Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Fox Factory Holding Corporation's Q4 and full year 2022 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 Vivek Bhakuni, Senior Director of Investor Relations and Business Development. Thank you, sir. You may begin. Thank you. Good afternoon, and welcome to Fox Factory's Q4 and full year 2022 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 quarter and full year financial results and then the outlook, followed by closing remarks from Mike. We will open the call up for your questions. By now, everyone should have access to the earnings release, which went out today at approximately 4:05 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 investor.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 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 Form 10-K 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. Reconciliations 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. With that, it is my pleasure to turn the call over to our CEO, Mike Dennison. Thank you, V. Good afternoon. We appreciate everyone taking the time to join us for today's call. I am pleased to announce that we delivered another record year for both revenue and earnings. We're creating more separation between us and our competition thanks to the meaningful relationships we have with OEMs and enthusiasts, as well as the continued execution of our strategy. This differentiation is propelled by our team's dedication and tenacity as they capitalize on opportunities while navigating the significant challenges throughout 2022. Our consistent strong performance is achieved primarily due to two factors, the power of our brand and the sustainability of our diversified portfolio. As we entered Q4, the macroeconomic and inflationary challenges persisted. We delivered the best Q4 for both the top and bottom line in our company's history. Besides our team's ability to be agile, nimble, and execute at the highest level, what made this quarterly performance even more gratifying was the continued improvement in our Gainesville, Georgia facility. We delivered the highest number of shocks in a quarter since the facility's inception in late 2020 and the highest number of shocks for PVG ever. These results, as well as less than expected seasonality in our Specialty Sports Group, supported the impressive results in Q4. I am pleased to report Q4 sales of $408.6 million, an increase of 19.4% compared to the same period last year. For the Q4, we reported earnings per diluted share of $1.25 versus $0.89 in the same period in 2021, an increase of 40.4% quarter-over-quarter. We also reported non-GAAP adjusted earnings per diluted share of $1.43 versus $1.06, an increase of 34.9% over the prior year. We continue to prove that our collective resilience and strength are able to carry us through these turbulent economic times. I am proud of the team for delivering over 23% annual year-on-year revenue growth as we finish the year with revenue of more than $1.6 billion. These results continue to give us confidence in our long-term vision of $2 billion in revenue by 2025, therefore, we are now beginning to set our sights on even more ambitious goals. As announced earlier this week, we signed a definitive agreement to acquire Custom Wheel House, LLC. Custom Wheel House is known for designing, marketing, and distributing high-performance wheels, performance off-road tires and accessories, including the premier performance brand of Method Race Wheels. This acquisition broadens and diversifies our product offerings across the truck, SUV, and powersport space and provides significant vertical integration and synergistic opportunities, especially for our lift kit, our upfitted truck, and our Outside Van businesses. This acquisition will enable us to continue to create an ecosystem of high-performance integrated products for our enthusiast customer base. Our ability to weave together these iconic brands to build a robust platform of products is unique amongst our competition. I am excited to welcome the Custom Wheel House team to Fox, and to take the next step in building the best aftermarket applications product group in the business. Let us take a closer look at the product lines. Starting with Specialty Sports Group, we delivered a quarterly revenue of $159.5 million, a decline of 1.9% as compared to the same quarter last year. The last time we had a quarter-over-quarter revenue decline was Q1 of 2020. I am proud to say we've had an incredible run in our bike business for over two years, we did substantially better than most of our industry peers. As I had mentioned on a previous call, we were expecting the return of seasonality in the business. However, the Q4 performance was stronger than we had anticipated, which means we expect the seasonality impact in Q1 to be more significant. I