Good day everyone, and welcome to the Fox Factory Holding Corporation’s Third Quarter Fiscal Year 2013 Earnings Result Conference Call. This call is being recorded, at this time for opening remarks and introductions I would like to turn the conference over to David Haugen, General Counsel for Fox Factory. Mr. Haugen please begin.

Thank you, good afternoon and welcome to Fox Factory’s Third Quarter Fiscal Year 2013 Earnings Conference Call. On the call today are Larry Enterline, Chief Executive Officer; Mario Galasso, Senior Vice President – Business Divisions; and Zvi Glasman, Chief Financial Officer. By now, everyone should have access to the third-quarter fiscal 2013 earnings release, which went out today at approximately 4:00 PM Eastern time. If you’ve not had a chance to review the release, it’s available on the Investor Relations portion of our website at www.ridefox.com. Before we begin, we’d like to remind everyone that the prepared remarks contain forward-looking statements, and Management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the Company’s control. And can cause future results, performance, or achievements to differ significantly from the results, performance, or achievement expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks detailed in the Company’s earnings release, Form 10-Q, and prospectus filed with the Securities and Exchange Commission, except as required by law the Company undertakes no obligation to update any forward-looking or other statements herein. Whether as a result of new information, future events, or otherwise. In addition, within our earnings release and in today’s prepared remarks, non-GAAP adjusted net income, non-GAAP adjusted earnings per share, adjusted EBITDA and adjusted EBITDA margin percent are reference. And it’s important to note that these are non-GAAP financial measures. A reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures is included in the Company’s press release, which has also been posted on our website. With that, it’s my pleasure to turn the call over to our CEO, Mr. Larry Enterline.

Thank you David. Good afternoon everyone, and thank you for joining us today. On today’s call, I’ll provide a brief overview of our third-quarter results, and progress on our ongoing strategic initiatives. Mario will then discuss recent highlights from each of our businesses; Zvi will review the financial results for the quarter in more detail and discuss our guidance. After that, we will open up the call for any questions that you may have. In the third quarter Fox continued to benefit from demand for our high-performance mountain bike and powered vehicle products, which enabled us to report sales of $82.3 million, an increase of 12.9% versus the prior-year third quarter, and at the high end of our expectations. Sales were aided by a few customer pull-ins at quarter end, which is not unusual in our business. Our sales increase combined with a 30.8% gross margin, an improvement of 320 basis points, enabled us to report earnings of $0.27 per diluted share, also at the high end of our guidance. Our team continued to execute on our long-term strategy to improve our operating efficiencies across our global infrastructure, with operating margin expanding 290 basis points and adjusted EBITDA margin 270 basis points higher, as compared to the prior-year period. We have identified several areas in our business for future margin improvement, which I will provide an update on in a moment. And we expect to continue to improve our gross and adjusted EBITDA margins as we go forward. Importantly, we believe our business continues to benefit from positive industry dynamics. Over the past several years we have seen consistent and steady growth for retail units sold for premium mountain bikes, and powered vehicles. We have been, and will continue to be in a position to capture our share of this…

Thank you Larry, and good afternoon to everyone, to reiterate Larry’s comments. The Fox brand is very well established across our key product categories, and well recognized by consumers. During my remarks I would like to discuss some of our recent business and industry highlights as well as initiatives, that will help drive our business both over the short, and the long term. To start, we’re very proud of our recent milestones, and the performance of our race teams and athletes. On the mountain bike side, we capped off the race season at the World Championships in South Africa, with gold in men’s and women’s Elite Downhill, and junior men’s Downhill. For the season at both the world and national levels, Fox athletes took home 38 Gravity wins, 17 Cross-Country wins, and 15 Enduro wins in 2013. The model year ‘15 step season is in full swing for our bike group. Our sales team, with engineering support, is out in the field working closely with product managers from our OEM customers, to develop suspension solution that would enhance the ride dynamics of their product lineups. Manufacturing and operations is ramping up to produce next year’s exciting product lineup. Moving on to powered vehicle side of things we have some great things to share here as well. As we speak, SEMA is going on in Las Vegas. SEMA is the premier automotive show. And last year more than 60,000 domestic and international buyers were in attendance. We’re there in full force with our on and off-road truck, side-by-side, circle track, and military offerings. A new product category for us is circle track. Since debuting on the circle track race circuit, with a win on July 13th of this year, we continued racking up the wins and gaining traction with racer adoption.…

