Other liabilities $ 11,994 Maturities of lease liabilities by fiscal year for the Company's operating leases are as follows: For fiscal year Total future payments 2019 (excluding the six months ended June 28, 2019) $ 2,979 2020 5,372 2021 3,779 2022 2,179 2023 2,194 Thereafter 3,151 Total lease payments 19,654 Less: imputed interest (1,670 ) Present value of lease liabilities 17,984 Less: current portion (5,990 ) Lease liabilities less current portion $ 11,994 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 28, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: June 28, December 28, 2019 2018 Payroll and related expenses $ 12,392 $ 15,870 Current portion of lease liabilities 5,990 — Warranty 6,208 6,433 Income tax payable 3,601 6,691 Other accrued expenses 6,111 4,613 Total $ 34,302 $ 33,607 Activity related to warranties is as follows: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Beginning warranty liability $ 5,740 $ 6,596 $ 6,433 $ 6,481 Charge to cost of sales 1,558 503 2,133 1,797 Fair value of warranty assumed in acquisition 100 — 100 — Costs incurred (1,190 ) (957 ) (2,458 ) (2,136 ) Ending warranty liability $ 6,208 $ 6,142 $ 6,208 $ 6,142 |
Debt
Debt | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Former Second Amended and Restated Credit Facility In August 2013, the Company entered into a credit facility with SunTrust Bank, N.A. and other named lenders, periodically was amended and restated, (the "Second Amended and Restated Credit Facility"). The Company paid off the Second Amended and Restated Credit Facility in June 2019 upon entering into the new Credit Facility with Bank of America, N.A. ("Bank of America"). The Company expensed $516 of remaining debt issuance costs, which are included in other expense, net on the Condensed Consolidated Statements of Income . New Credit Facility In June 2019, the Company entered into a credit facility with Bank of America and other named lenders (the "The Credit Facility"). The Credit Facility, which matures on June 3, 2024, provides a senior secured revolving line of credit with a maximum borrowing capacity of $250,000 . The Company paid $510 in loan costs that will be deferred and amortized on a straight-line basis over the term of the Credit Facility. The Credit Facility provides for interest at a rate either based on the London Interbank Offered Rate, or LIBOR, plus a margin ranging from 1.00% to 1.50% , or based on the base rate offered by Bank of America plus a margin ranging from 0.00% to 0.50% . At June 28, 2019 , the one-month LIBOR and prime rates were 2.40% and 5.50% , respectively. At June 28, 2019 , our weighted average interest rate on outstanding borrowing was 3.64% . The Credit Facility 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 June 28, 2019 . The Credit Facility permits up to $15,000 of the aggregate revolving commitment to be used by the Company for issuance of letters of credit, of which $5,000 was outstanding at June 28, 2019 . The following table summarizes the line of credit under the Credit Facility: June 28, 2019 Amount outstanding $ 77,553 Standby letter of credit 5,000 Available borrowing capacity 167,447 Total borrowing capacity $ 250,000 Maturity date June 3, 2024 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnification Agreements - In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise due to their status or service as directors, officers or employees. While the outcome of these matters cannot be predicted with certainty, the Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on the Company’s results of operations, financial position or liquidity. Legal Proceedings - A lawsuit was filed on December 17, 2015 by SRAM Corporation (“SRAM”) in the U.S. District Court, Northern District of Illinois, against the Company’s wholly-owned subsidiary, RFE Canada Holding Corp. (“RFE Canada”). The lawsuit alleges patent infringement of U.S. Patent number 9,182,027 ("'027 Patent") and violation of the Lanham Act. SRAM filed a second lawsuit in the same court against RFE Canada on May 16, 2016, alleging patent infringement of U.S Patent number 9,291,250 ("'250 Patent"). The Company believes that the lawsuits are without merit and intends to vigorously defend itself. As such, the Company has filed, before the U. S. Patent and Trademark Appeals Board ("PTAB"), for Interparties Reviews ("IPR") of the '027 Patent and separately the same for the '250 Patent. In April 2018, the PTAB issued opinions in the ‘027 Patent petition cases stating that the Company has not shown the claims of the ‘027 Patent to be obvious. Regarding the PTAB ‘027 opinions, the Company has filed an Appeal to the Court of Appeals for the Federal Circuit. Regarding that appeal the Company has further moved the CAFC for remand of the ‘027 IPR to the PTAB. The PTAB has issued an opinion in the ‘250 Patent petition case stating that the Company has not shown the claims of the ‘250 Patent to be obvious. In a separate action the Company filed a lawsuit on January 29, 2016 in the U.S. District Court, Northern District of California against SRAM. That lawsuit alleges SRAM’s infringement of two separate Company owned patents, specifically U.S. Patent numbers 6,135,434 and 6,557,674. A second lawsuit was filed by the Company on July 1, 2016 in the U.S. District Court, Northern District of California against SRAM alleging infringement of