know one of the questions on top of everyone's mind is how will the bike business hold up in 2023? Let me start by saying that the volatility and sentiment and confidence within the industry is likely even greater than the volatility of demand. I believe end customer demand, even though seasonality has finally returned, continues to be generally positive, and the largest challenges are a function of supply chain bloat and the corresponding cash flow challenges within our OEM and aftermarket partners. Clearly, the strength of our balance sheet and the performance of our team has protected us from similar challenges. In our opinion, these next couple of quarters will provide the time necessary to get back to equilibrium between supply and demand and the persisting issues of semi-finished bikes and excess inventory, paving a path for a strong second half. Having said that, there is a lot of unpredictability in the bike world currently, and how the next few quarters shake out will be crucial. Our team is keeping a finger on the pulse of the market. As we sit today, we believe the full year Specialty Sports Group could be down anywhere between high single digits to high teens before it returns to our long-term growth expectations. Lastly, I finally had a chance to return to Taiwan since COVID. It is just incredible what the team in Taiwan has done in the last 2-plus years, and it is no surprise the Taiwan government presented the team with the best place to work title and Golden Merchant Award. Shifting to our Powered Vehicles Group, Q4 marked another remarkable revenue quarter, led by 38.5% growth in sales versus the same quarter last year, driven by strong performance in our OE channel and upfitted product lines. We delivered a quarterly revenue of $249.2 million, a fourth consecutive record revenue quarter for our Powered Vehicles Group. We are heading into 2023 with great momentum, thanks to the foundation provided by our Gainesville facility and the continued resilience of our upfitting product lines. As automotive OE production plans stabilize, it will enable a more predictable production plan as well as alleviate pressure on cash flows with less stockpiling of chassis in upfitting, which primarily drive our prepaid balance. In addition, with some positive signs of easing in our supply chain, we expect to see a reduction in inventory as lead times return to a more normal environment. I am pleased to see how our Powered Vehicles Group has performed in 2022. Given the above-mentioned expansionary drivers and industry tailwinds, I feel confident that 2023 will be another strong year of performance with an expectation to deliver 20% revenue growth or more. Considering the macroeconomic and supply chain challenges, we believe our 2022 results reflect the strength of our brand, highlight the power of our well-diversified portfolio, and the strong execution by our teams. As we head into 2023, the macroeconomic challenges we experienced in 2022 will likely persist and could intensify. Thus, we are choosing to remain conservative in spending and hiring. We're steadfastly committed to a stronger customer-focused business that generates sustainable, profitable growth with returns well above the cost of capital. Therefore, our plan is to focus on ongoing top and bottom-line growth while investing in critical long-term opportunities that we believe will position Fox well for the eventual return of economic stability. We will continue to invest in the people, technology, and innovation that drive customer loyalty and retention. All this cannot be done without our incredible team. I thank each and every single member of our Fox family that help us challenge the impossible every day. With that, I'll turn the call over to Scott. Thanks, Mike. Good afternoon, everyone. I'll begin by going over our Q4 and full year financial results and then review our guidance. Sales in the Q4 of 2022 were $408.6 million, an increase of 19.4% versus sales of $342.3 million in the Q4 of 2021. Our Powered Vehicles Group, PVG, delivered a 38.5% increase in sales in the Q4 compared to the same quarter last year, primarily due to strong performance in our upfitting product lines and increased demand in our OEM channels. Moving to our Specialty Sports Group, SSG delivered a 1.9% decrease in sales compared to the Q4 of 2021, primarily due to a return to seasonality in the bike business. On a full year basis, sales were $1,602.5 million versus $1,299.1 million in the same period last year, an increase of 23.4%. This jump in full-year sales is driven by increased demand, primarily in SSG's OEM business. Strong performance from our upfitting product lines and increased demand in our PVG OEM channels. Fox Factory's gross margin was 32% in the Q4 of 2022, a 70 basis point increase from 31.3% in the same period in the prior