Business Context and Reporting Period
Company: Fox Factory Holding Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: October 24, 2025
Event: Entry into a Material Definitive Agreement involving the amendment of the Company's credit facilities.
Key Financial Metrics and Debt Structure
The filing details a refinancing of the Company's existing debt obligations. Key terms of the Amended Credit Agreement include:
- Total Borrowing: $710 million borrowed under the new agreement.
- Term Loan: $537.5 million aggregate outstanding amount, repayable in quarterly installments of $6,718,750.
- Revolving Credit Facility: Up to $500.0 million, including $25.0 million for swing line loans and $25.0 million for letters of credit. The Company initially drew $172.5 million under this facility.
- Incremental Loan Facility: Up to $175.0 million plus unlimited additional amounts, subject to a pro forma Consolidated Net Leverage Ratio of less than 3.25.
- Maturity Date: October 24, 2030.
- Interest Rates: SOFR loans bear interest at term SOFR plus a margin of 1.00% to 2.50%. Base rate loans bear interest at the highest of Federal Funds Rate + 0.50%, Prime Rate, or term SOFR + 1.00%, plus a margin of 0.00% to 1.50%.
Material Changes Versus Prior Period
The Fifth Amendment replaces the existing loans under the Credit Agreement dated April 5, 2022. Material changes include:
- Debt Restructuring: Replacement of prior outstanding amounts with the new Term Loan and Revolving Credit Facility structure.
- Covenant Modifications:
- Removal of the "Covenant Relief Period" definition.
- Modification of negative covenants to provide flexibility through additional carveouts and increased limits on indebtedness and investments.
- Amendment to the definition of Consolidated EBITDA to account for additional expenses.
- Use of Proceeds: Funds were used to repay all outstanding amounts owed under the prior Credit Agreement and for general corporate purposes.
Financial Covenants and Outlook
The Company is required to maintain specific financial ratios under the Amended Credit Agreement:
- Consolidated Net Leverage Ratio:
- Not to exceed 4.50 for fiscal quarters ending October 3, 2025, through January 2, 2026.
- Not to exceed 4.25 for the fiscal quarter ending April 3, 2026.
- Not to exceed 4.00 for fiscal quarters ending July 3, 2026, and thereafter.
- Note: The ratio limit may be increased by 0.50 (up to a maximum of 4.50) for four fiscal quarters following a Permitted Acquisition exceeding $75.0 million.
- Consolidated Interest Coverage Ratio: Not less than 2.75.
Management Commentary: The filing does not provide specific management commentary on future performance beyond the terms of the debt agreement. The filing text does not provide clear values for revenue, profit, cash flow, or margins.
Investor Verification Checklist
- Verify the exact amount of debt repaid from the prior Credit Agreement to confirm the net new borrowing.
- Review the full text of Exhibit 10.1 (Fifth Amendment) for specific definitions of "Permitted Acquisition" and "Consolidated EBITDA" adjustments.
- Monitor the Company's ability to meet the stepped-down Consolidated Net Leverage Ratio requirements starting April 2026.
- Assess the impact of the new interest rate margins (SOFR + 1.00% to 2.50%) on future interest expense given current rate environments.
- Check for any subsequent filings regarding the utilization of the $175.0 million incremental loan facility.