Thank you Mario, good afternoon everyone. I will focus on our third-quarter financial results. Sales for the third quarter of fiscal 2013 were $82.3 million, an increase of 12.9% versus sales of $72.9 million, in the third quarter of fiscal 2012. Sales of our products fall into two general categories, mountain bikes, powered vehicle products. Our year-over-year growth in the third quarter reflects improvement in both categories. Sales of mountain vehicle products, mountain bike products increased 10.8%, compared to the third quarter of last year. And sales of powered vehicle products increased 18.2% on a year-over-year basis. Gross margin was 30.8% for the third quarter of fiscal 2013, a 320-basis-point improvement, from gross margin of 27.6% in the prior-year period. Approximately 140 basis points of the improvement in gross margin, relates to our successful execution of initiatives. Designed to improve operating efficiencies, and the remaining 180-basis-point improvement is largely due, to additional warranty and other related costs, incurred in the third quarter of 2012 to upgrade certain dampers, contained in the Company’s suspension projects, which costs did not re-occur in 2013. Total operating expenses were $10.6 million, or 12.8% of sales, for the third quarter of fiscal 2013, compared to $9.1 million, or 12.5% of net sales, in the third quarter of the prior year. Also within operating expenses our sales and marketing, increased to $3.6 million in the third quarter of 2013, compared with $3.1 million in the prior-year period. Due largely to personnel expenses, as we continue to spend at the point of attack to support the Company’s sales growth. Research and development expenses increased to $2.5 million in the third quarter of this year, compared to $2.4 million in fiscal 2012. Expenses were up $0.1 million, due to higher personnel expenses, but down as a percentage of…

Thank you, Zvi. With that, we’d like to open the call for questions, operator?

(Operator Instructions) And our first question in queue, it’s from Craig Kennison of Robert W. Baird, your line is open. Craig Kennison – Robert W. Baird & Co: Hello and thanks for taking my question. Maybe Mario I’d start with you. I know it’s early, and you won’t have a solid idea of where spec position will be until the New Year, but can you give us just a directional feel with respect to spec position. And the volume expectations as you have these conversations with your OEM customers?

Let’s see Craig. thanks for the question. As far as spec position goes, what this time of year includes getting together with our customers, riding new product anticipated to be produced in model year ‘15, giving factory tours and in particular, taking people through our Taiwan plant. What’s going on right now is bike week in Taiwan where a lot of spec conversations start to happen. We’re also showcasing our new factory in Taiwan, which is going quite well. So, what I can say is the reception to that package of product, Taiwan conversation, and customer relationship is going quite well. It’s early to have any hint on volumes at this point. Craig Kennison – Robert W. Baird & Co: Thank you, just a follow-up on that. Have they given any indication of their comfort in terms of inventory levels at the OEM or dealer level? Just wondering if we should be concerned at all about accumulating inventory?

Nothing that stands out to us, no it’s sort of typical, I would say for this time of year, given at least my involvement over the last several years. Craig Kennison – Robert W. Baird & Co: Okay great and then Larry, if I could switch to Taiwan, it sounds like that’s on track. Would you indicate, or would you tell us would be key factors to consider in the next three to six months as milestones as you make progress there?

