Greetings and welcome to the Fox Factory Holding Corp. First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to David Haugen, General Counsel for opening remarks. Thank you, sir. Please begin.

Thank you. Good afternoon and welcome to Fox Factory's first quarter fiscal 2016 earnings conference call. On the call today are Larry Enterline, Chief Executive Officer; Mario Galasso, President Business Divisions; and Zvi Glasman, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out today at approximately 04:05 PM Eastern Time. If you have not had a chance to review the release, it's available on the Investor Relations portion of our website at www.ridefox.com. Please note that throughout this call, we will refer to Fox Factory as Fox or the company. Before we begin, I would like to remind everyone that the prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company's control and can cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors and risks that could cause or contribute to such differences are detailed in the company's earnings release issued this afternoon and in the Annual Report on Form 10-K filed with the Securities & Exchange Commission. Except as required by law, the company undertakes no obligation to update any forward-looking or other statements herein whether as a result of new information, future events or otherwise. In addition, within our earnings release and in today's prepared remarks, non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, adjusted EBITDA and adjusted EBITDA margin are referenced. It is important to note that these are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures are included in today's press release, which has also been posted on our website. And with that, it is my pleasure to turn the call over to our CEO, Mr. Larry Enterline.

Thank you, David. Good afternoon, everyone, and thank you for joining us today. On today’s call, I will discuss key highlights of our first quarter 2016 results and provide an update on our ongoing strategic initiatives. Mario will then discuss some of our recent business highlights; Zvi will review the financial results in more detail and discuss our guidance. After that, we will open the call for your questions. We started the year with solid momentum. Our top line increased approximately 18% to $80.2 million in the first quarter, which was above our guidance of $73 million to $77 million. This growth was driven by both our bike and powered vehicle products. Bike products were up approximately 27% and powered vehicle products were up approximately 9%. The increase in bike product sales was primarily due to the continued success of the company’s model year 2016 produce line up, particularly in the OEM channel, and a shift in the timing of approximately $3.5 million of certain customer orders from the second quarter into the first quarter of fiscal 2016. Powered vehicle product sales reflected higher demand for suspension products in both on and off-road vehicles. From a profitability perspective, we generated non-GAAP adjusted earnings per share of $0.16 in the first quarter, which was at the high-end of our guidance of $0.12 to $0.16. Additionally, we generated adjusted EBITDA of $11.5 million in the first quarter of 2016, representing approximately a 22% increase compared to the prior year’s quarter. The strength of our diversified product portfolio across both bike and powered vehicles along with our teams continued execution of our strategic initiatives helped us achieve these solid results. Our innovative products have helped fuel the continued strong sell-through of our model year 2016 product line ups in both bike and powered…

Thank you, Larry, and good afternoon, everyone. During my remarks today, I’ll touch on some industry trends and discuss some of our recent business highlights. I’ll begin with our bike business. Our brand building momentum continues with a successful launch of our model year 2017 products such as Sea Otter Classic in Monterey, California from April 14 through April 17. The festivals are time for us to walk dealers, consumers and the media through the product line. As a result, our initial U.S. dealer orders are coming in strong with very positive consumer and media reactions. Our flagship cross-country fork, the Factory Series 32 Step-Cast had been in the media’s hands for a couple of months under an embargo. The embargo was lifted just ahead of the Sea Otter and the fork has received very favorable reviews. Bicycling magazine had this to say – Remarkably, it seems like Fox was able to pull a significant amount of weight out of its premier cross-country fork with no penalty. Though it's pitched towards an increasingly-niche arm of the sport, the 32 SC’s manners are so good it’s impressive outside the confines of a race course too. And BikeRadar’s first impression – The fork is certainly light, comparing well to previous iterations and also when compared to other cross-country forks. We found the front wheel stuck doggedly to the ground, offering impressive grip and control, even with slightly higher tyre pressures than we might usually run. We also launched our new Race Face NEXT SLG-4 crank at the Sea Otter Classic, building upon the success of our lightest NEXT SL crank, the G-4 increases stiffness while shedding even more weight. Initial sales to dealers have been strong and we believe sell-through will follow suit based on the market success of the next model…

