What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-08 · 127 added, 119 removed, 248 unchanged (50% of the section changed)

10 unchanged sentences

Forward-looking statements generally relate to future events or our future financial or operating performance that involve substantial risks and uncertainties.

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”, “remain”, or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “can,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential”, “remain”, or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

Forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to numerous risks and uncertainties, including but not limited to risks related to:

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• future disruptions in the operations of our manufacturing facilities;

• our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, and international trade policies;

• our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, and international trade policies, including regulations or orders related to the import and export of industry products;

• changes in the relative proportion of profit earned in the numerous jurisdictions in which we do business and in tax legislation, case law and other authoritative guidance in those jurisdictions;

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We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make or choose not to make.

Critical Accounting Policies and Estimates

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The table below summarizes our results of operations:

For the three months ended For the six months ended

(in millions) July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

For the three months ended For the nine months ended

(in millions) October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Net sales $ 376.4 $ 359.1 $ 1,106.2 $ 1,041.1

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Provision (benefit) from income taxes 2.3 0.3 1.4 (1.4)

Net income (loss) $ 2.7 $ 5.4 $ (257.0) $ 1.9

Net (loss) income $ (0.7) $ 4.8 $ (257.7) $ 6.7

net loss attributable to non-controlling interest — — (0.1) —

Net income (loss) attributable to FOX stockholders $ 2.7 $ 5.4 $ (257.0) $ 1.9

Net (loss) income attributable to FOX stockholders $ (0.6) $ 4.8 $ (257.6) $ 6.7

*Amounts may not foot due to rounding.

The following table sets forth selected statement of income data as a percentage of net sales for the periods indicated:

For the three months ended For the six months ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

For the three months ended For the nine months ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Net sales 100.0 % 100.0 % 100.0 % 100.0 %

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Provision (benefit) from income taxes 0.6 0.1 0.1 (0.1)

Net income (loss) 0.7 % 1.6 % (35.2) % 0.3 %

Net (loss) income (0.2) % 1.3 % (23.3) % 0.6 %

net loss attributable to non-controlling interest — — — —

Net income (loss) attributable to FOX stockholders 0.7 % 1.6 % (35.2) % 0.3 %

Net (loss) income attributable to FOX stockholders (0.2) % 1.3 % (23.3) % 0.6 %

*Percentages may not foot due to rounding.

Three months ended July 4, 2025 compared to three months ended June 28, 2024

Three months ended October 3, 2025 compared to three months ended September 27, 2024

Consolidated net sales

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Net sales $ 376.4 $ 359.1 $ 17.3 4.8 %

Total net sales for the three months ended July 4, 2025 increased $26.4 million, or 7.6%, compared to the three months ended June 28, 2024.

The increase in net sales is driven by the stabilization in bike sales, increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE product lines.

Although, net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions impacting dealers and consumers remain headwinds.

Total net sales for the three months ended October 3, 2025 increased $17.3 million, or 4.8%, compared to the three months ended September 27, 2024.

The increase in net sales is driven by increased demand for aftermarket products, strategic customer program launches, and market share gains in motorcycle business, which more than offset lower industry demand in the automotive OE product lines and reduced inventory levels by OEMs, distributors, and dealers in response to market-wide economic conditions.

Although net sales increased, high interest rates impacting industry and consumer demand, high vehicle costs, and macro-economic conditions remain headwinds.

Cost of sales

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Cost of sales $ 261.9 $ 251.6 $ 10.3 4.1 %

Cost of sales for the three months ended July 4, 2025 increased $20.4 million, or 8.6%, compared to the three months ended June 28, 2024.

The increase in cost of sales is mainly due to our increased sales.

Our gross margin decreased 60 basis points to 31.2% for the three months ended July 4, 2025, as compared to the same prior fiscal year period, primarily due to our product mix and impact of tariffs.

Cost of sales for the three months ended October 3, 2025 increased $10.3 million, or 4.1%, compared to the three months ended September 27, 2024.

The increase in cost of sales is mainly due to our increased sales and impact of tariffs.

Our gross margin increased 50 basis points to 30.4% for the three months ended October 3, 2025, as compared to the same prior fiscal year period, primarily due to our product mix.

Operating expenses

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Operating expenses:

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Total operating expenses $ 99.4 $ 88.7 $ 10.7 12.1 %

Total operating expenses for the three months ended July 4, 2025 were $98.5 million, compared to $92.4 million for the three months ended June 28, 2024.

