Greetings and welcome to the Fox Factory Holdings Corporation Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Haugen. Thank you, David. You may begin.

Thank you. Good afternoon, and welcome to Fox Factory's third quarter fiscal 2020 earnings conference call. I am joined today by Mike Dennison, our Chief Executive Officer; and Scott Humphrey, our Chief Financial Officer and Treasurer. First, Mike will provide business updates, Scott will then review the quarter’s financial results and the outlook followed by closing remarks from Mike. We will then open the call up for your questions. By now, everyone should have accessed to the earnings release, which went out today at approximately 4:05 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 investor.ridefox.com. Please note that throughout this call, we will refer to Fox Factory as FOX or the company. Before we begin, I'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 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 achievements expressed or implied by such forward-looking statements. Important factors and risks that could cause or contribute to such differences are detailed in the company's latest Form 10-Q and in the annual report on Form 10-K 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 gross margins, non-GAAP operating expenses, non-GAAP income tax, non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, adjusted EBITDA and adjusted EBITDA margin are referenced. It is important to note that these are non-GAAP financial measures that we believe are useful metrics that better reflect the performance of our business on an on-going basis. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures are included in today's press release, which has also been posted on our website. And with that, it is my pleasure to turn the call over to our CEO, Mike Dennison.

Thank you David and good afternoon. We appreciate everyone taking the time to join us for today’s call. Before we jump into our business and financial highlights, I hope everyone is staying safe and healthy in these trying times. I want to thank every single member of our FOX family who has demonstrated incredible commitment and resilience to help us not only perservere but to achieve a record quarterly performance in our third quarter of 2020. I am pleased to report third quarter sales of $260.7 million which supports our conviction on the value and innovation the FOX brand is bringing to our customers in our growing enduser base. The strength in our performance was a result of our best-in-class and diversified product portfolio within the speciality sports group, which grew over 32% compared with the third quarter of 2019. Our PVG segment further contributed to the strong performance growing nearly 18% as OEMs came back from significant shutdowns as well as continued strong demand in the aftermarket where we have extended leading market share through the SCA acquisition. The strong topline growth coupled with gross margin expansion and operating expense leverage fuelled our third quarter profitability exceeding our expectations, finishing the quarter with an adjusted EPS of $1.07, a growth of 29% over Q3 2019. Within our Specialty Sports Group, our business continues to benefit from the on-going robust trend in outdoor recreational activities. Importantly, the environment is attracting new and diverse participants the bicycling category, which is propelling demand for our product offerings in both OEMs and aftermarket channels to record levels. In the third quarter, we achieved the highest volume of shocks and forks ever shipped. This is a significant achievement in an environment where production for practices and supply chains have to be constantly monitored to…

Thanks, Mike. Good afternoon, everyone. I'll start with our third quarter financial results, and then review our guidance. Sales in the third quarter of 2020 were $260.7 million, an increase of 23.4% versus sales of $211.3 million in the third quarter of 2019. Especially sports groups experienced a 32.4% increase in sales compared to the same period last year, driven by high demand in both the OEM and aftermarket channels. Sales for the power vehicles group reflected a 17.7% increase compared to the third quarter of 2019 primarily due to sales from FCA, which we acquired in March of this year. Gross Margin was 34.3% in the third quarter of 2020, a 130 basis point increase from 33.0% in the prior year period. Non-GAAP gross margin increased by 110 basis points to 34.5%. The increase in gross margin was driven by our FBA acquisition, better product and channel mix and improved supply chain efficiencies. Total operating expenses were $43.9 million, or 16.8% of sales in the third quarter of 2020, compared to $34.5 million or 16.3% of sales in the third quarter of last year. The increase in operating expenses on a dollar basis was primarily due to the inclusion of FCA operating costs of $4.4 million, amortization expense of $3.6 million, and acquisition related compensation costs of $1.3 million. However, looking at non-GAAP operating expenses as a percentage of sales demonstrates the operating leverage that we believe is inherent in our business as we further scale our operations. For third quarter, non-GAAP operating expenses decreased by 90 basis points to 14% compared to 14.9% in the prior year period. For the third quarter of fiscal 2020, our effective tax rate was 12.5%. This rate is slightly lower than our previous long range guidance of 15% to 19% primarily due…

