Fox Factory Holding Corp. (FOXF) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Fox Factory Holding Corp. annual meeting. I would now like to hand the conference over to your speaker today, Mr. Larry Enterline. Sir, please go ahead.

Good afternoon, ladies and gentlemen. I'm Larry Enterline, Executive Chairman of Fox Factory Holding Corp. The meeting will now come to order. It is a pleasure to welcome you to this virtual annual meeting of stockholders of Fox Factory Holding Corp. Let me start by saying that we wish you and your families good health during these uncertain times, and we thank you for your continued support of Fox. An agenda that outlines the order of business for the meeting has been posted on the virtual meeting site. The matters on which the stockholders are going to vote are: one, elect 2 Class I directors for a 3-year term; two, ratify the appointment of Grant Thornton LLP as the company's independent, registered public accounting firm for the 2020 fiscal year; and three, vote on the resolution to approve the compensation of the company's named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. I would like to begin the meeting by introducing the company officers on the line with us today. Joining me today are Mike Dennison, our Chief Executive Officer; John Blocher, our Interim Chief Financial Officer and Interim Treasurer; and David Haugen, our General Counsel and Corporate Secretary. We also have Dudley Mendenhall, our Lead independent Director, on the line with us today. David Haugen will serve as secretary of the meeting and record the proceedings. At this time, I would like to ask David if proper notice of this annual meeting has been sent to all stockholders entitled to vote at this meeting.

Thank you, and good afternoon. Yes, I have here an affidavit of Joanne Vogel of Broadridge Financial Solutions, Inc. duly signed, which indicates that on March 26, 2020, Notice of the Meeting and notice of the internet availability of proxy materials was distributed to stockholders of record as of the close of business on March 9, 2020, the record date for the meeting. This affidavit is also posted on the virtual website.

The Affidavit is accepted. Mr. Haugen will now discuss the procedures for transacting the business of the meeting.

The meeting will take place as described in the agenda. Throughout this meeting, stockholders may submit appropriate questions using the question box on the virtual meeting website. After voting on the proposals described in the proxy statement, we will read and answer as many of your questions as possible. In a few moments, we will open the polls on the virtual meeting website. Any ballot not submitted before polls are closed will not be saved or counted. We will announce the initial results of the report of the inspector of election when the voting is complete. If any stockholder has any matter of individual concern, please enter it through the question feature on our virtual meeting website. Other representatives of the company, who are also attending, can respond to those questions after the meeting.

[ Deborah Baker ], representing Broadridge Financial Solutions, Inc., has been appointed to serve as the inspector of election for this meeting and is with us today on this call. [ Deborah ] has signed an oath to act as inspector of election, and this oath will be filed with the minutes of this meeting. The inspector has the registered stockholder list of the company as of March 9, 2020, the record date for this meeting, which shows the registered stockholders and the respective number of shares entitled to vote at this meeting. This list is posted on the virtual meeting website, if any stockholder wishes to examine it, and will be filed with the minutes of this meeting. Will the secretary now report the number of shares, beneficial and registered, represented at this meeting.

Out of 38,602,699 shares of common stock entitled to vote at this meeting, there are present, in person or represented by proxy, at least 37,464,691 shares or approximately 97% of such shares entitled to vote.

A quorum is present at the meeting, so I declare the meeting duly and lawfully convened. The meeting is now open and ready for business. Since no stockholder nominations or proposals were properly filed in advance of this meeting as provided for in the company's bylaws, the business of the meeting is limited to the 3 proposals stated in the Notice of Meeting. The first item of business is proposal 1, a proposal to elect 2 Class I directors of the company. The election of nominees for director is discussed in the proxy statement. The directors who are elected today and the remaining 5 directors, whose terms continue after this meeting, will be the directors of the company. Dudley Mendenhall and Elizabeth Fetter have each been nominated for reelection as a Class I Director to serve for a 3-year term or until his or her successor has been elected and qualified, or earlier, in the case of his or her death, resignation or removal. These candidates have been nominated to serve as director by the company's Nominating and Corporate Governance Committee and the company's Board of Directors. The Board of Directors of the company recommends that stockholders vote for all of the director nominees. A motion to elect Mr. Mendenhall and Ms. Fetter is now in order. Is there a motion?

I move that Dudley Mendenhall and Elizabeth Fetter be elected as Class I Directors to serve for a 3-year term or until his or her successor has been elected and qualified, or earlier, in the case of his or her death, resignation or removal.