Research and development expenses and sales and marketing expenses increased $3.1 million and $1.7 million, respectively, mainly due to investments to support future growth and product innovation.

Total operating expenses for the three months ended October 3, 2025 were $99.4 million, compared to $88.7 million for the three months ended September 27, 2024.

General and administrative expenses increased $5.2 million driven by our organizational restructuring initiatives.

Sales and marketing expenses and research and development expenses increased $3.6 million and $2.5 million, respectively, mainly due to investments to support strategic customer launches and product innovation.

Income from operations

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Income from operations $ 15.1 $ 18.8 $ (3.7) (19.7) %

As a result of the factors discussed above, income from operations for the three months ended July 4, 2025 decreased $0.1 million, or 0.5%, compared to income from operations for the three months ended June 28, 2024.

As a result of the factors discussed above, income from operations for the three months ended October 3, 2025 decreased $3.7 million, or 19.7%, compared to income from operations for the three months ended September 27, 2024.

Interest and other expense, net

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Interest expense $ 13.9 $ 14.2 $ (0.3) (2.1) %

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Interest and other expense, net $ 13.5 $ 13.7 $ (0.2) (1.5) %

Interest and other expense, net for the three months ended July 4, 2025 decreased by $0.6 million to $13.0 million, compared to $13.6 million for the three months ended June 28, 2024.

Interest and other expense, net for the three months ended October 3, 2025 decreased by $0.2 million to $13.5 million, compared to $13.7 million for the three months ended September 27, 2024.

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

Expense (benefit) from income taxes

$ 2.8 $ (0.4) $ 3.2 (800.0) %

The effective tax rates were 50.9% and (7.4)% for the three months ended July 4, 2025 and June 28, 2024, respectively.

For the three months ended July 4, 2025, the difference between the Company’s effective tax rate of 50.9% and the 21% federal statutory rate was primarily due to the unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

For the three months ended June 28, 2024, the difference between our effective tax rate of (7.4)% and the 21% federal statutory rate was primarily due to the favorable impact of discrete items in proportion to lower levels of pre-tax income.

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Provision for income taxes $ 2.3 $ 0.3 $ 2.0 666.7 %

The effective tax rates were 140.8% and 5.0% for the three months ended October 3, 2025 and September 27, 2024, respectively.

For the three months ended October 3, 2025, the difference between the Company’s effective tax rate of 140.8% and the 21% federal statutory rate was primarily due to unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

For the three months ended September 27, 2024, the difference between our effective tax rate of 5.0% and the 21% federal statutory rate was primarily due to the favorable impact of discrete items on lower levels of pre-tax income.

Net (loss) income

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

Net income $ 2.7 $ 5.4 $ (2.7) (50.0) %

As a result of the factors described above, our net income decreased $2.7 million, or 50.0%, to $2.7 million in the three months ended July 4, 2025 from net income of $5.4 million for the three months ended June 28, 2024.

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Net (loss) income $ (0.7) $ 4.8 $ (5.5) (114.6) %

As a result of the factors described above, our net income decreased $5.5 million, or 114.6%, to a net loss of $0.7 million in the three months ended October 3, 2025 from net income of $4.8 million for the three months ended September 27, 2024.

Segment Review

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PVG, AAG, and SSG.

For additional financial information related to our operating segments including the reconciliation of net income attributable to our common stockholders to adjusted EBITDA, see Note 15 – Segment Information .

For additional financial information related to our operating segments including the reconciliation of consolidated net (loss) income to adjusted EBITDA, see Note 15 – Segment Information .

The following table summarizes consolidated net sales and adjusted EBITDA by segment:

For the three months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Powered Vehicles Group $ 125.9 $ 109.3 $ 16.5 15.1 %

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Adjusted EBITDA $ 44.4 $ 42.0 $ 2.4 5.7 %

*Numbers may not foot due to rounding.

Powered Vehicles Group

Powered Vehicles Group net sales increased by $5.7 million, or 4.9%, due to the inclusion of $11.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE product lines.

Powered Vehicles Group net sales increased by $16.5 million, or 15.1%, mainly due to strategic customer program launches and the inclusion of $9.1 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE product lines.

Powered Vehicles Group adjusted EBITDA increased by $10.0 million, or 112.4%, primarily due to higher gross profit, partially offset by an increase in research and development expenses.