year. For the Q4 of 2022, non-GAAP adjusted gross margin also increased by 40 basis points to 32% versus Q4 of 2021. The increase in gross margin and non-GAAP adjusted gross margin in Q4 2022 were primarily driven by increased efficiencies in the Gainesville facility and strong performance in our upfitting product lines. On an annual basis, both our gross margin and our non-GAAP adjusted gross margins decreased 10 basis points to 33.2 and 33.3% respectively. The decrease in gross margin and non-GAAP adjusted gross margin were primarily due to increases in factory overhead and materials costs, each of which were driven higher by inflation. Additionally, the completion of the planned shutdown of our Watsonville, California facility and transition of those production lines resulted in inefficiencies in the first half of fiscal year 2022. Total operating expenses were $74.2 million or 18.1% of sales in the Q4 of 2022, compared to $64.2 million or 18.8% of sales in the Q4 of last year. The increase in operating expenses in Q4 2022 in dollar terms was primarily due to higher employee headcount and benefits, higher insurance and facility-related costs, and higher commission costs. Looking at non-GAAP operating expenses as a percentage of sales, our non-GAAP operating expenses decreased by 50 basis points to 16.2% in the Q4 of 2022, compared to 16.7% in the same period in the prior year. Focusing on operating expenses in more detail, sales and marketing expenses increased approximately $1.8 million in the Q4 of 2022 compared to the Q4 of 2021, primarily due to higher commissions. Research and development costs increased approximately $2.2 million in the Q4 of 2022 compared to the Q4 of 2021, primarily due to personnel investments to support future growth and product innovation. General and administrative expenses increased by approximately $5.9 million in the Q4 of 2022 compared to the Q4 of 2021 due to higher employee headcount and benefit-related costs of $5.3 million. On a full year basis, operating expenses were $284.6 million or 17.8% of sales, compared to $235.4 million or 18.1% of sales in the prior year, a decrease of 30 basis points. Our non-GAAP operating expenses as a percent of sales were flat versus the prior year period, going from $207.8 million and 16% of sales in 2021 to $257.1 million and 16% of sales in 2022. On a full year basis, sales and marketing spend increased by approximately $19.9 million compared to the prior year, primarily due to commissions of $9.7 million, higher headcount and employee benefit related costs of $5.8 million, and higher marketing related costs of $4 million. As a percent of revenue, the sales and marketing spend increased by 20 basis points in the full year of 2022 versus the prior year. Research and development dollar spend increased by approximately $9.6 million for the full year 2022 as compared to the prior year due to headcount investments to support future growth and product innovation. As a percent of revenue, however, research and development spend decreased by 10 basis points in 2022 versus the prior year. Lastly, general and administrative dollar spend increased by $18.9 million in full year 2022 as compared to the prior year, but was lower as a percent of revenue by 30 basis points versus the prior year. The increase in dollar spend in fiscal year 2022 is primarily due to higher headcount and employee benefit related costs of $11.7 million and higher insurance and facility related costs of $11.1 million. These increases were partially offset by lower acquisition related compensation. For the Q4 and full year 2022, our effective tax rate was 0.4% and 12.2% respectively. This rate was lower than our previously estimated full year 2022 guidance of approximately 16%. The decrease in the company's effective tax rate was primarily due to U.S. tax regulations proposed in November of 2022 that the company early adopted, which resulted in the ability to use certain foreign tax credits. On a GAAP basis, net income in the Q4 of 2022 was $53 million or $1.25 per diluted share, compared to $37.7 million or $0.89 per diluted share in the same prior year period. Q4 earnings per diluted share were positively impacted by approximately $0.23 due to a lower than expected tax rate. On a full year basis, net income was $205.3 million or $4.84 per diluted share. Compared to $163.8 million or $3.87 per diluted share in the prior year. non-GAAP adjusted net income was $60.8 million in the Q4 of 2022, an increase of approximately $16 million or 35.8% compared to $44.8 million in the Q4 of last year. We delivered $1.43 of non-GAAP adjusted earnings per diluted share in the Q4 of 2022 compared to $1.06 in the Q4 of 2021. Full-year earnings per diluted share had approximately the same positive impact due to lower than expected tax rate. On a full year