foxf fox factory jan 2016 investor presentation

8/20/2019 FOXF Fox Factory Jan 2016 Investor Presentation

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SAFE HARBOR STATEMENT

This presentation contains forward-looking statements within the meaning ofthe federal securities laws, which statements involve substantial risks anduncertainties. Forward-looking statements generally relate to future eventsor 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 or othersimilar terms or expressions that concern our expectations, strategy, plansor intentions.

These forward-looking statements are necessarily based upon estimatesand assumptions that, while considered reasonable by the Company and itsmanagement, are inherently uncertain. Factors that may cause actualresults to differ materially from current expectations include, but are not

limited to, those factors identified in the Company’s prospectus in thesections titled “Risk factors,” “Special note regarding forward-lookingstatements” and “Management’s discussion and analysis of financialcondition and results of operations.”

Nothing in this presentation should be regarded as a representation by anyperson that the forward-looking statements set forth herein will be achievedor that any of the contemplated results of such forward-looking statementswill be achieved. You should not place undue reliance on forward-lookingstatements, which speak only as of the date they are made. The Companyundertakes no duty to update these forward-looking statements.


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MANAGEMENT PRESENTERS

Zvi GlasmanCFO

Larry EnterlineCEO


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INTRODUCTION TO FOX

Global, aspirational, performance-based brand

Multiple attractive end markets Powerful customer relationships:

More than 150 global OEM customers

Global aftermarket network of more than 3,000 retail dealers and distributors

Highly-engineered products sold into multiple end markets

Relentless focus on innovation with an active patent program

Strong track record of profitability


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1991

Entered the mountainbike rear suspension market

1987

Snowmobiles startgetting the benefits ofFOX suspension

1974

Bob Fox sets out toredefine motorcycleride dynamics

First production militaryvehicle, GMV 1.1

2001

Entered the mofront suspensio

Sport Truck USAacquisition

OVER 40 YEARS OF REDEFINING RIDE DYNAMIC

2008

Entered the SxSand utility quadmarkets

Race Face / Eastonacquisition

2009

Spec’d on the2010 Ford F-150SVT Raptor

2014

http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=polaris+2008+rzr&source=images&cd=&cad=rja&docid=MJD1XDKxu5xN4M&tbnid=Wop0qXUXUL8KiM:&ved=0CAUQjRw&url=http://www.off-road.com/atv/tech/full-specifications-2008-polaris-rzr-side-by-side-23552.html&ei=E5fQUc71BcifyQGOu4GwBg&bvm=bv.48572450,d.aWc&psig=AFQjCNEl--RXpFXztiFX8-QlPCcDR1tVgw&ust=1372711044306359http://www.google.com/url?sa=i&rct=j&q=polaris+2008+rzr&source=images&cd=&cad=rja&docid=MJD1XDKxu5xN4M&tbnid=Wop0qXUXUL8KiM:&ved=0CAUQjRw&url=http://www.off-road.com/atv/tech/full-specifications-2008-polaris-rzr-side-by-side-23552.html&ei=E5fQUc71BcifyQGOu4GwBg&bvm=bv.48572450,d.aWc&psig=AFQjCNEl--RXpFXztiFX8-QlPCcDR1tVgw&ust=1372711044306359http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833http://www.google.com/url?sa=i&rct=j&q=1990+arctic+cat&source=images&cd=&cad=rja&docid=qb4YY1P-EePywM&tbnid=Qtbqrw8TN-mRgM:&ved=0CAUQjRw&url=http://www.bosscatlegacy.com/acproto/production2/1990.htm&ei=_o3QUY-GNKW3ywGhrIGABA&bvm=bv.48572450,d.aWc&psig=AFQjCNGzemre1hf0q8WVzMuzpZAkDErsUQ&ust=1372708683780833


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FOX’S FORMULA FOR SUCCESS

FORD Raptor

Transportable model across vehicle categories and end markets

POLARIS RZR XP1000 FOX Edition

- Aftermarket satisfies existing market with an appetite for performance

OEMs look for brands that add authenticity to the vehicles in the marketplace

YETI INFI


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REDEFINE YOUR LIMITS

Jason PulleHarley Freesty

We redefine our athletes’ limits

Laurie Greenland2015 Downhill World Champion

Rachel Atherton2015 Downhill WorldChampion

Rob MacCachren2014 & 2015 BAJA 1000 Champion


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FOX ENABLES ENHANCED RIDE DYNAMICS

