Fox Factory's Marucci sale shows $120M pro forma loss
Fox Factory applied the $200 million in net closing cash proceeds to reduce borrowings under its credit facility.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Fox Factory Holding Corp.'s wholly owned subsidiary, Fox Factory, Inc., completed the sale of Wheelhouse Holdings Inc., parent of Marucci Sports, LLC, to Squared Up Holdings, LLC, on September 25, 2026. The sale price was based on a $225 million enterprise value and comprised $200 million in cash plus $25 million in principal and interest payable under an unsecured subordinated convertible note. After closing adjustments, Seller received $200 million in net cash proceeds and applied them to reduce the Company's credit-facility borrowings.
The note's original aggregate principal was $24.7 million, due December 31, 2026; it bears 4.55% annual interest through maturity and 10% thereafter if unpaid until repayment or conversion, with interest added to principal quarterly beginning January 1, 2027. If unpaid at maturity, principal increases by an additional $2.5 million plus PIK interest. The unaudited pro forma information reflects a $120.136 million loss on disposal and $7.512 million in transaction costs; it is illustrative and not necessarily indicative of actual results.
1 point · 1 major1 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major point$200 million in net proceeds was applied to reduce credit-facility borrowings. 25% of market cap
Negative
- Major pointA $120.136 million loss on disposal was reflected in the unaudited pro forma information. 15% of market cap
Filing Explained
If the $24.7 million note remains unpaid at its December 31, 2026 maturity, Fox Factory, Inc. may convert all principal and unpaid interest into equity of the purchaser’s parent; the equity amount is based on the debt owed divided by the lesser of $225 million or the parent’s fair market value.
8-K Event Classification
3 items: 1.01, 2.01, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.01
Completion of Acquisition or Disposition of Assets
Financial
The company completed a significant acquisition or sale of business assets.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Enterprise value: $225 million
Net cash proceeds: $200 million
Note consideration: $25 million in principal and interest
+5 more
8 metrics
Enterprise value
$225 million
Basis for the Marucci divestiture sale price
Net cash proceeds
$200 million
Received by Fox Factory, Inc. at closing after adjustments
Note consideration
$25 million in principal and interest
Part of the divestiture consideration
Note original aggregate principal
$24.7 million
Unsecured subordinated convertible note
Note maturity and interest
December 31, 2026; 4.55% per annum through maturity and 10% thereafter if unpaid
The post-maturity rate applies until repayment or conversion
Additional principal increase
$2.5 million
If the note is not repaid in full on the maturity date, plus PIK interest
Loss on disposal
$120.136 million
Unaudited pro forma balance-sheet adjustment
Transaction costs
$7.512 million
Costs incurred in connection with the divestiture
Key Terms
PIK Interest, collar, enterprise value, transition services agreement
4 terms
PIK Interest financial
"Interest will be paid in kind by increasing the outstanding principal balance"
Payment-in-kind (PIK) interest is interest on a loan or bond that is paid by adding to the borrower’s debt rather than by handing over cash; think of it as paying rent by giving an IOU that increases the total owed instead of using money now. Investors care because PIK raises short-term cash for the borrower but increases future risk — the lender receives a larger, deferred payment and assumes more credit and timing uncertainty.
collar financial
"a $250,000 collar on post-closing adjustments"
A collar is a risk-management strategy that locks an investor’s stock between a floor and a ceiling by buying protection against big losses and selling the right to some gains. Think of it as buying an insurance policy to limit how much you can lose while giving someone else the chance to share in any big upside, often making the protection inexpensive or free. Investors use collars to protect gains or reduce portfolio volatility without fully selling the shares.
enterprise value financial
"The sale price of Wheelhouse was based on an enterprise value of $225 million"
Enterprise value is the total worth of a company, reflecting what it would cost to buy the entire business. It includes the company's market value plus any debts, minus its cash holdings, offering a comprehensive picture of its true value. Investors use it to compare companies regardless of their capital structures, helping them assess how much they would need to pay to acquire the business.
transition services agreement financial
"the Seller also entered into a transition services agreement"
A transition services agreement is a formal arrangement where one company continues to provide essential services—such as IT, human resources, or accounting—to another company after a business deal or change in ownership. It acts like a temporary bridge, ensuring smooth operations during a transition period. For investors, it provides clarity on how long support will last and helps assess potential costs and stability during the change.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did FOXF receive for the Marucci divestiture?