Thanks, Scott. In closing, as we look to a strong finish to 2020 and heading into 2021, we believe FOX is well positioned to extend our lead and capitalize on any opportunity. Given our diversified product lines to support a growing customer base of enthusiasm that use our products to make their lives exciting, enjoyable and active. Our third quarter results clearly demonstrate the strength of our agile operating network, the resilience of our people, the power of the FOX brand, and our performance to find products. We believe these core competencies when combined with the strength of our valued OEM partners, and aftermarket network will continue to be our competitive advantage in the market as we move forward. I would now like to open the call for questions. Operator?

Thank you. [Operator Instructions] Thank you. Our first question comes from Jim Duffy with Stifel. Please proceed with your question.

Thanks, good afternoon. Hoping you can provide more color on the policy [Indiscernible] group trends? Can you comment on what you saw in third quarter with the aftermarket business outside of FCA with your auto OEMs and then with the non-automotive OEMs. And then what changes do you expect to see with respect to this business in the fourth quarter?

Hey Jim, this is Mike. So good question. You know, let’s start with Power Sports in the third quarter. That continued to be a very strong product category for us as you probably know, from a lot of our customers who have reported, their demand signals continue to be extremely strong, they're still still working to try to re-inventory, showrooms across the country and across the world. So we saw that growth continue on to Q3, and we believe they'll continue along through Q4 during the early part of 2021. After market didn't slow down at all. As you saw, kind of the recovery out of Q2 into Q3, our aftermarket business, say in SCA as we mentioned, continues to be strolling through Ford traffic into our legacy business. At the same time, of course, as you know, in Q3 we're moving that production from California to Georgia. So it's a pretty amazing accomplishment and achievement delivered to that increased demand while transitioning, so we are really proud of that. And then I think, finally when we look at kind of aftermarket going forward, it's hard to really get an early forecast yet on 2021 for aftermarket shop business, but we believe the strength [Technical difficulty] broad strength in that category, there wasn't anything significant to fall out there as a weakness or as a concern.

Okay, great. And then, Mike it's clear from Dennison…

Operator, I didn't catch that. Did you hear what Jim said?

Mike, I'll come again with it. The -- it's clear from diligence in the channel that fewer lots are depleted of inventory, how's your visibility with respect to those power vehicle OEM categories looking out into 2021?

Yes, the powered vehicles so again, I kind of break it into two pieces with the power sports and automotive. You're right on both. On both cases, there's been a lot of funding depleted. We see, we see that reduction that happened in Q3 on the automotive side, which is functionally been shut down in Q2. When they shut down for 60 days, that creates a hole that was really hard for the factories to recover for in Q3 that'll slowly improve as you go to Q4 and into 2021. But yes, there's definitely a gap in vehicles on lots. And especially with the demand in the high end of the truck and SUV market that's complicating matters, which is driving a lot of people to buy used trucks. And of course, we don't mind that trend. And it allows us to sell the aftermarket. So it's a good trend for us as well. In Power Sports, like I mentioned earlier, the showrooms are pretty low. And I think they stay low. I think we are working as hard as we as we can to fulfill the increased demand for those Power Sports customers throughout Q4 allocating you all into Q1. I don't, I don't envision that those showrooms will be replenished to the extent they used to be until Q2 of next year. 2021 prior to -- one.

Great, thank you, Mike. Appreciate the perspective.

Yes.

Thank you. Our next question comes from Larry Solow with CJS Securities. Please proceed with your question.

Great. Good afternoon and congrats on the quarter. Thanks for taking my questions. A quick follow up to Jim's question. Follow up to Jim's question on the power vehicle side. So clearly the COVID has lifted the renaissance on your on the bike side, what’s gone whatever over 30% this quarter, but power vehicles. I know it sounds like demand in the after-channel you mentioned this is stronger than it's ever been. Organic sales are flat on last couple of quarters, which is great. And you know in this environment or this quarter, is that sounds like it's more of a function of supply and demand, which seems like it's running way ahead of that. So is there like a nice tailwind for a couple of quarters two, three quarters to sort of get back into what true demand is?