High-performance suspension enables riders to harness power and speed

OPTIMIZED TECHNOLOGIES(Uniquely Tuned for Specific Applications)

2017 FORD RAPTOR

(First Internal BypassOEM automotive application)

POLARIS RZR XP1(First Internal Bypas


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OVERVIEW OF BIKE PRODUCT OFFERING

_____________________(1) Sales breakdown represents FY 2014 performance on a pro forma basis after giving effect to the Sport Truck USA and Race Face / Easton acquisitions.(2) Management estimates; assumes typical $3,000 retail mountain bike.

B

FOX is focused on the premium segment of performance bike market

40 Float

FRONTSUSPENSION

REARSUSPENSION

FLOAT – CTD

NON-SUSPENSIONCOMPONENTS

SEAT POST AND

CRANKSET32 Float

Pro Forma FY 2014Sales Breakdown (1)

WHEELS

EASTON HAVEN

CARBON


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OVERVIEW OF POWERED VEHICLES

PRODUCT OFFERING

PRICERANGE

RETAILPRICE

SIDE-BY-SIDE

$1,100 – $1,495(set of 2)

2.5 PODIUM-X

$1,495(set of 2)

SNOWMOBILE

$695 – $1,595(set of 2)

FLOAT X EVOL

$1,495(set of 2)

ATV

$695 – $1,595(set of 2)

PODIUM XPIGGYBACK

$995

MOTORC

$ 649 – $

PODIU

FOX is focused on the premium performance segment of powered vehicles

TRUCK

$127 – $1,250

2.0 SERIES

$127

Pro Forma FY 2014Sales Breakdown (1)

_____________________(1) Sales breakdown represents FY 2014 performance on a pro forma basis after giving effect to the Sport Truck USA and Race Face / Easton acquisitions.

$79(set o


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COMPANY HIGHLIGHTS

1. Multiple Attractive End Markets

2. Relentless Approach to Innovation

3. Authentic Brand Driving Consumer Demand and Loyalty

4. Powerful OEM Relationships

5. Expanding Global Presence

6. Experienced Management Team Leading a Company of Enthus

7. Multifaceted Growth Strategy


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Performance benefits from

increases in horsepower limited bystandard suspension

Further improvements in vehicleperformance require improved ridedynamics technologies

Growing need forsuspension performance Growing demand for higher

performing products

More rapid adoption cycles

Mountain bike – evolving wheel/tire sizesand electronic technologies

Side-by-Side – more capable andpowerful stock models

Preference for authentic, aspirational brands

Shifting consumer preferences

Advanced technCustomized soldifferentiation

Recognizable bdrawing power

Scale and sophneed for other s

Fulfilling OEpremium ridofferings

Santa Cruz Bronson Carbon 27.5 equipped with ouraward-winning Factory Series 36 FLOAT Fork

Yamaha YXZ1000

suspension introdu

1. MULTIPLE ATTRACTIVE END MARKETS

Ford’s 2017 F -150 Raptor with InternalBypass suspension


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2. RELENTLESS APPROACH TO INNOVATION

Approximate # of annualraces attended globally

50

2015 DH World Champions(Women’s Elite & Jr. Men’s)

Active Patent Program Helps Build a Robust Pipeline of New and Enhan

2015 BAJA 1000 Champions(Trophy Truck & UTV)

RECENT

CHAMPIONSHIPS

2015 EWS Champions

(Men’s & Women’s)

2015 Super Dirt Week(Syracuse 200 & Sportsmen Mod)


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3. AUTHENTIC BRAND DRIVING CONSUMER

DEMAND AND LOYALTY

Professional AthletesDemand the best product for acompetitive edge

Weekend Warriors & EnthusiastsLook for the same performance as theprofessional athletes they admire

Diehard


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4. POWERFUL OEM RELATIONSHIPS

BIKE POWERED VE

Select OEM Relationships


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Scotts Valley, CACorporate HQSalesR&DManufacturing

El Cajon, CAManufacturing

SalesServiceR&D

Baxter, MNSalesService

TaiMaSal

Bern, SwitzerlandSales

Watsonville, CAManufacturingServiceDistributionWarehousing

FOX HEADQUARTERS MANUFACTURING MARKETS OF INTERESTSALES

Rodalben, GermanySales

Service

ChileMarket of Interest

ArgentinaMarket of Interest

BrazilMarket of Interest

AustraliaMarket of Interest

Global Infrastructure to Supply International OEMs and Provide Afterm

Coldwater, MI

Manufacturing(Sport Truck)

Vancouver, B.C.Race Face / Easton

5. EXPANDING GLOBAL PRESENCE


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6. EXPERIENCED MANAGEMENT TEAM…

LARRY ENTERLINE CEO

BSEE / MBA, 41 years in technology businesses. 5 years with FOX.

