What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-24 compared with 2021-02-25 · 49 added, 57 removed, 289 unchanged (27% of the section changed)

9 unchanged sentences

was incorporated in Delaware on December 28, 2007.

In October 2018, we announced the relocation of our corporate headquarters from Scotts Valley, California to Braselton, Georgia, which was effective on December 31, 2018.

In October 2018, we announced the relocation of our business headquarters from Scotts Valley, California to Braselton, Georgia, which was effective on December 31, 2018.

In June 2021, we established a principal executive office in Duluth, Georgia.

In August 2013, we completed an initial public offering ("IPO") of our common stock.

9 unchanged sentences

We design our products for, and market our products to, some of the world’s leading cycling and automotive OEMs and to consumers through the aftermarket channel.

Many of our OEM customers, including Giant, Pivot, Santa Cruz Bicycles, Specialized, Scott, Trek, Yeti Cycles and YT in Specialty Sports and BRP, Ford, Honda, Jeep, Kawasaki, Polaris, Toyota, Triumph, Textron and Yamaha in Powered Vehicles, are among the market leaders in their respective product categories, and help shape, as well as respond to, consumer trends in their respective categories.

Many of our OEM customers, including Giant, Merida, Orbea, Kenstone Metal, Canyon Bicycles, Santa Cruz Bicycles, and Yeti Cycles in Specialty Sports and BRP, Ford, Polaris, Toyota, 4 Wheel Parts, Kawasaki, Yamaha, and Honda in Powered Vehicles, are among the market leaders in their respective product categories, and help shape, as well as respond to, consumer trends in their respective categories.

We believe that OEMs often prominently display and incorporate our products to improve the marketability and consumer demand for their performance models, which reinforces our brand image.

35 unchanged sentences

Over the past several years, we have developed multiple new products, such as:

• PODIUM Internal Bypass, introduced into the utility task vehicle ("UTV") market, which through its internal bypass technology, allows the vehicle to be plush on small bumps and deliver excellent chassis control while providing progressive bottoming resistance with each increment of travel used;

• X2 technology used in our 2.5 PODIUM shocks for UTVs that feature high- and low-speed rebound adjustment, high- and low-speed compression adjustment, and a dual-rate spring for the rear shocks to allow drivers to tune for many different terrain types and driving styles;

• Aluminum bodied derivatives of Internal Bypass and X2 that allow for up to 10 pounds of weight loss per vehicle and improve corrosion resistance;

• A new hydraulic top out system, released on Jeep and Ford, that is instrumental in controlling the high corner weights of trucks during off road maneuvers;

• The first original equipment ("OE") capable hydraulic bump stop, currently used on the new Jeep Mojave, which allows for bottoming resistance never before available from the factory;

• Our new motorcycle fork cartridge uses bicycle damper technology and allows us to sell both front and rear suspension solutions to the motorcycle aftermarket;

• Our new iQS modal electronic suspension control system, current in use on UTVs, Snowmobiles, and Trucks, allows for easy aftermarket fitment and cheaper OE fitments;

• Our ultra-light weight coil and air snowmobile shock platforms offer the same dominant FOX performance features at a new class leading weight;

• The first independently controlled compression and rebound, semi-active Live Valve X2 shock.

On a 3.0 internal bypass platform, it is the longest rear UTV shock to date with 15.6” of stroke;

• The next generation of Live Valve combined with a 3.1-inch diameter anodized aluminum shock body, specifically designed to withstand the higher internal pressures created by the new valve’s wider dynamic range;

• Electronically adjustable rear suspension pre-load allowing a user to easily compensate for the additional weight and bring a vehicle back to optimal ride height;

• Position sensitive spiral technology uses internal grooves placed in the shock body to improve small bump comfort and bottom out control, providing the performance of position sensitive damping at a lower price point;

• Ridetech RidePro E5 Air Suspension Control System, improving comfort and performance to your vehicle;

• Ridetech 62-67 Nova Suspension System (Coil-Over & Air), bringing today's performance to your vintage vehicle;

• Market leading 3-4” Bronco suspension lift products that are custom designed to each model configuration and that utilize a combination of strut and pre-load spacers for a more balanced performance;

• LIVE Valve, our proprietary semi-active, electronic suspension that processes data from multiple vehicle sensors to adjust the suspension virtually instantaneously to the demands of changing terrain.

