Q2 2021 Fox Factory Holding Corp Earnings Call
And your patience and ask that you. Please continue to standby.
[music].
Good afternoon, ladies and gentlemen, and thank you for standing by and welcome to the Fox factory holding corporations second quarter 2021 earnings Conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. Please note. This conference is being recorded and I'd now like to turn the conference over to your host David balcony director of Investor Relations and business development. Thank you Sir you may begin.
Good afternoon, and welcome to Fox Factory second quarter 2021 earnings Conference call I'm joined today by Mike Dennison, Our Chief Executive Officer, and Scott Humphrey, Our Chief Financial Officer, and Treasurer first Mike will provide business updates and then Scott and reviewed the financial results for the quarter.
And then the outlook followed by the closing remarks from Mike.
We'll then open the call up for your questions.
By now everyone should have access to the earnings release, which went out today at approximately 4 of 5 eastern time. If you have not had the chance to review the release, it's available on the Investor Relations portion of our website at Investor Day, right Fox Dot com.
Please note the throughout this call the wood Refered to Fox factory as Fox or the company.
Before we begin I would like to remind everyone that the prepared remarks contain forward looking statements and management may make additional forward looking statements and the response to your questions such statements involve a number of known and unknown or the children of these many of which are outside of the company's control and can cause future.
The 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 the 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 the result of new information future events or otherwise.
In addition, where appropriate and today's prepared remarks, and we did not earnings release, we will refer to non-GAAP financial measures to evaluate our business and do you believe these are useful metrics that better reflect the performance of our business and then ongoing basis.
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 watch the E. Mike Dennison.
Thanks, and good afternoon, and we appreciate everyone, taking the time to join US for today's call on behalf of the Fox team and I'm extremely proud to say that this quarter is 1 for the record books and thanks to the dedication and perseverance and execution by our team we have not only delivered a fourth consecutive record revenue quarter.
But also crossed 1 billion and revenue on a trailing 12 month basis.
This feat clearly demonstrates the market performance and fundamentals that highlight our portfolio of innovative products within a well diversified business.
This achievement is particularly noteworthy as our team delivered these impressive results while maneuvering through the numerous supply chain and inflationary challenges plaguing the global economy I am happy to report that we completed 2 acquisitions this quarter, so of sport and outside of Dan.
So of sport, which is in our specialty sports group as the distributor for Fox and most of your brands and Australia.
Paired with the race face and Easton components, so of sport and has a full offering of mountain bike and rode parts and accessories.
More importantly, the acquisition gives us a foothold and Australia, which we believe is an important market for Fox and both S. S. G N P D G going forward.
And outside van which is not powered vehicles group is a premier and adventure van up fit or that sells directly to an ever growing base of overland and enthusiasts.
And I'm, sorry, Dan like FCA. He continues to enable growth of Fox products, and we vertically integrate into these vehicles. Both of these acquisitions represent core tenants of our M&A strategy, which is geographic expansion and new market development.
Although these deals were relatively small financially we see them as valuable additions to the Fox brand.
Moving on to the numbers, we had a successful second quarter with over 328 million and sales, which is 79% growth versus the second quarter of last year.
Given the fact, we had of skewed year on year comparison is most of the P. B G. Oems were shut down for the majority of Q2 last year. It is worth highlighting that we also achieved almost 17% growth and Q2 revenue all of the sequential basis versus Q1 of 2021.
This outstanding growth was driven by both our SSG and P V G businesses, which grew 64 per cent and 92% respectively versus the prior year period.
The demand across our product categories continues to be strong with no signs of abating, given our uncompromising brand and customer loyalty our non-GAAP adjusted earnings per share increased from 50 cents and the second quarter of 2020 to $1.20 and the second quarter of 2021, which is also a new record.
The pandemic has brought a fundamental shift in consumer behavior towards the health conscious and the outdoor lifestyle products. We believe this change is more secular in nature. Consequently, we are benefiting from the new wave of Fox enthusiasts and Bo.
The recreational and professional categories.
Starting with the specialty sports group this was our fifth consecutive record revenue quarter.
Thanks for extremely capable team, we were able to scale and accelerate production, while managing our supply chain to deliver for our customers and there's robust demand environment. Despite a slight improvement and the bike inventory channels. The inventory of wells continue to remain close to historic lows with the current pace of industry demand. We believe it will still take.
8 to 10 months to meet the current customer demand level and another 12 to 18 months to replenish depleted inventory channels.