Craig we’re pleased with the way things are going. The fact that we’ve produced almost 700,000 sub-assemblies this year makes us feel pretty good about it. I think a couple things we’ve actually just got our first completed full-fork off the initial pre-production that we’re going to obviously be testing, just rolled off here, I guess about a week ago. We will be making the first production deliveries toward the end of this quarter so that certainly would be a milestone. I would say then as we get into next year, probably through about the midpoint of the year, maybe August, we will be in full-fork production, which means we’ll have about 80% to 85% of our forks being produced in our Taichung plant. So I would say as we get through the spring we’ll be ramping that up and introducing models. And clearly the new model year introduction as it occurs in kind of the late April, May time frame will be another key point to just make sure we’re on track. The way we’re doing this, I think as we’ve described to you before, it’s not certainly risk-free but we’ve tried to reduce the risk of opening that plant by being able to speed up or slowdown that production. I would tell you in this past year we’ve actually been able to speed up the number of sub-assemblies, we got kind of ahead on that. And hopefully we see that same pace continue as we bring the forks into production. If for some reason we see something that gives us pause, then we’ll keep producing here while we get that sorted out and get back on track over there. But I would say so far so good. Craig Kennison – Robert W. Baird & Co: That’s very helpful, thank you.

Thank you, our next question in queue is from John Anderson at William Blair, your line is open. John Anderson – William Blair & Company: Good afternoon everybody.

Afternoon John, how are you? John Anderson – William Blair & Company: Good, good thanks. I guess I wanted to start just by asking from a big, bigger-picture question on the mountain bike market. I’m looking at the sell-through data from external providers like BPSA. You’ve seen a pretty consistent trend broadly, that overall mountain bikes at lower price points, suspended mountain bikes, due to demand being somewhat soft. But at the same time quite strong at the $2,000 price point and above, which, when you recognize that’s kind of where you play today. I was just wondering if you could talk a little bit more about that dynamic, and what you think is driving that, and how sustainable that is in light of some softer I guess, end-demand at lower price points?

Well John, thanks for the question, this is Mario. I guess I would start by saying, what you just described, we would agree with. I think the difference between some of the lower-priced stuff and the product that we participate in is that there’s more innovation and excitement in the upper end. And that’s where the enthusiast lives, and so that enthusiast continues to spend. It’s sort of a short answer but I think that’s what’s going on.

Yeah. I think, John, we tend to see probably a lot of the same things you do, and in terms of the strength of the upper end it seems to be solid. I think like a lot of things in fact, I think it’s about this same time every year I get frightened when I read what’s happening in the industry. And then everything just always seems to be fine in our segment. I’d say right now we don’t see anything that would tell us that we’re not in kind of a normal situation there. John Anderson – William Blair & Company: Terrific that’s helpful, question on the guidance for the fourth quarter. The sales guidance implies a growth rate of about anywhere between I guess 3% and 10% in the fourth quarter, somewhat slower than we saw in the third quarter. Does that reflect any kind of pull-forward of shipments into the third quarter? I’m just trying to get a sense, or if you’re seeing something in particular in the fourth quarter that we should be aware of?

I think it’s important to say that because we’re a large part of our sales go to OEM. The ordering pattern year between various years can vary. I wouldn’t say it’s a reflection of any sort of shift. You tend to see different dynamics in various years, depending on the OEMs’ horizons and their inventory positions. As Larry mentioned in his remarks, it’s not uncommon for us to have some sales shift last couple days of one quarter into the other quarter, but that tends to be on the margins. Does that answer the question, John? John Anderson – William Blair & Company: It does, that’s helpful. And one more, I wanted to ask just, if I could, a little bit more about the acquisition you made of your German distributor. Is that a distributor that served just Germany in that country, or was it a distributor that served continental Europe more broadly? And does this, what kind of opportunities does this offer in terms of broadening your footprint and I guess, in that part of the world? Thanks.

Yeah, okay. John, this is Mario, I should speak to what Toxoholic’s coverage was. And then maybe Larry can talk about the opportunities that it affords us. With our European distributors, they’re generally set up to serve their national market. But Germany being a cornerstone market for the European mountain bike segment is very influential. And we expect that we’ll be able to get a lot closer to the market and influence the market through working more closely with Toxoholics.

