As filed with the Securities and Exchange Commission on November 9, 2015.

Registration No. 333-207477

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Truck Hero, Inc.

(Exact name of Registrant as specified in its charter)

Delaware

3714

47-1350873

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

5400 S. State Rd.

Ann Arbor, MI 48108

(734) 677-0444

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

William J. Reminder

President and Chief Executive Officer

5400 S. State Rd.

Ann Arbor, MI 48108

(734) 677-0444

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Jon M. Herzog, Esq.

Bradley C. Weber, Esq.

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, Massachusetts 02109

(617) 570-1000

Arthur D. Robinson, Esq.

Daniel N. Webb, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

(212) 455-2000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Amount to be registered(1)	Proposed maximum aggregate offering price per share(2)	Proposed maximum aggregate offering price(2)	Amount of registration fee(3)
Common Stock, $0.001 par value per Share	12,777,778	$19.00	$242,777,782	$24,448

(1)

Includes 1,666,666 shares of common stock that the underwriters have the option to purchase.

(2)

Estimated solely for the purpose of computing the amount of registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended. Includes offering price of the additional shares that the underwriters have the option to purchase.

(3)

The Registrant previously paid $10,070 of the total registration fee in connection with its initial registration statement on October 19, 2015.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated November 9, 2015

Prospectus

11,111,112 Shares

LOGO

Truck Hero, Inc.

Common stock

This is an initial public offering of shares of common stock of Truck Hero, Inc.

We are offering 5,555,556 shares to be sold in this offering and the selling stockholders identified in this prospectus are offering 5,555,556 shares to be sold in this offering. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $17.00 and $19.00. Our common stock has been approved for listing on the New York Stock Exchange under the symbol “TRUK.”

We are an “emerging growth company” as defined under the federal securities laws and, as such, we will be subject to reduced public company reporting requirements for this prospectus and future filings.

See “Risk factors” beginning on page 19 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


	Per share	Total

Initial public offering price	$	$

Underwriting discounts and commissions(1)	$	$

Proceeds to us from this offering, before expenses	$	$

Proceeds to the selling stockholders from this offering, before expenses	$	$

(1)

See “Underwriting” for a description of the compensation payable to the underwriters.

The underwriters may also purchase up to an additional 1,666,666 shares from the selling stockholders at the public offering price, less the underwriting discounts and commissions, within 30 days from the date of this prospectus. We will not receive any proceeds from the exercise of the underwriters’ option to purchase additional shares.

The underwriters expect to deliver the shares to purchasers on or about , 2015 through the book-entry facilities of The Depositary Trust Company.


J.P. Morgan		Baird		BofA Merrill Lynch


KeyBanc Capital Markets		Raymond James		Stifel		SunTrust Robinson Humphrey

, 2015

LOGO

Table of contents


	Page

Prospectus summary		1

Risk factors		19

Special note regarding forward-looking statements		45

Corporate structure		47

Use of proceeds		48

Dividend policy		49

Capitalization		50

Dilution		52

Unaudited pro forma condensed consolidated financial information		54

Selected consolidated financial data		61

Management’s discussion and analysis of financial condition and results of operations		64

Business		88

Management		108

Executive compensation		116

Certain relationships and related party transactions		123

Principal and selling stockholders		128

Description of capital stock		131

Shares eligible for future sale		136

Certain material U.S. federal income tax considerations for non-U.S. holders of common stock		138

Underwriting		142

Legal matters		151

Experts		151

Where you can find more information		151

Index to consolidated financial statements		F-1

Neither we, the selling stockholders, nor any of the underwriters have authorized anyone to provide any information or to make any representations other than as contained in this prospectus or in any free writing prospectuses we have prepared. We, the selling stockholders and the underwriters take no responsibility for, and provide no assurance as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

For investors outside of the United States: Neither we, the selling stockholders, nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.

Unless otherwise specified or the context requires otherwise:

•

the terms “we,” “us,” “our,” the “company” and “THI” mean: for the periods presented herein occurring (1) prior to the consummation of the TA Acquisition (as defined below), Tectum Holdings, Inc. and its consolidated subsidiaries; and (2) after the consummation of the TA Acquisition, Truck Hero, Inc. and its consolidated subsidiaries;

•

the term “2015 Acquisitions” means, collectively, our acquisition of (i) all of the issued and outstanding equity interests in each of (a) A.R.E. Accessories, LLC, a Delaware limited liability company (“A.R.E.”) and (b) RealTruck, Inc., a North Dakota corporation (“RealTruck”) and (ii) 75% of the issued and outstanding equity interests in THI E-Commerce, LLC, a Delaware limited liability company (“THI E-Commerce”) formed for the purpose of acquiring all of the issued and outstanding equity interests in Auto Customs, LLC, a Delaware limited liability company (“Auto Customs”). None of the 2015 Acquisitions were individually “significant” to the company under Rule 3-05 of Regulation S-X under the rules and regulations of the Securities and Exchange Commission (the “SEC”), and collectively, the 2015 Acquisitions were not “significant” to the company at or above the 50% level set forth in Rule 3-05 of Regulation S-X in the aggregate;

•

the term “BAK Acquisition” means the acquisition by the Predecessor of all of the issued and outstanding capital stock and other equity interests of Laurmark Enterprises, Inc., a Texas corporation (“BAK”) and its subsidiaries in March 2014;

•

the term “Combined Pro Forma Year Ended December 31, 2014 (Unaudited)” means the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2014 giving pro forma effect to (i) the BAK Acquisition and (ii) the TA Acquisition and excluding the effect of the 2015 Acquisitions, as if the BAK Acquisition and the TA Acquisition had occurred on January 1, 2014, as more fully described in “Management’s discussion and analysis of financial condition and results of operations—Results of operations,” which section includes a comparative presentation showing all pro forma adjustments made to our historical statements of income in accordance with the rules and regulations of the SEC;

•

the term “GAAP” means generally accepted accounting principles in the United States;

•

the term “North America” means, collectively, the United States and Canada;

•

the term “Predecessor” means the business of Tectum Holdings, Inc. and its consolidated subsidiaries prior to the consummation of the TA Acquisition;

•

the term “Pro Forma Year Ended December 31, 2014 (Unaudited)” means the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2014 giving pro forma effect to (i) the BAK Acquisition, (ii) the TA Acquisition and (iii) the 2015 Acquisitions, as if such transactions had occurred on January 1, 2014, as more fully described in “Unaudited pro forma condensed consolidated financial information,” which section includes a comparative presentation showing all pro forma adjustments made to our historical statements of income in accordance with the rules and regulations of the SEC;

•

the term “Successor” means the business of Truck Hero, Inc. and its consolidated subsidiaries, following the consummation of the TA Acquisition; and

•

the term “TA Acquisition” means the series of transactions that were consummated in July 2014 whereby the Predecessor was acquired by investment funds and entities associated with TA Associates Management, L.P. (“TA Associates”).

Amounts and percentages appearing in this prospectus have been rounded to the amounts shown for convenience of presentation. Accordingly, the total of each column of amounts may not be equal to the total of the relevant individual items.

All trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ^® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Industry and market data

This prospectus contains statistical data, estimates and forecasts that are based on independent industry publications, such as those published by the Specialty Equipment Market Association (“SEMA”) on July 23, 2015, the U.S. Department of Transportation as of November 7, 2014, WardsAuto Group (“WardsAuto”), Manheim, Inc. in January 2015, Tom Kontos, the chief economist of ADESA Analytical Services, Edmunds.com and other publicly available information, as well as other information based on internal sources. This prospectus also contains statistical data and information from a report dated June 3, 2014 commissioned by us and prepared by Sterling Associates Group, LLC (“Sterling Associates Group”), an independent market research firm. Sterling Associates Group was not commissioned to prepare its report in connection with this prospectus. Our statements regarding our market position and that of our brands reflect management’s estimates based on currently available information. Our statements regarding retail prices reflect the manufacturer’s suggested retail price. Although we believe that the third-party sources referred to in this prospectus are reliable and the information generated internally is accurate, neither we nor the underwriters nor the selling stockholders have independently verified any of the information from third-party sources. While we are not aware of any misstatements regarding any information presented in this prospectus, estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed in “Risk factors” and elsewhere in this prospectus.

iii

Prospectus summary

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. You should also consider, among other things, the matters described under “Risk factors” and “Management’s discussion and analysis of financial condition and results of operations,” in each case appearing elsewhere in this prospectus.