the Company’s U.S. Patent numbers 8,226,172 and 8,974,009. These lawsuits have been moved to U.S. District Court, District of Colorado and are otherwise proceeding. The stay of the SRAM lawsuits against the Company have been lifted by the U.S. District Court, Northern District of Illinois. The Company filed and SRAM filed lawsuits are now moving forward in the respective courts. Due to the inherent uncertainties of litigation, the Company is not able to predict either the outcome or a range of reasonably possible losses, if any, at this time. Accordingly, no amounts have been recorded in the consolidated financial statements for the settlement of these matters. Were an unfavorable ruling to occur, or if factors indicate that a loss is probable and reasonably estimable, the Company's business, financial condition or results of operations could be materially and adversely affected. The Company is involved in other legal matters that arise in the ordinary course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company's financial condition, results of operations or cash flows. Other Commitments - On November 30, 2017, the Company through FF US Holding Corp. acquired an 80% interest in the business of Flagship, Inc. ("Tuscany"). The stockholders' agreement provides the Company with a call option (the "Call Option") to acquire the remaining 20% of Tuscany any time from November 30, 2019 through November 30, 2024 at a value that approximates fair market value. In addition, if the Call Option has not been exercised as of November 30, 2024, the non-controlling owners shall be entitled to exercise a put option on November 30, 2024 and for a 180 day period thereafter, which would require the Company to purchase all of the remaining shares held by the non-controlling owners at a price that approximates fair market value. Other Contingencies - On June 21, 2018, the U.S. Supreme Court (the “Court”) decided South Dakota v. Wayfair, Inc., et al., holding that internet retailers do not have to maintain a physical presence in a state in order to be required to collect the state’s sales and use tax. Ultimately, the Court remanded the case to the South Dakota Supreme Court on the question of “whether some other principle in the Court’s Commerce Clause doctrine might invalidate the Act,” which may delay federal legislation on the issue. However, as a result of the Court’s decision, additional states may now begin requiring all remote sellers, primarily those engaged in e-commerce, to register, collect and remit sales and use taxes on transactions with in-state customers. Numerous states have either enacted legislation or informally indicated that they will not assert liability for uncollected taxes on a retroactive basis. Nevertheless, the Company believes that it is possible that it will incur a liability for uncollected sales tax on some portion of its e-commerce sales through June 28, 2019 . Any retroactively imposed liability is not expected to be material to the Company’s results of operations or financial position because direct end-user sales in states where the Company is not registered comprise a small portion of total revenues. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The following table presents the Company's hierarchy for its assets, liabilities and redeemable non-controlling interest measured at fair value on a recurring basis as of the following periods: June 28, 2019 December 28, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Second Amended and Restated Credit facility $ — $ — $ — $ — $ — $ 59,426 $ — $ 59,426 Non-controlling interest subject to put provisions — — 15,022 15,022 — — 14,282 14,282 Total liabilities measured at fair value $ — $ — $ 15,022 $ 15,022 $ — $ 59,426 $ 14,282 $ 73,708 There were no transfers of assets or liabilities between Level 1, Level 2, and Level 3 categories of the fair value hierarchy during the three and six month period ended June 28, 2019 . The Company used Level 2 inputs to determine the fair value of its Second Amended and Restated Credit Facility. As of December 28, 2018 , the carrying amount of the principal under the Company’s Second Amended and Restated Credit Facility approximated fair value because it had a variable interest rate that reflected market changes in interest rates and changes in the Company’s net leverage ratio. The Company paid off the Second Amended and Restated Credit Facility in June 2019 upon entering into the new revolving Credit Facility with Bank of America. The Company has potential obligations to purchase the non-controlling interests held by third parties in the Tuscany subsidiary. These obligations are in the form of put provisions and are exercisable at the third-party owners' discretion within the specified periods outlined in the put provision within the Tuscany stockholders' agreement. If these put provisions were exercised, the Company would be required to purchase the third-party owners' non-controlling interests at the appraised fair value. The initial non-controlling interest value was implicit in the purchase price and is revalued each quarter, with the adjustment being recorded directly as a component of retained earnings. The methodology the Company uses to estimate the fair value of the non-controlling interests subject to these put provisions is based on an average multiple of earnings before income