Thank you, Mario. Good afternoon everyone. I’ll focus on our first quarter results and then review our guidance. As detailed by Larry, sales in the first quarter of 2016 were $80.2 million, an increase of 18.3% versus sales of $67.8 million in the first quarter of 2015. Gross margin was 31.3% for the first quarter of 2016, a 360 basis point increase from 27.7% in the prior year period. The increase in gross margin was primarily due to favorable product and customer mix, as well as manufacturing efficiencies. Additionally, gross margin improved due to the non-recurrence of costs associated with West Coast port slowdown in the first quarter of 2015 and lower inventory adjustments related to acquisition. Excluding the acquisition related costs, non-GAAP gross margin for the first quarter of 2016 expanded 210 basis points as compared to the first quarter last year. We believe non-GAAP gross margin is a useful metric that better reflects the performance of our business on an ongoing basis. You will find a reconciliation of all GAAP to non-GAAP financial measures in our earnings release issued today. Total operating expenses were $19.4 million or 24.2% of sales in the first quarter of 2016 compared to $17.2 million or 25.4% of sales in the first quarter last year. Non-GAAP operating expenses, stated as a percentage of sales, were 20.3% versus 18.5%, in Q1 last year. We believe the increase in operating expenses reflects a slight seasonal shift in timing of development and promotional spend ahead of the model year 2017 pre-launch phase versus last year. Additionally, the Company continued to invest in strategic initiatives such as its ERP system and the Marzocchi mountain bike product line. As a reminder, we continue to expect non-GAAP Opex as a percentage of sales to be approximately 16.7% for full…

Thank you, Zvi. With that, we’d like to open the call for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Larry Solow with CJS Securities. Please proceed.

Good afternoon guys, maybe give us - it sounds like you had an encouraging start to the model year spec performance. Can you may be give us little more color on that, are you running ahead of last year? Are you running ahead of your internal expectations? And then more [Indiscernible] specific question, a little more color, you mentioned there was some headwind, is that more geographical are suppliers seeing that on the mountain bike side too or is that more of a general statement for bikes?

Hi, Larry, this is Mario. I’ll address the spec position question. Yeah, we’re excited about how 2017 has been received and we do feel like we’ve picked up spec position versus model year 2016 and like we’ve communicated in the past that’s part of the story, the rest of the story is sell-through which we’re still monitoring as the season rolls out.

Larry, I would say on the other suppliers it certainly looks to us like it’s broader based, we don’t think it specifically impacts the segment of mountain bike that we operate in, but certainly when you see the kind of news that’s come out over the last week, it causes us just to monitor it carefully. Again we believe our brand position and kind of the diversity of the end markets we serve do give us a little bit of insulation, but it’s something we feel is worth keeping an eye on.

Great. If I could just follow up with one more, you mentioned in the press release there was some pull forward in sales. Can you may be quantify that or give us a little more color on that and was that for model year 2017 suspension that some of the providers wanted earlier or what was that? Thanks.

Larry, I think as our Larry here has communicated many times over the years since we went public, it’s not unusual for customers to schedule an order that was previously scheduled to be in the beginning of one to quarter to shift into another quarter that happens kind of every quarter and oftentimes we won’t even - if it’s a couple dollars we won’t even typically mention it. It doesn’t necessarily signify any change in any market demand and this fits squarely into that kind of an explanation. In terms of the magnitude, we’d say it is about $3.5 million, it’s [Indiscernible] and it’s all the previous model year, not our new model year.

Okay. So some sales normally do ship in in Q2 for the prior year too then, it is sort of a mixture in Q2 and then Q3 I guess goes mostly to the forward year?

Correct.

Got it. Okay. Great. Thanks a lot.

Thank you. Our next question comes from the line of Mike Swartz with SunTrust. Please proceed.

Hi, guys. How are you?

Good. Mike, how are you?

Good. Hi, Larry just wanted to touch on your comments that you said around like the side by side and offered vehicle market, seeing some positives there over the past couple of months and expectations maybe in the back half of the year that could be a little better than expected. I guess, how does that fit within the prior kind of outlook you had when we last talked back in January, I think you had said kind of flat to up 10 for that market. Is that still the right way to look at it?

