Fox Factory Holding (FOXF) FY2025 10-K Risk Factors: 6 New, 10 Dropped

What the changes say

Fox Factory faces heightened geopolitical risks in Taiwan and China alongside rising U.S. tariffs on steel and aluminum.
The company maintains significant indebtedness under its Amended Credit Agreement and remains vulnerable to variable interest rate fluctuations.
Supply chain vulnerabilities, labor disputes, and public health issues continue to threaten manufacturing and OEM customer operations.

What changed since the prior 10-K

New

NewRISKS RELATED TO OUR BUSINESS AND OPERATIONS
The impact of the risks associated with international geopolitical conflicts—including, among others, the continuing tensions between Taiwan and China—on the global economy, energy supplies, and raw materials is uncertain, and may prove to negatively impact our business and operations
Political tensions between Taiwan and China and potential trade disruptions threaten Fox Factory's manufacturing facility in Taiwan and global supply chain.
NewRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our business, financial condition, and results of operations could be impacted by public health issues and related business interruptions
Future public health issues and pandemics could disrupt consumer demand, supply chains, and distribution channels for Fox Factory's products.
NewRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Interruptions in operations, infrastructure constraints, labor issues, supply chain issues, or other disruptions, including those affecting our suppliers or customers, could adversely affect our business, financial condition, and results of operations
Labor disputes at automotive OEM customers, such as United Auto Workers strikes, and seaport infrastructure constraints could disrupt Fox Factory's operations.
NewRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Qualitative data and limited sources support our beliefs regarding the future growth of the performance-defining product market and may not be reliable
Reliance on limited and qualitative data sources for the performance-defining product market could lead to incorrect growth assumptions.
NewRISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
In the future, we may be able to incur substantial additional debt from amendments to the Amended Credit Agreement, additional lending sources subject to the restrictions contained in the Amended Credit Agreement, or because of certain debt instruments we may issue
Fox Factory had $673.5 million of indebtedness and $349.8 million in available revolving credit under its Amended Credit Agreement as of January 2, 2026.
NewRISKS RELATED TO LAWS AND REGULATIONS
The tariff actions by the U.S. may result in a decrease of global trade volumes due to uncertainty, may create an administrative burden and will cause retailers to make difficult decisions as to how to pay the tariff or absorb the cost into their profit margins
Expanded U.S. tariffs could increase supply chain costs and prompt U.S. Customs and Border Patrol to hold imported products for inspection.

Dropped

DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our business, financial condition, and results of operations have been and may continue to be adversely affected by global public health epidemics or pandemics, including the ongoing effects of the COVID-19 pandemic
DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Work stoppages, infrastructure issues, or other disruptions, including those that involve our customers, could adversely affect our operating results
DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
The professional athletes, athletic programs, and race teams who use our products are an important aspect of the image of our brands. The loss of the support of professional athletes for our products or the inability to attract new professional athletes may harm our business
DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
margins, even if we are ultimately successful in limiting the distribution of a product that infringes our rights, which in turn may affect our business, financial condition, or results of operations
DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
An adverse determination in any material product liability claim against us could adversely affect our operating results or financial condition
Ongoing effects of the COVID-19 pandemic and related restrictions.
DroppedRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We may incur higher employee costs in the future
DroppedRISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
As of January 3, 2025, we had $705.1 million of indebtedness and $496.8 million in revolving credit available to borrow under the 2022 Credit Facility. Our ability to borrow under the 2022 Credit Facility fluctuates from time to time due to, among other factors, our borrowings under the 2022 Credit Facility
DroppedRISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
We may incur losses on interest rate swap and hedging arrangements
DroppedRISKS RELATED TO LAWS AND REGULATIONS
Regulations related to conflict minerals may force us to continue to incur additional expenses and otherwise adversely impact our business
DroppedRISKS RELATED TO LAWS AND REGULATIONS
Our vendors and any potential commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements

Reworded

90% rewrittenRISKS RELATED TO LAWS AND REGULATIONS
U.S. policies related to global trade and tariffs could have a material adverse effect on our results of operations
Updated to reflect the new Trump administration's 2025 policy increasing aluminum and steel tariffs to 50% for all countries except the United Kingdom.
67% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
If we are unable to maintain our premium brand image, our business may suffer as a result of brand degradation
Minor phrasing updates regarding the maintenance of premium brand reputation through OEM relationships and sponsorships.
63% rewrittenRISKS RELATED TO LAWS AND REGULATIONS
We are subject to employment practice laws and regulations. As such, we are exposed to litigation risks and may incur higher employee costs in the future
Added specific risks regarding employment practice laws and litigation exposure as the company expands internationally.
61% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our operating results are subject to quarterly variations in our sales, which could make our operating results difficult to predict and could adversely affect the price of our common stock
Refined wording regarding quarterly sales variations and factors influencing operating results predictability.
56% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
If we inaccurately forecast demand for our products or inaccurately predict OEM and dealer destocking and restocking cycles and production schedules, we may manufacture insufficient or excess quantities or our manufacturing costs could increase, which could adversely affect our business
Added a specific risk regarding the baseball industry, noting potential loss of customers if production cannot keep up with demand.
55% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We are a supplier in the high-end bike and powered vehicles markets, and our business largely depends on the orders we receive from our OEM customers and on their success
Expanded OEM customer risks to include barriers impacting customers' ability or choice to conduct operations.
53% rewrittenRISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
Our outstanding indebtedness under the Amended Credit Agreement bears interest at a variable rate, which makes us more vulnerable to increases in interest rates and could cause our interest expense to increase and decrease cash available for operations and other purposes
Updated reference from 2022 Credit Facility to Amended Credit Agreement and noted 2025 Federal Reserve rate cuts and hedging costs.
Was: Our outstanding indebtedness under the 2022 Credit Facility bears interest at a variable rate, which makes us more vulnerable to increases in interest rates and could cause our interest expense to increase and decrease cash available for operations and other purposes
51% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our business depends substantially on our ability to attract and retain experienced and qualified talent, including our senior management team
Added explicit mention of potential material adverse effects on business, operating results, and financial condition if CEO Michael C. Dennison or top management leaves.
50% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We depend on a limited number of suppliers for some of our materials, component parts, and products. The loss of any of these suppliers or an increase in the cost of raw materials could harm our business
48% rewrittenRISKS RELATED TO LAWS AND REGULATIONS
We are, and may in the future be, subject to legal proceedings. If the outcomes of these proceedings are adverse to us, it could have a material adverse effect on our business, financial condition and results of operations
45% rewrittenRISKS RELATED TO LAWS AND REGULATIONS
Climate change and related regulatory responses may adversely impact our business
44% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
If we are unable to continue to enhance existing products and develop, manufacture and market new products that respond to consumer needs and preferences and achieve market acceptance, we may experience a decrease in demand for our products, and our business and financial results could suffer
44% rewrittenRISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
These restrictions may interfere with our ability to obtain financing or engage in other business activities, which may have a material adverse effect on our business, financial condition, or results of operations
44% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Product recalls, and significant product repair and/or replacement due to product warranty costs and claims, including material product liability claims, may have a material adverse impact on our business
Was: Product recalls, and significant product repair and/or replacement due to product warranty costs and claims have had, and in the future could have, a material adverse impact on our business
42% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our growth in PVG and AAG depends on our continued ability to expand our product sales into powered vehicles that require performance-defining products and the continued expansion of the market for these powered vehicles
Was: Our growth in the Powered Vehicle and Aftermarket Applications Groups are dependent upon our continued ability to expand our product sales into powered vehicles that require performance-defining products and the continued expansion of the market for these powered vehicles
40% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We are subject to evolving privacy laws in the U.S. and other jurisdictions that could adversely impact our business and require that we incur substantial costs
40% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
If we are unable to enforce our intellectual property rights, our reputation and sales could be adversely affected
39% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
A disruption in the operations of our facilities could have a negative effect on our business, financial condition, or results of operations
37% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Because of the current inflation affecting the economy and the Federal Reserve’s changes in interest rates in response, we may be harmed in the future
37% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Fuel shortages, or high fuel prices, could have a negative effect on the use of powered vehicles that use our products
36% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We have grown and may continue to grow in the future through acquisitions. Growth by acquisitions involves risks, and we may not be able to effectively integrate businesses we acquire, or we may not be able to identify or consummate any future acquisitions on favorable terms, or at all
35% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Currency exchange rate fluctuations could impact our gross margins and expenses
Was: Currency exchange rate fluctuations could impact gross margins and expenses
33% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources. Failure to compete effectively against competitors would negatively impact our business and operating results
31% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our cost optimization efforts may not succeed or may be significantly delayed, which may impact our ability to deliver improved margins
30% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our operations may be impaired if our technology systems fail to perform adequately, and we could be negatively impacted by cybersecurity attacks
29% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline
27% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our business is sensitive to economic conditions that impact consumer spending. Our performance-defining products, including the bikes and powered vehicles into which many of them are incorporated, are discretionary purchases and may be adversely impacted by changes in the economy
26% rewrittenRISKS RELATED TO LAWS AND REGULATIONS
Federal, state, local, foreign, and international laws and regulations relating to environmental matters, land-use, and noise and air pollution may have a negative impact on our future sales and results of operations
26% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
The trading price of our common stock may be volatile, and you might be unable to sell your shares at or above the price you pay for the shares
24% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
We depend on our relationships with dealers, distributors, and retailers and their ability to sell and service our products. Any disruption in these relationships could harm our sales
22% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Changes in our customer base, marketing and distribution channels, or product mix could place demands that are more rigorous on our infrastructure and cause our profitability percentages to fluctuate
Was: Changes in our customer, channel, and product mix could place demands that are more rigorous on our infrastructure and cause our profitability percentages to fluctuate
21% rewrittenRISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our international operations are exposed to risks associated with conducting business globally