taxes, depreciation and amortization ("EBITDA"), taking into consideration historical earnings and other factors. The carrying value of the non-controlling interest as of June 28, 2019 has been adjusted to reflect the valuation floor, which represents the sum of the initial valuation and the cumulative net earnings attributable to the non-controlling interest. The estimated fair values of the non-controlling interests subject to put provisions can fluctuate and the implicit multiple of earnings at which these non-controlling interest obligations may ultimately be settled could vary significantly from our future estimates depending upon market conditions. The following table provides a reconciliation of the beginning and ending balances for the Company's redeemable non-controlling interest measured at fair value using Level 3 inputs: Redeemable Non-Controlling Interest (level 3 measurement) Balance at December 28, 2018 $ 14,282 Net income attributable to non-controlling interest 740 Balance at June 28, 2019 $ 15,022 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders' Equity Equity Incentive Plans The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of income: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Cost of sales $ 114 $ 131 $ 243 $ 233 Sales and marketing 113 139 239 299 Research and development 155 154 320 296 General and administrative 1,239 1,361 2,548 3,003 Total $ 1,621 $ 1,785 $ 3,350 $ 3,831 The following table summarizes the activity for the Company's unvested restricted stock units ("RSU") for the six months ended June 28, 2019 . Unvested RSUs Number of shares outstanding Weighted-average grant date fair value Unvested at December 28, 2018 655 $ 29.34 Granted 19 $ 71.94 Canceled (9 ) $ 30.97 Vested (169 ) $ 26.45 Unvested at June 28, 2019 496 $ 31.91 As of June 28, 2019 , the Company had approximately $11,208 of unrecognized stock-based compensation expense related to RSUs, which will be recognized over the remaining weighted-average vesting period of approximately 2.46 years . During the six months ended June 28, 2019 , 190 shares of common stock were issued due to the exercise of stock options, resulting in proceeds of $966 . No options to purchase common stock expired or were forfeited during the six months ended June 28, 2019 . As of June 28, 2019 , stock-based compensation expense related to stock options has been fully recognized. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Provision for (benefit of) income taxes $ 4,522 $ 4,711 $ 7,123 $ (1,868 ) Effective tax rates 16.2 % 20.0 % 14.6 % (4.9 )% For the three and six months ended June 28, 2019 , and the three months ended June 29, 2018 , the difference between the Company's effective tax rate and the 21% federal statutory rate resulted primarily from lower foreign tax rates, lower effective federal rates on foreign derived intangible income, research and development credits, and $1,808 , $3,635 , and $880 from excess benefits related to stock-based compensation. These benefits were partially offset by state taxes, foreign withholding taxes and the impact of non-deductible expenses. For the six months ended June 29, 2018 , the difference between the Company's effective tax benefit of 4.9% and the 21% federal statutory rate resulted primarily from a $9,838 one-time impact of the favorable conclusion of the 2015 U.S. Internal Revenue Service ("IRS") audit and the recognition of related tax positions with respect to the deductibility of amortization and depreciation expense resulting from the acquisition of the Company in 2008. The benefit of the deductions was not recognized in accounting for the acquisition due to uncertainty about whether the tax position would withstand audit. The results of the closing agreement with the IRS provided basis for the Company to conclude that the amortization and depreciation will be deductible for all open tax years. In addition, the effective tax rate benefited from lower foreign tax rates, lower effective federal rates on foreign derived intangible income, research and development credits, and $1,117 from excess benefits related to stock-based compensation. These benefits were partially offset by state taxes, foreign withholding taxes and the impact of non-deductible expenses. The Company's federal tax returns for 2016 and forward, state tax returns for 2014 forward, and foreign tax returns from 2016 forward are subject to examination by tax authorities. The Company is currently under examination by the California state tax authority for 2015 and 2016. The Company has obtained tax incentives in Switzerland that are effective on a formal basis through March 2019, and indefinitely on a statutory basis, as long as the Company's operations meet specified criteria. The effect of the tax incentive was not material to the Company's income tax provision for the three and six months ended June 28, 2019 and June 29, 2018 . |
Related Party Agreements
Related Party Agreements | 6 Months Ended |
Jun. 28, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Agreements | Related Party Agreements Fox Factory, Inc. has a triple-net building lease for its manufacturing and office facilities in Watsonville, California. The building is owned by a former member of our Board of Directors who retired on August 28, 2018. Rent expense under this lease was $179 and $358 for the three and six months ended June 29, 2018, respectively. On September 28, 2018, the Company purchased Tuscany's facilities from certain non-controlling interest stockholders who are also employees of the Company. The total purchase price was $3,750 . The Company leased these properties prior to purchasing them. Rent expense under these leases was $86 and $171 |