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however, high interest rates, high vehicle costs, and macro-economic conditions impacting dealers and consumers continue to pose challenges.

Aftermarket Applications Group adjusted EBITDA increased by $1.8 million, or 12.7%, mainly due to higher gross profit.

Aftermarket Applications Group adjusted EBITDA increased by $3.0 million, or 31.9%, mainly due to higher gross profit, partially offset by an increase in sales and marketing expenses.

Specialty Sports Group

Specialty Sports Group net sales increased by $13.6 million, or 11.0%, primarily due to the stabilization in bike sales.

Specialty Sports Group adjusted EBITDA increased by $1.2 million, or 4.1%, primarily due to higher gross profit.

Unallocated corporate expenses consist of corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated occupancy costs for our corporate headquarters, acquisition costs, other benefit and compensation programs, including performance-based compensation, and administrative expenses such as accounting, finance, legal, human resources, and information technology expenses.

Unallocated corporate expenses decreased by $1.6 million, or 10.6%, mainly due to cost containment measures.

Six months ended July 4, 2025 compared to six months ended June 28, 2024

Specialty Sports Group net sales decreased by $16.8 million, or 11.2%, primarily due to OEMs, distributors, and dealers reducing inventory levels in response to market-wide economic conditions.

Specialty Sports Group adjusted EBITDA decreased by $9.0 million, or 24.7%, primarily due to a decrease in gross profit.

Unallocated Corporate Expenses

compensation programs, including performance-based compensation, and administrative expenses such as accounting, finance, legal, human resources, and information technology expenses.

Unallocated corporate expenses increased by $1.6 million, or 12.5%, to $14.4 million, compared to $12.8 million in the same period of the prior fiscal year.

Nine months ended October 3, 2025 compared to nine months ended September 27, 2024

Consolidated net sales

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Net sales $ 1,106.2 $ 1,041.1 $ 65.1 6.3 %

Total net sales for the six months ended July 4, 2025 increased $47.9 million, or 7.0%, compared to the six months ended June 28, 2024.

The increase in net sales is primarily due to the stabilization in bike sales, increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE and power sports product lines.

Although net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions impacting dealers and consumers remain headwinds.

Total net sales for the nine months ended October 3, 2025 increased $65.1 million, or 6.3%, compared to the nine months ended September 27, 2024.

The increase in net sales is primarily due to increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE product lines.

Although net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions remain headwinds.

Cost of sales

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Cost of sales $ 765.1 $ 719.5 $ 45.6 6.3 %

Cost of sales for the six months ended July 4, 2025 increased $35.4 million, or 7.6%, compared to the six months ended June 28, 2024.

Cost of sales for the nine months ended October 3, 2025 increased $45.6 million, or 6.3%, compared to the nine months ended September 27, 2024.

The increase in cost of sales is primarily due to our increased sales.

Our gross margin decreased by 30 basis points to 31.1% for the six months ended July 4, 2025, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix and impact of tariffs.

Our gross margin decreased by 10 basis points to 30.8% for the nine months ended October 3, 2025, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix and impact of tariffs.

Operating expenses

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Operating expenses:

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Total operating expenses $ 558.1 $ 275.3 $ 282.8 102.7 %

Total operating expenses for the six months ended July 4, 2025 were $458.7 million, compared to $186.7 million for the six months ended June 28, 2024.

During the six months ended July 4, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S.

*Numbers may not foot due to rounding.

Total operating expenses for the nine months ended October 3, 2025 were $558.1 million, compared to $275.3 million for the nine months ended September 27, 2024.

During the nine months ended October 3, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S.

tariff policies, new and expanded tariffs enacted by the current presidential administration, and resulting sustained decline in our stock price.

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(Loss) income from operations

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

(Loss) income from operations

$ (217.0) $ 46.3 $ (263.3) (568.7) %

As a result of the factors discussed above, income from operations for the six months ended July 4, 2025 decreased $259.6 million, or 944.0%, compared to income from operations for the six months ended June 28, 2024.

As a result of the factors discussed above, income from operations for the nine months ended October 3, 2025 decreased $263.3 million, or 568.7%, compared to income from operations for the nine months ended September 27, 2024.