Yes, I think there is. From my perspective, we've got a record number of engineering projects in the queue right now in Power Sports and in Automotive, on the OT side. So, we're looking forward and we're seeing the demands that was coming from the end markets. This really has been a more of a supplier recovery story to trade with our partners and just the markets in general. So I think that creates a challenge in 2021, and we're not in a position yet to give guidance before 21, you know we did at the beginning of the year. But I would tell you, we have a very good insight into what demand signals look like on a long term basis, and what our automotive customers and power sports customers are asking us to go do in a longer period of time. With that information, well, we're already looking at 2021 and planning for a revenue north of a billion dollars. And again, we'll give you more detail on that as we get closer to 2021 and in 2021. But we're very confident in what we're seeing in signature in the market today.

Right. Okay, that's very helpful. And I’ve got on the progression in Georgia, you actually mentioned, I think, Scott mentioned that you're actually experiencing some productivity gains, is that sort of sequentially? Or do you would you say that overall, that sort of the transition is at least no longer a headwind to margins, and maybe closer to a push right now, in terms of next year? Or have you already sort of reached that Pinnacle switching to positive?

We're still climbing that hill. So yes, we did see productivity gains, and it gave us a lot of confidence in our long term view of what Georgia will bring to us is, I've talked to you about quite a bit. I believe that’s in front of us, so we're going to be able to achieve some great things with Georgia. So I'm really happy with what we saw in the quarter. That aside, we're not out of the process, yet. We're still -- we still have duplicative manufacturing, in California and Georgia, that's going to continue on, as until the second quarter of next year. So we've got puts and takes is the way I think about it, Larry. We're going to do some things that are going to improve in Georgia and some things that continue to be a headwind out of California. I'm proud of what the team is doing so far. And it works incredibly, as you saw in our numbers, achieving the expectations that we set for, but more work to do and willing to stay after it.

Okay, and just switching gears real fast on the SCA acquisition. Obviously, pretty early in the in the game there and COVID probably, maybe skewed things a bit. Just six months later, has the integration been relatively unplanned? Is Tuscany able to have actually been able to get some cross on opportunities and sort of leverage off of the SGA as much as much larger base of dealers and relationships? Or is it sort of too early and COVID, sort of skewed that?

In the quarter, we actually need some integration between SCA and Tuscany, and the benefit of that integration will really start to deliver in 2021. But, we feel good about where that business is, we're incredibly happy with the team that we integrated into FOX, and we have the strategy that we've gotten in our business. So it's performing, at or above our expectations. And, nobody expected COVID at the time that we did the acquisition. So that's the anomaly that we're all kind of reeling with this year. And when we look forward into the future with the FDA testing business, we're incredibly excited about it. It's allowing us to do a lot of vertical integration in the companies and opens new doors and new channels for us, just as you know, got that GE element in the quarter, which allows us to sell the GE products through our bailment system like we had with Ford, the Ford, Chrysler and GM. So really, really good story for us. And I think great progress in the quarter.

Great, thanks a lot. I appreciate the call.

Thank you. Our next question comes from Mike Swartz with SunTrust. Please proceed with your question.

Guys, Good evening. Just wanted to touch on the powered vehicle side of the business. Looking at the 10-Q it looks like if I’m reading this correctly, SGA was something in the low 20s in terms of revenue the quarter which would imply basically flattish revenue organically in our business, maybe if you could give us a view of some of the puts and takes in the quarter within the supply chain costs or just anything kind of that you were fighting through still in the third quarter?

Yes, great question Mike. There were challenges throughout the quarter between California wildfires admitted the evacuated facility for a period of time to just the whole notion of social distancing and a manufacturing plant’s pretty difficult. And nothing was elegant in the quarter. We had to kind of fight from day one. That was actually above our original expectations pre pandemic just based on model changes and things like that. So achieving, organic flat in the quarter was actually a strong, strong result. I would say that the one new [Indiscernible] hadn't come in my prepared script was that we did in the quarter with some backlog that will then play out into Q4. It wasn't an astronomical number that we are -- used to, but it wasn't bad. We just couldn't get out because of the transition to Georgia none of what we're trying to do. So, you know, I take a look at our vehicles, the two, three, again, proud of the two, that is a lot of good work and productivity in Georgia and all the work we’re trying to do. So I think it's -- on a long term basis still exactly where we want it to where it’s going in the right direction.