The sale price was based on a $225 million enterprise value. Consideration consisted of $200 million in cash and $25 million in principal and interest payable under the note. After closing adjustments, Fox Factory, Inc. received $200 million in net cash proceeds.
What happens if FOXF's note from the Marucci sale is not repaid by maturity?
If unpaid at December 31, 2026, the note bears interest at 10% per annum until repayment or conversion, and its principal increases by $2.5 million plus PIK interest. Fox Factory, Inc. may convert all outstanding principal and accrued unpaid interest into equity of the Purchaser's parent, based on the outstanding amount divided by the lesser of $225 million and fair market value at conversion.
What loss did FOXF show in the pro forma information for the Marucci divestiture?
The unaudited pro forma reconciliation reflects a $120.136 million loss on disposal, including a $112.624 million loss before $7.512 million in transaction costs. The pro forma information is illustrative and is not necessarily indicative of actual results.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||||||||
(Address of principal executive offices) (Zip Code)
(831 ) 274-6500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| (NASDAQ Global Select Market) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
As previously announced, on September 25, 2026, Fox Factory, Inc. (the “Seller”), a California corporation and a wholly owned subsidiary of Fox Factory Holding Corp., a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement (the “Agreement”) with Squared Up Holdings, LLC, a Delaware limited liability company (the “Purchaser”), pursuant to which the Purchaser acquired all of the issued and outstanding shares of capital stock of Wheelhouse Holdings Inc. (“Wheelhouse”), a Delaware corporation and a wholly owned subsidiary of the Seller immediately prior to the transaction (the “Marucci Divestiture”). The Marucci Divestiture closed simultaneously with the entry into the Agreement. Purchaser is an acquisition vehicle for an investor group led by and including members of the senior management of Marucci (as defined below). Wheelhouse is the parent company of the operating entity, Marucci Sports, LLC (“Marucci”), which is a designer, manufacturer, and marketer of premium wood, aluminum and composite baseball bats as well as other diamond sports products.
The sale price of Wheelhouse was based on an enterprise value of $225 million. The sale price was paid via a combination of (a) $200 million in cash and (b) $25 million in the form of principal and interest payable pursuant to an unsecured subordinated convertible promissory note (the “Note”), with the cash consideration subject to certain adjustments based on matters such as unpaid transaction expenses, net working capital and cash and debt balances of Wheelhouse at the time of the closing. After all adjustments, Seller received net cash proceeds at closing of $200 (in addition to the Note) and applied those cash proceeds to reduce outstanding borrowings under the Company’s credit facility. The Company incurred approximately $7.5 million in transaction related costs, which did not reduce the closing cash proceeds but the Company intends to satisfy such expenses separately with cash on hand. The Agreement further includes a $250,000 collar on post-closing adjustments, upward or downward, to the purchase price.
The Note, with an original aggregate principal amount of $24,700,000 due on December 31, 2026 (the “Maturity Date”), bears interest at the rate of 4.55% per annum until the Maturity Date and, if not repaid in full on the Maturity Date, 10% per annum thereafter until the earlier of (x) repayment of the Note in full and (y) the date on which the Note is converted as described below. Interest will be paid in kind by increasing the outstanding principal balance of the Note (the “PIK Interest”) on the first day of each calendar quarter, beginning January 1, 2027. If the Note is not repaid in full on the Maturity Date, the principal amount will be automatically increased by an additional $2,500,000 plus the PIK Interest described above. To the extent the Note is not repaid in full on the Maturity Date, the Seller may, in its sole discretion, convert all (but not less than all) of the outstanding principal amount and accrued but unpaid interest as of the date of conversion into a percentage of the equity of the parent company of the Purchaser (“Intermediate Co.”) equal to the outstanding amount of principal and interest divided by the lesser of (i) $225 million and (ii) the fair market value of Intermediate Co.’s outstanding equity interests on the conversion date. The Purchaser may prepay the Note at any time prior to the Maturity Date without penalty or premium; provided, however, that any prepayment will require payment of an aggregate amount of $25 million in principal and interest. The Purchaser must repay the Note upon certain equity capital raises by the Purchaser and its affiliates in excess of $5 million in the aggregate and upon certain other customary casualty, asset disposition, change of control and debt issuance events. The Note is subordinated to the senior secured debt of the Purchaser under its credit agreement entered in connection with the Marucci Divestiture and contains customary events of default and related remedies.
