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Fox Factory Holding Corp. (NASDAQ:FOXF), currently valued at $1.02 billion in market capitalization, announced Monday that it entered into a Fifth Amendment to its Credit Agreement and a Second Amendment to its Guaranty and Security Agreement on October 24. The amendments were made with Wells Fargo Bank, National Association, as administrative agent, and a group of lenders, according to a statement based on a recent SEC filing. InvestingPro data shows the company maintains strong liquidity with a current ratio of 3.03, indicating robust ability to meet short-term obligations.
Under the amended agreement, Fox Factory replaced its existing loans with a new term loan totaling $537.5 million and a revolving credit facility of up to $500 million. The revolving facility includes subfacilities for swing line loans and letters of credit, each up to $25 million. The company also secured an incremental loan facility of up to $175 million, with the possibility for additional borrowing if certain leverage ratios are met. All outstanding amounts under the term loan and revolving facility are due by October 24, 2030. According to InvestingPro analysis, the stock appears undervalued at its current price of $24.34, with additional insights available in the comprehensive Pro Research Report covering over 1,400 US stocks.
The term loan and revolving credit facility offer options for secured overnight financing rate (SOFR) loans or base rate loans. SOFR loans carry an interest rate equal to the term SOFR plus a margin between 1.00% and 2.50%. Base rate loans bear interest at the highest of the Federal Funds Rate plus 0.50%, the agent’s prime rate, or the one-month term SOFR plus 1.00%, plus a margin between 0.00% and 1.50%, subject to certain rate floors.
The amendment also modifies financial covenants, including the calculation of Consolidated EBITDA and increases flexibility on certain indebtedness and investments. Fox Factory must maintain a Consolidated Net Leverage Ratio not exceeding 4.50 for certain periods, decreasing to 4.00 in later quarters, with temporary increases allowed following large acquisitions. The company is also required to keep a minimum Consolidated Interest Coverage Ratio of 2.75.
Fox Factory borrowed $710 million under the amended agreement, consisting of the $537.5 million term loan and $172.5 million from the revolving facility. The proceeds were used to repay previous debt and for general corporate purposes.
This information is based on a statement from the company’s SEC filing.
In other recent news, Fox Factory Holding Corp reported its Q2 2025 earnings, showcasing strong revenue growth. The company achieved a revenue of $374.9 million, exceeding the expected $349.05 million. However, the earnings per share (EPS) came in at $0.40, which was below the forecasted $0.43. In anticipation of Fox Factory’s third-quarter 2025 report, Stifel adjusted its price target for the company to $33.00 from $36.00, while maintaining a Buy rating. The research firm noted a sequential moderation in the bike business, though this was partially offset by stronger upfitting sell-in for the quarter. These developments highlight the mixed performance of Fox Factory, reflecting both challenges and areas of strength.
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