As I mentioned and the last earnings call. We continued to capitalize on the expanded writer base. During this unprecedented restocking cycle by leveraging strong OEM and supplier relationships as part of our 2020.2 bike line and Fox launched 2 new Fox 2 new shocks and the new Ultra line transfer of S. L Dropper post.
Along with the 2 updated versions of the third and fourth Fork, which is 1 of our most popular models.
The innovative products feature of improved ride dynamics more tune of Dougherty and substantial weight reductions compared to last models.
Our new drop of posted and updated 34 of 4.4 featured and the Tokyo Olympics and addition between downhill World Cups, and Enduro World series races, Fox athletes have taken 19 podium and spots this quarter and we are.
And the standings for both World Cup downhill and Enduro World series.
Shifting to our powered vehicles group. This was our second consecutive record revenue quarter led by strong sales of empower sport and the up fitting product lines. I'm also pleased to report that automotive OEM model year changeovers are back on line, which should support our long term OEM and growth rate expectation and help us leverage the efficiency we are.
Creating and our new Gainesville facility.
Talking about the Gainesville facility the transition zone on track and should finish by the end of this year.
Moving onto our accomplishments and the racing wheel Fox continued its domination in the desert with overall wins by Bryce Menzies and central and PE, Larry Rossler at the bar of 510.
And the until the price of the race and Australia.
But all the technology continues to shine and the pro UTV class, where are and what's the wins and podiums and both San Felipe and Bard. Furthermore, in Baja Fox equipped vehicles cleaned 8 of the top 10 overall finishes 10 of the top 12 pro UTV spots and.
And 13 class wins and total at the ultra for and L. A the Ford performance stockbroker piloted by the Lasalle Brothers took the class 1 of the vehicles did the race and addition, fun getting junior and Lorne here and there they're all new Fox equipped for the performance unlimited cash brokers with that we're proud to announce that all.
And for performance Bravo race program's run Fox suspension.
As much as we are celebrating our success. It has clearly come as a result of a lot of hard work. While we are pleased with our performance and the the headwinds to our business continue to persist and potentially grow as the magnitude of our sales increase supply chain issues have not eased and we continue to search for alternative sources to minimize interruptions as well.
And has worked closely with our suppliers to expand their production, we believe that supply chain disruptions will remain at risk and the second half of this year. Additionally of components shortages across multiple industry segments are prevalent leading to material price increases, which continued to put pressure on gross margins.
Shipping and container shortages have also exacerbated free class and lead times around the world.
These issues are consistent with what we're hearing from the other management teams and will persist into next year.
All of this to say, we recognize the structural headwinds ahead of us, but we are refining our operational playbook to not only mitigate these challenges, but also strengthen our core competencies, thereby extending our competitive differentiation and with that I'll turn the call over to Scott.
Thanks, Mike Good afternoon, everyone I'll begin by going over our second quarter financial results and then review our guidance.
Sales and the second quarter of 2021 were $328.2 million and the increase of 79, 2% versus sales of $183.1 million and the second quarter of 2020.
Our powered vehicles group delivered a 92.4% increase and sales compared to the second quarter of 2020, primarily due to increased demand and both the OEM and aftermarket channels, including strong performance and our power sports and up fitting product lines.
Looking back at 2020, our results and the prior year quarter were impacted by production shutdowns at the majority of our OEM customers.
Moving to S. S. G. The specialty sports group delivered a 63.9% increase and sales in the quarter compared to last year.
Driven by continued high demand and their OEM channels.
Fox factory its gross margin was 33, 9% and the second quarter of 2021.
A 110 basis point increase from 32.8 per cent in the prior year period.
Non-GAAP gross margin also increased by 100 basis points to 34.1% versus Q2 of 2020.
The increase in gross margin was primarily driven by favorable product and channel mix led by higher volume sales and our specialty sports group and the strong performance and our power sports and up fitting product lines and.
Additionally, our prior fiscal year period results were negatively impacted by higher factory related costs, including incremental expenses related to the COVID-19 pandemic.
Total operating expenses were $58.4 million or 17, 8% of sales and the second quarter of 2021.
Compared to $40.6 million or 22.2 per cent of sales and the second quarter of last year.
The increase in operating expenses on a dollar basis was primarily due to higher employee related costs higher commission costs and investments to rightsize our back office infrastructure.
Looking at non-GAAP operating expenses as a percentage of sales our non-GAAP opex decreased by 220 basis points to $15.7 per cent compared to 17, 9% and the prior year period.
