Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Fox Factory Holding Corporation Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.
I'd now like to turn the conference over to your host, David Bakuni, Director of Investor Relations and Business Development. Thank you, sir. You may begin.
Thank you. Good afternoon, and welcome to Fox Factory's 2nd Quarter 2021 Earnings Conference Call. I'm joined today by Mike Dennison, our Chief Executive Officer and Scott Humphrey, our Chief Financial Officer and Treasurer. First, Mike will provide business updates. Then Scott will review the financial results for the quarter and then the outlook, followed by the closing remarks from Mike.
We will then open the call up for your questions. By now, everyone should have access to the earnings release, which went out today at approximately 4 or 5 Eastern Time. If you have not had a chance to review the release, it's available on the Investor Relations portion of our Web site at investor. Whitefox.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 or 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 latest Form 10 Q and in the annual report on the Form 10 ks filed with the Securities and 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, where appropriate in today's prepared remarks and within our earnings release, we will refer to non GAAP financial measures to evaluate our business as we believe these are useful metrics that better reflect the performance of our business on an ongoing basis.
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, Mike Benson.
Thanks, me, and good afternoon. We appreciate everyone taking the time to join us for today's call. On behalf of the Fox team, I'm proud to say that this quarter is one for the record books. Thanks for the dedication, perseverance and execution by our team, We have not only delivered a 4th consecutive record revenue quarter, but also crossed $1,000,000,000 in revenue on a trailing 12 month basis. This feat clearly demonstrates the market performance and fundamentals that highlight our portfolio of innovative products within a well diversified business.
This achievement is particularly noteworthy as our team delivered these impressive results while maneuvering through the numerous supply chain and inflationary challenges plaguing the global economy. I am happy to report that we completed 2 acquisitions this quarter, Soa Sport and Asai Band. Solar Sport, which is in our Specialty Sports Group, is a distributor for Fox and Marzocchi brands in Australia. Paired with Race Face and Eastern Components, Solasport is a full offering of mountain bike and road parts and accessories. More importantly, the acquisition gives us a foothold in Australia, which we believe is the important market for Fox in both FSG and PDG going forward.
Outside Van, which is in our Powered Vehicles Group, is a premium venture van upfitter that sells direct to an ever growing base of overland enthusiasts. Outside Band like FCA continues to enable growth of Fox products as we vertically integrate into these vehicles. Both of these acquisitions represent core tenants of our M and A strategy, which is geographic expansion and new market development. Although these deals were relatively small financially, we see them as valuable additions to the Fox brand. Moving on to the numbers.
We had a successful 2nd quarter with over $328,000,000 in sales, which is 79% growth versus the Q2 of last year. Given the fact we have skewed year on year comparison as most of the PVG OEMs were shut down for the majority of Q2 last year, It is worth highlighting that we also achieved almost 17% growth in Q2 revenue on a sequential basis versus Q1 of 2021. This outstanding growth is driven by both our SSG and TBG businesses, which grew 64% 92% respectively versus the prior year period. The demand across our product categories continues to be strong with no signs of abating, given our uncompromising brand and customer loyalty. Our non GAAP adjusted earnings per share increased from $0.50 in the Q2 of 2020 to $1.20 in the Q2 of 2021, which is also a new record.
The pandemic has brought a fundamental shift in consumer behavior towards health conscious and outdoor lifestyle products. We believe this change is more secular in nature. Consequently, we are benefiting from the movement of Fox enthusiasts in both recreational and professional categories. Starting with the Specialty Sports Group, this is our 5th consecutive record revenue quarter. Thanks to our capable team, we were able to scale and accelerate production while managing our supply chain to deliver for our customers in this robust demand environment.
Despite a slight improvement in the bike inventory channels, the inventory levels continue to remain close to historic lows. With the current pace of industry demand, we believe it will still take 8 to 10 months to meet the current customer demand level and another 12 to 18 months to replenish depleted inventory channels. As I mentioned in the last earnings call, we continue to capitalize on the expanded rider base during this unprecedented restocking cycle by leveraging strong OEM and supplier relationships. As part of our 2022 bike line, Fox launched 2 new forks, 2 new shocks and a new ultra light transfer SL dropper post. Along with the 2 updated versions of the 34 fork, This is one of our most popular models.