Overview

We are a fast-growing designer, manufacturer and marketer of branded consumer accessories for pickup trucks. The pickup truck market is large and expanding, driven in part by evolving pickup designs that have increased functionality and versatility, making trucks more suitable as family and lifestyle vehicles. Our products include accessories manufactured by us that we sell through multiple channels, primarily truck bed covers, truck caps and bed liners, as well as a broad range of third-party branded vehicle accessories that we sell online, including floor mats, grill guards, steps, tool boxes and towing products. Our primary products, truck bed covers and truck caps, enclose the beds of pickup trucks, providing for cargo security and weather protection as well as aesthetic enhancement, while bed liners protect truck beds and cargo from damage. Our products enhance the functionality and aesthetics of pickup trucks and enable consumers to customize and personalize their vehicles. Our portfolio of owned brands, complemented by the online sales of third-party branded products, makes us one of the leaders by sales in the pickup truck accessory market.

We are the top manufacturer of truck bed covers in North America. We are also one of the top manufacturers of truck caps, including fiberglass and aluminum offerings, and the largest manufacturer in North America of carpeted bed liners, a premium alternative to molded plastic or spray-on liners. We market our manufactured accessories under eight primary brands that offer over 85 product styles compatible with over 9,000 unique vehicle configurations. We have developed products for nearly every make and model of pickup truck that has been manufactured for the North American market in the last 40 years. In addition to products that we manufacture, we also sell third-party branded products directly to consumers online, including over 95,000 SKUs across over 200 brands. We believe our expanded product offering and our innovation are contributing to increasing penetration of our accessories among pickup truck owners.

In 2014, there were approximately 50 million registered pickup trucks in North America, where over 97% of our net sales were generated. We reach pickup truck owners through a variety of channels including specialty installers, online retailers and pickup truck dealerships. To support our marketing efforts, we advertise through traditional and online media and maintain a highly-skilled salesforce to promote our brands and products across our distribution channels. We believe the development of our distribution channels, our expanded product offering and our sales and marketing efforts have contributed to increased penetration of our accessories on pickup trucks. Sterling Associates Group reported that penetration of truck bed covers on the installed base of existing trucks was approximately 20-25% in 2014. With only 20-25% penetration of the 50 million trucks on the road, we believe there is a significant opportunity for continued growth of the truck bed cover market.

We believe our brands, history of product innovation, successful acquisitions of complementary businesses and multi-channel distribution strategy coupled with rapid delivery capabilities, lean operations and reputation for quality have been key drivers of our growth and strong financial performance:

•

our net sales were $323.0 million for the nine months ended September 30, 2015, $131.2 million for the period from January 1, 2014 to July 28, 2014 for the Predecessor and $49.7 million for the period from July 29, 2014 to September 30, 2014 for the Successor;

•

our net income was $12.2 million for the nine months ended September 30, 2015, $(4.5) million for the period from January 1, 2014 to July 28, 2014 for the Predecessor and $3.0 million for the period from July 29, 2014 to September 30, 2014 for the Successor;

•

our Adjusted EBITDA was $66.2 million for the nine months ended September 30, 2015, $30.2 million for the period from January 1, 2014 to July 28, 2014 for the Predecessor and $14.9 million for the period from July 29, 2014 to September 30, 2014 for the Successor;

•

our net sales were $131.2 million for the period from January 1, 2014 to July 28, 2014 for the Predecessor, $117.2 million for the period from July 29, 2014 to December 31, 2014 for the Successor and $436.2 million for the Pro Forma Year Ended December 31, 2014 (Unaudited);

•

our net income was $(4.5) million for the period from January 1, 2014 to July 28, 2014 for the Predecessor, $4.4 million for the period from July 29, 2014 to December 31, 2014 for the Successor and $(5.9) million for the Pro Forma Year Ended December 31, 2014 (Unaudited);

•

our Adjusted EBITDA was $30.2 million for the period from January 1, 2014 to July 28, 2014 for the Predecessor, $32.6 million for the period from July 29, 2014 to December 31, 2014 for the Successor and $73.9 million for the Pro Forma Year Ended December 31, 2014 (Unaudited); and

•

from 2010 to 2014, our net sales as calculated under GAAP grew on a year-over-year basis at approximately 30.9% from 2010 to 2011, approximately 19.7% from 2011 to 2012, approximately 23.5% from 2012 to 2013 and approximately 55.9% from 2013 to 2014, in each case on a year-over-year basis.

See “Summary consolidated financial and other data” for an explanation of pro forma adjustments related to recent acquisitions, the definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA.

Our industry and markets

Industry overview

According to the 2015 Annual Market Report published by SEMA, the North America specialty equipment market, which includes parts and accessories that customize or enhance the functionality, performance or appearance of new or used cars, light trucks and other passenger vehicles such as motorcycles, all-terrain vehicles, utility task vehicles and boats, was $36.2 billion in 2014. This market excludes direct repair and replacement of worn original parts.

Within the specialty equipment market, SEMA estimates that accessory and appearance products sold for cars, light trucks, including pickup trucks, crossover utility vehicles (“CUVs”), sport utility vehicles (“SUVs”) and vans, totaled approximately $13.6 billion in 2014. Within this segment, we have focused our business on products that increase the functionality and aesthetics of pickup trucks. Data from SEMA indicate that, of pickup truck owners that accessorize their vehicles, 69% spent at least $300 in 2014 on accessories, with less complex accessories installed by vehicle owners (do-it-yourself, or “DIY”) and more complex accessories installed by third-party installers (do-it-for-me, or “DIFM”).

Evolving designs have made pickup trucks more suitable as family and lifestyle vehicles due to increased functionality, versatility and fuel economy, with truck models accounting for three of the top five vehicles sold in the United States through the first nine months of 2015, according to WardsAuto. We estimate approximately 50 million pickup trucks were registered in North America in 2014, presenting a large base for accessory sales.

Products and sales channels

Our products increase the functionality and aesthetics of pickup trucks. The products we manufacture, including truck bed covers, truck caps and bed liners, are generally easy to install and provide a number of functional

features including weather protection for pickup truck beds and cargo, security and management of cargo and, in some cases, better fuel economy. These accessories have retail price points ranging from $100 per unit to over $5,000 per unit. Compared to the $42,100 average retail price of a new large pickup truck during 2014, according to Edmunds.com, or the $12,983 average retail price of a used truck during 2014, according to ADESA Analytical Services, the $700 average retail price of our truck bed covers represented approximately 2% and 5%, respectively, of the vehicle purchase price, making it a relatively inexpensive upgrade for most consumers.

Our manufactured products are sold to consumers through installers, specialty retailers, online retailers and pickup truck dealerships. Our largest sales channel is composed of a fragmented base of over 5,000 installers and retailers that are supplied by warehouse distributors as well as by direct shipments from us, particularly for items such as fiberglass truck bed covers and truck caps that are difficult to ship due to size, weight and susceptibility to damage. Our second largest sales channel, online retail, is also highly fragmented, consisting primarily of retailers specializing in pickup truck accessories (including two owned and operated by us), retailers that offer a broader range of automotive parts and large ecommerce retailers. In our third largest sales channel, we have developed direct relationships with major pickup truck brands such as Chevrolet, Ford, GMC, Nissan, RAM and Toyota, selling our products under these brands through pickup truck dealerships and OEM-approved modification centers.

Through our two owned online retailers, Auto Customs and RealTruck, we participate directly in the fast- growing online retail sales channel. Operating these retailers provides us with direct access to consumers, allows us to maintain retail pricing of our manufactured products in the online marketplace and expands our offering to include third-party branded products. Our gross margin on net sales through Auto Customs and RealTruck is generally lower than the gross margin on net sales from our manufacturing operations and we expect our gross margins to decrease as a result of these acquisitions. Online retailers of pickup truck accessories sell directly to consumers items such as truck bed covers, bed liners, floor mats, grill guards, steps, tool boxes and towing products. Online purchases represented only 27% of specialty equipment sales in North America in 2014, according to SEMA. We believe there is an opportunity to grow the online channel at a rate higher than the growth of the overall accessory market through increased penetration driven by user-friendly interfaces for selecting the right product fit, call center technical support for DIY installation and targeted, search-engine based advertising.

Trends in our favor

We believe the market for our pickup truck accessories is well positioned for growth due to a variety of factors, including:

•

increasing penetration of our accessories, particularly truck bed covers, due to rapid innovation that has promoted increased functionality;

•

growing end user awareness of our accessories and availability of our products across a broader range of price points;

•

evolving designs that have made pickup trucks more suitable as family and lifestyle vehicles due to increased functionality, versatility and fuel economy;

•

a strong volume of new and used pickup truck transactions in North America, which often lead to purchases of accessories;

•

an increasing population of registered pickup trucks in North America;

•

rising average retail selling prices of our primary products largely due to a shift in consumer preference from soft to hard truck bed covers, which generally have higher price points; and

•

increasing penetration of the online retail sales channel for accessories, allowing products to reach more consumers through a targeted approach.