Yeah I would say, John that this is an acquisition that’s strategic for us. Toxoholics, obviously in a cornerstone market over there a large distributor, primarily Fox. It just makes a lot of sense for us in terms of building our infrastructure over there staying closer to our customers. And this move is all about better serving our customers. It’s obviously not a large financial-based acquisition, but it will help us build our infrastructure, stay close to customers. And I think that’s going to benefit our business in Europe over the long haul. John Anderson – William Blair & Company: Thanks that’s helpful, congratulations on a nice quarter.

Thank you.

Thank you, our next question in queue is from the line of Sean Naughton of Piper Jaffrey, your line’s open. Sean Naughton – Piper Jaffray: Good day, just a quick question on the follow-up on the Toxoholics acquisition. Is this, it doesn’t sound like this distributor is, was the sole distributor in Germany for all Fox products. Is that a fair assessment? This was just part of the revenue that was going in to Germany?

Toxoholics is the sole bike products distributor we do some of our power sports and our powered vehicle products through a variety of distributors across Europe. Sean Naughton – Piper Jaffray: Okay, and then I guess just also following up on that, what is the, is there some significant sales up side in this transaction, or margin benefit that we could see especially in 2014, or is it, it is relatively negligible at this point?

Well, I think we would call the financial impact of this thing not material to us in 2014 Sean. I think the way to think about this though is, we’re clearly looking at better serving our customers. We’re continuing to build our infrastructure as the business grows. This does help us accelerate, I think a lot of things we would like to do, and we’re obviously hoping that does positively impact sales in future periods. But this transaction is really more about strategy in terms of laying out an infrastructure in Europe to better serve customers, as opposed to it’s a financial transaction that in and of itself has inherent benefit. Sean Naughton – Piper Jaffray: Understood okay.

Having said that Sean we’re not going to lose money doing it, either so. Sean Naughton – Piper Jaffray: Sure, sure that’s good. And then I guess just on the guidance for Q4, the revenue range there. How should we be thinking about, or how is the quarter shaping up for you in terms of mix between the products on the powered vehicles and the mountain biking? Which, are they growing in a relatively similar rate in Q4? Or are there any mix changes within the revenue stream for the fourth quarter?

Yeah, let me start Sean, and then I’ll have Zvi comment a little bit on mix. But, our business as it shapes up is fairly predictable here as you get close in. And I think if you look at our fourth-quarter guidance, and you look at how we’ve guided the year it lines up very well. And I think the only reason we have the spread we do is, that I’ve mentioned and Zvi commented on, you do get end-of-quarter activities where fairly significant pieces of business can either get pulled in or get pushed out. So we feel very good about the year, I would tell you it’s probably shaping up about as it normally does, anything on mix, Zvi?

Yes I don’t have the exact mix numbers in front of me, but what I would tell you is that the mix that we’re seeing in the quarter is not much different than we thought the mix would be when we looked at this some time back. The bike business as you know, tends to be well, all of our businesses have some seasonality. And I think Q4 is a low quarter, was our lower quarters. It’s going to be significantly lower than the $80 million we’re coming off on. As you are going to see variations in mix quarter over quarter, I just don’t have that except build-up in front of me right now. And inasmuch is we’re not going to generally provide that level of guidance –

Nothing unusual.

Nothing unusual. Sean Naughton – Piper Jaffray: Okay, and then I guess just lastly then, for any sort of upside, and I think you just answered this. Larry, is that the up side would really come whether or not you get potentially some pull-forward, not pull-forward, but some orders that are potentially right on the margin there for a couple of weeks one way or the other. At the end of the quarter, where you could see some pull-in and some of that revenue could be recognized in Q4 versus Q1?