This technology is currently in use UTVs, Trucks, and mountain bikes;

• Our new main piston LIVE technology has a low hysteresis design that speeds response time and allows for position sensitive algorithms;

• 32, 34 and 36 Factory Series FLOAT FIT4, which reduces overall fork weight, provides external adjustability with our fourth-generation FOX Isolated Technology (FIT) closed-cartridge damper, and includes the self-adjusting negative chamber air spring for quieter operation and ease of adjustment;

3 unchanged sentences

• X2 technology used in our Factory Series FLOAT and DH rear shocks, which allows the rider to independently tune high- and low-speed compression and high- and low-speed rebound;

• DPX2 rear shock technology that combines the character of our DPS damping and X2 damping circuits to provide a lightweight trail-tuned adjustable shock;

• Rhythm series fork products developed to address a lower price point offering without compromising proven FOX performance;

• Race Face Vault Hub, a new 120-point high-engagement mountain bike hubset featuring tool-free end caps that simplify conversion among all major axle standards and is approved for e-bike applications;

• Race Face Next R36 Carbon Wheels featuring a 36mm wide carbon rim for increase tire volume and traction, a single spoke length throughout and an offset rim design for improved spoke balance and strength;

• Easton EC90 SL Crankset, a versatile road bike crankset that allows quick conversion between 1x and 2x road and gravel chainring configurations.

18 unchanged sentences

We believe innovation is the foundation of our company.

As we continue to leverage latest technology to develop a diverse portfolio of performance-defining products, our new Powered Vehicle Group facility extends our ability to not only scale to newer levels but also do it efficiently.

As we continue to leverage latest technology to develop a diverse portfolio of performance-defining products, our Powered Vehicle Group facility extends our ability to not only scale to newer levels but also do it efficiently.

We have great relations with our OEM and Aftermarket partners and given our key distinct strengths, we believe we have and will continue to win more applications.

3 unchanged sentences

Over the past several years, we have completed acquisitions that we believe enhance our business and strategically expand our product offerings.

In 2014, we acquired the business of Sport Truck, a full-service distributor of aftermarket suspension solutions.

Sport Truck designs, markets, and distributes lift kit solutions primarily through its brands, BDS Suspension and Zone Offroad Products.

In 2014, we acquired the businesses of Race Face/Easton.

Known for its unique carbon technology, Race Face/Easton designs, manufactures, and distributes performance bike wheels and other performance cycling components including cranks, bars, stems, and seat posts, globally to OEMs and the aftermarket.

In 2015, we continued to expand our opportunities through the acquisition of certain assets of Marzocchi’s bike product lines.

In November 2017, through our subsidiary FF U.S.

Holding Corp.

d/b/a Tuscany Motor Company ("Tuscany") we acquired the majority interest in the business of Flagship, Inc., a designer, manufacturer and distributor of premium aftermarket powered vehicle performance packages and personal-use specialty vehicles based on OEM vehicle chassis.

We purchased the remaining interest in July 2020.

In May 2019, we acquired substantially all of the assets of Air Ride Technologies, Inc., d/b/a Ridetech, a manufacturer of suspension systems that enhance the handling and ride quality of muscle cars, trucks, sports cars and hot rods.

In March 2020, we acquired substantially all the issued and outstanding capital stock of SCA Performing Holdings, Inc.

("SCA"), a leading OEM authorized specialty vehicle manufacturer for light duty trucks and sport utility vehicles.

The Company expects this acquisition to expand its North American geographic manufacturing footprint and broaden its product offerings in the automotive industry.

We also believe that our passionate customer base has a desire for other types of performance products beyond those that attach to a vehicle or bike.

In May 2021, through our wholly owned subsidiary, SCA Performance, Inc.

("SCA"), we acquired all of the issued and outstanding stock of Manifest Joy LLC ("Outside Van), a custom van conversion company that designs and custom engineers recreational vehicles.

