Fox Files $120 Million IPO

Fox Then and Now LogoBeginning tomorrow, you can become an investor in Fox Racing Shox. The company completed an IPO yesterday and will be offering 8,571,429 shares at ~$14 per share. They will be trade on Nasdaq under the symbol FOXF

The company is seeking to raise $120 million to cover a remaining 52.9 million in debt from a June 2012 recapitalization.  The companies majority owner, Compass Group Diversified Holding, which has a 76% stake in the company is offering 4.7 million shares. Company founder Bob Fox has a 14% stake and be offering 866,723 of shares. After the IPO he will retain a 10% stake.

In 2012, Fox turned a profit of $14.2 million. Currently OEM sales account for 81% of business. Their bike sales account for 67% of business while the remaining 33% is from power sports and automotive suspension products. You can read the entire SEC filing here.

Via Seeking Alpha

 

Comments

Pete - 08/08/13 - 8:38am

Now we know what Fox has been up to for the last few years while Rock Shox has been developing forks and shocks…

captain derp - 08/08/13 - 9:25am

the bulk of fox’s business is motor sports. mtb stuff is a small slice of the pie.

BT - 08/08/13 - 9:40am

According to the blurb above, 2/3rd’s of the business is bike related with the remaining third being in motorsports

Quinn - 08/08/13 - 9:41am

Pete- I don’t know where you have been but the last 3 if not 5 years Fox has been Better than RoCK Shox, they have the ability to apply there motorsport technology that Rock Shox does Not Have, there are 2 DH-specific shops in my area that swear by Fox.

I just wish this announcement came Earlier, that way I could have planned to get in right from the start..

cyclistwebby - 08/08/13 - 9:43am

captain derp, can you read?

In 2012, Fox turned a profit of $14.2 million. Currently OEM sales account for 81% of business. Their bike sales account for 67% of business while the remaining 33% is from power sports and automotive suspension products

now i’m no professor but as far as i know a 33 / 67% split in favour of the cycling industry isn’t:
‘the bulk of fox’s business is motor sports. mtb stuff is a small slice of the pie’.

Bubbrubb - 08/08/13 - 9:47am

Fox has been better? Then why did they have to revise the damper in the overly-soft ctd forks? Why do I warranty their forks for creaking crowns several times a season? Why does their customer support suck so badly? All told, fox has been a complete disappointment over the last 3-5 seasons. DOSS anyone?

cheese - 08/08/13 - 9:57am

*company’s

captain derp - 08/08/13 - 10:02am

@ BT – that’s 67% of aftermarket sales (not clear in the bikerumor blurb, but broken out in the source link). Aftermarket sales only account for about 20% of total sales, the other 80% is OEM – specifically indicated as non-branded, which would exclude MTB sales, because their OEM stuff for MTB is branded.

Max - 08/08/13 - 11:08am

@Quinn: I will praise anything, if the margin is high enough!

Oh, wait! I’m doing this every day… Some overpriced skullcandy or Beats headphones? Anyone? Best stuff on earth!

Aaron - 08/08/13 - 12:09pm

If you’ve ever serviced a Fox fork…

Yeah. Not really a fan. Great marketing though.

Matt - 08/08/13 - 12:14pm

I would be careful buying any of this stock. While I understand shareholders wanting to diversify their holdings and VC funds wanting to recognize returns, the fact that the insiders are selling (granted I have not look at the S-1 filling yet) shares is not the best signal to the market. In addition, the proceeds to the company are going to paid down debt from a recapitalization which was probably debt raised and dividend out to the shareholders.

Mindless - 08/08/13 - 12:19pm

@Quinn: If you think that recently Fox was better you had not been paying attention. Especially to things like last year CTD, which was a disaster.

the dude - 08/08/13 - 12:28pm

Lefty for life!

Gillis - 08/08/13 - 12:39pm

Thank you @Matt for the only relevant and useful comment. I’m not a stock savy guy so this info is useful and interesting.

tandumb - 08/08/13 - 12:43pm

I live & ride in CO and see FOX forks everywhere, on every trail. Come race day, all you see is a sea of white forks at the line… I’ve owned 6 FOX forks myself over the years (Vanilla, TALAS, Floats), and never had any warranty issues. IMHO, they require about as much attention as any other part on my bike, maybe even less. Am I lucky?

I figure FOX is doing something right.