Acquisition
Acquisition | 6 Months Ended |
Jun. 28, 2019 | |
Subsequent Events [Abstract] | |
Acquisition | Acquisition On May 3, 2019, the Company acquired substantially all assets of Air Ride Technologies, Inc. dba RideTech, a manufacturer of suspension systems that enhance the handling and ride quality of muscle cars, trucks, sports cars and hot rods. In connection with the acquisition, the Company paid approximately $13,971 , of which $6,804 was cash on hand and $7,167 was from newly issued unregistered shares of common stock. The allocation of the purchase price to the assets acquired and liabilities assumed, including $5,156 in net working capital and $6,000 in identifiable intangible assets, is preliminary and subject to the completion of the Company's validation of working capital and its intangible valuation procedures, with the assistance of specialists. Goodwill acquired of $2,815 , is expected to be deductible for income tax purposes. The acquisition was not material to the Company's financial statements. |
Description of the Business, _2
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America ("U.S." or "United States") and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 28, 2018 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 26, 2019 . In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. |
Fiscal Year | The Company operates on a 52-53 week fiscal calendar. For 2019 and 2018 , the Company's fiscal year will end or has ended on January 3, 2020 and December 28, 2018 , respectively. The twelve month periods ended January 3, 2020 and December 28, 2018 , will include or have included 53 and 52 weeks, respectively. The three and six month periods ended June 28, 2019 and June 29, 2018 each included 13 weeks and 26 weeks, respectively. |
Principles of Consolidation | P rinciples of Consolidation - These condensed consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition - Revenues are generated from the sale of performance-defining products and systems to customers worldwide. The Company’s performance-defining products and systems are solutions that improve performance of powered vehicles and bikes. Powered vehicles include Side-by-Sides, on-road and off-road vehicles and trucks, all-terrain vehicles or ATVs, snowmobiles, specialty vehicles and applications, motorcycles and commercial trucks. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer, generally at the time of shipment. Contracts are generally in the form of purchase orders and are governed by standard terms and conditions. For larger OEMs, the Company may also enter into master agreements. Provisions for discounts, rebates, sales incentives, returns, and other adjustments are generally provided for in the period the related sales are recorded, based on management’s assessment of historical trends and projection of future results. Certain pricing provisions that provide the customer with future discounts are considered a material right. Such material rights result in the deferral of revenue that are subsequently recognized in the period that the customer utilizes the future discount. Measuring the material rights requires judgments including forecasts of future sales and product mix. At June 28, 2019 , the balance of deferred revenue related to pricing provisions was $162 . These amounts are expected to be recognized over the next 12 months. Revenues exclude sales tax. |
Segments | Segments - The Company has determined that it has a single operating and reportable segment. The Company considers operating segments to be components of the Company for which separate financial information is available, that is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. |
Use of Estimates | Use of Estimates - |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties - The Company is subject to those risks common in manufacturing-driven markets, including, but not limited to, competitive forces, dependence on key personnel, customer demand for its products, the successful protection of its proprietary technologies, compliance with and the impact of government regulations including tariffs, and the possibility of not being able to obtain additional financing when needed. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments - The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements using a three tiered approach and fair value measurement be classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The carrying amount of the Company's financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. The carrying amount of the Company's Credit Facility (as defined below) approximates its fair value, as the interest rate is set based on the movement of the underlying market rates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In May 2014, the FASB and International Accounting Standards Board issued their converged standard on revenue recognition, ASU 2014-09, which was updated in December 2016 with the release of ASU 2016-20. This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2018, using