FOX FACTORY HOLDING CORPFOXF

FOX FACTORY HOLDING CORP Fair Value Disclosure

10-KFiled Feb 27, 20263 min read
Fair Value Measurements and Financial Instruments
The FASB’s Accounting Standards Codification 820, “Fair Value Measurements and Disclosures” requires the valuation of assets and liabilities required or permitted to be either recorded or disclosed at fair value based on hierarchy of available inputs as follows:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The following table presents the Company’s hierarchy for its assets, liabilities and redeemable non-controlling interest measured at fair value on a recurring basis as of the following periods:
January 2, 2026January 3, 2025
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Interest Rate Swaps$— $1,068 $— $1,068 $— $5,685 $— $5,685 
Deferred Compensation Plan Investments4,693 — — 4,693 4,394 — — 4,394 
Total assets measured at fair value$4,693 $1,068 $— $5,761 $4,394 $5,685 $— $10,079 
Liabilities:
Interest Rate Swaps$— $762 $— $762 $— $— $— $— 
Incremental Term Loans— 530,781 — 530,781 — 560,714 — 560,714 
Deferred Compensation Plan Liabilities4,675 — — 4,675 4,300 — — 4,300 
Revolver— 150,000 — 150,000 — 153,000 — 153,000 
Total liabilities measured at fair value$4,675 $681,543 $— $686,218 $4,300 $713,714 $— $718,014 
There were no transfers of assets or liabilities between Level 1, Level 2, and Level 3 categories of the fair value hierarchy during the years ended January 2, 2026, and January 3, 2025.
As of January 2, 2026, the carrying amount of the principal under the Company’s Amended Credit Agreement - Term Loan and Revolver approximated fair value because they had variable interest rates that reflected market changes in interest rates and changes in the Company’s net leverage ratio.
The Company mitigates the cash flow risk associated with changes in interest rates on its variable rate debt through interest rate swap agreements. Refer to Note 11. Derivatives and Hedging for additional details of the agreements. In accordance with ASC 815, interest rate swap contracts are recognized as assets or liabilities on the consolidated balance sheets and are measured at fair values. The fair values were estimated based on expected cash flows over the life of the swaps. These expected cash flows were determined using a pricing model that incorporated reasonable assumptions and available market data.
The Company invests in marketable securities to mitigate the risk associated with the investment return on the non-qualified deferred compensation plan provided to executives and non-employee directors. The investments are recorded as cash and cash equivalents at their quoted market price. The corresponding deferred compensation plan liabilities are recorded at fair value based on the quoted market price of the underlying investments and are included in accrued expenses on the consolidated balance sheets.

Historical Timeline

Fiscal YearFiled
2026Feb 27, 2026Showing above
2025Feb 28, 2025
2023Feb 23, 2024
2022Feb 23, 2023
2021Feb 25, 2021
2020Mar 3, 2020
2018Feb 26, 2019
2017Feb 27, 2018
2016Mar 1, 2017
2015Feb 29, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs PerformanceNEO Compensation Adjustments