Topmounter - 08/08/13 - 12:50pm

I like Fox products quite a bit, but for the near-to-mid term this looks to be a cash-out opportunity for existing stake-holders rather than a cash-in opportunity for future stake-holders.

Mindless - 08/08/13 - 1:12pm

@tandumb: Ubiquity does not imply quality. Or performance. Try riding some of the better damping shocks and forks out there. Like CCDB, or Vector HLR, or BOS, or DH damper on Rock Shox. Also try to service different forks.

captain derp - 08/08/13 - 1:29pm

WHOA – surprising and not surprising, from the SEC filing:

“Specifically, we have begun the process of moving a majority of the manufacturing of our mountain bike products to Taiwan and intend to complete this process in 2015.”

herrow prease - 08/08/13 - 1:40pm

Bubbrubb – 08/08/13 – 9:47am
Fox has been better? Then why did they have to revise the damper in the overly-soft ctd forks? Why do I warranty their forks for creaking crowns several times a season? Why does their customer support suck so badly? All told, fox has been a complete disappointment over the last 3-5 seasons. DOSS anyone? <– This.

I cannot tell you how many kashima coated fox's i have hard to warranty with creaking crowns. Oh and dealing with their warranty dept. is a nightmare. I've had brand new ctd's with this creak and not even 1 ride on them and they want you to cover all shipping and fight with you on the warranty. Basically fox air shocks are not any better than RS. and RS is no king of the forks either. They are just as crappy. It's tough for the consumer too. They have these 600-1200 items (more than the frames typicallY) that require servicing every 40hrs. Some of them can hit that mark in less than 1 month of riding.

I wish ohlin would step in the XC game. Show fox how to well… be what fox once was back in the vanilla days. The top dog.

Pretty sad at the price of forks these days and lack of quality.

captain derp - 08/08/13 - 1:41pm

fox was only top dog in the vanilla days because everything else on the market at that time was much, much worse

Mindless - 08/08/13 - 1:45pm

Marzocchi was good in those days.

Ham-planet - 08/08/13 - 2:18pm

Clarification, if it were needed: “In each of the years ended December 31, 2010, 2011 and 2012, 75%, 69% and 67%, respectively, of sales were attributable to sales of suspension products for mountain bikes.”

Mindless - 08/08/13 - 4:09pm

I wonder if they market share was steadily declining as well. Would not be surprising one bit.

Padrote - 08/08/13 - 6:09pm

kashima is squeaky, expensive, and rubs off. people literally only buy it because it looks good and they want “top of the line”.

fox consistently does things that make me question their logic.

chasejj - 08/08/13 - 7:03pm

The only thing you need to ask yourself is this.
How long will the market support $10K+ full suspension mountain bikes and $1500 aftermarket forks?
I will short FOXF , and I LOVE their products.

Big_Nick - 08/08/13 - 9:52pm

I think this will go a lot like when Rock Shox and C’Dale went public…….tanked. I personally would stay away from this IPO.

vhom - 08/09/13 - 11:24am

Such a bummer that Fox is moving most of it’s production to Taiwan. But it makes a lot of sense to do so……

Jonathan Biddle - 08/09/13 - 3:04pm

A better headline would have been ‘Fox Floats’

captain derp - 08/09/13 - 3:23pm

c’dale didn’t tank because they went public… they went bankrupt because of the dirtbike. which is an absolute shame because from all accounts i’ve heard it would have been a serious contender against the big 4 moto companies

Saris - 08/09/13 - 3:36pm

@Jonathan

Wish I had thought of that!

satisFACTORYrider - 08/09/13 - 3:48pm

@captain- forgot about their 4stroke. it would’ve been interesting if they were able to tweak their design for the AMA and go into production. oh well..

Nelson Muntz - 08/10/13 - 9:14am

As far as the Cannondale dirtbike.
They had a bunch of “outside the box” ideas.
Were they great ideas improperly executed?
Or bad ideas that were perfectly executed?
Either way….they quickly found out why there was a “box” in the first place.
It was a bike that was born bad and it went downhill from there.

SCSal - 08/15/13 - 12:10pm

I really want to find a reason to buy this stock, being a local company, But I have worked for Fox on a temp basis and was not impressed…..A factory full of people that never ridden a mountain bike a single day, and very little machine shop skills,,,were talking maybe two real machinist and like 50 stoners

SCSal - 08/15/13 - 12:18pm

Maybe things have changed but? I’m not saying I haven’t been compelled to buy there products, but…….price has done that job for me

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