These innovative products feature improved ride dynamics, more tunability and substantial weight reductions compared to last models. Our new dropper post and updated 344 will feature in the Tokyo Olympics. In addition, Between Downhill World Cups and Enduro World Series races, Fox athletes have taken 19 podium spots this quarter, and we are leading in the finish for both World Cup Downhill and Endeavour World Series. Shifting to our Powered Vehicles Group. This was our 2nd consecutive record revenue quarter, led by strong sales in powersport and the outfitting product lines.
I am also pleased to report that automotive OEM model year changeovers are back online, which should support our long term OEM growth rate expectation and help us leverage the efficiency we are creating in our new Gainesville facility. Talking about the Gainesville facility, the transition is on track and should finish by the end of this year. Moving on to our accomplishments in the racing world. Fox continued its combination in the desert with overall wins by Bryce Menzies and Santo and Bay later also at the Baja 500. Going to be Friday for the race in Australia.
Our live dial technology continues to shine in the pro UTV class, where it earned multiple wins and podiums in both San Felipe and Baja. Furthermore, in Baja, Fox equipped vehicles claimed 8 of the top 10 overall finishes, 10 of the top 12 Pro D2D spots and claimed 13 Class wins in total. At the Ultra 4 in El Rey, the Ford Performance Stock Bronco, piloted by the Novell Brothers, 2nd class win in the vehicle's debut race. In addition, Ron Gittin, Jr. And Lauren Healy unveiled their all new Fox equipped Ford Performance Unlimited Class Brokers.
With that, we're proud to announce that all 6 Ford Performance Pro and Race Programs run FOX suspension. As much as we are celebrating our success, it has clearly come as a result of a lot of hard work. While we are pleased with our performance, the headwinds to our business continue to persist and potentially grow as the magnitude of our sales increase. Supply chain issues have not eased and we continue to search for alternative sources to minimize interruptions as well as work closely with our suppliers to expand their production. We believe that supply chain disruptions will remain a risk in the second half of this year.
Additionally, component shortages across multiple industry segments are prevalent, leading to material price increases, which continue to put pressure on gross margins. Shipping and container shortages have also exacerbated freight costs and lead times around the world. These issues are consistent with what we are hearing from other management teams and will persist into next year. All this to say, we recognize the structural headwinds ahead of us, but we are refining our operational playbook to not only mitigate these challenges, but also strengthen our core competencies, thereby extending our competitive differentiation. And with that, I'll turn the call over to Scott.
Thanks, Mike. Good afternoon, everyone. I'll begin by going over our Q2 financial results and then review our guidance. Sales in the Q2 of 2021 were $328,200,000 an increase of 79.2 percent versus sales of $183,100,000 in the Q2 of 2020. Our Powered Vehicles group delivered a 92.4% increase in sales compared to the Q2 of 2020, primarily due to increased demand in both the OEM and aftermarket channels, including strong performance in our powersports and upfitting product lines.
Looking back at 2020, our results in the prior year quarter were impacted by production shutdowns at a majority of our OEM customers. Moving to SSG, The Specialty Sports Group delivered a 63.9% increase in sales in the quarter compared to last year, driven by continued high demand in their OEM channels. Fox Factory's gross margin was 33.9% in the quarter of 2021, a 110 basis point increase from 32.8% in the prior year period. Non GAAP gross margin also increased by 100 basis points to 34.1% versus Q2 of 2020. The increase in gross margin was primarily driven by favorable product and channel mix, led by higher volume sales in our Specialty Sports Group and the strong performance in our powersport and upfitting product lines.
Additionally, our prior year period results were negatively impacted by higher factory related costs, including incremental expenses related to the COVID-nineteen pandemic. Total operating expenses were $58,400,000 or 17.8 percent of sales in the Q2 of 2021 compared to 40,600,000 or 22.2 percent of sales in the Q2 of last year. The increase in operating expenses on a dollar basis was primarily due to higher employee related costs, higher commission costs and investments to right size our back office infrastructure. Looking at non GAAP operating expenses as a percentage of sales, our non GAAP OpEx decreased by 220 basis points to 15.7% compared to 17.9% in the prior year period. Looking at OpEx in more detail, Sales and marketing expenses increased approximately $5,200,000 primarily due to higher commissions of 3,600,000 Research and development costs increased approximately $3,000,000 primarily due to personnel investments to support future growth and product innovation.