the modified retrospective implementation method. The Company applied the guidance to all open contracts at the date of initial application. The primary impact of adopting the standard resulted from certain pricing provisions within contracts that provide the customer with a material right. Under the new standard, revenue attributed to such pricing provisions is deferred and recognized when the right is exercised by the customer. During Q1 2018, the Company recorded a cumulative effect adjustment of $368 gross and $281 net of taxes, to the opening balance of retained earnings to reflect the cumulative effect of the adoption of the standard. In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes the existing guidance for lease accounting. To meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases, this ASU requires lessees to recognize most leases on the balance sheet as right-of-use assets and lease liabilities. The Company adopted this guidance as of the beginning of the first quarter of fiscal year 2019, with a cumulative effect adjustment to the opening balance of retained earnings at December 28, 2018 with no restatement of comparative periods’ financial information ("current-period adjustment method"). Additionally, the Company adopted this guidance using practical expedients with respect to the assessment of embedded leases, lease classification, and initial indirect costs for expired and existing leases. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all of its leases and elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. The Company did not use the hindsight practical expedient to adopt this guidance. The Company recorded a cumulative effect adjustment of $13,637 to operating lease right-of-use assets, $13,937 to operating lease liabilities, and $300 gross ( $228 net of taxes) to the opening balance of the Company's retained earnings to reflect the cumulative effect of the adoption of the standard. This standard did not have a material impact on our consolidated income statements. In June 2016, the FASB issue ASU 2016-13, Financial Instruments: Credit Losses, which adds an impairment model that is based on expected losses rather than incurred losses. Under this standard, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This standard is effective for public companies for fiscal years beginning after December 15, 2019, including interim reporting periods within those years and early adoption is permitted. The Company is currently assessing the impact of this guidance. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation of certain transactions, including but not limited to contingent consideration payments made after a business combination and debt prepayment and extinguishment costs in the cash flow statement. The Company adopted ASU 2016-16 effective in the first quarter of fiscal year 2019. The adoption of ASU 2016-15 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other: Internal-Use Software, which helps simplify how entities evaluate the accounting for costs paid by a customer in a cloud computing arrangement that is a service contract. This standard will be effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | The following table summarizes total sales by product category: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Powered Vehicles $ 115,245 $ 82,247 $ 211,954 $ 154,381 Specialty Sports 76,877 74,578 141,868 132,236 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 The following table summarizes total sales by sales channel: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 OEM $ 117,321 $ 86,994 $ 217,826 $ 160,052 Aftermarket 74,801 69,831 135,996 126,565 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 The following table summarizes total sales generated by geographic location of the customer: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 North America $ 131,158 $ 98,565 $ 240,790 $ 181,734 Asia 27,981 30,968 51,367 52,171 Europe 30,515 25,493 58,050 49,408 Rest of the world 2,468 1,799 3,615 3,304 Total sales $ 192,122 $ 156,825 $ 353,822 $ 286,617 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consisted of the following: June 28, December 28, 2019 2018 Raw materials $ 89,049 $ 75,652 Work-in-process 13,035 5,880 Finished goods 33,921 25,608 Total inventory $ 136,005 $ 107,140 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, plant and equipment, net consisted of the following: June 28, December 28, 2019 2018 Machinery and manufacturing equipment $ 51,008 $ 41,332 Leasehold improvements 11,051 10,386 Internal-use computer software 15,626 14,416 Lease right of use assets 17,652 — Building and land 22,921 18,978 Information systems, office equipment and furniture 8,603 7,262 Transportation equipment 4,403 3,932 Total 131,264 96,306 Less: accumulated depreciation and amortization (36,167 ) (31,518 ) Property, plant and equipment, net $ 95,097 $ 64,788 |