ZVI GLASMAN CFO

Bachelors Finance, 28 years of experience. 15 years as a CFO. 8 years with FOX.

MARIO GALASSO PRESIDENT

BSME, 24 years of vehicle dynamics and suspension industry experience. 13 years with FOX.

WES ALLINGER VP & GM, BIKE

BSME, 26 years of experience. 23 years of suspension industry experience. 15 years with FOX.

JOHN MARKING CORPORATE VP, BUSINESS INNOVATION

28 years of suspension industry experience. 25 years with FOX.

TOM WITTENSCHLAEGER

VP & GM, POWERED VEHICLES

BSEE, 17 years in executive roles. Holds multiple patents. 30+ years technology experience. Joined FOX in 2015.

JOHN BOULTON Senior Vice President

BSEE, 29 years of manufacturing experience. 15 years in senior executive role. 5 years with FOX.

DAVID HAUGEN GENERAL COUNSEL

BSME, JD, 20 years of patent law experience. 9 years with FOX.

BILL KATHERMAN SVP, GLOBAL OPERATIONS

Bachelors Business Administration, 35 years of management experience. 3 years with FOX.


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Create productsenhance ride dy

Avid users of F

Actively engageaspects of proddesign, developand testing

Keen observersand new marke

…LEADING A COMPANY OF ENTHUSIASTS

Our Employees Support a Culture of Continuous Innovation and Quality

JOHN MARKING

CORPORATE VP, BUSINESS INNOVATION

CODY RAHDERS

EL CAJON PRODUCTION

RYAN GREENINGPOWERSPORTS RACE TECHNICIAN

LARRY ROESELEROFFROAD TUNING TECHNICIAN

ARIEL LINDSLEYTECHNICAL MARKETINGSPECIALIST


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Continue Penetration in Existing Vehicle Categories

Penetrate New Vehicle Categories

Exploit International Opportunities

Expand FOX Brand Into Relevant Adjacencies

7. MULTIFACETED GROWTH STRATEGY

A

B

C

D


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Existing OEMs – round out our participation across customer product portfolios

Continue to focus on growing categories

New products in the pipeline

Capitalize on expanding aftermarket opportunity

CONTINUE PENETRATION IN

EXISTING VEHICLE CATEGORIES

A

FOX / Sport Truck Aftermarket Prod

Purpose-built. BDS lift kit and FOX s Chosen by Shelby America for their


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PENETRATE NEW VEHICLE CATEGORIES

Large Potential White Spac

RECENTLY ENTERED MARKETS IDENTIFIED FUTURE CATE

Ride Dynamics play a critical role in numerous large end markets

B


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EXPLOIT INTERNATIONAL OPPORTUNITIES

_____________________Source: McKinsey & Company, Winning the $30 trillion decathlon: Going for gold i

_____________________Source: 2014 Management estimates after giving effect to the Sport Truck USA and Race Face / Easton

acquisitions.

(billions of people)

Capturing the World’s

Eme

Middle Class

1990

FOX Sales by End-Destination

North America56%

Europe35%

Asia7%

South America

2%

The rise of the

Emerging Market

Middle Class9%

Increasing global demand for authentic American brands and performance products

1

2

3

4

5

* Forecast

C


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EXPAND FOX BRAND INTO

RELEVANT ADJACENCIES

HIGH-PERFORMANCE WHEELS

Enter adjacent categories organically or by way of acquisition

POWERED VEHICLES

HIGH-PERFORMANCE BRAK

WHEELS & OTHER COMPONENTS(RACE FACE/EASTON ACQUISITION)

Acquisition Closed: 12/12/2014Purchase Price: $30mm (plus a maximum earn-out of $16.9mm)2014 Sales: $23.6mm (unaudited)2014 Adj. EBITDA: $4.3mm (unaudited)