Okay, great. The second question just on EBITDA margins, I know long term we've talked about, it's kind of the 20% plus target. In that was some of the investments wrapping up, then in SCA, obviously being accretive to the mix. And as I look at your third quarter and your implied guidance or margin guidance for the fourth quarter, it looks like you're still kind of shooting for that low 20. So are we now at a point where 20% plus is kind of the new the new normal?

Well it was probably less percent in the past. And as you know, we mentioned we did better than that in Q3, and Q4. We're not ready yet as of 2014 guidance on it. But I do believe as I said to you, Georgia brings a lot of value to us, and a lot of a lot of productivity, which will help us on EBITDA basis. So, I do think we're, going to stay focused on delivering north of 20. And we'll come back to in the near term and talk about what we're doing on a long term basis.

Okay, great. Thanks a lot.

Thank you. Our next question comes from Scott Stember with CL. King. Please proceed with your question.

Good evening, guys. In the last quarter, you guys had talked about how I guess, supply the issues, or just a shortage of lower priced bites in the chain. I guess led some consumers to buy more expensive bikes, which certainly helped you guys out. Are you still seeing that trend as we speak right now?

Yes, I think you see a couple of things happening. Right now there's still an extreme shortage of bikes in showrooms. And we're seeing kind of a an increase in the demographics which is purchasing bikes. Last quarter Q2, we saw people just buying a bike was available. I think you'll see that start to trend, that trend will start to dissipate as low end bikes or to retail showrooms, they will go back to people looking for your premium bikes and e-bikes and the higher end of the of the range, which of course is where we play. So I don't know that’s the material difference and kind of thinking we all can do, our consumer or a consumer still a more affluent buyer. And we're seeing that continued growth in our order book and what we're looking at for in Q4 at least the first half of 2021.

Got it. And the commercial truck offering that you have, can you talk about how that's playing out? And how that plays into your estimates for the powered vehicles group?

Yes, both commercial truck and military are areas that have seemed like military probably more than commercial truck just recently. But both are areas of growth for us going into 2021 as we expand the Georgia facility, especially with regards to commercial truck where we really can't fulfill the demand in front of us out of our alcoholic facility. So we really need Georgia up and running in a more mature state for commercial truck to pick up steam.

Mike, just last question, just bigger picture. Obviously with talk of COVID-19 vaccine coming out shortly, there's, some folks out there that are concerned that people will go back to their normal ways of recreating, just talk about high level. How did you guys think about, how sticky it is? The customer base, the new customers that come into the market. And, when you think that this definitely no matter what happens with a vaccine, that your business will benefit no matter what’s going forward?

Yes, so we don't see it that way at all. We're really excited, obviously, as everybody is on the planet, if not at least the country that a vaccine is apparently near term. So I don't think that's a surprise for anybody, right? We've all been watching the news and tracking all these companies, pharmaceutical companies as soon as vaccine will emerge. So we're excited about that. We think that's a positive to sports in general and biking specifically, I don't think I don't think it takes away from this Renaissance we're seeing in the biking space or in the power vehicle space by the way. We think it actually brings people back to work and creates prosperity and allows people to invest into the hobby we've created over the last year over nine months as it may be. So we were not on the same page as some of the articles and we want to have people's opinions out there that say, this is the end of kind of these outdoor lifestyle sporting, and it would be boating, golfing or biking. I think it's, I think these are trends that are going to maintain and grow over time.

That's great. Thank you so much.

Thank you. Our next question comes from Craig Kennison with Baird. Please proceed with your question.

Hey, good afternoon. Thanks for taking my question. To your point, we've seen just tremendous demand in the end market for your product. And then your customers are really desperate to build more units. So I guess, I'm wondering, to what extent can you more aggressively flex your capacity to really produce a lot more in the fourth quarter so that some of your customers can catch up? I mean, they depend on hundreds of suppliers. So you're not the only one. But I think if they could have more product and could build more they would. But I'm wondering to what extent you can flex your own capacity to meet that demand?