Long-lived Assets by Geographic Location | The Company’s long-lived assets by geographic location are as follows: June 28, December 28, 2019 2018 United States $ 84,211 $ 59,056 International 10,886 5,732 Total long-lived assets $ 95,097 $ 64,788 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Lease Costs | Operating lease costs consisted of the following: For the three months ended For the six months ended June 28, 2019 June 28, 2019 Operating lease cost $ 1,549 $ 2,969 Other lease costs (1) 242 425 Total $ 1,791 $ 3,394 (1) Includes short-term leases and variable lease costs. The Company elected a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the right-of-use assets and lease liabilities. |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company's operating leases is as follows: Balance Sheet Classification June 28, 2019 Operating lease right-of-use assets Property, plant and equipment $ 17,652 Current lease liabilities Accrued expenses $ 5,990 Non-current lease liabilities Other liabilities $ 11,994 |
Maturity of Lease Liabilities | Maturities of lease liabilities by fiscal year for the Company's operating leases are as follows: For fiscal year Total future payments 2019 (excluding the six months ended June 28, 2019) $ 2,979 2020 5,372 2021 3,779 2022 2,179 2023 2,194 Thereafter 3,151 Total lease payments 19,654 Less: imputed interest (1,670 ) Present value of lease liabilities 17,984 Less: current portion (5,990 ) Lease liabilities less current portion $ 11,994 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: June 28, December 28, 2019 2018 Payroll and related expenses $ 12,392 $ 15,870 Current portion of lease liabilities 5,990 — Warranty 6,208 6,433 Income tax payable 3,601 6,691 Other accrued expenses 6,111 4,613 Total $ 34,302 $ 33,607 |
Activity Related to Warranties | Activity related to warranties is as follows: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Beginning warranty liability $ 5,740 $ 6,596 $ 6,433 $ 6,481 Charge to cost of sales 1,558 503 2,133 1,797 Fair value of warranty assumed in acquisition 100 — 100 — Costs incurred (1,190 ) (957 ) (2,458 ) (2,136 ) Ending warranty liability $ 6,208 $ 6,142 $ 6,208 $ 6,142 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Second Amended and Restated Credit Facility | The following table summarizes the line of credit under the Credit Facility: June 28, 2019 Amount outstanding $ 77,553 Standby letter of credit 5,000 Available borrowing capacity 167,447 Total borrowing capacity $ 250,000 Maturity date June 3, 2024 |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company's hierarchy for its assets, liabilities and redeemable non-controlling interest measured at fair value on a recurring basis as of the following periods: June 28, 2019 December 28, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Second Amended and Restated Credit facility $ — $ — $ — $ — $ — $ 59,426 $ — $ 59,426 Non-controlling interest subject to put provisions — — 15,022 15,022 — — 14,282 14,282 Total liabilities measured at fair value $ — $ — $ 15,022 $ 15,022 $ — $ 59,426 $ 14,282 $ 73,708 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balances for the Company's redeemable non-controlling interest measured at fair value using Level 3 inputs: Redeemable Non-Controlling Interest (level 3 measurement) Balance at December 28, 2018 $ 14,282 Net income attributable to non-controlling interest 740 Balance at June 28, 2019 $ 15,022 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of income: For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Cost of sales $ 114 $ 131 $ 243 $ 233 Sales and marketing 113 139 239 299 Research and development 155 154 320 296 General and administrative 1,239 1,361 2,548 3,003 Total $ 1,621 $ 1,785 $ 3,350 $ 3,831 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity for the Company's unvested restricted stock units ("RSU") for the six months ended June 28, 2019 . Unvested RSUs Number of shares outstanding Weighted-average grant date fair value Unvested at December 28, 2018 655 $ 29.34 Granted 19 $ 71.94 Canceled (9 ) $ 30.97 Vested (169 ) $ 26.45 Unvested at June 28, 2019 496 $ 31.91 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | For the three months ended For the six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Provision for (benefit of) income taxes $ 4,522 $ 4,711 $ 7,123 $ (1,868 ) Effective tax rates 16.2 % 20.0 % 14.6 % (4.9 )% |
Description of the Business, _3
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | Jun. 28, 2019USD ($) |
Accounting Policies [Abstract] | |
Deferred revenue | $ 162 |
Description of the Business, _4
Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 29, 2018 | Mar. 30, 2018 | Jun. 28, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 17,652 | ||
Operating lease liabilities | $ 17,984 | ||
ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect on retained earnings, before tax | $ 368 | ||
Cumulative effect on retained earnings, net of taxes | $ 281 | ||
ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect on retained earnings, before tax | $ 300 | ||
Cumulative effect on retained earnings, net of taxes | 228 | ||
Operating lease right-of-use assets | 13,637 | ||
Operating lease liabilities | $ 13,937 |
Revenues - Sales by Product Cat
Revenues - Sales by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 192,122 | $ 156,825 | $ 353,822 | $ 286,617 |
Powered Vehicles | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 115,245 | 82,247 | 211,954 | 154,381 |
Specialty Sports | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 76,877 | $ 74,578 | $ 141,868 | $ 132,236 |
Revenues - Sales by Sales Chann
Revenues - Sales by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 192,122 | $ 156,825 | $ 353,822 | $ 286,617 |
OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 117,321 | 86,994 | 217,826 | 160,052 |
Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 74,801 | $ 69,831 | $ 135,996 | $ 126,565 |
Revenues - Sales by Geographic
Revenues - Sales by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 192,122 | $ 156,825 | $ 353,822 | $ 286,617 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 131,158 | 98,565 | 240,790 | 181,734 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 27,981 | 30,968 | 51,367 | 52,171 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 30,515 | 25,493 | 58,050 | 49,408 |
Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 2,468 | $ 1,799 | $ 3,615 | $ 3,304 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 89,049 | $ 75,652 |
Work-in-process | 13,035 | 5,880 |
Finished goods | 33,921 | 25,608 |
Total inventory | $ 136,005 | $ 107,140 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 131,264 | $ 96,306 |
Less: accumulated depreciation and amortization | (36,167) | (31,518) |
Property, plant and equipment, net | 95,097 | 64,788 |
Machinery and manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 51,008 | 41,332 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 11,051 | 10,386 |
Internal-use computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 15,626 | 14,416 |
Lease right of use assets | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 17,652 | 0 |
Building and land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 22,921 | 18,978 |
Information systems, office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 8,603 | 7,262 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 4,403 | $ 3,932 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net (Long-lived Assets by Geographic Location) (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 95,097 | $ 64,788 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | 84,211 | 59,056 |
International | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets | $ 10,886 | $ 5,732 |
Leases - Additional Information
Leases - Additional Information (Details) | 6 Months Ended |
Jun. 28, 2019 | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 5 years |
Option to terminate, term | 1 year |
Weighted-average remaining lease term | 4 years 8 months 8 days |
Weighted-average incremental borrowing rate | 3.75% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Contract term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Contract term | 8 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,549 | $ 2,969 | ||
Other lease costs | 242 | 425 | ||
Total | $ 1,791 | $ 1,630 | $ 3,394 | $ 3,326 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 17,652 | |
Current lease liabilities | 5,990 | $ 0 |
Non-current lease liabilities | $ 11,994 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 28, 2018 |
Leases [Abstract] | ||
2019 (excluding the six months ended June 28, 2019) | $ 2,979 | |
2020 | 5,372 | |
2021 | 3,779 | |
2022 | 2,179 | |
2023 | 2,194 | |
Thereafter | 3,151 | |
Total lease payments | 19,654 | |
Less: imputed interest | (1,670) | |
Present value of lease liabilities | 17,984 | |
Less: current portion | (5,990) | $ 0 |
Lease liabilities less current portion | $ 11,994 |
Accrued Expenses (Components) (
Accrued Expenses (Components) (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 29, 2017 |
Payables and Accruals [Abstract] | ||||||
Payroll and related expenses | $ 12,392 | $ 15,870 | ||||
Current portion of lease liabilities | 5,990 | 0 | ||||
Warranty | 6,208 | $ 5,740 | 6,433 | $ 6,142 | $ 6,596 | $ 6,481 |
Income tax payable | 3,601 | 6,691 | ||||
Other accrued expenses | 6,111 | 4,613 | ||||
Total | $ 34,302 | $ 33,607 |
Accrued Expenses (Activity Rela
Accrued Expenses (Activity Related to Warranties) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | $ 5,740 | $ 6,596 | $ 6,433 | $ 6,481 |
Charge to cost of sales | 1,558 | 503 | 2,133 | 1,797 |
Fair value of warranty assumed in acquisition | 100 | 0 | 100 | 0 |
Costs incurred | (1,190) | (957) | (2,458) | (2,136) |
Ending warranty liability | $ 6,208 | $ 6,142 | $ 6,208 | $ 6,142 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 6 Months Ended |
Jun. 28, 2019USD ($) | Jun. 28, 2019USD ($) | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 |
Standby letter of credit | 5,000,000 | 5,000,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 250,000,000 | 250,000,000 |
Loan costs | $ 510,000 | $ 510,000 |
Weighted average interest rate on outstanding borrowings | 3.64% | 3.64% |
Revolving Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 2.40% | |
Revolving Credit Facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 1.00% | |
Revolving Credit Facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 1.50% | |
Revolving Credit Facility | Prime Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 5.50% | |
Revolving Credit Facility | Prime Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 0.00% | |
Revolving Credit Facility | Prime Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 15,000,000 | $ 15,000,000 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Remaining debt issuance costs expensed | $ 516,000 |
Debt - Summary of Amended and R
Debt - Summary of Amended and Restated Credit Facility (Details) $ in Thousands | Jun. 28, 2019USD ($) |
Debt Disclosure [Abstract] | |
Amount outstanding | $ 77,553 |
Standby letter of credit | 5,000 |
Available borrowing capacity | 167,447 |