Well. Let me comment on a little bit of what we saw specifically in side by side and what we’re seeing in off-road, then I’ll let Zvi relate that to how we’ve guided. What we’ve said is we, I think we early in the quarter we started seeing a little bit of slowing in our own order book that kind of coincided with what you were hearing from our OEM customers. We think we saw that, I think during the first quarter, we saw a little bit more positive news in that and we just believe I think you could see a little bit more strength in the second half of the year. The one thing I would caution is that is still kind of contained within our guidance range. We did anticipate that side-by-side sales were going to go down and stay down and keep going down. So, we did envision as we said that it would probably be flat to maybe slightly down, and I think we might see a little bit better than that, but again it wouldn’t cause me to change our guidance.

Yeah. I think as Larry said, when we put together our guidance this year, we kind of envisioned a flattish side by side market. One of the strengths of the FOX business is the diversity of our markets served and when you hear about some of these potential headwinds from the news from our industry suppliers we have a lot of puts and takes within our product portfolio and at this point, given that we haven’t even seen sell-through yet, but it’s too early for us to change our guidance, but we are encouraged by some of the early signs we’re seeing of strengthen coming that segment.

Yeah. And Mike, I would point out that we’ve - our kind of on road replacement shock business, I think on one hand, the oil prices kind of hurt a lot of the oil patch geographies that we sell into. On the other hand, people are buying a lot of new trucks and I think it helped but on balance that businesses has continued to grow pretty well for us and consistent with our thinking.

Okay, thanks. And then second question just in terms of the supply chain I know in the past we’d have some issues or hiccups with just the production calendar talking specifically about bike. And I’m wondering if with the earthquake in Japan, recently if you’ve see any kind of supply chain issues that give you pause, whether it’s from the OEMs or whether it’s from other component manufacturers?

Again, you’ve had a few events like that. I think at this point, we would tell you we don’t see a dramatic any kind of a big impact on our business from that specific event, nor any of the other ones you may have heard about.

Okay, thank you.

Thank you. Our next question comes from the line of Scott Stember with CL King & Associates. Please proceed.

Good evening.

Hi, how are you?

Good. Thank you. Can you talk about again on the powered vehicle side, you guys have been putting up fantastic numbers all organically and I know there is some new categories that you guys have been moving into and sport truck as well. Could you maybe just give us a little more color into what’s driving these very significant sales growth that we’re seeing right now?

Well. As you know we don’t break out numbers among the various categories, but I would say that certainly the on-road replacement shock business has been going good, lift has done well for us, snow because of the weather was a little bit muted this year, side-by-sides we were actually – probably given the slowness, I think we are a little bit surprised there year-over-year, it held up probably – maybe a little bit better than what we were thinking. We continue to make, albeit still a small part of our business, progress in on-road motorcycles. I think our military, again, small, but continues to move right along. So in general I think fairly broad based. I don’t think we were necessarily surprised to the downside on any of those categories albeit snow certainly we’ve projected to be slow because of the snow and did come to pass.

Okay, thanks. And with regards to the Raptor, which I believe is coming up online in the fourth quarter. Can you just maybe share what your initial thoughts are on the overall success of that model versus the previous model? And maybe also talk about the Toyota product that you will be making basically how big is it relative size compared to the Raptor business?

Well, we are obviously anxious for the new Raptor to come online. It’s a much more capable vehicle than the first version. It’s like a super can’t wait to getting going. We are looking at that it will be at least as well received, hopefully, better than the first version, lot of great press on it. Again, I think the thing we would leave you with is we are just excited to get it going and see what that market reception is. I think, Toyota, we feel great because its validation of the off-road capable on-road vehicle. We are happy to see a second entrant in there. Again, we think it’s a great vehicle. Obviously, our guys helped doing it and we would hope it’s well received.

And the size of it compared to the Raptor just high level?

It’s a much smaller truck.

Okay. So look at it that way? Okay. And just last question.

We are not going to comment on the specific customers, but I will tell you that if you go back to how start out with Ford, these things can do ramp up over time.

Right. Got you. Okay. And just last question, international sales. Can you talk about how that’s holding up and maybe talk about your aftermarket business as well and then that’s it for me.

Let me take international, again, I think you’ve got as you look around the world, probably no surprise, you’ve got areas that are more challenged than others. I think we’ve commented on that in prior quarters and again that is still consistent. I think we probably saw a little bit recovery in China in our bike business, which was good to see because that had been challenged most of last year. Europe, you’ve got pockets of strength in the bike business, you’ve got also still some areas that have a little more challenging time. We believe that a lot of South America, we don’t do a lot there now, we think that’s still opportunity for us, but clearly you’ve seen in the industry – bike industry a little bit of slowness there. I think in the first quarter we were pretty pleased in both bike and powered vehicle with our aftermarket business. I think both segments showed some strength and again that – I think that’s always good for us to see as it relates directly to our passionate end consumer.