Looking at Opex and more detail sales and marketing expenses increased approximately $5.2 million, primarily due to higher commissions of $3.6 million.
Research and development costs increased approximately 3 million, primarily due to personnel investments to support future growth and product innovation.
General and administrative expenses increased by approximately $9.8 million.
Due to higher employee related costs of $6.8 million as well as the increases and various other costs as we continue to right size our administrative support functions.
For the second quarter, our effective tax rate was 13, 3%.
This rate is lower than our previous long range guidance of 15% to 19% primarily due to a windfall from stock based compensation.
Adjusted EBITDA increased by $106.8 per cent to $69.7 million for the second quarter of 2021 compared to $33.7 million and the same quarter last year I.
And I want to congratulate our team on back to back record quarters and EBITDA.
Furthermore, adjusted EBITDA margin expanded 280 basis points to 21.2 per cent compared to 18.4% and the second quarter of 2020.
The increase in EBITDA margin is primarily due to the impact of higher sales and favorable product mix.
On a GAAP basis net income attributable to Fox and the second quarter of 2021 was $44.3 million or $1.05 per diluted share.
Compared to $12.6 million or 32 cents per diluted share and the prior year period.
Non-GAAP adjusted net income was 51 million and increase of approximately $31.3 million or 159 per cent compared to $19.7 million and the second quarter of last year.
And we delivered $1.20 and non-GAAP adjusted earnings per diluted share and the second quarter of 2021 compared to 50 cents and the second quarter of 2020.
Now focusing on our balance sheet for the second quarter, which ended on July 2nd 2021, compared to our 2020 year and on January 1st 2021, we ended with cash on hand of $275 million.
Counts receivable was $149.7 million compared to 121.2 million.
Inventory was $208.6 million compared to $127.1 million and.
And accounts payable was $154.1 million compared to $92.4 million.
The increase and inventory is primarily due to additional raw material purchases to mitigate risks associated with supply chain and uncertainty.
The changes and accounts receivable and accounts payable reflect business growth as well as of the timing of vendor payments.
Our net property plant and equipment increased to $177.6 million as of July 2021, compared to $163.3 million at the end of 2020, reflecting capital expenditures of 27.6 million and the first half of 2021.
The increase reflects investments and our manufacturing facility and Gainesville, Georgia.
Goodwill increased to $299.8 million as of July 2nd of 2021 compared to $289.3 million as of January 1.2021, due to our acquisition of outside van during the second quarter.
Now turning to guidance.
We are raising our guidance for both our third quarter and full year 2021.
For the third quarter, we expect sales and the range of 300 million to $320 million and non-GAAP adjusted earnings per diluted share and the range of 95 cents to 1 dollar and 15 cents per share.
For the full year, we expect sales and the range of 1.2 billion to 1.24 billion.
And non-GAAP adjusted earnings per diluted share and the range of $4.25 to $4.45 per share.
I'd also like to note that we're not providing guidance on GAAP EPS as it cannot be provided without unreasonable efforts due to the difficulty of actually predicting the elements necessary to provide such guidance and reconciliations.
For our full year tax guidance, we still expect our tax rate to be closer to the lower end of our previously provided range of 15% to 19%.
The excellence of Fox was operations brand and strategy were on full display and the first half of the year.
Given the well known and macro headwinds ranging from supply chain to labor and material inflation and Fox has been successful so far and mitigating these challenges with only a modest impact to the financial results.
As we enter the second half of the year, we are cognizant of the challenges ahead and their possible top and bottom line impact we expect to return to a more typical product mix and some of the T V. G automotive OEM model year, changeovers and come back online.
Historically, we have been able to offset inflationary cost pressures through price adjustments. However, the combination of expanding inflationary pressures on material labor and logistics costs could be a drag on margins and the second half of 2021 with that I would like to turn the call back over to Mike.
Thank you Scott and closing we had expanded our competitive positioning while delivering against our customer commitments and are looking forward to of continued strong momentum into the second half of the year. We believe we have laid out credible growth plans without taking our eyes off the risks we face the spread of the Covid Delta very and remains a concern.
And which threatens to derail the rapid reopening of the global economy, but throughout the pandemic. We have proven that Fox has only become more versatile and we will continue to invest and evolved and maximize value for our employees shareholders and the communities, where we operate I would now like the open the call for questions operator.