Total borrowing capacity | $ 250,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - Tuscany | Nov. 30, 2017 |
Loss Contingencies [Line Items] | |
Ownership interest acquired (as a percent) | 80.00% |
Call option to acquire remaining interest (as a percent) | 20.00% |
Period to exercise put option | 180 days |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Liabilities at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 29, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Second Amended and Restated Credit facility | $ 0 | $ 59,426 | ||||
Non-controlling interest subject to put provisions | 15,022 | $ 14,581 | 14,282 | $ 14,188 | $ 14,192 | $ 12,955 |
Total liabilities measured at fair value | 15,022 | 73,708 | ||||
Level 1 | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Second Amended and Restated Credit facility | 0 | 0 | ||||
Non-controlling interest subject to put provisions | 0 | 0 | ||||
Total liabilities measured at fair value | 0 | 0 | ||||
Level 2 | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Second Amended and Restated Credit facility | 0 | 59,426 | ||||
Non-controlling interest subject to put provisions | 0 | 0 | ||||
Total liabilities measured at fair value | 0 | 59,426 | ||||
Level 3 | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Second Amended and Restated Credit facility | 0 | 0 | ||||
Non-controlling interest subject to put provisions | 15,022 | 14,282 | ||||
Total liabilities measured at fair value | $ 15,022 | $ 14,282 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Reconciliation of Contingent Consideration (Details) $ in Thousands | 6 Months Ended |
Jun. 28, 2019USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 28, 2018 | $ 14,282 |
Net income attributable to non-controlling interest | 740 |
Balance at June 28, 2019 | $ 15,022 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 1,621 | $ 1,785 | $ 3,350 | $ 3,831 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 114 | 131 | 243 | 233 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 113 | 139 | 239 | 299 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 155 | 154 | 320 | 296 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 1,239 | $ 1,361 | $ 2,548 | $ 3,003 |
Stockholders' Equity - Unvested
Stockholders' Equity - Unvested RSU Activity (Details) - RSUs shares in Thousands | 6 Months Ended |
Jun. 28, 2019$ / sharesshares | |
Number of shares outstanding | |
Unvested at beginning of period (in shares) | shares | 655 |
Granted (in shares) | shares | 19 |
Forfeited (in shares) | shares | (9) |
Vested (in shares) | shares | (169) |
Unvested at end of period (in shares) | shares | 496 |
Weighted-average grant date fair value | |
Unvested at beginning of period (in usd per share) | $ / shares | $ 29.34 |
Granted (in usd per share) | $ / shares | 71.94 |
Forfeited (in usd per share) | $ / shares | 30.97 |
Vested (in usd per share) | $ / shares | 26.45 |
Unvested at end of period (in usd per share) | $ / shares | $ 31.91 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 28, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock options exercised (in shares) | shares | 190 |
Proceeds from exercise of stock options | $ 966 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense related to RSUs | $ 11,208 |
Period for recognition of unrecognized stock-based compensation expense | 2 years 5 months 15 days |
Income Taxes - Components (Deta
Income Taxes - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit of) income taxes | $ 4,522 | $ 4,711 | $ 7,123 | $ (1,868) |
Effective tax rates | 16.20% | 20.00% | 14.60% | (4.90%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Tax Contingency [Line Items] | ||||
Federal statutory rate | 21.00% | 21.00% | ||
Effective tax rates | 16.20% | 20.00% | 14.60% | (4.90%) |
One-time impact of favorable conclusion of 2015 audit and recognition of tax position relate with depreciation and amortization expense | $ (9,838) | |||
RSUs | ||||
Income Tax Contingency [Line Items] | ||||
Excess benefits related to exercise of awards | $ 1,808 | $ 880 | $ 3,635 | $ 1,117 |
Related Party Agreements (Detai
Related Party Agreements (Details) - USD ($) $ in Thousands | Sep. 28, 2018 | Jun. 29, 2018 | Jun. 29, 2018 |
Founder and Minority Stockholder | Related Party Transactions | |||
Related Party Transaction [Line Items] | |||
Payments made under lease | $ 179 | $ 358 | |
Beneficial Owner | Purchase of Properties | Employees | |||
Related Party Transaction [Line Items] | |||
Amount of related party transaction | $ 3,750 | ||
Beneficial Owner | Rental of Buildings | Employees | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | $ 86 | $ 171 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | May 03, 2019 | Jun. 28, 2019 | Dec. 28, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 91,661 | $ 88,850 | |
RideTech | |||
Business Acquisition [Line Items] | |||
Consideration | $ 13,971 | ||
Cash | 6,804 | ||
Newly issued unregistered shares of common stock | 7,167 | ||
Net working capital | 5,156 | ||
Identifiable intangible assets | 6,000 | ||
Goodwill | $ 2,815 |
Uncategorized Items - foxf2019-
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (281,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (228,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (281,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (228,000) |