In December 2021, through our wholly owned subsidiary, Shock Therapy Suspension, Inc., we acquired substantially all the assets of Shock Therapy LLC ("Shock Therapy"), a premier suspension tuning company in the off-road industry.

The Company expects these acquisitions to expand its North American geographic manufacturing footprint and broaden its product offerings in the automotive industry.

We believe there is opportunity to expand our total available market by broadening our acquisition focus to include a more diverse range of performance products that add to or increase our customers' enjoyment of their activities of choice.

We also believe that our passionate customer base has a desire for other types of performance products beyond those that attach to a vehicle or bike.

Our business development group is responsible for identifying and assessing inorganic and organic potential growth opportunities of our ride dynamics platform and other specialty sports technology platforms.

7 unchanged sentences

Accelerate international growth

While a significant percentage of our current sales are to OEMs and dealers and distributors located outside the U.S., we believe international expansion represents a significant opportunity for us and we have, and intend to continue to, selectively increase infrastructure investments and focus on identified geographic regions.

We believe international expansion represents a significant opportunity for us and we have, and intend to continue to, selectively increase infrastructure investments and focus on identified geographic regions.

We believe that rising consumer discretionary income in a number of developing markets and increasing consumer preferences for premium, performance bikes and powered vehicles should contribute to increasing demand for our products.

In addition, we believe increasing international viewership of racing and extreme sports and other outdoor events, such as the X Games, is contributing to the growth of international participation in activities in which our products are used.

In addition, we believe increasing international viewership of racing and extreme sports and other outdoor events, such as the Union Cycliste Internationale Mountain Bike World Cup and X Games, is contributing to the growth of international participation in activities in which our products are used.

We intend to leverage the recognition of our brands to capitalize on these trends by globally increasing our sales to both OEMs and dealers and distributors, particularly in markets where we perceive significant opportunities.

Improve operating and supply chain efficiencies

During 2017, we completed the process of moving all bike suspension component manufacturing to our facility in Taichung, Taiwan.

In connection with this move, we are using, and expect to continue to use, suppliers that are located closer to our Taichung, Taiwan facility for a number of materials and components.

This transition has shortened production lead times to our bike OEM customers, improved supply chain efficiencies, and reduced manufacturing costs.

With the transition of all of our bike suspension component manufacturing to Taichung, Taiwan, we converted the Watsonville, California manufacturing facility to exclusively manufacture powered vehicle suspension products.

In 2019, we completed the process of relocating our Specialty Sports Group’s U.S.

aftermarket bike products distribution, sales, and service operations to Sparks, Nevada.

In 2020, we substantially completed the first phase of construction of an approximately 336,000 square foot state-of-the-art facility in Hall County, Georgia to diversify our manufacturing platform and provide additional long-term capacity to support growth in our Powered Vehicles Group.

The first phase will be used for manufacturing, warehousing, distribution and office space.

We recently completed the construction of an approximately 336,000 square foot state-of-the-art facility in Hall County, Georgia (the "Hall County Facility") to diversify our manufacturing platform and provide additional long-term capacity to support growth in our Powered Vehicles Group.

The Hall County Facility is being used for manufacturing, warehousing, distribution and office space.

We are currently transitioning out of our Watsonville, California facility and relocating our powered vehicles suspension manufacturing to the Hall County Facility.

Certain portions of our business are seasonal;

15 unchanged sentences

(commonly known as King Shocks), Icon Vehicle Dynamics, Sway-A-Way, Pro Comp USA Suspension, and Rancho (Tenneco).

In the market for suspension systems, or

lift kits, we compete with TransAmerican Wholesale/Pro Comp USA, Rough Country Suspension Systems, TeraFlex, Falcon, ReadyLIFT Suspension, Tuff Country EZ-Ride Suspension, and Rusty’s Off-Road.

In the market for suspension systems, or lift kits, we compete with TransAmerican Wholesale/Pro Comp USA, Rough Country Suspension Systems, TeraFlex, Falcon, ReadyLIFT Suspension, Tuff Country EZ-Ride Suspension, and Rusty’s Off-Road.

In the market for up-fitted vehicles, we compete with Roush Performance and DSI Custom Vehicles.