The Agreement contains customary representations, warranties and covenants. In addition, in connection with the Marucci Divestiture, the Seller also entered into a transition services agreement with the Purchaser to provide certain ongoing services to the Purchaser and Wheelhouse on a transitional basis.
The foregoing summaries of the material terms of the Agreement and the Note do not purport to be complete and are subject to, and qualified in their entirety by reference to, the complete text of the Agreement and the Note, which are attached to this Current Report on Form 8-K as Exhibits 2.1 and 10.1, respectively, and are incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 above with respect to the Agreement is incorporated herein in its entirety.
Forward Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements with regard to the expectations related to the Marucci Divestiture and satisfaction of the Note. Words such as “believes”, “expects”, “anticipates”, “intends”, “projects”, “assuming”, and “future” or similar expressions, are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, including, but not limited to, risks associated with Marucci Divestiture generally and risks associated with the future operations and performance of the Company as well the Purchaser’s ability to satisfy, in cash, the principal and interest balance of the Note. Certain other factors are enumerated in the risk factor discussion in the Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) for the year ended January 2, 2026, the Form 10-Qs filed by the Company with the SEC for the quarters ended April 3, 2026 and July 3, 2026 and other filings with the SEC. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information
The unaudited pro forma condensed consolidated financial information of the Company giving effect to the Marucci Divestiture is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
(d) Exhibits
| Exhibit Number | Description | |||||||
2.1 | Stock Purchase Agreement, dated September 25, 2026, by and between Fox Factory, Inc and Squared Up Holdings, LLC* | |||||||
10.1 | Unsecured Subordinated Convertible Promissory Note, dated September 25, 2026, issued by Squared Up Holdings, LLC to Fox Factory, Inc.* | |||||||
99.1 | Unaudited pro forma condensed consolidated financial information | |||||||
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document) | |||||||
* Schedules and exhibits have been omitted pursuant to Instruction 4 of Item 1.01 of Form 8-K and Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules and exhibits to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Fox Factory Holding Corp. | ||||||||||||||
| Date: | September 29, 2026 | By: | /s/ Michael C. Dennison | |||||||||||
| Michael C. Dennison | ||||||||||||||
| Chief Executive Officer | ||||||||||||||
Exhibit 99.1
Unaudited Pro Forma Condensed Consolidated Financial Information
Overview
On September 25, 2026, Fox Factory, Inc. (the “Seller”), a California corporation and a wholly owned subsidiary of Fox Factory Holding Corp., a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement (the “Agreement”) with Squared Up Holdings, LLC, a Delaware limited liability company (the “Purchaser”), pursuant to which the Purchaser acquired all of the issued and outstanding shares of capital stock of Wheelhouse Holdings Inc. (“Wheelhouse”), a Delaware corporation and a wholly owned subsidiary of the Seller, immediately prior to the transaction (the “Marucci Divestiture”). Wheelhouse is the parent company of the operating entity, Marucci Sports, LLC, which is a designer, manufacturer, and marketer of premium wood, aluminum and composite baseball bats, as well as other diamond sports products (the “Marucci Business”).
The Marucci Divestiture does not meet the criteria requiring the presentation of the Marucci Business as a discontinued operation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and is considered a disposition of a significant business under Item 2.01 of Form 8-K. To facilitate the Marucci Divestiture, the Company prepared the accompanying unaudited pro forma condensed consolidated financial information in accordance with Article 11 of Regulation S-X.
The unaudited pro forma condensed consolidated financial information is prepared based upon available information and does not include all of the information and note disclosures required by U.S. GAAP. The accompanying unaudited pro forma condensed consolidated balance sheet as of July 3, 2026 has been prepared giving effect to the Marucci Divestiture as if it had occurred on July 3, 2026, the end of the most recent period for which a balance sheet is required. The accompanying unaudited pro forma condensed consolidated statements of operations for the fiscal year ended January 2, 2026 and six months ended July 3, 2026 give effect to the Marucci Divestiture as if it had occurred on January 4, 2025.