General and administrative expenses increased by approximately 9,800,000 due to higher employee related costs of $6,800,000 as well as increases in various other costs as we continue to rightsize our administrative support functions. For the Q2, our effective tax rate was 13.3%. This rate is lower than our previous long range guidance of 15% to 19%, primarily due to a windfall from stock based compensation. Adjusted EBITDA increased by 106.8 percent to $69,700,000 for the Q2 of 2021 compared to $33,700,000 in the same quarter last year. I want to congratulate our team on back to back record quarters in EBITDA.
Furthermore, adjusted EBITDA margin expanded 280 basis points to 21.2% compared to 18.4% in the Q2 of 2020. The increase in EBITDA margin is primarily due to the impact of higher sales and favorable product mix. On a GAAP basis, net income attributable to Fox in the Q2 of 2021 was $44,300,000 or $1.05 per diluted share compared to 12,600,000 or $0.32 per diluted share in the prior year period. Non GAAP adjusted net income was 51,000,000 an increase of approximately $31,300,000 or 159 percent compared to $19,700,000 in the Q2 of last year. We delivered $1.20 of non GAAP adjusted earnings per diluted share in the Q2 of 2021 compared to $0.50 in the Q2 of 2020.
Now focusing on our balance sheet. For the Q2, which ended on July 2, 2021 compared to our 2020 year end on January 1, 2021, We ended with cash on hand of $275,000,000 Accounts receivable was 149 point $7,000,000 compared to $121,200,000 Inventory was $208,600,000 compared to $127,100,000 and accounts payable was $154,100,000 compared to $92,400,000 The increase in inventory is primarily due to additional raw material purchases to mitigate risks associated with supply chain uncertainty. The changes in accounts receivable and accounts payable reflect business growth as well as the timing of vendor payments. Our net property, plant and equipment increased to $177,600,000 as of July 2, 2021 compared to $163,300,000 at the end of 2020, reflecting capital expenditures of $27,600,000 in the first half of twenty twenty one. The increase reflects investments in our manufacturing facility in Gainesville, Georgia.
Goodwill increased to $299,800,000 as of July 2, 2021, compared to $289,300,000 as of January 1, 2021 due to our acquisition of Outside Van during the Q2. Now turning to guidance. We are raising our guidance for both our Q3 and full year 2021. For the Q3, we expect sales in the range of $300,000,000 to $320,000,000 and non GAAP adjusted earnings per diluted share in the range of $0.95 to 1 $0.15 per share. For the full year, we sales in the range of $1,200,000,000 to $1,240,000,000 and non GAAP adjusted earnings per diluted share in the range of $4.25 to $4.45 per share.
I'd also like to note that we're not providing guidance on GAAP EPS as it cannot be provided without unreasonable efforts due to the difficulty of actually predicting the elements necessary to provide such guidance and reconciliations. For our full year tax guidance, we still expect our tax rate to be closer to the lower end of previously provided range of 15% to 19%. The excellence of Fox's operations, brand and strategy were on full display in the first half of the year. Given the well known macro headwinds ranging from supply chain to labor and material inflation, Fox has been successful so far in mitigating these challenges with only a modest impact to the financial results. As we enter the second half of the year, we are cognizant of the challenges ahead and their possible top and bottom line impact.
We expect to return to a more typical product mix as some of the PVG automotive OEM model year changeovers come back online. Historically, we have been able to offset inflationary cost pressures through price adjustments. However, the combination of expanding inflationary pressures on material, labor and logistics costs could be a drag on margins in the second half 2021. With that, I would like to turn the call back over to Mike.
Thank you, Scott. In closing, we have expanded our competitive position while delivering against our customer commitments and are looking forward to a continued strong momentum into the second half of the year. We believe we have laid out credible growth plans without taking our eyes off the risks we face. The spread of the COVID delta variant remains a concern, which threatens to derail the rapid reopening of the global economy. But throughout the pandemic, we are proving that Fox has only become more versatile and we will continue to invest and evolve to maximize value for our employees, shareholders and the communities where we operate.
I would now like to open the call for questions. Operator? And
we will take our first question today from Mike Swartz with Truist Securities. Your line is open.
Yes. Good afternoon, guys. Just wanted to
touch on these acquisitions, understanding they're fairly small, but Maybe just give us a high level strategic rationale for each of the transactions? And then maybe for Scott, did you embed any benefit from those 2 acquisitions in your guidance for 2021?