Got you. That’s all I have. Thank you so much for taking my questions.

You bet. Thank you.

Thank you. Our next question comes from the line of Jon Berg with Piper Jaffray. Please proceed.

Great. Thanks a lot guys. Good afternoon.

Good afternoon.

First, I guess on Race Face/Easton, I guess, you guys are now lapping your first full quarter of owning that company. How did that company perform in the quarter versus your expectations and maybe how did it grow versus some of your more recent acquisitions?

We are not going to comment specifically on performance our segments. We will tell you that Race Face since the time we bought it has consistently grown well because it has less market share, it isn’t the market share that [indiscernible] and suspension, it’s long-term growth rate is higher than the bike – it has the ability to grow better than the bike industry on the higher end of our growth rate. In terms of – as you know, we maxed – we settled out their earn-out for the maximum because they were performing so well.

Okay, great. And then as far as – you’ve got two big I guess launches coming in the second half of the powered vehicle side with the Raptor and then the Toyota. Should we be thinking about any inventory build or anything with the balance sheet ahead of those launches or is it going to be pretty seamless and we should continue to expect inventory days to be down?

Those all we sum it at, those all we sum it at, the seasonal factors probably are – the seasonal reach of our business far outweighs that, but as you can appreciate with our business again the diversity that we have, a fair bit of product launch scattered throughout the year depending on the business, depending on the segment.

Okay, great. Thanks a lot again.

Thank you. Our next question comes from Craig Kennison with Robert W Baird. Please proceed.

Good afternoon. Thank you for taking my questions as well.

Sure.

My first question just has to do with anything you can share with respect to the challenge and the mountain bike side on the retail front or inventory at the OEM or dealer level, I know your visibility is limited there, but interested in what you could share.

Well, yeah, let me start and then I will see if Mario would like to add some specific color. Again, I’m sure you’ve read some of the reports that are out. Some of those reports touch on some inventory in certain mountain bike segments. So while we read that I would tell you broadly in what – in the segments we serve, we don’t see a major inventory issues at this point. I think we are probably more concerned about just that macro industry environment that we’ve read about same as you and it’s something I think we just need to monitor for any further development. At this point in time, I would tell you we are still feeling pretty good about our bike business for the year.

Just to reiterate what Larry said, a lot of the information that’s out there is inventory across the entire industry and we don’t see anything really markedly different in our specific segments.

And Mario to the extent you have conversations…

Go ahead, sorry.

No, I’m sorry. To the extent you have conversations with your dealer partners, I grant you it’s not a huge sample yet, but to what extend are you seeing strength at retail that would refute any concerns about excess inventory at the dealer or OEM level?

Well, we view – our aftermarket is fairly real time and we utilize that as sort of our canary in a coal mine and our U.S. dealer aftermarket reception and orders have been strong. So while that is in – the enthusiast end consumer seems to be speaking with those strong aftermarket orders and we think that will follow us through into model your 2017 bikes which are just starting to get put together over the next – through the second quarter. So we use that as an indication, we think the end consumer is pretty excited about what the industry is going to offer to it. And like Larry said, the reports that you read are about the entire, all of the segments of the bike industry and we feel pretty good about our specific portion in enthusiasts mountain bike segment.

And could comment on the e-bike market and whether you’re seeing any traction there as you make progress?

Yeah. We’re making traction within it. The e-bike category is one that is growing; it’s been growing for a while. It’s an exciting category for the industry, particularly the e-mountain bike, which our current product line is well suited to serve and primarily has been a European phenomena, but we do see it coming more and more into the U.S. and more and more a lease developing some pretty nice products around it.

Thanks. And finally, with respect your EPS guidance, what does it assume with respect to share repurchase activity?

Yeah, we don’t forecast our share repurchase because there is sockets much uncertainty around it. So it would assume the same guidance we gave in the beginning of the year about share count.

Just to clarify, does it include the buyback that you have completed in the quarter?

No.

Okay. Thank you.

Thanks, Craig.

Our next question comes from line of Jon Anderson with William Blair. Please proceed. Mr. Anderson your line is live or you perhaps on mute.