Craig, that’s a great question. One of the things we've been doing throughout Q3 we'll continue to do in Q4 is add workforce. We've literally done job fairs, in some cases, drive through job fairs, because we need to do it because of COVID. We've done job fairs in probably four or five factory locations in the U.S., including California. We've done it in Taiwan. We're going to continue to do it. It's a function right now getting enough people in these factories to support the capacity. It's about adding production lines in Georgia, adding production lines in Taiwan, all of which are which we're doing. Now, those things aren't overnight. While we can hire people and get them trained, and let's call it two weeks, frankly, it's probably more like 60 to 90 days to add lines and staff them and get them up and running with the supply chain. So keep in mind, it's not a digital scenario. But we are absolutely doing it now for a couple of months. And we're going to continue working hard to increase that capacity. These are not big cap expense, these are really more about production lines and people. But, we are, tightly aligned with our largest partners in both SSG and PVG to establish the capacity they need going into 2021. And that their relationship alignment is really helping us understand how best to serve their needs, and to make sure that we went back, because when you find in times like this is a guy that can be nimble and fast and agile in their factories, can achieve spec gains and more volume than other guys can. So as a manufacturing guy, we're pretty focused on that stuff in order to continue to drive that throughout Q4 into Q1.

Thanks. And I guess a lot of our clients are pretty excited about the e-bike market as a potential commuter option. Could you just shed a little more light on where you see the FOX opportunity in e-bikes. I know, in particular, it's on a higher end mountain bike, which may not be that commuter unit, but how excited you people be about that market in the scheme of all of Europe, in the context of all of your opportunities?

I think it's big. I think it’s in one of our primary growth drivers in our mountain bike business. And I would even say beyond our mountain biking you know recently, there's an interesting category because I tell you this word it doesn't exist, but it's called [indiscernible] we call each time or FPV. And in the bike world, and what it is, is kind of a common control city bike, and a mountain bike. It's got, in some cases, both suspensions and some cases front forks. We've seen a huge increase in demand for our Maverick X3 product on the E SUV category. We think that's a very interesting, dynamic from here because it’s a mountain of cases of bikes that people ride in the city. And, and we're seeing price points of 5000, 6000, 7000, especially in Europe, was a really popular mode of transportation where you can load your groceries or your dog, if you will, and heading to town. That category really allows for high performance mountain biking product use on a road application, not so dissimilar, what you see in like a Ford Raptor. So think about it, the strengthening and broadening of a category across e-bike. So let us play in ways we haven't in the past, we've seen significant success coming out of that already. On the premium side, again, the prices get better and better. They get lighter and lighter and the expense was getting better or lighter. We've become a prime candidate to supply products in that category, not just for suspension but we have videos and keypoints, cranes in handlebars, so the e-bike is dead. And that's a real important part of how we think about our technology roadmap going forward.

Hey, thank you so much.

Thank you. Our next question comes from Alex Maroccia with Berenberg Capital Markets. Please proceed with your question.

Hi, good afternoon, guys. Tag me on this last question on bikes from earlier. So your aging bike partners continue to report somewhat underwhelming numbers from compared to your especially sports growth, which I'm assuming is all related to supply chain constraints. So can you slow up by first line OEM versus aftermarket and how that compares to store growth?

Are you talking about between aftermarket and OEM? In FSU specifically? Are you talking about a broader question?

No, it’s just an SSG.

Okay. Yes, so we're seeing growth consistently across both ends of that spectrum. In SSG, where a lot of our product is in the OEM category, level of volume is there. So that's where you're seeing similar supply chain challenges for some of our partners, because they are unable to get certain components. And we are seeing a tendency for some component manufacturers to move very slowly towards capacity expansion, so that those customers partners, larger challenges. That said in the premium space, not as big of an issue, so probably a bigger issue for more broad line or lower cost components not as big an issue for us. We're working hard on our supply chain to make sure it can keep up with our demand signals having pretty good luck in that. So it hasn't been a major issue. It's just a full time full time event for our teams to manage. But we're seeing strength across aftermarket. And are we pretty consistently, loss of strength in the premium products category, seeing some of our partners, you're not seeing not reflecting the same growth levels as we are. And I think, again, that's a function of low cost versus mid-price bikes versus high end premium bikes, and we tend to be well when the high end premium bikes are in so much demand.