At this time, if he would like to ask a question. Please press the star and the 1 on your Touchtone telephone you may remove yourself from the queue at any time by pressing the pound key once again to ask a question. Please press the star and 1 on your Touchtone phone.
And we will take our first question today from Mike Swartz with Truest Securities. Your line is open.
Yeah. Good afternoon, guys I just wanted to touch on these acquisitions understanding the they're fairly small, but maybe just give us the high level strategic rationale for each of the transactions and then.
Maybe for Scott did you embed any benefit from those 2 acquisitions and your and your guidance for 2021.
Hey, Mike This is Mike I'll start and then I'll, let Scott handle the second question. So for instance, or some of them.
And obviously more strategic and financial in nature and.
We think Australia with the solar sport.
Acquisition.
The important from the standpoint of getting engaged getting a footprint and Australia for both current vehicles and for our bike business and SSG. So this ability to pick up the team pick up the facility and pick up in the entrance into that and do that and cotton and as important. So 1 of this will drive long term value.
And both of those type of our business and and we're pretty excited about it.
And Dan and you know operating has been of great part of our business, we've added to it and the last the last year with FCA you of that.
We think outside bands of the very similar model of that where we can vertically integrate our products into those vehicles and we.
Thank the premium performance nature of the user of that vehicle is is our is our customers aren't demographic. So.
As we see that market expanding significantly and a high you know of high premium of company like outside and meeting the scalability of meeting the ability to go grow manufacturing and drive more volume.
The increase productivity, we think are of great fit for that so it allows us to play that all of their own components and shocks and products, but also play into our space and we think is very similar in nature to 2 are out.
And 2 are putting the business so both very synergistic and acquisitions, both very close to kind of a target if you will.
Talk about being on point with the acquisitions, we do tours to our strategy into our culture to 2 of those so so we live and but again small and financial status, but the big and strategic significance and Scott will take the second question, Yes, Sir.
Yeah.
And as part of our guidance certainly, but as Mike said.
And then the impact is minimal and the second half.
Of the theory of it but we have big plans moving forward.
Okay. Thanks, that's helpful. And then just a follow up question just give us a sense of a lot of a lot of capacity constraints and availability issues throughout the supply chain and maybe touch on your up fitting business and and you're a bit of your ability to source chassis is that of risk is that something that.
<unk> you.
And dealt with and the second quarter.
Yeah, we can fundamentally dealt with the there's always a risk when you don't have the vehicles in hand.
The the vehicles are allocated and just not kind of a lot of debt if you will.
So we think we're in pretty good shape, where it is as the risks go and find out 1 of the bigger risks for us of the second half of the year don't want to completely eliminate that from the some of the concern.
Level, yet as of wafer vehicles to show up at the channel so good.
And finding creative ways to get the vehicles in the first half of the year to make sure and we had more of than we expected and the first half of the year, that's current continuum and the second half as well and and I think we're in pretty good shape.
Thanks, a lot.
Thanks, Mike.
Thank you and and we will go next to Jim Duffy with Stifel. Your line is open.
Thanks, and good afternoon, guys, great job with the gym.
During the Corp.
Yeah, a couple of questions for me.
Looking at the guidance if I use 2019 as the baseline the guided growth rate looks stronger and the fourth quarter than the third quarter and just thinking about your pattern historically, you've been more conservative the further into the future.
Looking to the fourth quarter or is there some sort of timing issues or something and your sights that bolsters your your confidence on the fourth quarter.
The other big thing Jim Good question, and the Big thing and Q4, and we have to think about is the lack of seasonality and a business right now and based on supply chains and the land so.
The other normal nature of Q4, where you have seasonality, where you have literally the near the fluctuation of the move into of winter season doesn't occur. This year as there is just so much pent up demand and as soon as we pushed through and both the bike and powered vehicle business and you won't see that seasonality I don't think and in Q4 Q.
1 of next year like you might normally see.
That's helpful I get it.
And then Mike I wanted to ask on the specialty sports segment.
Just what you guys are doing and the marketplace to try to get a feel for what is an appropriate rate of demand to plan for I'm. Certain there is a lot of interest and bikes, it's being double counted maybe even triple counted.
And you know how and how is it you're thinking about.
Yeah, you know planning for what will be a more normalized rate of demand.
Yeah, you know, Jim and we've talked before about this too I think the important thing here is is that the.
