FOX FACTORY HOLDING CORP Q4 FY2025 earnings call

• Mike emphasized focus on profitable growth, Phase 1 $25M profit optimization plan completed, Phase 2 focuses on core high-margin businesses, business line rationalization, supply chain and material cost productivity, and reducing operating expenses. • Dennis reviewed Q4 financial results, balance sheet, cash flow, and 2026 outlook. • Organizational change: Mike assumed responsibility for AAG to drive critical actions.

PVG: Q4 net sales $116.7M, automotive OE stable, benefited from premium vehicle SKUs, PVG delivered margin improvement in 2025; aluminum supplier disruption impacted Q4 revenue by ~$8M. AAG: Taking portfolio actions, divesting operations dilutive to margin, Q4 net sales $126.2M, up 12.5% YOY and 7.1% sequentially, OE programs underpin long-term growth. SSG: Q4 net sales $118.2M, down 5% YOY; bike industry challenging, Marucci Q4 stronger than Q3 but margin compression due to strategic investments and tariffs.

• Full-year 2026 net sales expected $1.328B - $1.416B (midpoint down ~6.5% YOY) due to divestitures, product line rationalization, and down market. • Adjusted EBITDA expected $174M - $203M (midpoint margin 13.7%, ~200 basis points improvement vs 2025). • Q1 2026 net sales expected $343M - $369M, adjusted EBITDA $27M - $34M; Q2 and beyond expected to improve as tariff comparisons normalize, aluminum supplies normalize, and Phase II actions materialize.

• Unforeseen tariffs masking savings and impacting results. • Aluminum supplier disruption at OEM customers impacting volumes. • Macro realities like elevated interest rates, soft labor markets, and channel partners tightening inventory levels. • Tariffs adding pressure to OEMs and driving inventory levels below historical norms, with disruptive market entrants creating competitive dynamics.

Q: Dive in on moving parts on guidance, revenue and profitability related to sold businesses.

A: Taking look at dilutive businesses, Geyser and Shock Therapy divestiture expected to improve margins, continuing to look at other businesses.

Q: Thought process behind divesting Phoenix business.

A: Business in portfolio doesn't fit, heavy investment and working capital utilization, dilution in margin, will continue to partner in product development.

Q: Tariffs net impact, baked into guidance.

A: 2025 $50M gross tariff impact offset $25M, 2026 estimated $30M gross tariff impact, expect to mitigate 50%, leaving $15M headwind in first half.

Q: Pursue refund of tariff payments.

A: Will do everything possible, but can't guide on when.

Q: Plan to use proceeds from divestment.

A: Debt reduction.