Fox(FOXF) - 2023 Q2 - Quarterly Report

Financial Performance - Net sales for Q2 2023 were $400.7 million, a decrease of$6.0 million or 1.5% compared to Q2 2022[109] - Powered Vehicle Group net sales increased by $34.5 million, or 32.6$32.3 million, or 26.2%, due to the acquisition of Custom Wheel House and strong performance in upfitting products[109] - Specialty Sports Group net sales decreased by $72.8 million, or 41.0$15.9 million, or 2.0%, to $800.6 million compared to$784.7 million for the same period in 2022[119] - Powered Vehicle Group net sales increased by $92.0 million, or 48.4$4.9 million, or 1.9%, leading to a gross margin decrease of 220 basis points to 32.9%[110] - Total operating expenses for Q2 2023 were $79.2 million, an increase of$6.7 million or 9.2% compared to Q2 2022[111] - General and administrative expenses rose by $1.7 million, or 6.0$1.0 million, reflecting investments in personnel for future growth and product innovation[111] - Operating expenses for the six months ended June 30, 2023 increased by $19.3 million, or 13.9$157.9 million compared to $138.6 million for the same period in 2022[121] Income and Profitability - Net income for the six months ended June 30, 2023, was$81.5 million, compared to $101.5 million for the same period in 2022[107] - Income from operations for the three months ended June 30, 2023 decreased by$17.7 million, or 25.1%, to $52.8 million compared to$70.5 million for the same period in 2022[112] - Net income for the three months ended June 30, 2023 decreased by $13.8 million, or 25.8$39.7 million from $53.5 million for the same period in 2022[117] - Net income for the six months ended June 30, 2023 decreased by$20.0 million, or 19.7%, to $81.5 million from$101.5 million for the same period in 2022[127] Cash Flow and Financing - Net cash used in operating activities for the six months ended June 30, 2023 was $3.3 million, a significant improvement compared to$85.4 million for the same period in 2022[130][131] - Net cash used in investing activities for the six months ended June 30, 2023, was $156.5 million, compared to$19.9 million for the same period in 2022[133] - Cash consideration of $130.9 million was used for the purchase of Custom Wheel House in the first half of 2023[133] - Net cash provided by financing activities for the six months ended June 30, 2023, was$119.8 million, significantly up from $32.3 million in the same period of 2022[134][135] Debt and Interest - The 2022 Credit Facility provides for revolving loans and letters of credit up to an aggregate amount of$650.0 million, maturing on April 5, 2027[137] - The company borrowed $475.0 million under the 2022 Credit Facility, which was used to repay all outstanding amounts owed under the Prior Credit Facility[138] - As of June 30, 2023, the weighted-average interest rate on outstanding borrowing was 5.56%[140] - The company was in compliance with the covenants of the 2022 Credit Facility as of June 30, 2023[141] Market and Economic Conditions - Significant increases in inflation, particularly related to wages and raw materials, could adversely impact the company's financial condition and results of operations[143] - There have been no material changes to the company's material cash requirements related to commitments or contractual obligations since the last annual report[142] - No material changes were reported in the disclosures about market risk compared to the previous annual report[144]