Yeah, that’s exactly right, Sean. In our business again because of our nature of our large OEM customers it’s pretty well set now, with the exception that you just mentioned. Sean Naughton – Piper Jaffray: Okay, that’s very helpful. Thanks a lot.

Thank you, our next question is from Jim Duffy at Stifel. Jim Duffy – Stifel Nicolaus: Thanks, hello everyone, nice quarter.

Thanks, Jim. Jim Duffy – Stifel Nicolaus: A few questions for you. I recognize the OE business drives better than 75% of the revenue. But can you speak about what you saw from aftermarket business trends during the third quarter?

I think after market did about the same percentage, I think.

We were 83%, 17%, I think, in the quarter.

We’re right around there. We continue to look at the aftermarket as an opportunity, because we commented on the IPO road show we’d like to see that edge up a bit, and we’ve got programs in place. So I would say nothing terribly unusual. We’re probably within the band we would expect. Jim Duffy – Stifel Nicolaus: Okay, and then Larry I’m going to dig in a little bit on the, what can be fluctuations between quarters, you mentioned in your prepared remarks some pull-forward of volumes. So should we think about that as a timing shift, or a pull-forward that’s reflective of stronger end-market demand?

Well I think as you get to the end of a quarter, Jim its timing. As we look between quarters, and again, you can, as I’m sure you can appreciate, you can get to the last week and you can get a request to try to get something out that was going to ship in the next quarter. Or you can have something that because of logistics pushed out into the next week, and so it would go out of the quarter, I think it’s mainly that. Now I would also tell you, I wouldn’t mind having things pulled in. If they pull in every quarter from now to the end of time, that’s probably not a bad thing. But I think the way to think about it though, is we’re going to have fluctuations like that, that are kind of normal in this business. That come down to the last week or two that are difficult to predict, and that’s kind of why we have the band around the guidance. Jim Duffy – Stifel Nicolaus: Got you, helpful. And then the last question, perhaps one from Mario, the side-by-side category growth’s been phenomenal, momentum seems to continue to be strong. Can you look to the past as historical reference, other transformational vehicles like maybe four-wheelers or so forth, do they provide a template for an adoption curve?

The question Jim, that in our experience, have you seen a similar dynamic to side-by-sides or? Jim Duffy – Stifel Nicolaus: Yeah. Is there period of phenomenal growth followed by a predictable period of moderating growth, followed by something else, or is there not any set adoption curve?

I don’t know that there’s a set adoption curve. One of the interesting things that happens with side-by-sides, is they first were displacing ATVs, primarily on the utility side, because it’s a more utilitarian vehicle. And now as we start to get four-seaters and more wheel travel and higher horsepower, they start to displace what we would have thought of as typical off-road enthusiast vehicles. So I’m not sure that there’s a real end in sight on this one. Jim Duffy – Stifel Nicolaus: All right, great to hear. Thanks guys.

Thank you. [Operator Instructions] Our next question is from Michael Swartz of SunTrust, your line is open. Michael Swartz – SunTrust: Hey guys good afternoon.

Hey Michael. Michael Swartz – SunTrust: I just wanted to get out of the way a question on guidance and just to confirm that the guidance that you have is GAAP, it’s based on GAAP?

The guidance is GAAP. Michael Swartz – SunTrust: Okay and related to that, are there any kind of one-time transaction closing charges, whatever you want to call them, for the Toxoholics acquisition that fall into the fourth quarter? And if so, would they be material?

There may be some immaterial ones and we’ve not factored them into the guidance. We don’t know if, $0.01 or $0.02 two, max.

Yeah, we wouldn’t expect a lot.

Right. Michael Swartz – SunTrust: But safe to say if there were, or whatever there, is you will call out when you report fourth quarter?

Correct, we think a better way to view our business is on our adjusted earnings, but the guidance we give is GAAP. Michael Swartz – SunTrust: Right, okay, that’s helpful. And then I don’t know maybe this question’s for Mario or Larry. Just wanted to get into the transition we’ve seen two 27.5-inch wheels over the past year or two, and kind of maybe comparing it to what we saw when we originally went to 29 inches. How is that transition playing out? I mean is it playing out faster than you expected?