Is there a second to this motion?

I second the motion.

The motion has been duly made and seconded. Our next item of business is proposal 2, a proposal to ratify the appointment of Grant Thornton LLP as the company's independent, registered public accounting firm for the 2020 fiscal year. The appointment of Grant Thornton LLP is discussed in the proxy statement. The Board of Directors of the company recommends that stockholders vote for this proposal 2. A motion to ratify the independent, registered public accounting firm appointment as described in the proxy statement is now in order. Is there a motion?

I move that the appointment of Grant Thornton LLP as the company's independent registered public accounting firm for the 2020 fiscal year be ratified.

Is there a second to this motion?

I second the motion.

The motion has been duly made and seconded. I would now like to introduce Rimma Tabakh, an audit partner; and David Sandry, Managing Director with Grant Thornton LLP as the company's independent registered public accounting firm.

Thank you for having us today, and we look forward to answering any questions that your stockholders may have.

Thank you, Rimma. As a reminder, any questions can be submitted through the virtual meeting website, and we will put forth those questions at the end of the official business section of the meeting. Our next item of business is proposal 3, a proposal to vote on a resolution to approve the compensation of the company's named executive officers. This proposal 3 is a nonbinding stockholder advisory vote. The company's executive compensation is discussed in the proxy statement. The Board of Directors of the company recommends that stockholders vote for this proposal 3. A motion to vote on the resolution to approve the compensation of the company's named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission is now in order. Is there a motion?

I move that the resolution to approve the compensation of the company's named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rule of the Securities and Exchange Commission, including the compensation discussion and analysis, the summary compensation tables and the related narrative discussions be approved.

Is there a second to this motion?

I second the motion.

The motion has been duly made and seconded. Having presented all matters to be voted on by stockholders, I declare the polls now open for voting on the proposals. The votes on these proposals would be conducted through the virtual meeting website. It is important that all votes be cast. It is not necessary for you to vote now if you previously returned a proxy card, unless you wish to change your vote. We will take a brief pause while we wait for any votes to be cast. [Voting]

The voting portal will now be closed since all the formal matters to be considered have been voted upon. The balloting having been completed, I declare that the polls are now closed. I would again like to express my sincere appreciation to the stockholders who attended this virtual meeting as well as those who submitted their proxies but were unable to attend this webcast. I understand that the preliminary report of the inspector of election has been delivered to the company. Inspector, will you please announce the results of the stockholders' vote?

My preliminary report indicates that Mr. Mendenhall received 35,742,140 votes for election as a Class I Director. Mr. Fetter received 35,330,711 votes for election as a Class I Director. No other candidates for election as Class I Director received any votes. At least 98% of the outstanding shares of common stock present in person or represented by proxy voted in favor of proposal 2. At least 97% of the outstanding shares of common stock present in person or represented by proxy voted in favor of proposal 3.

Thank you. I am pleased to announce the following based on the preliminary results: Dudley Mendenhall and Elizabeth Fetter have been duly elected as Class I Directors, each to serve for a 3-year term or until his or her successor has been elected and qualified, or earlier, in the case of his or her death, resignation or removal. Since the number of votes in favor of approval of proposal 2 represents more than a majority of the outstanding shares of common stock present in person or represented by proxy, the appointment of Grant Thornton LLP as the company's independent, registered public accounting firm for the 2020 fiscal year has been ratified. Since the number of votes in favor of approval of proposal 3 represents more than a majority of the outstanding shares of common stock present in person or represented by proxy the resolution to approve the compensation of the company's named executive officers, as disclosed in the proxy statement pursuant to the compensation disclosure rules of the securities and Exchange Commission, has been approved. I hereby request that the final report of the inspector of election be filed with the minutes of this meeting. This concludes the formal matters to be acted upon in this annual meeting. Since there is no further business to come before this meeting, a motion to adjourn the formal meeting is now in order. Is there such a motion?

I move that we adjourn the formal meeting.

Is there a second to this motion?

I second the motion.

It has been moved and seconded that the formal meeting adjourn. The motion is carried. The formal meeting is now adjourned. We will now open the meeting up to questions entered before the meeting. Seeing no questions before the management team, we will now conclude the informal part of the meeting. Thank you very much. I believe this concludes all of our business today. Thank you all for attending, and stay safe.

Ladies and gentlemen, thank you for participating. You may now all disconnect.