The unaudited pro forma condensed consolidated financial information is provided for illustrative informational purposes only and has been derived from the historical consolidated financial statements of the Company and is presented based on available information and certain assumptions that the Company believes are reasonable and that are described in the accompanying notes. Differences between these preliminary estimates and the final divestiture accounting may arise, and these differences could have a material effect on the unaudited pro forma condensed consolidated financial information and the Company’s future results of operations and financial position. The unaudited pro forma condensed consolidated financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the Marucci Divestiture been completed as of the dates indicated or that may be achieved in the future.
The accompanying unaudited pro forma condensed consolidated financial information should be read together with:
• The accompanying notes to the unaudited pro forma condensed consolidated financial information;
• The Company’s unaudited historical condensed consolidated financial statements and the accompanying notes included in the Quarterly Report on Form 10-Q as of and for the six months ended July 3, 2026, filed with the Securities and Exchange Commission (the “SEC”) on August 7, 2026; and
• The Company’s audited historical consolidated financial statements and the accompanying notes included in the Annual Report on Form 10-K as of and for the fiscal year ended January 2, 2026, filed with the SEC on February 27, 2026.
1
Fox Factory Holding Corp.
Unaudited Pro Forma Condensed Consolidated Balance Sheet As of July 3, 2026
(in thousands)
| As of July 3, 2026 | Transaction Accounting Adjustments | As of July 3, 2026 | |||||||||||||||
| Fox Factory (Historical) | Fox Factory (Pro forma) | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 61,276 | $ | 189,510 | 2A, 2B, 2C | $ | 250,786 | ||||||||||
| Accounts receivable (net of allowances of $3,265) | 198,817 | (21,331) | 2A | 177,486 | |||||||||||||
| Inventory | 382,897 | (57,915) | 2A | 324,982 | |||||||||||||
| Prepaid and other current assets | 121,157 | (2,653) | 2A | 118,504 | |||||||||||||
| Note receivable | — | 25,000 | 2B | 25,000 | |||||||||||||
| Total current assets | 764,147 | 132,611 | 896,758 | ||||||||||||||
| Property and equipment, net | 211,138 | (30,965) | 2A | 180,173 | |||||||||||||
| Lease right-of-use assets | 82,722 | (30,334) | 2A | 52,388 | |||||||||||||
| Deferred tax assets | 85,500 | 27,516 | 3D | 113,016 | |||||||||||||
| Goodwill | 83,575 | (34,300) | 2A | 49,275 | |||||||||||||
| Intangibles, net | 376,875 | (231,959) | 2A | 144,916 | |||||||||||||
| Other assets | 32,499 | (656) | 2A | 31,843 | |||||||||||||
| Total assets | $ | 1,636,456 | $ | (168,087) | $ | 1,468,369 | |||||||||||
| LIABILITIES, AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable | $ | 134,886 | $ | (10,683) | 2A | $ | 124,203 | ||||||||||
| Accrued expenses | 84,350 | (7,435) | 2A | 76,915 | |||||||||||||
| Current portion of long-term debt | 26,875 | — | 26,875 | ||||||||||||||
| Total current liabilities | 246,111 | (18,118) | 227,993 | ||||||||||||||
| Revolver | 163,000 | — | 163,000 | ||||||||||||||
| Term Loan, less current portion | 477,827 | — | 477,827 | ||||||||||||||
| Other liabilities | 82,691 | (30,053) | 2A | 52,638 | |||||||||||||
| Total liabilities | 969,629 | (48,171) | 921,458 | ||||||||||||||
| Commitments and contingent liabilities | |||||||||||||||||
| Non-controlling interest | (220) | 220 | — | ||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Preferred stock | — | — | — | ||||||||||||||
| Common stock | 42 | — | 42 | ||||||||||||||
| Additional paid-in Capital | 358,084 | — | 358,084 | ||||||||||||||
| Treasury stock | (13,754) | — | (13,754) | ||||||||||||||
| Accumulated other comprehensive income | 2,793 | — | 2,793 | ||||||||||||||
| Retained Earnings | 319,882 | (120,136) | 2D | 199,746 | |||||||||||||
| Total stockholders’ equity | 667,047 | (120,136) | 546,911 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,636,456 | $ | (168,087) | $ | 1,468,369 | |||||||||||
2
Fox Factory Holding Corp.