Our strengths

We believe our success is attributable to the following factors:

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Market leader in attractive categories of the pickup truck accessory market. We are one of the leaders by sales in the pickup truck accessory market, and we hold the #1 or #2 North America market position for truck bed covers, truck caps and carpeted bed liners. We are the top manufacturer of truck bed covers in North America. Further, we hold the #1 position in all seven major sub-categories of functional truck bed cover types. We are also one of the top manufacturers of truck caps, including fiberglass and aluminum offerings, and the largest manufacturer in North America of carpeted bed liners, a premium alternative to molded plastic or spray-on liners. We believe sales of these product categories are experiencing outsized growth, compared to the overall vehicle accessory industry, due to increased penetration on both new and used pickup trucks.

•

Portfolio of brands highly recognized within their categories. We manufacture products under eight primary brands, Extang, TruXedo, UnderCover, Advantage, Retrax, BAK, A.R.E. and BedRug, which each offer distinct functionalities and value propositions and together cover a wide range of retail price points and product variations. We believe our brands are among the most recognizable in the industry and these brands are associated with innovation, performance, functionality and quality by both consumers and installers of our products. Additionally, nearly all of our products are assembled in the United States, a feature that we believe is valued by the consumers of our products. We believe our specialty online retailers, Auto Customs and RealTruck, are highly recognized among pickup truck and SUV enthusiasts, with loyal and growing customer bases.

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Innovative products and rapid product development capabilities. Our ability to develop innovative products has been a key driver of our success and our organic growth. Assuming we owned all of our acquired businesses since 2010, our organic net sales increased at a compound annual growth rate, or CAGR, of 17%, growing from $232 million in 2010 to $436 million in 2014. Approximately one-quarter of our 2014 truck bed cover net sales, before giving effect to the 2015 Acquisitions, were from products developed over the past five years, and we have launched 57 new products since the start of 2014. We have a team of 30 engineers that develop new, advanced features and functionalities in response to targeted customer needs, which we believe drives increased demand for our products. In order to protect our designs, we have developed a significant portfolio of intellectual property that includes more than 60 U.S. patents.

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Established distribution relationships. We sell our products to installers and consumers primarily by leveraging our established relationships with warehouse distributors, online retailers and pickup truck OEMs/dealerships. We have entered into preferred relationships with key warehouse distributors, which we believe constitutes an important advantage. We believe our market presence, targeted advertising, field salesforce, strength of brands and rapid delivery capabilities produce strong end-user demand for our products, creating value for our distributors and retailers that have fostered long-standing relationships. Further, we believe the gross profit contribution from our products is meaningful to our distributors given the relatively high average retail selling prices of our primary products as compared to other accessory categories, making us a

highly valued supplier within our distribution channels. We also own and operate two online retailers, Auto Customs and RealTruck, which provides us with direct access to consumers, allows us to maintain retail pricing of our manufactured products in the online marketplace and expands our offering to include third-party branded products. We believe this diversified distribution model reduces our reliance on any one channel or customer and allows us to reach consumers wherever and however they make purchase decisions.

•

Lean operations and a commitment to continuous improvement. We operate our facilities on a lean, just-in-time demand-pull system in which we typically manufacture products based on incoming orders rather than building finished goods inventory. We believe this system has supported our financial performance and our ability to efficiently serve our customers. Our commitment to lean manufacturing and distribution practices supported inventory turns of approximately 12 times in 2014 and enables us to ship many of our products sold in the online retail channel within 24 to 48 hours of receiving an order, a service that we believe is highly valued by our customers. We have embraced a culture of continuous improvement and seek opportunities to increase our efficiency and reduce our cost structure, sharing best practices across our manufacturing facilities. With these methodologies, we have realized significant synergies in the businesses that we have acquired; for example, our corporate sourcing strategy uses economies of scale to reduce procurement costs across our different brands and manufacturing facilities.

•

Committed management team with deep sector expertise. Our senior management team has an average of 11 years of industry experience and 20 years of executive experience. Our Chief Executive Officer, William J. Reminder, and Chief Operating Officer, Kelly Kneifl, are founding employees of Truck Hero, Inc. who served as chief executives of our predecessor companies, Extang Corporation and TruXedo, Inc. respectively. Furthermore, management owns a significant stake in Truck Hero, Inc. Management has overseen growth from approximately $36 million of net sales in 2007 to $436 million of Pro Forma Year Ended December 31, 2014 (Unaudited) net sales and will continue to pursue attractive growth opportunities.

Our business strategy

Key elements of our growth strategy are to:

•

Extend our technology and product leadership through innovation. In order to continue providing advanced product functionalities that are attractive to consumers, we focus our product development efforts on both the design of new products and the design of new features that enhance our existing products. We introduced 57 new products since the start of 2014, and we plan to continue to develop and market products that incorporate innovative designs, advanced features, improved performance and enhanced functionality that differentiate us in the pickup truck accessory market and drives penetration of our products.

•

Drive awareness and penetration of our brands and products through increased advertising. We use a mix of focused web-based advertisements, event sponsorships that target key demographics and marketing across multiple media platforms to increase familiarity with our brands among consumers and installers and to drive penetration of our products. We expect to continue increasing consumer awareness of our products and to continue building the strength of our brands through targeted advertising campaigns that communicate the benefits, features and functionalities of our products.

•

Expand our distribution reach. We currently have a broad distribution network that includes customers across multiple channels. We plan to continue to leverage our status as one of the largest manufacturers of pickup truck accessories and our short lead-time delivery capabilities to grow our share with our warehouse distributor partners. Through our direct relationships with pickup truck manufacturers, we intend to increase

our sales through pickup truck dealerships. Additionally, we intend to further grow our direct-to-consumer sales by continuing to develop and grow our online retailers.

•

Remain committed to lean operations and continuous improvement. We have embraced lean operating principles and have implemented a culture of continuous improvement that has driven down the cost structure of our operations and those of the businesses that we have acquired. We plan to continue driving economies of scale across our businesses, including sharing of best practices, establishment of centers of excellence and implementation of corporate sourcing strategies, to expand our profit margins.

•

Continue to acquire businesses within the fragmented vehicle accessory market. We have a track record of successfully acquiring businesses, having completed eight acquisitions since our formation through a merger in 2007. We intend to selectively evaluate potential acquisition opportunities in the vehicle accessory market, targeting companies that we believe will further diversify our product portfolio into other attractive segments and/or provide us with new or enhanced access to additional distribution channels.

Our history

THI was formed in November 2007 when Kinderhook Industries, a private equity investment firm (“Kinderhook”), acquired and merged Extang Corporation and TruXedo, Inc. (the “Kinderhook Acquisition”), both leading manufacturers of pickup truck accessories. Under Kinderhook’s ownership from November 2007 through July 2014, we grew organically and through a series of five strategic acquisitions that expanded the breadth of our portfolio of products to include seven primary brands. Acquisitions of pickup truck accessory manufacturers during this time period included BedRug, Inc. (“BedRug”) in 2009, UnderCover, Inc. (“UnderCover”) in 2010, Advantage Truck Accessories, Inc. (“Advantage”) in 2010, Applied Products, Inc., also known as Retrax Holdings, LLC, (“Retrax”) in 2013, and BAK in 2014. See “Corporate structure” for additional information regarding our corporate structure.

On July 28, 2014, a majority of our stock was acquired by funds managed by TA Associates in the TA Acquisition. In April 2015, we acquired A.R.E., a top selling brand of custom-made fiberglass and aluminum truck caps and truck bed covers. Additionally, we entered into the direct-to-consumer internet retail sales channel through the acquisitions of Auto Customs and RealTruck in March and April 2015, respectively.

Corporate information

The Predecessor was originally incorporated under the laws of the State of Delaware as Tectum Holdings Inc. on November 2007. The Successor was incorporated under the laws of the State of Delaware on July 9, 2014 in connection with the TA Acquisition. In October 2015, the name of the company was changed to Truck Hero, Inc. Our principal executive office is located at 5400 S. State Rd., Ann Arbor, MI 48108, and our telephone number is (734) 677-0444. Our corporate website address is www.truck-hero.com. We do not incorporate the information on or accessible through our website into this prospectus, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus. The reference to our website is an inactive textual reference only and is not a hyperlink.

Our principal stockholder

As of September 30, 2015, investment funds affiliated with TA Associates owned approximately 73.1% of our issued and outstanding common stock, on an as-converted basis which gives effect to the Conversion, as described in “—The offering.” Following this offering (assuming an initial public offering price of $18.00 per

share (the midpoint of the estimated price range set forth on the cover page of this prospectus)), TA Associates will beneficially own approximately 52.0% of our issued and outstanding common stock (48.8% if the underwriters’ option to purchase additional shares is exercised in full). TA Associates will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult without the support of TA Associates. Furthermore, TA Associates may have interests that conflict with, or are different than, those of other stockholders.