Mike, this is Mike. I'll I'll let Scott handle that second question. So for us, this is obviously more strategic than financial in nature. We think Australia with the Sonosport acquisition is incredibly important from the standpoint of getting engaged in the footprint in Australia to both power vehicles and for our bike segments, LSG. So this ability to pick up a community, pick up a facility and pick up an entrance into that continent is important.
So we need to drive long term value in both both of the businesses and we're pretty thrilled about it. On outside band, as you know, Costa has been a great part of our business. We've added to it in the last year with FCA, year and a half. We think outside of them is a very similar model to that where we converted them into our products into those vehicles. And we think premium performance nature, user of that vehicle is our customers, our demographic.
So as we see that market expanding significantly and a high premium company like outside band, needing the ability to manufacturing, drive more volume, increase productivity. We think we're a good fit for that. It allows us to play not only with our own components and shocks and products, but also play into a space that we think is very similar in nature to our So both very synergistic in acquisitions, both very close to kind of target EO. When we talk about the ongoing acquisitions we do to our strategy, to our culture, to our So again, small and financial status, but there's a strategic significance. Scott, you want to take the second question?
Yes, sure. Mike, yes, I
mean, we considered it as part of our guidance certainly, but as Mike said, the impact is very minimal in
the second half of this year, but we have big plans moving forward.
Okay. Thanks. That's helpful. And then just
a follow-up question. Just give us a sense of a lot of capacity constraints and availability issues throughout the supply chain. Maybe touch on your upfitting business and your ability to source chassis.
Is that a risk?
Is that something that you dealt with in the Q2?
Yes. We think it's
fundamentally dealt with it. There's always risk when you don't have the vehicles in hand, but the vehicles are allocated just not kind of on the deck, if you will, Mike. So we think we're pretty safe. It is as risks are required that one of the bigger risks for us in the second half of the year. Don't want to completely remove that from the in finding creative ways to get vehicles in the first half of the year to make sure that we have more than we expected in the first half of the year, that's going to continue in the second half as well, and I think we're in pretty good shape.
Thanks a lot.
Thanks, Doug.
Thank you. And we will go next to Jim Duffy with Stifel. Your line is open.
Thanks. Good afternoon, guys. Great job Good afternoon. During the quarter.
Good afternoon.
Yes, a couple of questions for me. Now looking at the guidance, if I use 2019 as a baseline, the guided growth rate looks stronger in the Q4 than the Q3. Just thinking about your pattern historically, you've been more conservative to further into the future. Looking to the Q4, is there some sort of timing
seasonality in our business right now based on supply chains and demand. So the normal nature of Q4 when you have seasonality, where you have literally the fluctuation in the move into a winter season doesn't occur this year as there's so much pent up and there's going to be pushed through in both the bike and the power vehicle business. So you won't see that seasonality, I don't think, in Q4 or Q1 of next year that you've had going to see.
That's helpful. I get it. And then Mike, I wanted to ask on the Specialty Sports segment. Just what you guys are doing in the marketplace to try to get a feel for what is an appropriate rate of demand to plan for. I'm certain there's a lot of interest in bikes that's being double counted, maybe even triple counted.
How is it you're thinking about planning for what will be a more normalized rate of demand?
Yes, Jim, we talked before about this too. I think the important thing here is that The most approximately we have to sell through to our OEM relationships to understanding what their business looks like and what they're doing in terms of close inventory level, gives us a pretty healthy idea of what could be happening in Double K or double booking of people who are pretty early in bikes. You might start to really see that net of step out. But right now the demand is still so much more significant than what can be supplied that double counting is the factor. So again, I think that might be more of an issue 18 months out.
Right now, not a big concern and not what we're talking about with our distributors or OEMs into the risk or the concern.
And Mike, just in your prepared remarks, I think you spoke to 8 to 10 months just to meet customer demand. What was the figure on the additional months to restock the channel?
12 to 18 is the only thing that's a big ten to kind of cover the current Yes, pre order growth, if you will, and then 12 to 18 to get the inventory levels back up in distribution. There are all the channels, right, that occur distribution hubs or dealers and things like that. If you walk into a bike shop today, you're still not going to find much inventory. If you walk Yes, 8 to 10 with preorders, 12 in 4 with the
Very helpful. Thank you.