Interest and other expense, net

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Interest expense $ 41.2 $ 41.4 $ (0.2) (0.5) %

Other expense, net (1.5) — (1.5) NA

Other income, net (2.0) (0.5) (1.5) (300.0)

Interest and other expense, net $ 39.2 $ 40.9 $ (1.7) (4.2) %

Interest and other expense, net for the six months ended July 4, 2025 decreased by $1.4 million to $25.8 million, compared to $27.2 million for the six months ended June 28, 2024 due to the effect of foreign currency exchange rates.

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

(Benefit) for income taxes

$ (0.8) $ (1.6) $ 0.8 (50.0) %

The effective tax rates were 0.3% and (600.0)% for the six months ended July 4, 2025 and June 28, 2024, respectively.

For the six months ended July 4, 2025, the difference between the Company’s effective tax rate of 0.3% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

For the six months ended June 28, 2024, the difference between our effective tax rate of (600.0)% and the 21% federal statutory rate was due to the favorable impact of discrete items in proportion to lower levels of pre-tax income.

Interest and other expense, net for the nine months ended October 3, 2025 decreased by $1.7 million to $39.2 million, compared to $40.9 million for the nine months ended September 27, 2024 due to the effect of foreign currency exchange rates.

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Provision (Benefit) for income taxes $ 1.4 $ (1.4) $ 2.8 (200.0) %

The effective tax rates were (0.6)% and (26.2)% for the nine months ended October 3, 2025 and September 27, 2024, respectively.

For the nine months ended October 3, 2025, the difference between the Company’s effective tax rate of (0.6)% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

For the nine months ended September 27, 2024, the difference between our effective tax rate of (26.2)% and the 21% federal statutory rate was due to the favorable impact of discrete items on lower levels of pre-tax income.

Net (loss) income

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Net (loss) income $ (257.7) $ 6.7 $ (264.4) (3,946.3) %

As a result of the factors described above, our net income decreased $258.9 million to a net loss of $257.0 million for the six months ended July 4, 2025 from a net income of $1.9 million for the six months ended June 28, 2024.

As a result of the factors described above, our net income decreased $264.4 million to a net loss of $257.7 million for the nine months ended October 3, 2025 from a net income of $6.7 million for the nine months ended September 27, 2024.

Segment Review

For additional financial information related to our operating segments including the reconciliation of consolidated net (loss) income to adjusted EBITDA, see Note 15 – Segment Information .

The following table summarizes consolidated net sales and adjusted EBITDA by segment:

For the six months ended

(in millions) July 4, 2025 June 28, 2024 Change ($) Change (%)

For the nine months ended

(in millions) October 3, 2025 September 27, 2024 Change ($) Change (%)

Powered Vehicles Group $ 371.5 $ 345.2 $ 26.3 7.6 %

8 unchanged sentences

Adjusted EBITDA $ 133.3 $ 126.6 $ 6.7 5.3 %

*Numbers may not foot due to rounding.

Powered Vehicles Group

Powered Vehicles Group net sales increased by $9.7 million, or 4.1%, due to the inclusion of $23.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE and power sports.

Powered Vehicles Group adjusted EBITDA decreased by $1.0 million, or 3.1%, mainly due to higher research and development expenses, partially offset by an increase in gross profit.

Powered Vehicles Group net sales increased by $26.3 million, or 7.6%, due to the inclusion of $32.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE.

Powered Vehicles Group adjusted EBITDA increased by $9.0 million, or 22.1%, mainly due to an increase in gross profit, partially offset by higher research and development expenses.

Aftermarket Applications Group

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Specialty Sports Group

Specialty Sports Group net sales increased by $21.1 million, or 8.9%, primarily due to the stabilization in bike sales.

Specialty Sports Group adjusted EBITDA increased by $0.5 million, or 0.9%, primarily due to an increase in gross profit.

Specialty Sports Group net sales increased by $4.3 million, or 1.1%.

Specialty Sports Group adjusted EBITDA decreased by $8.5 million, or 9.5%, primarily due to a decrease in gross profit and increases in sales and marketing and research and development expenses.

Unallocated corporate expenses

Unallocated corporate expenses decreased by $0.8 million, or 2.7%, driven by cost containment measures.

Unallocated corporate expenses increased by $0.8 million, or 1.9% to $43.1 million, compared to $42.3 million in the same period of the prior fiscal year.

Liquidity and Capital Resources

Our primary cash needs are to support working capital, research and development, interest on debt, employee compensation, capital expenditures, acquisitions, debt repayments, and other general corporate purposes.