Founded in 1968, TA Associates is one of the oldest and largest growth private equity firms in the world. TA Associates invests in growing private companies in exciting industries, with the goal of helping management teams grow their businesses. With approximately $18 billion raised since inception and over four decades of experience, TA Associates offers its portfolio companies strategic guidance, global insight, strategic acquisition support, recruiting assistance and a significant network of contacts. Among TA Associates’ successful previous investments are Dealer Tire, Tempur-Pedic, SkinnyPop Popcorn, Intercontinental Exchange, Lawson Software and McAfee.

We expect that more than 50% of our voting power will be held by investment funds and entities affiliated with TA Associates upon the consummation of this offering, and therefore we will be a “controlled company” as defined under the New York Stock Exchange Listing Rules. We do not intend to take advantage of the “controlled company” exemption from certain of the corporate governance listing standards of New York Stock Exchange. See “Risk factors—Risks related to this offering and ownership of our common stock” and “Principal and selling stockholders.” Additionally, we intend to enter into a stockholders agreement with entities affiliated with TA Associates in connection with this offering (the “New Stockholders Agreement”). For more information regarding this agreement, see “Certain relationships and related party transactions—New Stockholders Agreement.”

Recent developments

N-FAB acquisition

On October 29, 2015, we entered into a definitive purchase agreement (the “Acquisition Agreement”) which provides that, upon the terms and conditions set forth therein, we will acquire all of the outstanding equity interests of N-FAB Inc. (“N-FAB”), together with certain related intellectual property assets. N-FAB is a manufacturer of tubular accessories for pickup trucks and SUVs, including nerf bars, running boards and off-roading accessories. N-FAB is located in Houston, Texas. The acquisition is expected to close in November or December 2015 after the completion of this offering. Under the current terms of the Acquisition Agreement, we will acquire N-FAB in exchange for approximately $28 million in cash and 118,238 shares of our common stock. The Acquisition Agreement also provides an earn-out of up to $7 million in cash payable to the sellers upon N-FAB achieving certain EBITDA-based targets for the fiscal years ended December 31, 2015 and 2016. All recipients of our common stock pursuant to the Acquisition Agreement will be subject to certain lock-up restrictions on such shares for at least six months after the closing. For additional information, see “Risk factors—Completion of the N-FAB acquisition is subject to conditions and if these conditions are not satisfied or waived, the acquisition may not be completed.”

For the nine months ended September 30, 2015, N-FAB generated net sales of approximately $14.4 million. We expect that if we successfully acquire N-FAB, that N-FAB will generate financial results that are consistent with or accretive to our pro forma Adjusted EBITDA Margin.

Risks affecting us

Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk factors” immediately following this prospectus summary, that primarily represent challenges we face in connection with the successful implementation of our strategy and the growth of our business. We expect a number of factors may cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance. Such factors include:

•

unfavorable economic conditions;

•

changes in consumer preferences and our ability to introduce new products into the market;

•

our ability to maintain our network of sales and distribution channels;

•

a significant shift in our customer concentrations, or the loss of a large customer;

•

changes in the competitive landscape for pickup truck accessories;

•

product development that may require significant financial investment;

•

increasing costs of goods, raw materials and cost of labor;

•

product liability and/or warranty claims from customers, end-users and/or third parties;

•

loss of our senior management;

•

implementation of a new information technology infrastructure;

•

our ability to service our significant debts;

•

integration of acquired businesses; and

•

other risks described under the heading “Risk factors.”

Implications of being an emerging growth company

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise applicable generally to public companies. These provisions include:

•

an option to present only two years of audited financial statements and only two years of related management’s discussion and analysis in the registration statement of which this prospectus is a part;

•

an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting for so long as we qualify as an emerging growth company;

•

an exemption from compliance with any requirement that the Public Company Accounting Oversight Board (“PCAOB”) may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements for so long as we qualify as an emerging growth company;

•

an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

•

reduced disclosure about our executive compensation arrangements for so long as we qualify as an emerging growth company; and

•

exemptions from the requirements to obtain a non-binding advisory vote on executive compensation or a stockholder approval of any golden parachute arrangements for so long as we qualify as an emerging growth company.

We will remain an emerging growth company until the earliest to occur of: the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates as of the last day of our most recently completed second fiscal quarter; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some, but not all, of the available benefits under the JOBS Act. We are choosing to irrevocably “opt out” of the extended transition periods available under the JOBS Act for complying with new or revised accounting standards, but we intend to take advantage of the other exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. See “Risk factors—Risks related to ownership of our common stock and this offering” which describes that we are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

The offering

Common stock offered by us

5,555,556 shares.

Common stock offered by the selling stockholders

5,555,556 shares (7,222,222 shares if the underwriters exercise their option to purchase additional shares in full).

Common stock to be outstanding immediately after this offering

39,431,536 shares. For additional information regarding the impact of the difference between the assumed initial public offering price and the actual initial public offering price on the number of shares outstanding after completion of this offering related to the conversion of our convertible preferred stock, see below in this section “—The offering.”

Underwriters’ option to purchase additional shares

The underwriters have the option to purchase up to an additional 1,666,666 shares of common stock from the selling stockholders. The underwriters can exercise this option at any time within 30 days from the date of this prospectus. We will not receive any proceeds from the exercise of the underwriters’ option to purchase additional shares.

Use of proceeds

We estimate that we will receive net proceeds from this offering of approximately $88.0 million, based upon an assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015). We will not receive any proceeds from the sale of shares by the selling stockholders.

We currently intend to use the net proceeds of this offering to (i) repay outstanding indebtedness, including applicable prepayment premium payments, (ii) pay the applicable cash consideration pursuant to our acquisition of N-FAB and (iii) for working capital and other general corporate purposes. We may also use a portion of the net proceeds for future acquisitions or investments; however, we have not entered into any agreements or commitments with respect to any acquisitions or investments at this time, other than our planned acquisition of N-FAB. See “Use of proceeds” for additional information.

Risk factors

Investing in our common stock involves a high degree of risk. You should carefully read “Risk factors” in this prospectus for a discussion of factors that you should consider before deciding to invest in our common stock.

Concentration of Ownership

Upon the completion of this offering (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the

cover page of this prospectus)), our executive officers and directors and stockholders holding more than 5% of our capital stock, and their affiliates, will beneficially own, in the aggregate, approximately 65.1% of our outstanding shares of common stock (61.1% if the underwriters exercise their option to purchase additional shares in full).

Dividend Policy

We currently intend to retain earnings to finance the development and growth of our business and do not anticipate paying cash dividends on our common stock in the foreseeable future. See “Dividend policy” for additional information.

Proposed New York Stock Exchange trading symbol

“TRUK”

New Stockholders Agreement

We and entities affiliated with TA Associates intend to enter into the New Stockholders Agreement in connection with this offering. Under our New Stockholders Agreement, TA Associates will have the right to nominate three of the members of our board of directors if TA Associates owns at least 50% or more of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares, two members of our board of directors if TA Associates owns between 25% and 50% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares and one member of our board of directors if TA Associates owns between 12.5% and 25% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares. Our New Stockholders Agreement will also provide that so long as the entities affiliated with TA Associates hold at least 25% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares, we, and our subsidiaries, shall not take certain actions without the approval of at least one director nominated by TA Associates. Accordingly, our New Stockholders Agreement may limit our ability to engage in significant transactions, such as a merger, acquisition or liquidation. Conflicts of interest could arise between us and TA Associates, and any conflict of interest may be resolved in a manner that does not favor us. Any decision that TA Associates may make at some future time regarding their ownership of us will be in their absolute discretion. For more information regarding the New Stockholders Agreement, see “Certain relationships and related party transactions—New Stockholders Agreement” and “Risk factors—Risks related to this offering and ownership of our common stock—Concentration of ownership among a small group of investors and their affiliates and our New Stockholders Agreement with TA Associates may prevent new investors from influencing significant corporate decisions.”

Unless otherwise indicated, the number of shares of our common stock to be outstanding after this offering is based on 33,875,980 shares of our common stock outstanding as of September 30, 2015, which assumes the

conversion of all outstanding shares of our convertible preferred stock into 32,043,061 shares of common stock (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus)), which will occur immediately prior to the closing of this offering, and excludes (i) 4,400,000 shares of our common stock reserved for future issuance under our 2015 Stock Option and Incentive Plan, which will become effective upon completion of this offering, (ii) 43,400 shares of our common stock issuable upon exercise of options to purchase shares of our common stock granted after September 30, 2015, with an exercise price of $16.91 per share and (iii) 118,238 shares of our common stock issuable to the sellers of N-FAB upon the closing of the N-FAB acquisition.