Thank you.
We will move next to Craig Kingston with Baird. Your line is open.
Hey, good afternoon. Thanks for taking my questions as well. Scott, I think you mentioned inflation as a potential risk to the second half. I couldn't tell whether that was something that you just included in the prepared remarks because it is a risk or whether you're really concerned it could pressure margin. Maybe just shed a little more light on how concerned you are about the inflationary environment.
Yes. I think we have
a few concerns as we look forward to the second half of the year with regard to margin, and big one that I also touched on is mix. Just the expansion of the automotive OE business the second half of the year versus the first half of the year caused a little bit of margin degradation for us. But then we're, at the same time, trying to overcome material price increases, supply chain disruption with logistics, a little bit of labor inflation. Obviously, we're trying to go out and get price increases at the same time, but it is a risk that I wanted sort of to call out to just put everybody on notice that we're fighting a lot of we're fighting on a lot of fronts on gross margin in the second half of the year.
That's great. And Mike, looking forward to seeing you in September at your Analyst I'm wondering if you could just set the table maybe for that agenda and maybe comment on whether you'll provide specific 5 year kind of revenue and profit and other financial metric targets?
Yes. So I'm going to walk you through our 5 year vision for the company and go into some detail on product lines and where we think that expansion occurs and what we think that materializes. We're not going to give detailed yearly guidance at that time, but we're going to talk about what we think is going to be we'll be talking to you at some point some early success in all those plans. So I'm looking forward to it as well. I think it's the opportunity for us to give you guys some at the end of product level details that you probably haven't seen in the past and give you a longer term view where these companies are in.
Great. Thank
you.
We'll go next to Ana Gulyshan from Jefferies. Your line is open.
Hi, good afternoon. Thanks for taking my question. First, on the annual guide, I guess, to what extent are you embedding conservatism around potential disruptions to the supply chain, particularly for that of OEM partners who could be disrupted by component availability and therefore, makes a change kind of the pattern?
Anna, this is Michael. I'll respond to the financial So, Craig can jump in. From my perspective, we usually look at our guidance with a bit of conservatism. Just from a standpoint, there's a lot of variables. We're in very diverse markets.
We're operating in locations that still have at least some risk of COVID impact including Taiwan. So we're going to be reasonably conservative in our assessment in what we think could happen, but positive in the negative in the 4 to 3 quarters.
Got it. And then you spoke to using pricing to some extent to offset cost inflation. Could you maybe put in context how the model year 'twenty two pricing increase year over year compares to the historical trend that we've seen?
Pricing is an interesting thing. We've been working pricing issues, inflationary issues for a while and we made pricing adjustments and updates across most of our platforms that got back on prior calls. The challenge we run into is the frictional cost and inflation that is hard to capture real time and push through a little bit on basis. It actually becomes kind of a natural lag as you go longer into an inflectionary period. Our lag in terms of how quickly you can process that through and getting analyzed and getting some of customers with price increases.
So Where we sit today, we're doing price increases more frequently. And we're doing price increases for both material cost cost increases, labor cost increases. And as Scott mentioned in the prepared remarks, we're shipping container cost increases. So we continue to do that. I think price increases for our businesses like new businesses will be in more place in the conversation for the foreseeable future.
Why we don't really understand whether any social issues are a short term issue or a longer term issue. But for now, it's a conversation that occurs
We will go next to Larry Solow with CJS Securities. Your line is open.
Hi, good afternoon guys and thanks for taking the questions. Just a couple of follow ups.
Mike, can you give us a heads up as you look out over
the last few quarters, as you
try and look at the growth, look at the growth in specialty sports, is there
any categories that have sort of had outsized growth. I realize everything is just going to the moon, but anything within your portfolio that's had outsized growth? And has anything even change or evolve over
the last few quarters since COVID sort of broke out? Yes, Larry. It's Jim Murphy with a question. Outside of S and P, I think, is expected. We talked about it in protocols and I don't think it was a surprise.
But we believe the e bike category, what we kind of call as the E SUV category, which is the more burly I see bikes that carry kids and groceries and turf boards and everything else. That category is just still on fire. It continues to be on fire. And I said the 4Q area, I'll say it again. I think there is this occurrence happening in the market where people are thinking about other ways to be mobile than a second, 3rd or 4th car.