Yes. Hi, good afternoon guys.

Hi, Jon.

Hi, Jon.

The first question, the timing, the pull forward, I guess some shipments into Q1, just want to understand is that kind of a typical thing that can happen from time to time or what basically drive that? Is that incentive driven to kind of clear model year 2016 inventory or is it indicative of strong sell-through at this point in time, retail, just a little more color there.

No. Jon as we try to relate I mean around the end of any quarter, orders can shift around and they can - the customer can say hey, I know I had it shipping probably the next quarter. I really like based on a container ship for some other reason. It can be just a small shift in time, but it’s a bit shipment. You can have them good them go the other way, you can have a couple of million dollars sitting waiting to get picked up that the truck base doesn’t make it. And therefore, couple of million going up, this kind of activity is unusual, it’s not related to any - we can see any particular demand dynamic, no change in those business fundamentals. It’s more related to something that a particular customer was doing. I would say generally we will not comment on it, if it’s a few bucks because you’ve got what’s happening all the time. If it gets to be a significant percentage of our performance, we’d like to point it out. So that you guys have a feel, hey we had a great quarter, whether it was in there or out of there. We want to let you know that did come out of Q2.

Okay, that’s what I thought. I just wanted to make sure. I guess the second question is, you had a very strong quarter obviously, particularly on the top line. It sounds like you kind of got a little bit more constructive outlook on the side-by-side market, if not some other segments of power vehicles as you move through the year and then, we kind of Raptor and Tacoma coming that’ll be additive as well. So, I mean would it be fair to say that while you didn’t raise your revenue guidance for the year. Your kind of overall comfort level or you’re position within the range or you’re feeling pretty good about right now relative to where we were a quarter ago.

Yeah, let me comment, I will let Zvi follow-up Jon. Again you got a lot going on in the world right now. I probably feel a lot better if I didn’t read the papers, as I say, I mean we’ve known about the government Tacoma and Raptor, obviously when we forecast the year. So our estimates of those lately year are already in that guidance. I think it’s early on we’re waiting to see sell-through on bike. We feel good about spec at this point, but we’re waiting on sell-through. You’ve had side by side deserve, slip a little bit. Now, that looks like it might be firming up that I don’t think that’s going to be a run away in terms of it suddenly going to start to accelerate, but I think it could firm up in the second half. So, you’ve good things offset by if you look around, you still got a lot of macro uncertainties in various parts of the world. So on balance we think it’s still probably a little early to do anything with guidance for the year. We would hope obviously as, I think, every company would like to do, we’d like to outperform and be able to raise guidance, but I don’t think, well, we feel we are in a position to do that now.

So, I would just reiterate what Larry said, if you look at the company performance and our execution about the controllable assets of our business, we feel great. But depending on what happens with currency or demand in the Far East or inventory in segments of other mountain bikes that bikes were not in and that in turn affects dealers dollars to buy. Those macro industry and economic factors are the things that give us pause, but we are quite encouraged by where we came out with spec and the product line and then the reception by our customers and the execution on our operational initiatives. All that stuff makes us feel really good about the long-term. And if the macro cooperates with us, then we can be in position to rise.

Great. That’s extremely helpful and the prime thing to do with this is early in the year, I understand that. Shifting gears, on the lower price point mountain bike forks, could you just remind me that’s model year 2017 and is this for OEM spec or aftermarket only and what are your kind of expectations out of that particular product maybe over the next year and over the next few years?

Yeah, so over the next few years, Jon, we’ll be rounding it out into more and more models and as I said in my portion of the call, we’re calling as our rhythm [ph] series. We brought it out in our 34 millimetre platform. We’ll over subsequent years bring it out in our 32 millimetre platform, likely 36. Now, it is a 2017 in a 34 version. We’ll bring out 32’s in other platform in subsequent years. We’re happy with new reception. This is very clearly best-in-class for the segment that is addresses. And we picked up some new specs with it from the competition. So we’re happy with it. We’ve been talking about it for a little bit, this is our first entry into it and we’ll follow-up with more models in model years to come.

Excellent. Yeah, congrats on that. The last question I had was on the supply chain. So, it sounds like the production move to Taichung is largely complete now and the benefits are accruing from that, but I think there are some other benefits – incremental benefits perhaps in terms of retrofitting of the Watsonville plant and in El Cajon, is that the right way to think about this that there are some incremental benefits here that are yet to be realized given some of the optimization you can do back here in the states?