Immediately prior to the consummation of this offering, we will convert each outstanding share of (i) our Series A convertible preferred stock into one share of our common stock plus an additional number of shares of common stock determined by dividing the Series A convertible preferred preference amount, which is $11.4286 per Series A convertible preferred share, by the initial public offering price of a share of our common stock in this offering and (ii) our Series A-1 convertible preferred stock into one share of our common stock plus an additional number of shares of common stock determined by dividing the Series A-1 convertible preferred preference amount, which is $14.2857 per Series A-1 convertible preferred share, by the initial public offering price of a share of our common stock in this offering. We refer to the conversion of all of our convertible preferred stock as the “Conversion.”

Assuming an initial public offering price of $18.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, 33,875,980 shares of common stock will be outstanding immediately after the Conversion but before the consummation of this offering. The actual number of shares of common stock that will be issued as a result of the Conversion is subject to change based on the actual initial public offering price.

Because the number of shares of common stock into which a share of convertible preferred stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the assumed initial public offering price would have a corresponding impact on the number of outstanding shares of common stock presented in this prospectus after giving effect to this offering and the Conversion. The following number of shares of our common stock would be outstanding immediately after the Conversion but before the consummation of this offering, assuming the initial public offering prices for our common stock shown below:


Initial public offering price	$17.00	$18.00	$19.00
Shares of common stock outstanding	34,608,376	33,875,980	33,220,680

Unless otherwise indicated, all information in this prospectus reflects or assumes the following:

•

the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, which will occur immediately prior to the closing of this offering;

•

the automatic conversion of all of our outstanding shares of convertible preferred stock into an aggregate of 32,043,061 shares of common stock upon the closing of this offering (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus));

•

an 8.75-for-1 forward stock split of our common stock that was effected on October 30, 2015; and

•

no exercise by the underwriters of their option to purchase up to 1,666,666 additional shares of common stock from the selling stockholders in this offering.

Summary consolidated financial and other data

The following tables summarize our historical consolidated financial and other data. We have derived the summary statements of income data for the year ended December 31, 2013 and the period from January 1, 2014 to July 28, 2014 for the Predecessor and for the period from July 29, 2014 to December 31, 2014 for the Successor from the audited consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the summary (1) statements of income data for the period from July 29, 2014 to September 30, 2014 and the nine months ended September 30, 2015 for the Successor and (2) balance sheet data as of September 30, 2015 for the Successor from our unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus. The Predecessor and Successor financial data has been prepared on different accounting bases and therefore the sum of the data for the two reporting periods should not be used as an indicator of our full year performance.

Our unaudited interim condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in management’s opinion, all normal recurring adjustments necessary for the fair presentation of the financial information set forth in those statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future, and our interim results are not necessarily indicative of the results to be expected for the full year or any other period.

The Pro Forma Year Ended December 31, 2014 (Unaudited) and the unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2014 and 2015 are derived from “Unaudited Pro Forma Condensed Consolidated Financial Information” in this prospectus and are included for informational purposes only and do not purport to reflect the results of operations of Truck Hero, Inc. that would have occurred had each of the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions occurred on January 1, 2014. The Pro Forma Year Ended December 31, 2014 (Unaudited) and the unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2014 and 2015 (as more fully described in “Unaudited Pro Forma Condensed Consolidated Financial Information”) contain a variety of adjustments, assumptions and estimates, are subject to numerous other uncertainties and the assumptions and adjustments as described in the notes accompanying the unaudited pro forma condensed consolidated financial information included elsewhere in this prospectus and should not be relied upon as being indicative of our results of operations had the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions occurred on the date assumed.

You should read the following summary consolidated financial and other data in conjunction with “Management’s discussion and analysis of financial condition and results of operations,” “Risk factors,” “Capitalization,” “Unaudited pro forma condensed consolidated financial information” and our consolidated financial statements and related notes included elsewhere in this prospectus.


	Predecessor						Successor			Successor			Successor
	Year ended December 31, 2013			January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			July 29, 2014 to September 30, 2014			Nine months ended September 30, 2015
(in thousands, except per share, share and percentage information)

Statement of Income Data:
Net sales	$	159,394		$	131,249		$	117,208		$	49,683		$	322,989
Gross profit		58,304			47,593			46,138			20,472			111,758
Gross profit percentage		36.6%			36.3%			39.4%			41.2%			34.6%
Income from operations		27,573			8,360			19,244			8,080			42,281
Operating income percentage		17.3%			6.4%			16.4%			16.3%			13.1%

Other income (expense):
Interest expense		(7,019	)		(10,065	)		(11,441	)		(4,687	)		(24,075	)
Other income (expense)		(198	)		251			507			274			(420	)

Total other income (expense)		(7,217	)		(9,814	)		(10,934	)		(4,413	)		(24,495	)

Income before taxes		20,356			(1,454	)		8,310			3,667			17,786
Income tax expense (benefit)		6,385			3,005			3,929			688			5,601

Net income		13,971			(4,459	)		4,381			2,979			12,185
Net income attributable to non-controlling interest		—			—			—			—			473

Net income (expense) attributable to THI stockholders		13,971			(4,459	)		4,381			2,979			11,712

Cash Flow Data:
Cash from operating activities		15,254			10,842			16,273			9,376			27,545
Cash from (used in) investing activities		(26,738	)		(126,456	)		(610,930	)		(609,509	)		(71,513	)
Cash from financing activities		17,752			110,928			612,261			613,892			49,009

Other Financial Information (Non-GAAP)(1):
Adjusted EBITDA	$	37,088		$	30,187		$	32,581		$	14,853		$	66,249
Adjusted EBITDA Margin		23.3%			23.0%			27.8%			29.9%			20.5%
Free Cash Flow	$	34,168		$	28,128		$	30,103		$	13,796		$	60,109
Free Cash Flow Conversion		92.1%			93.2%			92.4%			92.9%			90.7%

(1)

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion are non-GAAP financial performance measures. See “—Non-GAAP financial measures” below for more information and a reconciliation of Adjusted EBITDA and Free Cash Flow to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.


	Pro Forma
	Year ended December 31, 2014			Nine months ended September 30, 2014			Nine months ended September 30, 2015
(in thousands, except per share, share and percentage information)

Statement of Income Data:
Net sales	$	436,230		$	321,994		$	378,391
Gross profit		133,384			98,466			123,252
Gross profit percentage		30.6%			30.6%			32.6%
Income from operations		41,211			30,253			45,483
Operating income percentage		9.4%			9.4%			12.0%

Other income (expense):
Interest expense		(33,078	)		(24,831	)		(24,597	)
Other income (expense)		(3,628	)		(3,855	)		(388	)

Total other income (expense)		(36,706	)		(28,686	)		(24,985	)

Income before taxes		4,505			1,567			20,498
Income tax expense (benefit)		10,444			7,889			5,715

Net income (loss)		(5,939	)		(6,322	)		14,783
Net income attributable to non-controlling interest		127			282			544

Net income (expense) attributable to THI stockholders		(6,066	)		(6,604	)		14,239

Other Financial Information (Non-GAAP)(1):
Adjusted EBITDA	$	73,905		$	55,159		$	69,847
Adjusted EBITDA Margin		16.9%			17.1%			18.5%
Free Cash Flow	$	67,411		$	51,025		$	63,214
Free Cash Flow Conversion		91.2%			92.5%			90.5%

(1)


	At September 30, 2015
	Actual		As adjusted(1)		As further adjusted(2)(3)
(In thousands)

Balance Sheet Data:
Cash and cash equivalents	$	22,645	$	22,645	$	22,645
Property and equipment, net		31,747		31,747		31,747
Total assets		848,706		848,706		848,706
Total indebtedness		439,232		439,232		381,036
Total stockholders’ equity	$	21,897	$	246,009	$	330,473

(1)

Reflects (i) the automatic conversion of all outstanding shares of our convertible preferred stock as of September 30, 2015 into an aggregate of 32,043,061 shares of common stock, which conversion will occur immediately prior to the completion of this offering, as if such conversion had occurred on September 30, 2015 (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus)) and (ii) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the closing of this offering.

(2)

Gives effect to the adjustments set forth in footnote (1) above and the sale and issuance by us of 5,555,556 shares of common stock in this offering at an assumed initial public offering price of $18.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, and the application of the net proceeds received by us from this offering as described in “Use of Proceeds” after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

(3)

A $1.00 increase (decrease) in the assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the amount of cash and cash equivalents, total assets and total stockholders’ equity (deficit) on an as further adjusted basis by approximately $5.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015). Similarly, each increase (decrease) of one million shares offered by us would increase (decrease) cash and cash equivalents, total assets and total stockholders’ equity (deficit) on an as further adjusted basis by approximately $16.7 million, assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

Non-GAAP financial measures

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion are financial performance measures that are not calculated in accordance with GAAP. We define Adjusted EBITDA as net income adjusted to exclude, when appropriate, interest expense, income tax expense, depreciation, amortization of intangible assets, expenses related to moving operating facilities, expenses related to our predecessor owners (“Kinderhook expenses”), recall expenses, acquisition expenses, equity-based compensation expenses, bank fees and other non-operational items. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. We define Free Cash Flow as Adjusted EBITDA less the purchase of property and equipment. We define Free Cash Flow Conversion as Free Cash Flow divided by Adjusted EBITDA.