basis, non-GAAP adjusted net income was $232.7 million, an increase of approximately $41.9 million or 21.9% compared to $190.8 million in the prior year period. We also delivered $5.49 of non-GAAP adjusted earnings per diluted share for full year 2022 compared to $4.50 in the prior year period. These results include approximately $0.23 in non-recurring tax benefits realized in 2022 due to tax law changes. Adjusted EBITDA increased by 25.9% to $76.8 million for the Q4 of 2022 compared to $61.1 million in the same quarter last year. Adjusted EBITDA margin increased by 100 basis points to 18.8% in the Q4 of 2022 compared to 17.8% in the Q4 of 2021. The increase in Adjusted EBITDA margin in the Q4 of 2022 is primarily due to increased efficiency in our Gainesville plant, offset by inflationary cost pressures. On a full year basis, Adjusted EBITDA increased by 21.9% to $321.8 million versus the prior year. The Adjusted EBITDA margin decreased by 20 basis points to 20.1% versus the prior year period. Focusing on our balance sheet. For the Q4, which ended on December 30th, 2022, compared to our 2021 full year, which ended on December 31st, 2021, we ended with cash on hand of $145.3 million compared to $179.7 million. Accounts receivable was $200.4 million compared to $142 million. Inventory was $350.6 million compared to $279.8 million. Prepaid and other current assets was $101.4 million compared to $123.1 million, and accounts payable was $131.2 million compared to $100 million. The increase in inventory as of year-end is primarily due to several factors, including natural growth to meet anticipated demand, receipt of long lead time items that had been delayed, and higher levels of safety stock to mitigate supply chain uncertainty. The changes in accounts receivable and accounts payable reflect business growth as well as the timing of vendor payments. The decrease in prepaid and other assets at the end of the year is primarily due to a lower supply of chassis as we worked through the safety stock we secured in the first half of 2022. Our net property plant and equipment increased to $202.2 million as of December 30th, 2022, compared to $192 million at the end of fiscal year 2021, reflecting CapEx of $43.7 million for the year. Our deferred tax assets increased by $22.3 million, primarily due to recently finalized tax regulations that require the capitalization of research and development expenses. Turning to guidance. For the Q1 of 2023, we expect sales in the range of $380 million-$400 million, and non-GAAP adjusted earnings per diluted share in the range of $1.10-$1.30. For the fiscal year 2023, the company expects sales in the range of $1.67 billion-$1.7 billion and non-GAAP adjusted earnings per diluted share in the range of $5.15-$5.45. Please note the current guidance doesn't account for the impact of the Custom Wheel House transaction. We expect to provide updated guidance that takes this into account in our Q1 2023 earnings call. For our 2023 full year tax guidance, we expect our tax rate to be in the range of 15%-18%. We also expect CapEx for 2023 to be in line with our long-term outlook of 3%-4% of sales. 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. Finally, as we all know, 2023 looks to be another year of macro uncertainty. The possibility of a global re-recession and lingering inflationary pressures has our attention as we begin the year. From margin expansion to higher inventory turns to stability in the bike business, we are focused on some key initiatives in 2023. That being said, I have full faith in the agility of our team to help us deliver solid results as we continue our journey towards our 2025 goals. As acquisition multiples stabilize, we will continue to be more acquisitive and look for quality names like Custom Wheel House to join our Fox family. As positive as we may feel about our momentum going into 2023, we remain cautious in our outlook for our Specialty Sports Group in the first half of the year, along with anticipated revenue mix normalization in our Powered Vehicles Group throughout the year, driven by higher% mix of OEM sales. As our understanding of the global business environment evolves, we plan to provide incremental updates each quarter regarding our expectations for 2023. With that, I would like to turn the call back over to Mike. Thanks, Scott. We are incredibly proud of the way our team has delivered stellar results in 2022 through their sheer perseverance, commitment and execution. At the same time, I am confident that we will continue to capitalize on our strong momentum with Fox's diversified product portfolio, resilient operating model, and strong balance sheet. We believe our world-class team, financial discipline, and our relentless focus on delivering best-in-class products to our ever-growing base of performance-driven enthusiasts will