Unaudited Pro Forma Condensed Consolidated Statement of Operations For the six months ended July 3, 2026
(in thousands, except share and per share amounts)
| For the six months ended July 3, 2026 | Transaction Accounting Adjustments | For the six months ended July 3, 2026 | |||||||||||||||
| Fox Factory (Historical) | Fox Factory (Pro forma) | ||||||||||||||||
| Net sales | $ | 726,779 | $ | (79,185) | 3A | $ | 647,594 | ||||||||||
| Cost of sales | 510,698 | (49,986) | 3A | 460,712 | |||||||||||||
Gross profit | 216,081 | (29,199) | 186,882 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
General and administrative | 72,843 | (13,448) | 3A | 59,395 | |||||||||||||
Sales and marketing | 62,710 | (17,293) | 3A | 45,417 | |||||||||||||
Research and development | 37,052 | (1,768) | 3A | 35,284 | |||||||||||||
Amortization of purchased intangibles | 20,018 | (9,354) | 3A | 10,664 | |||||||||||||
| Total operating expenses | 192,623 | (41,863) | 150,760 | ||||||||||||||
| Income from operations | 23,458 | 12,665 | 36,123 | ||||||||||||||
Interest expense | 23,813 | - | 23,813 | ||||||||||||||
Other expense, net | 8,969 | (661) | 3A | 8,308 | |||||||||||||
| (Loss) income before income taxes | (9,324) | 13,326 | 4,002 | ||||||||||||||
| Provision (benefit) for income taxes | 1,660 | 3,108 | 3D | 4,768 | |||||||||||||
| Net (loss) income | $ | (10,984) | $ | 10,218 | $ | (766) | |||||||||||
| Less: net (loss) income attributable to non-controlling interest | (41) | 41 | - | ||||||||||||||
| Net (loss) income attributable to Fox stockholders | $ | (10,943) | $ | 10,177 | $ | (766) | |||||||||||
| Net (loss) earnings per share: | |||||||||||||||||
Basic | $ | (0.26) | $ | (0.02) | |||||||||||||
Diluted | $ | (0.26) | $ | (0.02) | |||||||||||||
| Weighted average shares used to compute (loss) earnings per share: | |||||||||||||||||
Basic | 41,933 | 41,933 | |||||||||||||||
Diluted | 41,933 | 41,933 | |||||||||||||||
3
Fox Factory Holding Corp.
Unaudited Pro Forma Condensed Consolidated Statement of Operations For the fiscal year ended January 2, 2026
(in thousands, except share and per share amounts)
| For the year ended January 2, 2026 Fox Factory (Historical) | Transaction Accounting Adjustments | For the year ended January 2, 2026 Fox Factory (Pro forma) | |||||||||||||||
| Net sales | $ | 1,467,321 | $ | (186,402) | 3A | $ | 1,280,919 | ||||||||||
| Cost of sales | 1,024,074 | (106,024) | 3A | 918,050 | |||||||||||||
Gross profit | 443,247 | (80,378) | 362,869 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
Goodwill impairment | 557,307 | - | 557,307 | ||||||||||||||
General and administrative | 151,827 | (31,250) | 3A | 120,577 | |||||||||||||
Sales and marketing | 132,058 | (32,518) | 3A | 99,540 | |||||||||||||
Research and development | 69,441 | (3,622) | 3A | 65,819 | |||||||||||||
Amortization of purchased intangibles | 42,030 | (18,740) | 3A | 23,290 | |||||||||||||
Intangible and long-lived asset impairment | 13,517 | - | 13,517 | ||||||||||||||
| Total operating expenses | 966,180 | (86,130) | 880,050 | ||||||||||||||
| (Loss) income from operations | (522,933) | 5,752 | (517,181) | ||||||||||||||
Interest expense | 53,667 | - | 53,667 | ||||||||||||||
Other (income) expense, net | (311) | 118,734 | 3A, 3B, 3C | 118,423 | |||||||||||||
| (Loss) income before income taxes | (576,289) | (112,982) | (689,271) | ||||||||||||||
| (Benefit) provision for Income taxes | (31,569) | 3,232 | 3D | (28,337) | |||||||||||||
| Net (loss) income | $ | (544,720) | $ | (116,214) | $ | (660,934) | |||||||||||
| Less: net income (loss) attributable to non-controlling interest | 141 | (141) | - | ||||||||||||||
| Net (loss) income attributable to Fox stockholders | $ | (544,579) | $ | (116,355) | $ | (660,934) | |||||||||||
| Net loss per share: | |||||||||||||||||
Basic | $ | (13.03) | $ | (15.82) | |||||||||||||
Diluted | $ | (13.03) | $ | (15.82) | |||||||||||||
| Weighted average shares used to compute loss per share: | |||||||||||||||||
Basic | 41,783 | 41,783 | |||||||||||||||
Diluted | 41,783 | 41,783 | |||||||||||||||
4
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
(in thousands)
1.Basis of Pro Forma Presentation
The unaudited pro forma condensed consolidated financial information is prepared in accordance with Article 11 of the Securities and Exchange Commission (the “SEC”) Regulation S-X. The pro forma adjustments are described in the accompanying notes and are based upon and derived from information and assumptions available at the time of filing the Current Report on Form 8-K to which this financial information and related notes are attached as an exhibit.
