WESTPORT, CT (BRAIN)—Fox Racing Shox earned $34.4 million in the second quarter of 2008 compared with $26.7 million for the same period of 2007, according to an earnings report released by Fox’s parent company, Compass Diversified Holdings, on Monday.
Income from operations was also up—from $1.66 million during the second quarter of 2007 to $3.1 million in 2008.
The higher revenue can be attributed to increased sales in Fox’s bicycle and power sports division, said James Bottiglieri, chief financial officer for Compass.
Sales in those divisions rose by $5.7 million, while aftermarket and service sales increased by about $2 million, according to a quarterly report filed with the Securities Exchange Commission.
For the first six months of the year, Fox pulled in $57.9 million, up from $42.7 million during the first six months of 2007.
“Needless to say, we are excited about Fox’s growth for the first six months and are optimistic about the remainder of 2008 as well. This performance both reaffirms our decision to acquire this business earlier this year as well as supports many of the initiatives [planned by] management to help them strategically manage their growth,” Bottiglieri said.
The majority of Fox’s growth occurred in Europe, said Joseph Massoud, chief executive officer for Compass.
“Certain pockets, like in Fox, we believe is driven by enthusiast purchases and today those enthusiasts appear to continue to be making their purchases and business is growing dramatically,” Massoud said.
Also a higher percentage of high-end mountain bikes are designed to carry Fox’s suspension products than a year ago, he added.
Alan Offenberg, a partner in Compass, said there was no single product that generated the majority of the growth for Fox.
“There were some price increases that went through both in Europe and domestically that helped carry revenues, and we believe that we took additional spec with a lot of the OEMs on some of the new 2009 model year products, so that was really the combination,” Offenberg said.
Overall Compass reported net income of $72.6 million for the second quarter of 2008, compared with $2.5 million during the same quarter last year. Most of the jump came from the June sale of two of Compass’ subsidiary businesses—Silvue Technologies Group, Inc. and Aeroglide Holdings Inc.
Compass now owns six middle-market North American businesses. The acquisition group purchased 76 percent of Fox Racing Shox in January; Bob Fox, the founder of the suspension company, retained the other 24 percent.
“In the face of a challenging economic environment, our business has performed well and demonstrated substantial cash flow growth, which we believe demonstrates the strength of each of our individual businesses as well as our model for working with the management teams of those businesses,” Massoud said.