Yeah, I mean, good question, Jon. We’ve always envisioned – I think as we’ve said as we embarked upon the program to take bike production to Taichung that there would be another favour, we looked at optimizing our facilities here around powered vehicles. So I would tell you there is two things that are going on. Now that we’ve got kind of that 85% of capacity over in Taichung, we were looking at what is the optimum mix between that factory and the U.S. factory producing bike. We picked 85% at a point very early back in 2011 when we are planning this based on kind of how we saw the best, logistical separation of production. We’re getting a change to relook at that now, right, and to optimize that. So that’s one program that’s going on. So whether that’s 85% or 82% or 92% or 93%, so our folks have a chance to improve our business by looking at that more closely and we’re in the process of doing that. Separately, that gives us – now that that amount of mountain bike is out of our U.S. facilities, we greenfielded the plant in El Cajon that we’re centering around our automotive and military business. We’ve got power sports fill up in Watsonville, so it’s given us a change to now look at those two facilities being wide of the fact that they don’t have to produce nearly as much. So, yeah, both of those going on and those things are things that we’ve had planned. They are envisioned and that improving gross margin profile we’ve talked to you about and we’re excited about getting to that work.

Great. Thanks so much and congrats on a great start to the year.

Thank you.

Thank you. Our next question comes from the line of Rafe Jadrosich with Bank of America Merrill Lynch. Please proceed.

Hi, good afternoon. Thanks for taking my questions.

Hi, Rafe.

On the gross margin first, just it came in really strong this quarter. Can you talk about how much of that was from just kind of lapping the port slowdown from last year and then what’s sort of the outlook for that for the rest of the year?

Yeah, we have said that the port impacted us by about $1 million last year. I think it works out about 150 basis points, more or less off of last year’s numbers. We continue to think that we can get to the legacy bike business in the mid-30s, which works out to a blended around 33% over the next few years here and we think we are well on track to execute against that.

Thank you. And then just in terms of some of the pockets of excess inventory that you guys have been referencing that you are seeing a – you are hearing about around the world, can you talk about sort of how that to be placed out of retail, how do the retailers going to deal with that? And then did that impacts kind of how you are planning at all or how sort of maybe how your competitors are acting?

Well, I wouldn’t be this early is concerned if I didn’t bicycle retailer. That’s what we are reading about a lot of this [indiscernible]. I mean I think it’s broader based, we do not see, at this point, in this segments that we serve any – you have always got pockets here and there of inventory broadly we wouldn’t be concerned. I think we are – what’s driving our caution is a little bit about what we are reading across the broader bike industry. And I think it just tells us to be a little bit more vigilant as we look out there in case we do start to see it creep into our segments. You will always have I think given a particular geography in the world for a particular manufacture model that may have an inventory issue from time to time. We just – I think the thing I would leave you with on the inventory question is we don’t see it broadly in the segments we serve. How does it play out when it does happen? Well, you usually – the folks in the channel are going to sell what they have before they get some more in, right. I mean that’s just a function, but again I don’t think we see that in our business today.

And [indiscernible] pricing this year, can you talk about how your pricing in units are playing out in the bike segment?

I think we are pretty pleased with what we see. Again, we are – we have a pause philosophy I think that’s commensurate with our brand position in the markets we serve, we don’t intend to be a -- the guy bringing price down, nor do we have a philosophy of cutting price still we get a certain volume of business, right. I mean, I think we tend to use price as a measure of our brands strength and we don’t want to do anything that would be perceived as harming that. I think when you look at how we want to enter a segment that’s maybe a bit lower like our new lower price point 4, we are going to do that with a different design philosophy. Again that’s maybe more commensurate with the specifications if that particular segment wants to see as opposed to cutting, just cutting price, does that help.

Yes, it was truly helpful. Thank you.

Thank you. We have reached the end of our Q&A session. I would like to hand the floor back over to management for closing remarks.

Thank you. Thank you for your questions and your interest in FOX. We look forward to continuing to execute our plans and updating you on our progress as we go forward with these quarterly earnings calls. I’m also thankful for the support of our customers and suppliers and the hard work of our great group of enthusiastic employees. All keys to our continued success. Thank you and have a good day.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.