enable us to continue delivering in support of our customer and shareholder expectations. I would now like to open the call for questions. Operator? Thank you, sir. At this time, if you would like to ask a question, please press the star and one keys on your touchtone phone. If at any time you find your question has been addressed, you may remove yourself from the queue by pressing star two. Once again, that is star one to ask a question. Our first question will come from Michael Swartz with Truist Securities. Your line is open. Hey, guys. Good evening. Maybe just to start with the guidance, I think if you're doing the math right, it looks like you're kind of guiding to EBITDA margins maybe flat to slightly down year-over-year. I think we had talked about and discussed before, you know, 2023 being a year for, you know, a lot of the synergies and savings out of the Georgia facility to come through. Maybe walk through what the offset is. Is it investment? Is it channel mix or customer mix that's kind of the negatives? Yeah. Hi, Mike. Thanks. Yes, channel mix is the biggest obstacle as we talk about any kind of slower quarters or weakness on SSG side. Mike mentioned in his prepared remarks, you know, 20% plus in PVG. The vast majority of that is expected to come from our OEM automotive customers. We're having a mix shift that is gonna be tough to overcome, even though we are seeing benefit from Gainesville and the efficiencies that we're getting there. It's being offset by that mix shift and just the makeup of our customer base for 2023. Okay. That's helpful. Then just maybe around the SSG business. Back in November, you guys kind of backed off the longer term growth algorithm for, at least for 2023. Now you're talking about maybe down high singles to down teens for that business. Maybe walk us through what's changed over the past 2 or 3 months to, I guess, temper your outlook a little. Yeah, Mike, this is Mike. A couple of things. One, we expected Q4 to actually be more seasonal than it was, and I think I mentioned that in my comments earlier. Without the seasonality in Q4, that really pushed into Q1. You know, earlier in the year, I went to Taiwan, met with some of our customers and really witnessed the challenges they were having with half-built bikes and inventory kind of stuck in the channel. I think that gave us more concern over Q1 and Q2 at least. As we kind of see what's happening and unfolding in almost a real-time basis, we wanna be very thoughtful about that when we put it together into our guide, which is what we've done. I think, you know, again, I think that blow will take care of itself over a couple of, you know, 2 or 3 quarters. We're expecting the back half to maybe be better. We're also being pretty conservative until we see, you know, see the light at the end of that tunnel. Okay. Just to clarify, the glut that you're talking about is not retail inventory, it's just working capital and half-completed inventory throughout the supply chain. Exactly. Yep, you're correct. Okay. Thank you. Thank you. Our next question will come from Larry Solow with CJS Securities. Your line is open. Great. Thanks guys for taking the question. Just to clarify, Mike, you said the high single digits to high teens drop for the year back-end loaded. Does that assume that, you know, Q1 and Q2 are even worse than that, or you're kind of just not building in much recovery even in the back half of the year, but hopeful that will occur? Just trying to figure out, you know, where we stand there. Yeah, I think Larry, good question. I think you see the majority of that reduction in Q1 and Q2. Okay. right. Okay. That's gonna drive a lot of inefficiencies too. Whatever margin improvement you're getting, from a high level, you're gonna probably lose that and then a mix shift in, on the power vehicle side, I guess to sort of. To a certain extent, Larry, I would caution to read too much into that because Taiwan is a very variable workforce. Right And labor structure adjust very quickly. We've already taken some of that action. Right Early in. You know, we'll have some headwinds on, because of the reduced revenue, but it's really more of a mix this year as Scott talked about. Right. On Powered Vehicles and PVG, in particular. You know, 20%-ish or plus growth. Most of that growth, like you mentioned, is coming from the OEM side. How about just, you know, the outlook for the upfitting market, which has been a, you know, a real driver for growth for you guys for the last several years, and obviously the acquisition of SCA in 2020 helped that. Is that market itself, just looking at that market, is that, you know, because I know some people are, you know, concerned that that market will start to slow? How is that, you know, holding out? It's holding up pretty well. You know, we have seen inventories last a little