BRASELTON, Ga. (BRAIN) — Fox Factory’s bicycle-related business was up 22.4% last year, totaling $367 million.
And Fox’s CEO said he’s optimistic that demand for bikes — especially those with Fox suspension — will remain strong for the rest of 2021 and beyond.
“There is a lot of demand for higher-end bikes and things like e-bikes as well,” Dennison told analysts on a call Thursday. “We really, really like what we are seeing relative to the premium category. Obviously we fit in really well in that space and that helps .”
Fox sells bike parts under the Fox, Marzocchi, RaceFace and Easton brands, which make up its Specialty Sports Group.
In the final quarter of 2020, the Speciality Sports Group had an increase of 41% over the same quarter in 2019.
Dennison told analysts that Fox’s bicycle suspension orders are booked out into 2022, which gives the company more visibility into future sales forecasts. Fox is forecasting full-year 2021 company sales to top $1 billion for the first time, ending in the range of $1,035 million to $1,085 million. 2020 company-wide sales were $891 million.
He also said Fox has been able to increase capacity at its bicycle suspension factory in Taiwan.
“In the bicycle industry there are reports of lead times going out north of 400, 450 or even 500 days in some components. We’ve been able, with our extra capacity, to bring that back down. We are not anywhere near where we are supposed to be at, let’s say, 45 days, but we are a lot closer to 300 days … We have a long way to go to get back to a more normal environment.”
He said Fox’s relationship with its OEM customers contributed to the success. “I can’t speak highly enough of the quality of the partnerships that we have and I think that’s going to bode well for us as well,” Dennison said.
Fox’s other division, which sells suspension for powered vehicles, provided 59% of Fox Factory’s revenues last year.
Overall, Fox’s 2020 sales were up 18.6% for the full year to $890.6 million, the highest annual sales in the company’s history. The last two quarters also hit records.
Full-year net income was $91.7 million, down from $94.7 million in 2019. Basic earnings per share for the years was $2.25, down from $2.43 in 2019. Non-GAAP adjusted gross margin for the years was down 10 basis points to 32%.
The reduced net income and margin was primarily due to higher transit costs, costs from moving much of its powered vehicle product manufacturing a new facility in Georgia. The company said “inefficiencies due to the COVID-19 pandemic” also increased costs.
Fox bought SCA, an authorized specialty vehicle manufacturer, in February, and SCA revenues were included in its second half and full-year figures, contributing to the sales increase in the powered vehicle division.
Fox also announced Thursday that former CEO Larry Enterline plans to retire from being executive chairman effective April 2. Enterline retired from the CEO position a year ago.