All 56 risk factors

Headings as the filing states them, in filing order.

RISKS RELATED TO OUR BUSINESS AND OPERATIONS

01The impact of the risks associated with international geopolitical conflicts—including, among others, the continuing tensions between Taiwan and China—on the global economy, energy supplies, and raw materials is uncertain, and may prove to negatively impact our business and operationsNew
02We depend on a limited number of suppliers for some of our materials, component parts, and products. The loss of any of these suppliers or an increase in the cost of raw materials could harm our business50% rewritten
03If we are unable to continue to enhance existing products and develop, manufacture and market new products that respond to consumer needs and preferences and achieve market acceptance, we may experience a decrease in demand for our products, and our business and financial results could suffer44% rewritten
04We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources. Failure to compete effectively against competitors would negatively impact our business and operating results33% rewritten
05Our business is sensitive to economic conditions that impact consumer spending. Our performance-defining products, including the bikes and powered vehicles into which many of them are incorporated, are discretionary purchases and may be adversely impacted by changes in the economy27% rewritten
06Our business, financial condition, and results of operations could be impacted by public health issues and related business interruptionsNew
07If we are unable to maintain our premium brand image, our business may suffer as a result of brand degradation67% rewritten
08Our growth in PVG and AAG depends on our continued ability to expand our product sales into powered vehicles that require performance-defining products and the continued expansion of the market for these powered vehicles42% rewritten
09A significant portion of SSG’s sales is highly dependent on the demand for high-end bikes and Marucci products. A material decline in the demand for these bikes, bike suspension components, or Marucci products could have a material adverse effect on our business or results of operations
10Our business depends substantially on our ability to attract and retain experienced and qualified talent, including our senior management team51% rewritten
11Changes in our customer base, marketing and distribution channels, or product mix could place demands that are more rigorous on our infrastructure and cause our profitability percentages to fluctuate22% rewritten
12A disruption in the operations of our facilities could have a negative effect on our business, financial condition, or results of operations39% rewritten
13Interruptions in operations, infrastructure constraints, labor issues, supply chain issues, or other disruptions, including those affecting our suppliers or customers, could adversely affect our business, financial condition, and results of operationsNew
14We may not be able to sustain our past growth or successfully implement our growth strategy, which may have a negative effect on our business, financial condition, or results of operations
15Our cost optimization efforts may not succeed or may be significantly delayed, which may impact our ability to deliver improved margins31% rewritten
16We depend on our relationships with dealers, distributors, and retailers and their ability to sell and service our products. Any disruption in these relationships could harm our sales24% rewritten
17We are a supplier in the high-end bike and powered vehicles markets, and our business largely depends on the orders we receive from our OEM customers and on their success55% rewritten
18Currency exchange rate fluctuations could impact our gross margins and expenses35% rewritten
19Our international operations are exposed to risks associated with conducting business globally21% rewritten
20Our sales could be adversely impacted by the disruption or cessation of sales by other manufacturers or if other manufacturers enter the specialty markets in which we operate
21We have been and may become subject to intellectual property disputes that could cause us to incur significant costs, pay significant damages, or prohibit us from selling our products
22If we are unable to enforce our intellectual property rights, our reputation and sales could be adversely affected40% rewritten
23If we inaccurately forecast demand for our products or inaccurately predict OEM and dealer destocking and restocking cycles and production schedules, we may manufacture insufficient or excess quantities or our manufacturing costs could increase, which could adversely affect our business56% rewritten
24Product recalls, and significant product repair and/or replacement due to product warranty costs and claims, including material product liability claims, may have a material adverse impact on our business44% rewritten
25We and our employees are subject to certain risks in our manufacturing and in the testing of our products
26Fuel shortages, or high fuel prices, could have a negative effect on the use of powered vehicles that use our products37% rewritten
27We do not control our suppliers, athletic programs, OEMs, other customers, or partners, or require them to comply with a formal code of conduct, and actions that they might take could harm our reputation and sales
28We rely on increasingly complex information systems to manage our manufacturing, distribution, sales, and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, our business could suffer
29Our operations may be impaired if our technology systems fail to perform adequately, and we could be negatively impacted by cybersecurity attacks30% rewritten
30We are subject to evolving privacy laws in the U.S. and other jurisdictions that could adversely impact our business and require that we incur substantial costs40% rewritten
31Our vendors’ and commercial partners’ information technology systems may fail or suffer security breaches, which could result in a material disruption of our operations
32We have grown and may continue to grow in the future through acquisitions. Growth by acquisitions involves risks, and we may not be able to effectively integrate businesses we acquire, or we may not be able to identify or consummate any future acquisitions on favorable terms, or at all36% rewritten
33Our operating results are subject to quarterly variations in our sales, which could make our operating results difficult to predict and could adversely affect the price of our common stock61% rewritten
34Qualitative data and limited sources support our beliefs regarding the future growth of the performance-defining product market and may not be reliableNew
35Because of the current inflation affecting the economy and the Federal Reserve’s changes in interest rates in response, we may be harmed in the future37% rewritten

RISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY

36The Amended Credit Agreement places operating restrictions on us and creates default risks
37These restrictions may interfere with our ability to obtain financing or engage in other business activities, which may have a material adverse effect on our business, financial condition, or results of operations44% rewritten
38In the future, we may be able to incur substantial additional debt from amendments to the Amended Credit Agreement, additional lending sources subject to the restrictions contained in the Amended Credit Agreement, or because of certain debt instruments we may issueNew
39Our outstanding indebtedness under the Amended Credit Agreement bears interest at a variable rate, which makes us more vulnerable to increases in interest rates and could cause our interest expense to increase and decrease cash available for operations and other purposes53% rewritten

RISKS RELATED TO LAWS AND REGULATIONS

40Changes in tax laws and regulations or other factors could cause our income tax obligations to increase, potentially reducing our net income and adversely affecting our cash flows
41Unpredictability in the adoption, implementation, and enforcement of increasingly stringent emission standards by multiple jurisdictions could adversely affect our business
42Increasing focus on environmental, social, and governance responsibility may impose additional costs on us and expose us to new risks
43Climate change and related regulatory responses may adversely impact our business45% rewritten
44We are subject to employment practice laws and regulations. As such, we are exposed to litigation risks and may incur higher employee costs in the future63% rewritten
45We are subject to environmental laws and regulations and potential exposure for environmental costs and liabilities
46Federal, state, local, foreign, and international laws and regulations relating to environmental matters, land-use, and noise and air pollution may have a negative impact on our future sales and results of operations26% rewritten
47We retain certain personal data about individuals and are subject to various privacy and consumer protection laws
48U.S. policies related to global trade and tariffs could have a material adverse effect on our results of operations90% rewritten
49The tariff actions by the U.S. may result in a decrease of global trade volumes due to uncertainty, may create an administrative burden and will cause retailers to make difficult decisions as to how to pay the tariff or absorb the cost into their profit marginsNew
50We are, and may in the future be, subject to legal proceedings. If the outcomes of these proceedings are adverse to us, it could have a material adverse effect on our business, financial condition and results of operations48% rewritten

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

51The trading price of our common stock may be volatile, and you might be unable to sell your shares at or above the price you pay for the shares26% rewritten
52The issuance of additional shares of our common stock, such as the follow-on offering of approximately 2.8 million shares of common stock that we completed in June 2020, could dilute the ownership interest of our common stockholders and could depress the market price of shares of our common stock
53If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline29% rewritten
54Anti-takeover provisions in our charter documents and Delaware law could discourage, delay, or prevent a change in control of our Company
55We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our common stock
56Failure of our internal controls over financial reporting could adversely affect our business and financial results

Other Fox Factory Holding 10-Ks

FY2024 10-K risk factors
60 risks
Fox Factory is heavily exposed to discretionary consumer spending on bikes, powered vehicles, and Marucci sports products. The company relies on single-source suppliers, OEM relationships, and international manufacturing. High leverage under the 2022 Credit Facility and debt-funded acquisitions introduce financial and integration risks.
Filed Feb 28, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.