Historically, we generally financed our liquidity needs with operating cash flows, borrowings under our 2022 Credit Facility, and the issuance of common stock.

Historically, we generally financed our liquidity needs with operating cash flows, borrowings under our Credit Agreement, and the issuance of common stock.

These sources of liquidity may be impacted by events described in Cautionary Note Regarding Forward-Looking Statements and Part II, Item 1A.

Risk Factors .

As of July 4, 2025, we held $19.5 million of our $81.5 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

As of October 3, 2025, we held $12.7 million of our $65.4 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

A summary of our operating, investing, and financing activities is shown in the following table:

For the six months ended

(in millions) July 4, 2025 June 28, 2024

For the nine months ended

(in millions) October 3, 2025 September 27, 2024

Net cash provided by operating activities $ 42.8 $ 50.1

4 unchanged sentences

*Amounts may not foot due to rounding.

We expect that cash on hand, cash flows from operations and availability under our 2022 Credit Facility will be sufficient to fund our operations during the next 12 months from the date of this Form 10-Q and beyond.

We expect that cash on hand, cash flows from operations and availability under our Credit Agreement will be sufficient to fund our operations during the next 12 months from the date of this Form 10-Q and beyond.

Operating activities

In the six months ended July 4, 2025, net cash provided by operating activities was $37.5 million.

Our investment in operating assets and liabilities is a result of a decrease in accounts payable of $19.4 million, an increase in accounts receivable of $15.4 million, a decrease in income taxes payable of $4.0 million, and a decrease in accrued expenses and other liabilities of $0.4 million, partially offset by a decrease in prepaids and other assets of $17.6 million and a decrease in inventory of $1.8 million, excluding the impact of foreign currency translation.

On a reported currency basis, the change in our accounts payable is driven by timing of inventory purchases and vendor payments and foreign currency translation.

In the nine months ended October 3, 2025, net cash provided by operating activities was $42.8 million.

Our investment in operating assets and liabilities is mainly a result of an increase in accounts receivable of $30.7 million, a decrease in accrued expenses and other liabilities of $8.5 million, an increase in inventory of $4.9 million, and a decrease in income taxes payable of $4.8 million, partially offset by a decrease in prepaids and other assets of $0.6 million, excluding the impact of foreign currency translation.

The change in our accounts receivable reflects an increase in our sales and the timing of customer collections.

The decrease in income taxes payable is mainly due to our income tax payments.

The decrease in prepaids and other assets is primarily due to lower chassis deposits driven by working capital optimization efforts.

On a reported currency basis, inventory increased primarily due to foreign currency translation, planned inventory builds to support anticipated demand, and the impact from higher tariffs, partially offset by our efforts to optimize inventory levels.

In the six months ended June 28, 2024, net cash provided by operating activities was $36.0 million.

Our investment in operating assets and liabilities is a result of an increase in prepaids and other assets of $37.1 million, a decrease in income taxes payable of $23.2 million, and an increase in inventory of $7.8 million, partially offset by an increase in accounts payable of $34.6 million, a decrease in accounts receivable of $12.0 million, and an increase in accrued expenses and other liabilities of $2.9 million.

The increase in prepaids and other assets is primarily due to carrying new model year chassis to meet current year production needs for the upfitting product lines and, to a lesser degree, slowing sales of older model years.

The decrease in income taxes payable is mainly due to our income tax payments.

The decrease in accrued expenses and other liabilities is driven by a reduction in warranty reserve.

On a reported currency basis, inventory increased primarily due to planned inventory builds to support anticipated demand, the impact from higher tariffs, and foreign currency translation, partially offset by our efforts to optimize inventory levels.

In the nine months ended September 27, 2024, net cash provided by operating activities was $50.1 million.

Our investment in operating assets and liabilities is a result of an increase in inventory of $29.0 million, a decrease in income taxes payable of $25.3 million, and an increase in accounts receivable of $21.8 million, partially offset by an increase in accounts payable of $24.2 million, an increase in accrued expenses and other liabilities of $11.3 million, and a decrease in prepaids and other assets of $7.8 million.

The decrease in income taxes payable is mainly due to lower income tax expense and our income tax payments.

The increase in inventory is mainly due to timing and some seasonal inventory.

The change in our accounts receivable reflects an increase in our sales and the timing of customer collections.