We include Adjusted EBITDA and Adjusted EBITDA Margin in this prospectus because they are important measures upon which our management assesses our operating performance and because we believe including Adjusted EBITDA and Adjusted EBITDA Margin facilitates operating performance comparisons from period-to-period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of depreciation and amortization expense on our fixed assets and the impact of equity-based compensation expense. We include Free Cash Flow and Free Cash Flow Conversion in this prospectus because they are important measures upon which management assesses our operating performance. Because Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion facilitate internal comparisons of our historical operating performance on a more consistent basis, we also use these metrics for business planning purposes, to incentivize and compensate our management personnel, and in evaluating acquisition opportunities. In addition, we believe Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion and similar measures are widely used by investors, securities analysts, ratings agencies and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.

Our use of Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion has limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:

•

Adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA and Free Cash Flow do not reflect capital expenditure requirements for such replacements;

•

Adjusted EBITDA and Free Cash Flow may not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA and Free Cash Flow do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; and

•

other companies, including companies in our industry, may calculate Adjusted EBITDA and Free Cash Flow and other non-GAAP measures differently, which reduces their usefulness as a comparative measure.

In evaluating our Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion

should not be construed as an inference that our future results will be unaffected by these expenses or any other expenses, whether or not they are unusual or non-recurring items. When evaluating our performance, you should consider Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion alongside other financial performance measures, including our net income and other GAAP results.

The following table presents a reconciliation of Adjusted EBITDA and Free Cash Flow to our net income, the most directly comparable GAAP measure, for each of the periods indicated:


	Predecessor						Successor			Pro forma			Successor			Successor			Pro forma			Pro forma
	Year ended December 31, 2013			January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			Year ended December 31, 2014			July 29, 2014 to September 30, 2014			Nine months ended September 30, 2015			Nine months ended September 30, 2014			Nine months ended September 30, 2015
(in thousands, except percentages)

Adjusted EBITDA reconciliation:
Net income	$	13,971		$	(4,459	)	$	4,381		$	(5,939	)	$	2,979		$	12,185		$	(6,322	)	$	14,783
Depreciation and amortization		5,680			6,151			10,474			29,414			4,088			21,408			21,972			22,928
Interest expense		7,019			10,065			11,441			33,078			4,687			24,075			24,831			24,597
Income taxes		6,385			3,005			3,929			10,444			688			5,601			7,889			5,715


EBITDA		33,055			14,762			30,225			66,997			12,442			63,269			48,370			68,023
Moving costs(1)		195			—			—			—			—			—			—			—
Kinderhook expenses(2)		675			506			—			506			—			—			506			—
Recall expenses(3)		—			350			—			350			—			—			350			—
Acquisition expenses(4)		2,909			5,235			2,461			1,895			2,437			1,625			1,872			—
Equity-based compensation(5)		—			9,479			—			—			—			228			—			228
Bank fees(6)		254			—			—			—			—			33			—			33
Other adjustments(7)		—			(145	)		(105	)		4,157			(26	)		1,094			4,061			1,563

Adjusted EBITDA	$	37,088		$	30,187		$	32,581		$	73,905		$	14,853		$	66,249		$	55,159		$	69,847
Adjusted EBITDA Margin		23.3%			23.0%			27.8%			16.9%			29.9%			20.5%			17.1%			18.5%
Purchase of property and equipment(8)		(2,920	)		(2,059	)		(2,478	)		(6,494	)		(1,057	)		(6,140	)		(4,134	)		(6,633	)

Free Cash Flow		34,168			28,128			30,103			67,411			13,796			60,109			51,025			63,214
Free Cash Flow Conversion		92.1%			93.2%			92.4%			91.2%			92.9%			90.7%			92.5%			90.5%

(1)

Represents cost associated with moving the Advantage facility into Extang facility.

(2)

Represents management fees and board of director fees paid to Kinderhook.

(3)

Represents expenses related to the Extang Encore truck bed cover recall.

(4)

Represents expenses related to the acquisition of Retrax on October 11, 2013 and expenses related to the acquisition of BAK on March 12, 2014.

(5)

Represents equity-based compensation related to dividend distributions in the first quarter of 2014 and a stock redemption in the third quarter of 2014. The 2015 amount relates to non-cash executive equity based compensation.

(6)

Represents bank fees related to refinancing costs and annual fees for our Credit Facilities (as defined in “Management’s discussion and analysis of financial condition and results of operations—Credit facilities.”)

(7)

Represents (income) and expense associated with the change in an indemnification asset related to an uncertain tax position, a loss in connection with a disposal of an asset of A.R.E. in 2014 of $4.2 million and a loss in connection with a disposal of an asset and non-operational expenses at RealTruck in 2015 of $0.5 million.

(8)

Represents the purchase of property and equipment and includes cash expenditures for the acquisition of new property and equipment or maintenance of existing property and equipment.

Risk factors

Investing in our common stock involves a high degree of risk. We operate in an industry that involves numerous risks and uncertainties. You should carefully consider the risk factors discussed below, as well as the other information presented herein, as described in “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and related notes included elsewhere in this prospectus, in evaluating us, our business and an investment in our common stock. The risks and uncertainties described below may change over time and other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or prospects could be materially and adversely affected. This could cause the trading price of our common stock to decline, and you may lose all or part of your investment.

Risks related to our business

Unfavorable economic conditions could have a negative effect on our business, financial condition or results of operations.

Our business depends on general economic and market conditions. A majority of our sales are made to customers who have recently purchased a new or used pickup truck and a high percentage of our sales are discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases on products such as ours or purchase a new or used pickup truck (on which our products are used) during periods of favorable general economic conditions, stronger consumer confidence and lower fuel prices. Discretionary spending is also affected by many other macroeconomic factors, including interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions. During periods of unfavorable economic conditions, weaker consumer confidence or higher fuel prices, consumer discretionary spending could be reduced, which in turn could reduce our product sales and sales of new and used pickup trucks (on which our products are used) and have a negative effect on our business, financial condition or results of operations.

In addition, there could also be a number of secondary effects resulting from an economic downturn, such as: insolvency of our suppliers resulting in product delays, an inability of our customers to obtain credit to finance purchases of our products or a desire of our customers to delay payment to us for the purchase of our products. Any of these effects could negatively affect our business, financial condition or results of operations.

If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected.

In order to meet the demands of the marketplace, we are focused on product innovation and continual product evolution. We introduce numerous new products each year. Approximately one-quarter of our 2014 truck bed cover net sales, before giving effect to the 2015 Acquisitions, were from products developed over the past five years, and we have launched 57 new products since the start of 2014. We may not be able to compete as effectively with our competitors, and ultimately satisfy the needs and preferences of our customers and the end users of our products, unless we can continue to enhance existing products and develop new, innovative products in the markets in which we compete. Consumer preferences differ across and within each of our markets and shift over time in response to changing consumer trends in the desired functionality and appearance of products like ours. We may not anticipate or respond to changes in consumer preferences, and even if we do anticipate and respond to such changes, we may not bring to market in a timely manner enhanced or new products that meet these changing preferences. If we fail to anticipate or respond to changes in consumer preferences or fail to bring to market in a timely manner products that satisfy new preferences, while our competitors are able to meet these preferences in a timely manner, our market share and our net sales and

profitability could be adversely affected. Furthermore, in order for new products to generate equivalent or greater revenues and margins than their predecessors, they must maintain the same or higher sales volumes with the same or higher pricing or be manufactured at a cost equal to or lower than their predecessors. If our new products are unable to achieve sufficient pricing levels, we are unable to increase our sales volumes to compensate or we are unable to manufacture our products at the same or lower cost, our profitability could decrease.

If we were unable to maintain our network of sales and distribution channels, it could adversely affect our net sales, profitability and the implementation of our growth strategy.

Our position as one of the leading designers, manufacturers and marketers of branded accessories and appearance products for the North American pickup truck market depends on our ability to maintain effective sales and distribution channels in each of the markets in which we operate. We make use of a variety of distribution channels, including installers/retailers, warehouse distributors, online retailers, pickup truck dealerships and pickup truck OEMs. This network of distribution channels enables us to efficiently reach consumers at a variety of points of sale. If we are not able to maintain our sales and distribution channels, we could experience a decline in sales, as well as reduced market share, as consumers may decide to purchase competitor products that are more easily obtainable. The failure to deliver our products to certain warehouse distributors in accordance with our delivery schedules could harm our relationships with these warehouse distributors and may impair our ability to use the distribution channels provided by such warehouse distributors. Consequently, our net sales, profitability and the implementation of our growth strategy could be adversely affected.