bit longer, so days of supply has gone up a little bit. That business has been so nimble to adjust and change dealership structures and add more dealers. We actually see that as a growing business in 2023 as well. We're not taking our foot off the gas there. With the Method Wheels or Custom Wheel House, you know, acquisition, man, there's even more we can do in that space. We're super excited about 2023 and that entire aftermarket applications business. Okay. As you mentioned, it sounds like, you know, I know 2025 is getting closer, but it feels like if the SSG recovers, you're not too, you know, that should give plenty of time to recover, obviously. Barring a, you know, multi-year recession type thing, it sounds like you're still pretty comfortable, certainly on the revenue side and hopefully even on the margin side of getting back to sort of your targets, you know, within a couple of years or that target, which is a 25 target. Is that, is that fair? Yeah, you said it well, Larry. I think, you know, we're still very confident in top line and, you know, $2 billion by 2025. We still have the plans and the actions in place and the objectives to get to the EBITDA expectation of 25%. You know, obviously, there's some mix issues on a short-term basis that kind of affect us there. The improvement in Gainesville and Q4 were significant, and we think we're gonna realize that 250-350 basis point improvement in 2023. Even helping us kind of offset the mix change. Scott and I and the team are very confident in that 2025 view. Okay, great. I appreciate all the color. Thanks, guys. Thank you. Our next question will come from Jim Duffy with Stifel. Your line is open. Thank you. Good afternoon, guys. Yeah. Good afternoon, Jim. Two questions for you. I wanted to start on the Powered Vehicles Group and assumptions in the guidance. You're expecting strong contribution from OEMs. Maybe speak to the factors contributing to that OEM strength and how that plays across the year just to help us, perhaps get some dimension of how that flows and how the mix influence might play out by quarter. Yeah, that's a great question, Jim. You know, in the last couple of years, you know, OEM launches, product launches, OEM capacity, supply chain were pretty dinged up, I guess, to use a technical term. That's coming, you know, that's coming around now. We're starting to see that in Q4 where, you know, the demand and the pull, you know, from the OEMs was getting stronger. That continues into Q1, and I think you see a fairly linear strength in automotive OEM throughout the entire year. I think you can see it pick up a little bit in the back half, not necessarily from a demand problem or issue, but from the standpoint of their, like on the block or the other supply chain issues get resolved. As those get resolved, we'll be pushing even more product out to Ford and other, you know, OEMs to support the demand. I think it's gonna be strong all year. Fairly linear. Could get better in the back half, if they can get some of the other issues resolved. Okay, great. Then you spoke to expectations for continued strength from upfitting. Maybe touch on what you're seeing with the powersports business and then the aftermarket business including Sport Truck USA. Yeah. Power sports continues to be strong. We're still in backlog. We expect to be out of backlog, meaning kind of caught up in current with our power sports customers by Q2, sometime in Q2. We think that's strong throughout the year. There's still a lot of demand for those products and, you know, you're reading those reports as well, Jim, I know. You're seeing what's happening with Polaris and BRP. We feel very, very comfortable with kind of what we were looking at for 2023 in that space. It'll level off a little bit. It was growing so fast that we expect that to come back to a more normal growth curve. Obviously very strong. I think this is gonna be a great year for our Sport Truck business. You know, between Sport Truck and Outside Van and upfitting, taking advantage of the you know, the Custom Wheel House acquisition. We're gonna have new ways to go to market, new ways to combine product. Even Shock Therapy, one of our more recent acquisitions, will benefit from the Custom Wheel House transaction. I think this is gonna be a good year for that, you know, what we call kind of aftermarket applications and we'll be talking a lot about, you know, that business or those businesses this year. Great. Lastly, I wanted to ask about Custom Wheel House. I recognize you don't get own the business. You probably don't want to get too far ahead of yourself. In the press release it seemed to suggest that you saw them a reliable supplier for a number of different aspects of your business. I'm just curious about their ability to scale and ramp demand. It seems there's a lot of different avenues