9 unchanged sentences

Powered Vehicles

In our powered vehicle product categories, we offer premium products under the FOX, BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4x4 Posi-Lok, Ridetech, Tuscany, and SCA brands for Side-by-Sides, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, ATVs, snowmobiles, specialty vehicles and applications, motorcycles, and commercial trucks.

In each of the years ended January 1, 2021, January 3, 2020 and December 28, 2018, approximately 59%, 60% and 54%, respectively, of our sales were attributable to sales of powered vehicles related products.

In our powered vehicle product categories, we offer premium products under the FOX, BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4x4 Posi-Lok, Ridetech, Tuscany, Outside Van, and SCA brands for side-by-sides, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, ATVs, snowmobiles, specialty vehicles and applications, motorcycles, and commercial trucks.

In each of the years ended December 31, 2021, January 1, 2021 and January 3, 2020, approximately 55%, 59% and 60%, respectively, of our sales were attributable to sales of powered vehicles related products.

Products for these vehicles are designed for use on roads, for trail riding, in racing, and to help provide performance and comfort.

8 unchanged sentences

Given this wide range of bike products and brands, as well as the potential to expand our offerings to include other types of performance-defining products, we changed the name of the group from Bike Division to Specialty Sports Group.

In each of the years ended January 1, 2021, January 3, 2020 and December 28, 2018, approximately 41%, 40% and 46%, respectively, of our sales were attributable to sales of bike-related products.

In each of the years ended December 31, 2021, January 1, 2021 and January 3, 2020, approximately 45%, 41% and 40%, respectively, of our sales were attributable to sales of bike-related products.

Primarily for the mountain bike market, we offer mid-end and high-end front fork and rear suspension products designed for cross-country, trail, all-mountain, free-ride and downhill riding.

35 unchanged sentences

No material portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the U.S.

Sales attributable to our 10 largest OEM customers, which can vary from year-to-year, collectively accounted for approximately 36%, 44% and 43% of our sales in 2020, 2019 and 2018.

In 2020, no single customer represented 10% or more of our sales.

Our sales to Ford, a powered vehicles OEM, accounted for approximately 11% and 8% in 2019 and 2018, respectively.

Sales attributable to our 10 largest OEM customers, which can vary from year-to-year, collectively accounted for approximately 35%, 36% and 44% of our sales in fiscal years 2021, 2020 and 2019, respectively.

In 2021 and 2020 no single customer represented 10% or more of our sales.

Our sales to Ford, a powered vehicles OEM, accounted for approximately 11% in 2019.

Although we refer to the branded bike OEMs that use our products throughout this document as "our customers," "our OEM customers" or "our bike OEM customers," branded bike OEMs often use contract manufacturers to manufacture and assemble their bikes.

1 unchanged sentence

Our North American sales totaled $811.3 million, $593.3 million, and $502.3 million, or 62%, 67% and 67%, of our total sales in 2021, 2020 and 2019, respectively.

Our international sales totaled $297.3 million, $248.8 million and $230.5 million or 33%, 33% and 37% of our total sales in 2020, 2019 and 2018, respectively.

Our international sales totaled $487.8 million, $297.3 million and $248.8 million or 38%, 33% and 33% of our total sales in fiscal years 2021, 2020 and 2019, respectively.

Sales attributable to countries outside the U.S.

2 unchanged sentences

Additional information about our product revenues and certain geographical information is available in Note 2 - Revenues of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Additional information regarding our sales, income, and total assets is available in Item 6.

" Selected Financial Information ."

Powered Vehicles

We sell our powered vehicle-suspension products to OEMs, including BRP, Ford, Honda, Jeep, Kawasaki, Polaris, Toyota, Triumph, Textron and Yamaha.

We sell our powered vehicle-suspension products to OEMs, including BRP, Ford, Polaris, Toyota, Kawasaki, Yamaha, and Honda.

We also are continually nurturing and developing relationships with our existing and new OEMs, as the powered vehicles market continues to grow.

4 unchanged sentences

Specialty Sports

We sell our bike suspension and components products to a broad network of domestic and international bike OEMs, including Giant, Pivot, Santa Cruz Bicycles, Specialized, Scott, Trek, Yeti Cycles and YT.