The closer proximity and do you have to sell through to 2 of OEM relationships and understanding what their business looks like and what they're doing in terms of current inventory levels given the of a pretty healthy idea of what you know what could be happening in Belmont county, or double booking of the people who are pretty over and bikes and.
And we just found it and not be a significant issue now at some point in time and.
18 months from now and say you might start to really see that net itself out but right now the demand is still so so much more significant than what can be supplied the double carry of just don't factor. So again, I think that might be more of an issue.
18 months out right now not a big concern and not what we're talking about with the with our distributors are Oems and.
In terms of the risk or or a big concern.
And Mike just and your prepared remarks, I think you spoke to 8 to 10 months just to meet customer demand what was the figure on the additional months to restock the channel.
12 to 18, and nobody really thinks that they intend to kind of cover of the current free.
The order book, if you will and then and then 12 to 18 to get the inventory levels back up and distribution and all the channels right that did occur whether it's distribution hubs of dealers and things like that and do you walk into a bike shop today.
Still not gonna find much inventory and if you walk into a hub like a regional hub for all of the.
And you buy a company and you're going to try and basically zero inventory so the agent.
8 and 10, where the preorders 12.18.
The channel replenishment.
Very helpful. Thank you.
Thanks, Jim.
We will move next to Craig Kennison with Baird. Your line is open.
Hey, good afternoon, and thanks for taking my questions as well Scott I think you mentioned the inflation as a potential risk.
The second half I couldn't tell whether that was something that you just included in the.
The prepared remarks, because it is of risk or whether you're really concerned of could pressure.
The margin, maybe just shed a little more light on how concerned you are about the inflationary environment.
Yeah, I think we had a few concerns as we look forward to the second half of the year with regard the margin and and you know the big 1 that I also touched on is mix.
And just the the expansion of the automotive OE business and in the second half of the year versus the first half of the year.
And it causes a little bit of margin degradation for us, but then we're.
At the same time trying to overcome in a must.
Serial of price increases are.
Yeah, and supply chain disruption with logistics, a little bit of labor inflation.
And obviously, we're trying to go out and get price increases at the same time, but it is the risk that I wanted.
Sort of to call out to just put everybody on notice that.
And you know we're fighting a lot of and we're fighting on a lot of front and on gross margin and the second half of the year.
That's great and.
And looking forward to seeing you in September at your Analyst day, and wondering if you could just.
Set the table, maybe for that agenda, and and and maybe comment on whether you'll provide specific 5 year kind of revenue and <unk>.
Profit and other financial metric targets.
Yeah, Craig we are gonna and walk them through the kind of our 5 year vision for the company and go into some detail on product lines and what we think the expansion occurs and what we think that materialize and we're not going to give the.
Detailed.
Yearly guidance at that time, but we're going to talk about where we think we're going to be.
5 years out from now and and we're well on track.
Risk of Covid impact, including Taiwan.
So we're going to be reasonably conservative and our assessments and what we think could happen on both positive and the negative.
And the 4 the headquarters.
Got it thanks, and and then you start to use and pricing to some extent top of that uhm cost inflation could you maybe put his contacts town the model and year of 22 price increase the every year of compares to the historical trend that we've seen.
And can and.
Interesting thing we have been.
Working pricing and issues inflationary issues for awhile, and we've made and pricing adjustments and updates across and most of our platform is I've talked about and part of the cold.
The challenge of you run into is the frictional cost and inflation that is hard to capture of real time, and and pushed through and a real time basis of actually becomes kind of natural leg and then you get the longer and do an inflationary periods.
And Ah lag in terms of of how quickly you can process that through and get and analyzed and get it in the front of customers with price increases so.
We spent today.
We're doing the price increases more frequently and and we do of price increases for both of the material cost increases the labor cost increases and and Scott mentioned and his prepared remarks and for even shipping container cost increases.
So we will continue to do that I think price increases for our business and like many businesses will be a more frequent and conversation for the foreseeable future. While we don't really understand what the room inflation of issues of or a <unk>.
Short term issue or a longer term issue, but for now.
It's a conversation of the occurs much more frequently and it used to and our business and those businesses out there.
And that's the that's not the case, but I would look at what we did and and our innovation and design as well as what we did and their operations and supply chain and and as I told him my team and tell you I think.
We we just did a lot of things right and and get them right early.
And sometimes early and more importantly, actually the right. So I think during the combination of those things of allow us to see the growth of we're seeing today and the things that were making and taking action on today is going to help us and 2023 and beyond and so really positive.
I think the changes and a great job.