The decrease in prepaids and other assets is primarily due to lower chassis deposits as we worked to sell through model year 2024.

The increase in accrued expenses and other liabilities is mainly due to additional leases.

The change in our accounts payable is driven by timing of inventory purchases and vendor payments.

The change in our accounts receivable reflects a decrease in our sales and the timing of customer collections.

Investing activities

In the six months ended July 4, 2025 and June 28, 2024, net cash used in investing activities was $19.4 million and $26.6 million, respectively.

Investing activities for the six months ended July 4, 2025 consisted of $19.4 million of property and equipment additions.

Investing activities for the six months ended June 28, 2024 consisted of $21.2 million of property and equipment additions, $5.0 million of cash consideration for our acquisitions, and $0.4 million of cash consideration for our purchase of other assets.

In the nine months ended October 3, 2025 and September 27, 2024, net cash used in investing activities was $27.2 million and $42.5 million, respectively.

Investing activities for the nine months ended October 3, 2025 consisted of $27.2 million of property and equipment additions.

Investing activities for the nine months ended September 27, 2024 consisted of $32.1 million of property and equipment additions, $5.3 million of cash consideration for our purchase of other assets, and $5.0 million of cash consideration for our acquisitions.

Financing activities

In the six months ended July 4, 2025, net cash used in financing activities was $9.4 million, and consisted of the proceeds from our 2022 Credit Facility revolver of $57.0 million that were used to support our working capital, offset by payments of $53.0 million to reduce the revolver borrowings, $12.1 million repayments on our term loans, and payments of $1.3 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

In the six months ended June 28, 2024, net cash used in financing activities was $10.7 million, and consisted of the proceeds from our 2022 Credit Facility revolver of $119.0 million and draw from the Delayed Draw Term Loan of $200.0 million that were used to support our working capital, offset by payments of $295.0 million to reduce the revolver borrowings, $7.1 million quarterly repayment on our Term A Loan, $25.0 million to repurchase shares of our common stock for retirement, and payments of $2.5 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

2022 Credit Facility

On April 5, 2022, the Company entered into a new credit agreement with Wells Fargo Bank, National Association, and other named lenders (the “2022 Credit Facility”).

The 2022 Credit Facility, which matures on April 5, 2027, provides for revolving loans, swingline loans and letters of credit up to an aggregate amount of $650.0 million.

The Company may borrow, prepay, and re-borrow principal under the 2022 Credit Facility during its term.

Advances under the 2022 Credit Facility can be either Adjusted Term SOFR loans or base rate loans.

In the nine months ended October 3, 2025, net cash used in financing activities was $21.5 million, and consisted of the proceeds from our Credit Agreement revolver of $77.0 million that were used to support our working capital, offset by payments of $79.0 million to reduce the revolver borrowings, $18.2 million repayments on our term loans, and payments of $1.3 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

In the nine months ended September 27, 2024, net cash used in financing activities was $1.7 million, and consisted of the proceeds from our Credit Agreement revolver of $169.0 million and draw from the Delayed Draw Term Loan of $200.0 million that were used to support our working capital, offset by payments of $329.0 million to reduce the revolver borrowings, $13.2 million quarterly repayment on our Term A Loan, $25.0 million to repurchase shares of our common stock for retirement, and payments of $2.6 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Credit Agreement

On April 5, 2022, the Company entered into a new credit agreement with Wells Fargo Bank, National Association, and other named lenders.

The Credit Agreement, which matures on April 5, 2027, provides for revolving loans, swingline loans and letters of credit up to an aggregate amount of $650.0 million.

The Company may borrow, prepay, and re-borrow principal under the Credit Agreement during its term.

Advances under the Credit Agreement can be either Adjusted Term SOFR loans or base rate loans.

SOFR rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to Term SOFR for such calculation plus 0.10% plus a margin ranging from 1.00% to 2.25%.

Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the lender as its “prime rate”, and (iii) Adjusted Term SOFR rate for a one-month tenor plus 1.00%, subject to the interest rate floors set forth therein, plus a margin ranging from 0.00% to 1.00%.

At July 4, 2025, the one-month SOFR and three-month SOFR rates were 4.33% and 4.34%, respectively.

At July 4, 2025, our weighted-average interest rate on outstanding borrowing was 6.41%.