Okay, that's helpful. And then secondly, you're sitting on a pretty significant amount of cash right now. We're almost to the Georgia facility. So what would you be prioritizing for internal investments going forward? And then are you seeing any assets in the market right now in either place, or PDG that would easily fit into the business at a decent price?

Yes, a couple of comments later let Scott jump in on this one, too. So you're right, we are seeing cash where we took on additional cash so that we could be opportunistic and pay off so you can have defenses you remember me saying before. What's going off and the challenge we found both in SSG, and in PTG categories, is evaluations and kind of price points that these companies are asking for an acquisition model and just not aligned with our, our culture, our approach or our view of the business going forward. So we're going to be pretty thoughtful and pretty conscientious about moving forward in the company's next affiliate federal trade. That said, we're going to continue to use those dollars to invest in organic growth first and in organic growth second, so we will keep looking and we will keep working it, any small acquisitions will occur along the way. It's immaterial to the kind of the broader public, but we'll do those to help vertically integrate our business and continue to expand our portfolio in a technology space. So we're going to continue to do that. But first, we have a big which I would like to see a nice large acquisition like an FCA. Then we will see valuations come back into line of what the market should bear. So Scott, you want to take it.

Yes, the only other thing I would add to that is, especially on the PDG side. We're in the midst of a huge transformation with bringing everything across the country from California to Georgia. And, and so we're weighing any kind of transformational acquisitions on that side of the equation a little bit, a little bit more heavily. In terms of not burdening the business too much when they have so much in their plate from an execution perspective because obviously as you can see from our results, they are very busy.

All right, great. I appreciate the color.

Thank you. Our next question comes from Ryan Sundby with William Blair. Please proceed with your question.

Yes. Hi, good afternoon. Thanks for taking my question. Mike, and Mike with, when you look at favorable demand environments, like the Wonder and tight supply, that usually creates a marketplace that's supportive of higher price fee. I'm just wondering if you've been able to lean into that this year, and maybe take more price than normal, just because it's dynamic.

Yes, I would be careful on that. We’ve got really long term partnerships with some really great customers. And to go in in a market like this and try to increase your prices, just because they're really dying for products and volume for life is not really a good long term strategy for a partnership. So what we try to find out what you're suggesting, but we try to avoid scenarios like that. We do try to drive innovation and technologies. And things like that to drive price increases. And as we know, and can envision, over the years at the price point of our products have consistently gone up year-on-year. So if we focus on that, and we'll use innovation and technology to drive value, which drives product price, and we're pretty focused on going up and going down and try not to be a commodity player. That said, I think our biggest opportunity right now for margin enhancement comes from, supply chain management from expansion in our factories, and from becoming more productive, and efficient in the manufacturing process. So, not a lot of price increases relative to just supply and demand right now, really more about driving technology innovation to keep our price points higher, and reflect the value of going into those customers.

Helpful color there, and then just on the innovation front. I guess, when you see our OEM partners struggling to keep up with demand and trying to just get back into the store, does that conversation changed with them? Does the question become more the focal point over the next six months? And maybe innovation becomes less important to them, or you still think China…?

We’re seeing growth. We will see two different sides of a partner business. The supply guys are absolutely knocking on the door every day asking us to drive more product, create more capacity, and get as much volume as we can. On the engineering side, all these companies are looking at this as a new Renaissance to go out and it's automotive and power sports or in biking. And so they're also doubling down in terms of innovation and technology. We try to make sure that they are the winner as they act as reactive, this kind of anomaly that the pandemic. So we're really driving both. Like I said, I think in my prepared remarks or after. We have more engineering projects in our -- today, directly related to power sports or automotive customers or whatever had acquired in the past. So there has not been tactical increase. We're adding resources to support it. But at the same time, we believe that the supply chain guys are really focused on volume and the design guys are focused on new product launches.

Got it. Thanks. Great color.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Mike for any closing comments.

Yes, thanks, everyone. We appreciate your participation and questions on today's call. As always, we appreciate your interest in FOX Factory as well. And in closing, we ask everyone to stay safe and have a nice evening. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.