It’s certainly happening faster than the 29-inch wheel transition happened. We prepared the product line so that we were prepared either way. So I’m not sure that when it’s happening any faster or slower than we anticipated, but it’s certainly happening faster than the 29-inch wheel adoption rate happened. Michael Swartz – SunTrust: And will there be any additional tooling costs or anything of the sort related to that, the growth of the 27.5-inch market?

No, as I said, we’ve prepared the product line for 26, 27.5, and 29, certainly in the middle 120, 140, on up through 160, 170 millimeters of travel, at the fringes, in a cross-country bike that’s going to be a 29er, and maybe some 27.5. And in the downhill fringe that’s going to be a 26 with a 27.5 follow-on, probably not 29. And we’re prepared for the ebbs and flows within each of those categories. Michael Swartz – SunTrust: Okay, great. Thanks for the color guys.

Thank you, our next question is from Larry Solow of CJS Securities. Your line is open. Larry Solow – CJS Securities: Good afternoon. Discuss just the pricing environment. I know it’s been sort of a, over the years you haven’t gotten much on price. And I don’t know if you’ve, I believe there has been talk that maybe you can get better pricing on your products. Maybe not yet, but any thoughts on that or maybe going out in ‘14 how it may impact things?

Well Larry, let me take it here and I’ll let Mario chime in. I think we’re going into the bike model year. And again we’re a premium price. I think we would look to get fair prices. I wouldn’t see certainly that prices in aggregate would come down in bike as we go into the next model year, probably edge up a bit in terms of all customers, that would be my expectation, but it’s still early, right? We’re out there hunting as they say. I think in powered vehicles, I think because of our technology position, that ASPs, if you will, my expectation is as we introduce new technologies that are relevant to our customers’ perception of the performance of the vehicle. Again we would be able to edge pricing on kind of a price-per-function basis up. So yeah, I mean I think from an overall environment, pricing environment question, I think it looks solid for us. Larry Solow – CJS Securities: Okay, Just in terms of Taiwan, is it still sort of, still there is a drag on profitability, and as we head into 2014 maybe it sort of turns neutral, and then ‘15 and beyond when you sort of see some benefit?

It’s still a drag, depending on the quarter, 75 to 100 basis points. We would tell you that in aggregate we’ve got a number of initiatives, and in aggregate we expect to get 200 basis points of improvements, roughly, next year. How Taiwan mixes into that kind of depends, but obviously, eventually, not only is it going to be neutral, it’s going to save us money. How much of that comes next year, we don’t want to get into right now. Larry Solow – CJS Securities: Got it. And then just lastly, just anything material and I realize it’s slow, but on the military side, anything you could speak of?

I think we were pleased, I think as Mario mentioned in his remarks. We did have a couple of wins there. Again, they’re not earth shattering, but I think if they keep telling us we’re headed in the right direction. I think like a lot of other folks, we’re waiting to see where Humvee retrofit and JLTV, those two programs, come out; because those are the two big ones that we would, could potentially be involved with. And I don’t know. A lot of people have projections on when those things are going to get awarded, money’s going to get spent. But I’m not sure I’m going to believe it until I actually see something. Larry Solow – CJS Securities: Right. Okay, great. Thanks, guys.

Thank you. And with that, I’m showing no further questions in queue. I’d like to turn it back to Larry Enterline, CEO, for any further comments.

Thank you, operator. And thank you, and thank you for your questions and interest in Fox. We look forward to continuing to execute our plans, and updating you on our progress as we go forward with these quarterly earnings calls. I’m also thankful for the support of our customers and suppliers, and as always, the great group of enthusiastic employees we have here at Fox. Thank you, and have a good day.

Thank you. Once again, thank you ladies and gentlemen for joining today’s conference. You may now disconnect. Have a great day.