D

LIGHT BARS

DOORS

5-POINT BELTS


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PROVEN TRACKRECORD OFPERFORMANCE


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PROVEN TRACK RECORD OF PERFORMANCE

$137 $158

$181 $179

97 112

61

78

92

128

136

159

1

$198$236

$273$307

$233$271

2011 2012 2013 2014 YTD Q3-

2014

YTD Q3 -

2015

($ in millions)

SALES


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$57$63

$80

$94

$73 $83

2011 2012 2013 2014 YTD Q3-

2014

YTD Q3-

2015

PROVEN TRACK RECORD OF PERFORMANCE CON

(1) FOX defines adjusted EBITDA as net income adjusted for interest expense, net other expense, income taxes, amortization of purchased intangibles, depreciation, stock-

expense, contingent consideration valuation adjustments, and certain other acquisition related or non-recurring items that are more fully described in the appendix

(2) Non-GAAP gross margin is adjusted to exclude the effect of finished goods inventory valuation adjustments associated with the company’s acquisition which are include

footnote 3 of the adjusted EBITDA reconciliation found in the appendix

GROSS PROFIT($ in millions)

ADJUSTED EBITDA (1)

($ in millions)

28.8% 26.6% 29.4% 31.1% 31.5% 31.1% 15.5% 15.4% 18.2% 18.1

$31$36

$50$56

2011 2012 2013 2014

NON-GAAP GROSS MARGIN (2) ADJUSTED EBITDA MARGIN

MARGIN GROWTH THROUGH STRATEGIC AND


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OPERATIONAL EFFICIENCY INITIATIVES

Key project: Shift of mountamanufacturing to Taiwan

Expect transition to be c

Reduces production leachain efficiencies and recosts

Shortens supply chain b

We expect substantial mthis project

Dedicated teams working on

improvement initiatives in sumanufacturability, and otherimprovements targeted at im

_____________________Source: 2017 gross margin is estimated by management on legacy FOX business excluding acquisitions.


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WRAP UP

Multiple Attractive End Markets

Relentless Approach to Innovation

Authentic Brand Driving Consumer Demandand Loyalty

Powerful OEM Relationships

Expanding Global Presence

Experienced Management Team Leading aCompany of Enthusiasts

Multifaceted Growth Strategy

SUSTAINA

COMPETITIVE AD

TO ENABLE FUTUR


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Q&A


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APPENDIX


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ADJUSTED EBITDA RECONCILIATION

(1) Represents non-cash stock-based compensation.(2) Represents the amortization or accrual of a portion of the acquisitions’ purchase price classified as compensation expense and the periodic revaluation of the

consideration associated with the acquisition of Sport truck based on actual performance, current assumptions regarding volatility, interest rates, and forecas(3) Represents various acquisition related costs and expenses incurred to integrate acquired entities into the Company’s operations and the impact of finished g

adjustments.(4) Represents costs and expenses incurred related to the shelf registration filed in March 2015.(5) Other expense, net includes interest expense, foreign currency transaction gain or loss, gain or loss on the disposal of fixed assets, and other miscellaneous(6) Represents management fees paid to an affiliate of the Company’s majority stockholder pursuant to a management services agreement that t erminated upo

Company’s initial public offering.

($ in Millions) YT

2011 2012 2013 2014

Net Income 13.5$ $14.2 $24.1 $27.7 $

Depreciation & Amortization 6.6 7.2 7.8 9.7

Stock-Based Compensation (1) 1.0 2.1 2.5 4.1Fair Value Adjustment of Contingent Consideration and

Acquisition Related Compensation (2) 0.0 0.0 0.0 2.2

Other Acquisition and Integration Related Expenses (3) 0.0 0.0 0.3 4.2

Offering Expense (4) 0.0 0.0 0.0 0.5

Provision for Income Taxes 7.1 8.2 10.6 6.6

Costs Associated with Tax Benefit 0.0 0.0 0.0 0.2

Other Expense, Net (5) 2.0 3.8 4.0 0.3

Management Fees (Related Party) (6) 0.5 0.5 0.3 0.0 Adjusted EBITDA 30.7$ 36.0$ 49.6$ 55.5$ $

Year Ended December 31,

foxf fox factory jan 2016 investor presentation

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