We depend on our relationships with warehouse distributors and their ability to sell and service our products. Any disruption in these relationships could harm our sales.

The largest portion of our products are distributed through a relatively concentrated network of approximately 230 warehouse distributors in the United States and Canada that serve as intermediaries between manufacturers and a fragmented base of over 5,000 installers/retailers. Warehouse distributors maintain inventories of a wide range of products that they provide to their customers on an as-needed basis. We have negotiated a preferred distribution agreement with the largest automotive and pickup truck accessory warehouse distributor, Keystone Automotive Operations Inc. (“Keystone”), a subsidiary of LKQ Corporation, that provides us with preferred arrangements for some of our products, among other benefits. We do not have direct control over the management or the business of these warehouse distributors, except indirectly through terms as negotiated in their contracts. Should the terms of doing business with them change, our business may be disrupted, which could have an adverse effect on our business, financial condition and results of operations.

Because the vast majority of our warehouse distributor contracts allow these entities to offer our competitors’ products, our competitors may incentivize our warehouse distributors to favor their products. We do not have long-term contracts with a majority of our warehouse distributors, and our warehouse distributors are not obligated to purchase specified amounts of our products. In fact, all of our warehouse distributors buy from us on a purchase order basis. Consequently, with little or no notice, these warehouse distributors may terminate their relationships with us or materially reduce their purchases of our products. If we were to lose any significant warehouse distributors, for among other reasons that the warehouse distributors acquired or were acquired by a competitor such that they became a direct competitor, then we would need to obtain one or more new warehouse distributors to cover the particular location or product line, which may not be possible on favorable terms or at all.

A portion of our net sales is derived from a few key customers. The loss of any one or more of these customers could have a material adverse effect on our business and financial results.

We have certain key customers and losing their business could have a material adverse effect on our net sales. Specifically, we had one customer, Keystone, which accounted for more than 10% of our Pro Forma Year Ended

December 31, 2014 (Unaudited) net sales, representing approximately 12%. The loss of, or reduction in, orders from any of our most significant customers could have a material adverse effect on our brands, business, financial condition and results of operations. In addition, continued consolidation within the automotive components distribution industry has resulted in an increasingly concentrated retail base. To the extent such consolidation continues to occur, it may adversely affect our relationships with one or more customers.

We depend on relationships with certain OEMs and any changes in our relationships with OEMs could have a material adverse effect on our business and financial results.

We have developed direct relationships and are an approved aftermarket vendor for Chevrolet, Ford, GMC, Nissan, RAM and Toyota through their dealerships and modification center affiliates. While we believe we have strong relationships with these customers there is no guarantee that we will win future business when these OEMs introduce new models. Our products sold in this channel are marketed under our brand names and under private label OEM names to consumers through pickup truck dealerships or are added to new special-edition vehicles at OEM-approved modification centers. Our products sold in this channel must meet OEM-level quality standards. If our products fail to meet the OEM-level quality standards or these OEMs reduce the business they do with us, our business may suffer.

Many of the markets we serve are highly competitive, which could limit the volume of products that we sell and reduce our operating margins.

Many of our products are sold in competitive markets. Our products generally compete on the basis of product performance, brand recognition, price, value, quality or other benefits to consumers. Our competitors have attempted in the past, and may attempt in the future, to gain market share by offering products at prices at or below those typically offered by us. For example, we face the risk of lower-cost foreign manufacturers located in China, Southeast Asia, India and other regions competing in the markets for our products, and as a result, the volume of products that we sell may decrease, reducing our operating margins. Additionally, we could face competition from well-capitalized new entrants into the market. We may not be able to compete successfully against current and future competitors and competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. Our competitors’ new products may reach the market before our products, be more effective and/or less expensive than our products, obtain better market acceptance or render our products obsolete. In addition, our competitors could develop an unforeseen and entirely new product or technology that renders our products less desirable or obsolete, which could negatively affect our business, financial condition or results of operations.

Product development requires significant financial investment.

The development of our products requires significant financial, technological and other resources. While we expended approximately $2.1 million and $3.2 million for our research and development efforts in 2013 and 2014, respectively, this level of investment in research and development may not be sufficient in the future to maintain our competitive advantage in product innovation, which could cause our business, financial condition or results of operations to suffer. Product improvements and new product introductions require significant planning, design, development and testing at the technological, product and manufacturing process levels, and we may experience unanticipated delays in our introduction of product improvements or new products. Any new products that we develop may not receive market acceptance or otherwise generate any meaningful sales or profits for us relative to our expectations.

Increases in the prices of aluminum, polypropylene, fabrics, vinyl, ABS resin, plastics and other raw materials, as well as the cost of labor may increase our cost of goods sold.

We are exposed to fluctuation in the market price of certain commodities, particularly aluminum, polypropylene, acrylonitrile butadiene styrene (“ABS”) resin, fabrics, vinyl, and plastics, each of which are used

in our production and in the manufacturing of certain products and sourced from third-party suppliers. Any increase in such prices may impact the price for which we purchase our products as well as costs of manufacturing and our cost of goods sold. Our costs for raw materials are affected by, among other things, weather, consumer demand, speculation on the commodities market, and other factors that are generally unpredictable and beyond our control. Generally, our pricing arrangements with suppliers are not long-term and thus do not lock in prices for many years. Prices for these products fluctuate with market conditions. We may from time to time enter into contracts designed to mitigate our exposure to price fluctuations. While these agreements may lessen the impact of rising prices, they may not fully protect us from these risks. We may be unable to completely offset the impact with price increases on a timely basis and our financial performance may be adversely impacted by further price increases. A failure by our suppliers to continue to supply us with certain raw materials or component parts on commercially reasonable terms, or at all, could have a material adverse effect on us. In addition, for some goods, we have a single source supplier. For example, Borealis AG is our sole supplier of polypropylene, which we use in manufacturing bed liners and other products. We may be adversely affected if those suppliers face financial, legal or operation problems, labor disruptions, increasing prices, reductions in quality or difficulties in timely delivery. These factors may result in our losing business and may affect our ability to source materials to produce our products in time, at a reasonable price, and deliver them to our customers. If we need to source production inputs from another supplier it may cause transitional difficulties, and there is no guarantee that we could engage another supplier on similar pricing terms or at all.

High fuel prices could have a negative effect on the sale or use of pickup trucks that use our products.

Gasoline or diesel fuel is required for the operation of pickup trucks that use our products. The prices of or taxes on gasoline or diesel fuel have fluctuated significantly in the past and may significantly increase in the future. Substantial increases in the price of fuel could have a material adverse effect on our sales since sales of our products are typically correlated in part to consumers’ spending toward and use of pickup trucks.

Rising costs from our third-party suppliers may compel us to increase our pricing or to take actions to reduce our manufacturing costs, either of which could adversely affect our net sales and profitability.

Certain suppliers have increased their prices in recent years in response to rising costs in their own businesses that they are seeking to pass along to us. In the future, we expect that costs for our suppliers will continue to increase (particularly labor costs) and, as a result, it may become increasingly difficult for us to maintain the product margins that we achieved in previous years if we continue to buy from these suppliers. In order to maintain our current margins, we may be required either to increase our pricing to our customers or to take actions to reduce our manufacturing costs. If we increase our price points, we could lose market share if our competitors are able to maintain theirs. On the other hand, as we seek out new suppliers with lower costs, it may be difficult to find suppliers that meet our requirements, in terms of quality, capacity, compliance standards and/or technical capability, which could affect our ability to meet customer demand. In either instance, our business and results of operations could be adversely affected.

A significant disruption in the operations of our manufacturing facilities could have a negative effect on our business, financial condition or results of operations.

We have manufacturing facilities located across the United States. Equipment failures, delays in deliveries or catastrophic loss at any of our facilities could lead to production or service disruptions, curtailments or shutdowns. In the event of a stoppage in production, or a slow-down in production due to high employee turn-over or a labor dispute at any of our facilities, even if only temporary, or if we experience delays as a result of events that are beyond our control including severe weather issues, delivery times to our customers could be severely affected. Any significant delay in deliveries to our customers could lead to increased returns or cancellations, expose us to damage claims from our customers or damage our brand and, in turn, negatively affect our business, financial condition or results of operations.

Product recalls, and significant product warranty or repair and replacement costs and claims in the future could have, an adverse impact on our business.

Unless otherwise required by law, we provide limited warranties on our products that can range from one year to the lifetime of the product. Our warranties begin on the date the product is originally purchased by a consumer from one of our customers or directly from us. In the ordinary course of business, we incur warranty costs and reserve against such costs in our financial statements. However, there is risk that we could experience higher than expected warranty costs.