I think they're thinking about electric for sure, but I think they're also thinking about electric bikes. And so I think that e bike phenomenon continues to grow continues to expand. And I think that demographic is very secular in nature. And I think you're going to see it grow for years ahead. So I think that's true.
And then in terms of your second kind of part of that question was, is there anything that we would do differently? Well, I'll tell you that, there's always things we may do differently. We always look back in terms of our earnings and way back and go until we've done something better. I don't want to conjecture that's not the case, but I would look at what we did in our innovation and design as well as what we did in operations and supply chain. And that's all my team.
I'll tell you, I think We just did a lot of things right and we did them right early. And sometimes early is more important than actually right. So I think the combination of things is a lot less to see the growth that we're seeing today. And the things that we're taking action on today
Okay, great. And then just
one quick follow-up on the gross margin there for Scott. I think if we look back on the 2 year stop, I think you're up 140 bps, 150 bps. Can you just maybe and I know that the major drivers there, there's some puts and takes, but Sounds like you're getting volume benefits on specialty sports. Curious if you're also getting benefits from mix within specialty sports, maybe the higher technology products? And then on the Powered Vehicles, is it simply the other driver there, simply better short term mix away from the North American OEMs.
And I guess that third factor is how with
the shift, the transition to Georgia, is that still a headwind win at all? Yes. So we're still not getting benefit because as of yet, we've really been unable to move much volume on the powersports business. And so we're still planning to have that all moved by the end of the year, but the majority of it now isn't going to come until the Q4 just because we're trying to meet customer demand. And so it makes it very hard to shut down.
Sorry, Larry, go ahead. No, no,
no. I was just
So I think you're right. Mix is a big issue or it's been a big benefit for us in the first half of the year. Also some positive on the PDG side as well, I think, is aftermarket has been very strong, powersports has been very strong and upfitting has been very strong. I don't know how much benefit we're getting on mix from different segments within SSG, but certainly, aftermarket has been strong there as well.
We will go now to Scott Stember with C. L. King, your line is open.
Good afternoon, guys.
Good afternoon. Good afternoon.
Before I
ask about supply chain and on the Upstream business, it seems
like that's one of the areas you have least concerned about, I
guess, in the back half of the year from the supply side.
Is there one area or two areas that we should look out that you're most concerned about in the back half of the year?
It will continue to have a level of elasticity to grow with us, both through we have a really good view of what we need by component for the balance of this year and next year. So that's a good healthy place to be. Given me it's not about risk, but it's a good healthy place to be. I think the challenge in North America, so we're now supply chain to align with those modeling changes and timing. And new suppliers on board, the terminal kind of oversized the growth we're seeing in North America has been more challenging.
So if I told you, well, I think the supply chain is probably the most risk, mostly in the powersports business where the demand has just been so significantly higher than expected. But we've kind of exceeded Mike Hunter. We've exceeded the capacity of a number of suppliers and we have to go out and look for new, which I said in my prepared remarks. So, for the next couple of quarters, That's the area one of those focuses today to make sure we've got a handle on it. Less than that, we will track that quickly, we're working hard, but a little less concern, more snow in powersports and in the legacy products where the most American suppliers are probably the most over the SKUs, if you will.
That was very helpful. And then in the quarter that just completed On the Powered Vehicle Group, could you talk about how the individual groups performed? I imagine the OE Automotive OE was a little bit slower, but talk about power sports versus upfitting in some other active market.
Yes. Scott, the only thing about that is we look at OE, it's probably the 4th new slides. If you remember Q2 2020 in Europe or not Europe, as you know. So that's you know, you're trying to get a year on year comp and really kind of derive much information from that. I would say it was slower in the OEM automotive just because the model of the churn is going to move as we discussed before.
So that caused a little bit of slowdown in automotive. However, with the rest of the business, the demand still far outreaching supply. So whether it's power sports upfitting, aftermarket, our sport truck segment, all of them saw more demand in the quarter than we expected at the beginning of the quarter. And the quarter was really just a race to to support as much as we could. And we're carrying backlog in almost every one of the categories from Q2 into Q3.
I'm showing that we have no further questions at this time. I'll turn the call back to Mike Dennison for any additional or closing remarks.
Thank you, sir. We appreciate everyone's participation on today's call. Thank you for your continued interest in Fox and have a great evening.