Okay, Great and and then just 1 quick follow up on the gross margin and for Scott.
If we look back Ah the to your staff and you're up 140, 150 Bucks could you just maybe and I know I know the the major drivers the others.
And takes but it sounds like you're getting volume and benefits and specialty sports curious of you're also getting benefits from mix you know within specialty sports, maybe the higher technology products and then on the powered vehicle and the simply the other drive of their simply better short term mix away from the.
You know the North American over the and then I guess that third factor is how is that the ship the Kansas and to Georgia, That's still a headwind and then at all.
[noise] yeah the worst.
Still not getting benefit because as of yet we've we've really been unable to move much volume on the power sports business and and so you know and we're still planning to have that all move by the end of the year, but the majority of of it and now it's been kind of coming from the fourth quarter just because.
And we're trying to meet the customer demand and and so it makes it very hard and shut down and sorry, Larry go ahead.
No no no I was just got.
And so so I think you know you're right and mix is it is the big issue or it's been a big benefit for us and the first half of the year you know I'll set some positive on the P. B G side as well I think is you know aftermarket has been very strong power sports has been very strong.
And of of fitting has been very strong so.
And I don't know how much benefit we're getting on mix from different segments within the F. S. G. But certainly aftermarket has been strong there as well.
Okay, great. Thanks, a lot of very helpful.
And do we will go now to Scott's temper with C. L. King of your line is open.
Good afternoon and guess.
Good afternoon.
Before I'm going to ask the about supply chain and the on the up for the business. It seems like that's 1 of the areas you have least concerned about I guess and the back half of the year from the supply side is there 1 area of of 2 areas that we should look at that you're most concerned about and the back there for Ya.
Yeah.
The drink about Taiwan day, with and and supply chain of work was done the.
It has continued to to have a level of of the last Tiffany to grow with US go through our work of the suppliers and their investment and capacity. So we're pretty comfortable with what we can we can get and of course of that told you before so the others before we are booked out so far in the future and SSG and the we have a really good and.
And do what we mean by component.
For the balance of this year next year. So that's that's a that's a good health and place to be doesn't mean and stuff without risk, but it's a good healthy place to be I think the the challenge of North America. So we're not talking more power sports and automotive OEM is is getting.
The model of your changes have been a bit of of challenge getting supply chain to align with those model of your changes and timing and.
And getting new suppliers onboard the here and little kind of of this oversized growth of a scheme in North America and it has been has been more challenging so if I. If I told you well I think the supply chains and probably the most risk it would be and more of our legacy business day, Powersports and automotive volume.
And probably mostly and the power sports business, where the demand and just been so significantly higher than expected that we've kind of the exceeded not kind of we've exceeded the capacity of the net.
<unk> of suppliers and had to go out and look for new ones, which I said and the prepared remarks.
So when we look forward to the next couple of quarters and that's the area where the most focuses today to make sure. We've got a handle on the lesson updating and chassis. Although we will track that closely and we're working hard and but but a little less concern more so in powersports and and the legacy of products were.
Or the North American suppliers of probably the most over over the skis if you will.
And that was very helpful and then and and the quarter. That's just completed on the.
The powered vehicle group could you talk about how the individual groups.
And formed I imagine the elite.
Automotive already was was a little bit slower per talk about powersports versus updating and some other aftermarket.
Yeah, Yes, and he's got the way the thing about that and if you look at Oh, and a year on there and it's probably it's probably the probably.
Probably the form despite the can remember Q2 of 2020 and was zero or not and your other close.
Close to it as you know so so that you don't want to do and try to do a year of your cough and really kind of derive much information from that I would say it was slower and the <unk>.
The motive just because of the model of your chosen kind of mood and U as we've discussed before so that that caused the little bit of slowness and alien automatic powersport with the rest of the business the demand they demand still far out of reaches.
Supply so 1 of those powers towards the fitting aftermarket.
Our sport truck because of all of them saw more demand and the quarterly expected it to be and a quarter and the quarter was really just a race to try to support as much of it as we could and would carry backlog and almost every 1 of those categories from Q2 and the queue 3.
Got it that's all I have thanks.
6 out of it.
[noise] and I'm showing that we have no further questions. The first time I'll turn the call back to my tennis and for any additional or closing remarks.
Thanks first of all we appreciate everyone's participation on today's call and.
And can you for your continued interest and Fox and have a great evening.
The status conclude today's program. Thank you for your participation you may disconnect at any time.
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