for the Method Race Wheels product through your distribution channels. You know, how quickly can you get that business to a higher level? Yeah, great question. We do think there's a lot of opportunity for integration, as I mentioned earlier, and we think that this is something that we'll get after the day that that deal actually gets transacted and closed. We're gonna be, you know, talking about that a lot in the next earnings call as we get the business integrated. My perspective on their supply chains, it's pretty scalable. They're not the manufacturer. You know, they use contract manufacturers mainly in China, starting to use some in Thailand and other places. We're gonna go do some more work on that, but we absolutely think that by the, you know, call at the end of this year, we'll have put an extra capacity in place to provide those wheels to our truck and Outside Van business and Sport Truck business and the rest. It'll have an impact this year on the rest of our business. Just not sure exactly, you know, how defined we can make that yet until we get the transaction closed. Understood. Thank you so much. Thanks, Jim. Thank you. Our next question will come from Anna Glaessgen with Jefferies. Your line is open. Hey, good afternoon. Thanks for taking my question. 1st, wanna touch on any considerations of the margin evolution when you're spec'd on a new auto trim. For example, in the 1st year, are you burdened with some startup costs that mean margins ramp in each subsequent year? For example, you have a lot of new trims layering in the model over this past year and the next year. Anything to consider there? That's a good question, Anna. What you see in the launch of a new automotive product is you see kind of the inefficiency of a line that's getting you know, ramped up and people learning to build the product. You usually have some lower quality levels, so you're doing more rework on product as it's coming off the line. Really, we feel like we're fairly mature in product launches, probably, you know, four to six months, depending on the product, after we've launched it. We launched a lot of products in 2022 that are kind of in, you know, full production mode now in 2023. That's helping us also with the improvements in Gainesville as we bring those lines to maturity and get the efficiencies that we need. Got it. Building on that, is there any sort of escalator built into the contract with the OEM? Say, you know, the Raptor's going for five years. Is there any step change within that? Yeah. Most of our contracts with OEMs typically don't have any kind of cost reduction expectation or requirement in them. As a general note, we don't go into the specifics of any one contract, but as a general way of thinking about it, you know, all those efficiency gains that we get are ours to benefit from. Great. That's super helpful. One of your comments, you said, being a little bit more conservative in spending and hiring. Is it fair to read into that and say that you guys feel pretty good about the current labor that you have and particularly at Gainesville where it was tight, especially over COVID? Yeah. You know, we're adjusting our labor force in Taiwan, as a reflection of kind of the seasonality that I mentioned in my comments and just kind of what we're seeing in the Q1 or Q2. In Gainesville, it's kind of the other side of that story where we're adding people fairly, you know, consistently and significantly, and we think that workforce is gonna continue to grow throughout this year. We're having pretty good luck finding the right people to come work for us. Okay, great. Thanks. Thank you. Our next question will come from Alex Perry with Bank of America. Your line is open. Hi. Yes. I just wanted to follow up on SSG a bit more. It's a pretty wide range in terms of the guidance. Could you maybe just give us some color on sort of what could drive upside or downside to the range? Does, you know, the high end of the range imply that the bloat you're seeing in the supply chain gets better? You know, is it assuming sort of better end market demand? Maybe just some color on, you know, the SSG guide. Yeah, good question. It's really about the speed in which the current inventory bloat kind of cleans itself up. You know, if that happens majority in Q1, then you're gonna see it much better in the range. If you see it happen in Q3, it's gonna be much worse in the range. It's not really as much about demand. Again, as I said in the comments, I think demand is actually more positive than people give it credit for. It's just that we've got a lot of big partners, big companies out there that are trying to chew through some clunky inventory systems and current inventory levels in their supply chains. That's really helpful. Can you just circling back to gross margin, can you just remind us the puts and