We sell our bike suspension and components products to a broad network of domestic and international bike OEMs, including Giant, Merida, Orbea, Kenstone Metal, Canyon Bicycles, Santa Cruz Bicycles, and Yeti Cycles.

We have long-standing relationships with many of the top bike OEMs.

23 unchanged sentences

Furthermore, manufacturing our own products enables us to adjust our labor and production inputs to meet seasonal demands and the customized requirements of some of our customers.

The first phase will be used for manufacturing, warehousing, distribution and office space.

We had approximately $128.5 million and $65.1 million in firm backlog orders at January 1, 2021 and January 3, 2020, respectively.

The increase in 2020 backlog, as compared to 2019, was due to growth in sales, growing market share, and shortage of non FOX components at the OEMs, affecting the application of FOX components.

We recently completed the Hall County Facility to diversify our manufacturing platform and provide additional long-term capacity to support growth in our Powered Vehicles Group.

The Hall County Facility is being used for manufacturing, warehousing, distribution and office space.

We are currently transitioning out of our Watsonville, California facility and relocating our powered vehicles suspension manufacturing to the Hall County Facility.

We had approximately $223.5 million and $128.5 million in firm backlog orders at December 31, 2021 and January 1, 2021, respectively.

The increase in 2021 backlog, as compared to 2020, was due to growth in sales, growing market share, and backfilling order that were delayed in prior year due to chassis shortages.

Suppliers and raw materials

1 unchanged sentence

We generally use multiple suppliers for our raw materials and believe that our raw materials are in adequate supply and available from many suppliers at competitive prices.

Prices for our raw materials fluctuate from time to time, but historically, price fluctuations have not materially impacted our business.

We do, however, depend on a limited number of suppliers for certain of our components.

If our current suppliers for such components are unable to timely fill orders, or if we are required to transition to other suppliers, we could experience significant production delays or disruption to our business.

Please read Item 1A.

" Risk Factors " – Risks Related to Our Business and Operations - "We depend on a limited number of suppliers for our materials and component parts for some of our products, and the loss of any of these suppliers or an increase in cost of raw materials could harm our business." In addition, prices for our raw materials fluctuate.

While price fluctuations have not materially impacted our business historically, we are actively monitoring the current market conditions and price trends.

We also have OEM partners that supply vehicle chassis used in our upfitting operations.

8 unchanged sentences

Employee Overview

As of January 1, 2021, we had approximately 3,000 full-time employees in the U.S., Canada, Europe and Taiwan.

As of December 31, 2021, we had approximately 4,100 employees in the U.S., Canada, Europe, Taiwan and Australia.

Our employees are primarily located in the U.S.

We also use part-time and temporary employees at our manufacturing facilities to help us meet seasonal demands.

We also use temporary employees at our manufacturing facilities to help us meet seasonal demands.

None of our employees are subject to collective bargaining agreements.

2 unchanged sentences

In response to the COVID-19 pandemic, we have been working to keep our employees safe and healthy from this outbreak.

Using guidance from the Centers for Disease Control ("CDC") and the World Health Organization ("WHO"), we have taken a number of measures to keep employees safe.

Using guidance from the Centers for Disease Control ("CDC"), the World Health Organization ("WHO"), and the various states and counties in which we operate, we have taken a number of measures to keep employees safe.

Employees are offered paid sick leave or paid time off to cover sickness and absences.

38 unchanged sentences

manufacturing, sale and service of performance-defining products.

Additional information about our product segment and certain geographic information is available in Note 2 - Revenues and Note 5 - Property, Plant and Equipment, net of the "Notes to Consolidated Financial Statements" in this Annual Report on Form 10-K.

Additional information about our product segment and certain geographic information is available in Note 2.

" Revenues " and Note 5.

" Property, Plant and Equipment, net " of the "Notes to Consolidated Financial Statements" in this Annual Report on Form 10-K.

Corporate and available information

Our principal executive offices are located at 6634 Hwy 53, Braselton, GA 30517, and our telephone number is (831) 274-6500.

Our principal executive offices are located at 2055 Sugarloaf Circle, Suite 300, Duluth, GA 30097, and our telephone number is (831) 274-6500.

Our website address is www.ridefox.com.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business