On November 14, 2023, in connection and concurrently with the closing of the Marucci acquisition, the Company entered into the First Incremental Facility Amendment (the “Amendment”) amending the 2022 Credit Facility.

The Amendment provided the Company with the Incremental Term A Loan in an amount of $400.0 million and the Delayed Draw Term Loan in an amount of $200.0 million, each of which are permitted under the 2022 Credit Facility, subject to satisfaction of certain conditions.

At October 3, 2025, the one-month SOFR and three-month SOFR rates were 4.29% and 4.34%, respectively.

At October 3, 2025, our weighted-average interest rate on outstanding borrowing was 6.28%.

On November 14, 2023, in connection and concurrently with the closing of the Marucci acquisition, the Company entered into the First Incremental Facility Amendment (the “First Amendment”) amending the Credit Agreement.

The Fist Amendment provided the Company with the Incremental Term A Loan in an amount of $400.0 million and the Delayed Draw Term Loan in an amount of $200.0 million, each of which are permitted under the Credit Agreement, subject to satisfaction of certain conditions.

The Incremental Term A Loan was fully funded on November 14, 2023 and used to fund a portion of the consideration owed under the Marucci acquisition.

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The Incremental Term Loans are in the form of term SOFR loans and base rate loans, at the option of the Company, and have an applicable margin ranging from 0.50% to 1.50% for base rate loans and 1.50% to 2.50% for term SOFR loans, subject to adjustment provisions.

Each Incremental Term Loan has a maturity date of April 5, 2027, consistent with the 2022 Credit Facility.

Each Incremental Term Loan has a maturity date of April 5, 2027, consistent with the Credit Agreement.

The Company paid $10.1 million in debt issuance costs, of which $6.7 million were allocated to the Term A Loan and $3.4 million were allocated to the Delayed Draw Term Loan.

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On July 31, 2024 and December 20, 2024, the Company entered into the Third and Fourth Amendment to the Credit Facility, respectively to secure an improved covenant profile on its capital structure to provide more flexibility given the uncertain macro environment.

The 2022 Credit Facility is secured by substantially all of the Company’s assets, restricts the Company’s ability to make certain payments and engage in certain transactions, and requires that the Company satisfy customary financial ratios.

The Company was in compliance with the covenants as of July 4, 2025.

The Credit Agreement is secured by substantially all of the Company’s assets, restricts the Company’s ability to make certain payments and engage in certain transactions, and requires that the Company satisfy customary financial ratios.

The Company was in compliance with the covenants as of October 3, 2025.

On October 24, 2025, the Company entered into the Fifth Amendment to the Credit Agreement and Second Amendment to Guaranty and Security Agreement among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as administrative agent, swingline lender and L/C issuer (the “Agent”), and a group of lenders party thereto.

Refer to Note 16.

Subsequent Events for further information.

Recent Developments

Global Trade Actions and Tariffs - New and expanded tariffs recently announced under the Trump administration and triggered retaliatory actions by certain affected countries, and other foreign governments have introduced additional costs and uncertainty into our supply chain, which may impact our cost structure and working capital needs in the near term.

We are evaluating the potential effect on our supply chain and sourcing strategies, and while we expect some volatility in cash flows as we adjust, we believe our existing liquidity and access to the 2022 Credit Facility provide sufficient flexibility to manage these developments.

Global Trade Actions and Tariffs - New and expanded tariffs announced under the Trump administration and triggered retaliatory actions by certain affected countries, and other foreign governments have introduced additional costs and uncertainty into our supply chain, which may impact our cost structure and working capital needs in the near term.

We are evaluating the potential effect on our supply chain and sourcing strategies, and while we expect some volatility in cash flows as we adjust, we believe our existing liquidity and access to the Credit Agreement provide sufficient flexibility to manage these developments.

Please read “U.S.

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The OBBBA includes multiple effective dates, with certain provisions taking effect in 2025 and others phased in through 2027.

We have reviewed the enacted legislation and have determined that these provisions do not affect the measurement of our deferred tax assets and liabilities as of July 4, 2025.

We are currently assessing the impact on the effective tax rate for future periods.

We have reviewed the enacted legislation and have determined that these provisions do not affect the measurement of our deferred tax assets and liabilities as of October 3, 2025.

We will continue to assess the impact on the effective tax rate for future periods.

Material Cash Requirements

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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-Q

Item 2. Management’s Discussion and Analysis