takes there? You have the channel mix headwinds from the increased OEM business, Gainesville improvement, presumably some freight tailwinds, but still, like, all in, it seems like gross margins are gonna be down on a year-over-year basis. Is that the right way to think about that? Yeah, I think so, Alex. you know, we're gonna do our best to mitigate the mix shift, and part of that will be absolutely the efficiencies in Gainesville. It is a big shift in mix for us that we're gonna try to have to work against. We're gonna come out of the gates, as Mike said, you know, conservative in our guide as we see what we can do, you know, especially on the aftermarket with new offerings and doing some things around our new acquisition, to. To kind of offset that. Perfect. That's really helpful. Best of luck going forward. Thanks, Al. As a reminder, that is star one to ask a question. Our next question will come from Craig Kennison with Baird. Your line is open. Hey, good afternoon. Thanks for taking my question. You've addressed a lot already, but wanted to ask about the M&A environment. I think you've been patient kind of waiting for deals to come your way and trying to stay disciplined on valuation. Should we look at this Custom Wheel deal as a sign that, you know, valuations have begun to normalize and you could, you know, maybe rekindle some of those dormant conversations? Good question, Craig. Yeah, absolutely. You know, in the powered vehicles space, we see some good opportunities and the multiples are more in line with our historical expectations and what they should be. We think that's really good. Even more importantly, you know, we've been wanting to do some acquisitions in the SSG space, but those valuations had just gotten crazy. With some of the challenges in the supply chain, we're gonna take that as an opportunity to go look at some companies that could be very, very good for us in the SSG world that don't have as rich valuation maybe this year as they would have last year. We think it actually creates some opportunities, and we've got a great balance sheet, we're gonna go use it. That's helpful. Just I guess as a follow-up, maybe if you comment on CapEx and maybe working capital, as maybe a, you know, source of cash, or maybe less of a drain on cash going forward next year that might help you fund some of these deals. I think, you know, CapEx, we're expecting something in the 3%-4% range, you know, on the high end probably this year. We really have spent a lot of time and energy investing for what we have in place now, which will take us, you know, pretty well through 2025 in our expectations on revenue there. You know, we are looking at some additional lower cost regions for manufacturing in the future, but that's not gonna be a CapEx drain in 2023 specifically. Then of course, working capital, Scott, you can speak to that. I think, you know, we've made a lot of strides on reducing chassis inventory, and you've seen that pay off over the last two quarters with some good cash flow generation out of working capital reduction. You know, I think for us this year, it's gonna be maybe a little bit of a continuation of that, and then trying to keep inventory, you know, flat as we grow or, you know, work off some of the inventory that we've accumulated and, you know, potentially even go down a little bit. We've got some good working capital stories over the last couple quarters and hoping to continue that in through the first half of this year. Great. Thank you. Thank you. As a reminder, that is star one to ask a question. At this time, we have no further questions in the queue. I would like to turn the call back over to Mike Dennison for any additional or closing remarks. Thanks, Chelsea. I appreciate everybody taking the time for today's call. One comment that I didn't, that I didn't make in the Q&A period that I probably should have. When we think about the bike business and the bike demand, one of the things we've talked about a lot over the prior quarters is the strength of the e-bike business and the change in the demographic in biking caused by the innovations happening in e-bikes. That remains incredibly strong. We are still very bullish on the e-bike side of the business as well, and we think that's gonna help us as we come through this kind of inventory challenge and get back to growth. You know, e-bike will be a big factor in that. You know, there's some good news as well in all the commentary on bike, and I'd say that's around, you know, how we think about the e-bike and the, and the innovation in that space. With that, we'll end the call. Have a good evening. Look forward to talking to everybody soon. Thank you. Ladies and gentlemen, this does conclude the Fox Factory Holding Corporation's Q4 and full year 2022 earnings call. You may disconnect your line and have a great day.