The unaudited pro forma condensed consolidated financial information is based on financial statements prepared in accordance with U.S. GAAP, which are subject to change and interpretation. The unaudited pro forma condensed consolidated financial information is based on and derived from our historical consolidated financial statements, adjusted for certain transaction accounting adjustments. The unaudited pro forma condensed consolidated financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Marucci Divestiture. Additionally, while the unaudited pro forma condensed consolidated financial information does not give effect to the use of proceeds, we intend to use the proceeds to reduce outstanding indebtedness.
The unaudited pro forma condensed consolidated financial information is based upon available information and assumptions that management considers to be reasonable, and such assumptions have been made solely for purposes of developing such unaudited pro forma condensed consolidated financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of what the financial position or statements of operations results would have actually been had the Marucci Divestiture occurred on the dates indicated. In addition, this unaudited pro forma condensed consolidated financial information should not be considered to be indicative of our future consolidated financial performance and statement of operations results.
2.Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet
The following is a description of the pro forma accounting adjustments reflected in the unaudited pro forma condensed consolidated balance sheet:
(A)Reflects the removal of historical assets and liabilities associated with the Marucci Business.
(B)Reflects consideration received for the Marucci Divestiture, comprised of $200,000 in cash and a $25,000 Promissory Note, which is payable on or before December 31, 2026.
(C)Reflects the payment of $7,512 in transaction costs incurred in connection with the Marucci Divestiture.
(D)Reflects the $120,136 loss recognized from the Marucci Divestiture.
| (in thousands) | Marucci Business | |||||||
| Cash and cash equivalents | 2,978 | |||||||
| Accounts receivable | 21,331 | |||||||
| Inventory | 57,915 | |||||||
| Prepaid and other current assets | 2,653 | |||||||
| Property and equipment, net | 30,965 | |||||||
| Lease right-of-use assets | 30,334 | |||||||
| Goodwill | 34,300 | |||||||
| Intangibles, net | 231,959 | |||||||
| Other assets | 656 | |||||||
| Total assets | 413,091 | |||||||
| Accounts payable | 10,683 | |||||||
| Accrued expenses | 7,435 | |||||||
| Other liabilities | 57,569 | |||||||
| Total liabilities | 75,687 | |||||||
| Non-controlling interest | (220) | |||||||
| Net assets disposed of (a) | 337,624 | |||||||
| Consideration received (b) | 225,000 | |||||||
| Loss on disposal before certain adjustments (b) - (a) | (112,624) | |||||||
| Transaction costs (c) | (7,512) | |||||||
| Loss on disposal (b) - (a) - (c) | (120,136) | |||||||
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3.Adjustments to the Unaudited Pro Forma Condensed Consolidated Statements of Operations
The following is a description of the pro forma accounting adjustments reflected in the unaudited pro forma condensed consolidated statements of operations:
(A)Reflects the reduction of Net sales, Cost of sales, Operating expenses, and Other (income) expense, net associated with the Marucci Business for the periods presented.
(B)Reflects $7,512 of transaction costs incurred in connection with the Marucci Divestiture.
(C)Reflects the $112,624 loss recognized from the Marucci Divestiture before giving effect to adjustment 3(B).
(D)Reflects the estimated income tax effects of the pro forma adjustments. Tax-related adjustments have been calculated using the statutory tax rates applicable in the jurisdictions in which the adjustments were or are expected to be incurred. The Company is continuing to evaluate the income tax consequences of the Marucci Divestiture, and the final tax impacts reported in the Company's future financial statements may differ materially from those presented in the unaudited pro forma condensed consolidated financial information.
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