In December 2013, we conducted a voluntary safety recall with the National Highway Traffic Safety Administration of one of our products, the Extang Encore truck bed cover. Through September 30, 2015, we have spent approximately $350,000 in connection with this recall, which is still pending, and is expected to be substantially completed by the end of 2015. In the future, we may be required by regulators to conduct, or may voluntarily choose to execute, recalls involving our products or components if any prove to be defective. To preserve our customer relationships and protect our brand reputation, we may elect to conduct a voluntary recall should an issue arise with one of our products that is not covered by our warranties. In addition to the direct costs of any claim or product recall, any such claim or recall could adversely affect our brand image and have a negative effect on our business, financial condition or results of operations.

The quality and performance of our products are, in part, dependent on the quality of the component parts that we obtain from various suppliers, which makes us susceptible to performance issues that could materially and adversely affect our business, reputation and financial results.

The successful performance of our products are dependent, in part, upon the quality and performance of key components, such as aluminum clamps and plastic hinges. These and other product parts and components may have performance issues from time to time, and the warranties provided by our suppliers may not always cover the potential performance issues or may not provide full coverage to support our warranty obligations to our customers. Even when a performance issue is fully covered, our suppliers may not have financial ability to support their warranties. If a particular component is defective or of poor quality, our entire product may be affected. We may face disputes with our suppliers with respect to these performance issues and they may deny their warranty obligations to us, and our customers could claim damages as a result of such performance issues. Any such issues with the performance of our products could have a material adverse effect on our business, reputation and financial results.

In the ordinary course of business, we may be subject to product liability claims and lawsuits, including potential consumer class actions, alleging that our products have resulted in or could result in economic losses or unsafe condition or injury.

We may be required to pay for economic losses or injuries to our customers or third parties purportedly caused by our products. Claims could be based on allegations that, among other things, our products contain design or manufacturing defects or provide inadequate instructions regarding their use. Product liability claims could result in negative publicity that could harm our sales, reputation, value of our brands and operating results. Although we maintain product liability insurance coverage, potential product liability claims may exceed the amount of insurance coverage or certain product liability claims may be excluded under the terms of the policy. We also could be subject to consumer class action claims or regulatory actions due to alleged misrepresentations in product advertising. Any product liability or advertising claim brought against us, with or without merit, could be costly to defend and could result in an increase of our insurance premiums. Our other business activities may also expose us to litigation risks, including risks that may not be covered by insurance. If successful claims are asserted by third parties against us for uninsured liabilities or liabilities in excess of applicable insured limits of coverage, our business, financial condition and results of operations may be adversely affected. Additionally, our products may be associated with competitor products or other products in

the same category, which may be alleged to have caused harm to consumers. As a result of this association, we may be named in legal actions. The potential costs of defense may materially affect our business, financial condition and results of operations in future periods.

Harm to our reputation or the reputation of one or more of our leading brands could have an adverse effect on our business.

We believe that maintaining and developing our brand names are critical to our success and that the importance of brand recognition increases as competitors offer products similar to our products. We devote significant time and incur substantial marketing and promotional expenditures to create and maintain brand loyalty as well as increase brand awareness of our products. Adverse publicity about us or our brands, including product safety or quality or similar concerns, whether real or perceived, could harm our image or that of our brands and result in an adverse effect on our business, as well as require resources to rebuild our reputation.

Our reputation, ability to do business, and results of operations may be impaired by improper conduct by any of our employees, agents or business partners.

Our internal controls and compliance systems may not protect us from acts committed by our employees, agents, or business partners that would violate U.S. and/or non-U.S. laws. We do not control our suppliers, warehouse distributors, pickup truck dealership customers, OEMs, or other business partners, and we do not require them to comply with a formal code of conduct. Their violation of labor, environmental or other laws, or a failure of these parties to follow generally accepted ethical business practices, could create negative publicity and harm our reputation. Other consumer products companies have faced significant criticism for the actions of their business partners, and we could face such problems ourselves. Any of these events could reduce demand for our products, harm our ability to meet demand or harm our reputation, brand image, business, financial condition or results of operations.

If we inaccurately forecast demand for our products, we may manufacture insufficient or excess quantities or our manufacturing costs could increase, which could adversely affect our business.

We plan our manufacturing capacity based upon the forecasted demand for our products. We forecast demand for our products through our annual budget process. If actual demand for our products exceeds forecasted demand, we may not be able to fulfill orders and the margins on our incremental sales in excess of anticipated sales may be lower due to temporary higher costs, which could result in a decrease in our overall margins. We may be unable to hire additional labor rapidly enough to capture market demand when product demand exceeds forecasts. If actual demand is less than the forecasted demand for our products and we have already committed to fixed costs such as the purchase materials in support of forecasted demand or capital expenditures to expand our facilities, our profitability could suffer. In addition, if we incorrectly forecast demand we may face capacity constraints in our manufacturing plants and within our supply chain, or incur increased material costs, increased freight costs and additional overtime, all of which in turn could adversely impact our cost of goods sold and our gross margin. In summary, either excess or insufficient production due to inaccurate forecasting could have a negative effect on our business, financial condition or results of operations.

We may not be able to attract and retain a sufficient number of skilled workers, which could have a material adverse effect on our business.

Our continued success depends on our ability to attract and retain qualified personnel in all areas of our business. We require a substantial number of employees and can experience high employee turnover. We compete with other businesses in our market to attract and retain qualified employees. A tight labor market, increased overtime and a higher full-time employee ratio may cause labor costs to increase. A shortage of qualified employees may require us to enhance wage and benefits packages in order to compete effectively in the hiring and retention of qualified employees, to hire more expensive temporary employees or to reduce

manufacturing hours. Our labor costs may increase and such increases may not be recovered through increased prices charged to customers. In addition, we expect increases in payroll expenses as a result of federal and state mandated increases in the minimum wage, and we cannot assure you that there will not be material increases in the future. The demand for skilled workers is high, and the supply is limited. A significant increase in the wages paid by competing employers or the unionization of groups of our employees could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both.

We may be subject to unionization and work stoppages at our facilities or our customers may be subject to work stoppages, which could seriously impact the profitability of our business.

We are not aware of any present active union organizing drives at any of our facilities but such unionization efforts could commence at any time. We cannot predict the impact that any unionization would have on our workplace. Some of our direct or indirect customers and suppliers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these customers or our suppliers could result in slowdowns or closures of their operations, which could harm our supply chain or sales. In addition, organizations responsible for shipping our customers’ products may be impacted by occasional strikes or other activity. Any interruption in the delivery of our customers’ products could also reduce demand for our products over the longer term and could have a material adverse effect on us.

We are subject to certain safety and labor risks in our manufacturing and in the testing of our products.

We employ approximately 2,000 full-time and part-time employees, a large percentage of which work at our manufacturing facilities. Our business involves complex manufacturing processes that can be dangerous to our employees. Although we employ safety procedures in the design and operation of our facilities, there is a risk that an accident or death could occur in one of our facilities. Also, prior to the introduction of new products, our employees test the products under rigorous conditions, which involve the risk of injury or death. Any accident could result in manufacturing or product delays, which could negatively affect our business, financial condition or results of operations. The outcome of litigation is difficult to assess or quantify and the cost to defend litigation can be significant. As a result, the costs to defend any action or the potential liability resulting from any such accident or death or arising out of any other litigation, and any negative publicity associated therewith, could have a negative effect on our business, financial condition or results of operations.

We may not be able to sustain our past growth or successfully implement our growth strategy, which may have a negative effect on our business, financial condition or results of operations.

Our future growth will depend upon various factors, including the strength of our brand image, our ability to continue to produce innovative products, consumer acceptance of our products, competitive conditions in the marketplace and the continued growth of the pickup truck markets into which we sell our products. If we are unable to sustain our past growth or successfully implement our growth strategy, our business, financial condition or results of operations could be negatively affected.

We have grown, and may grow in the future, through acquisitions. Acquisitions involve risks and we may not be able to effectively integrate businesses we acquire, and we may not be able to identify or consummate any future acquisitions on favorable terms, or at all.

Since 2007, we have achieved growth due in part to our ability to successfully acquire and integrate complementary businesses. Acquisitions may continue to play a role in our future growth. Any future acquisitions that we might make, however, are subject to various risks and uncertainties, including:

•

the inability to integrate effectively the operations, products, technologies and personnel of the acquired companies (some of which may be located in different geographic regions);

•

the potential disruption of our existing business and diversion of management’s attention from day-to-day operations;

•

the inability to maintain uniform standards, controls, procedures and policies or correct deficient standards, controls, procedures and policies, including internal controls and procedures with respect to financial reporting, that are compatible with our policies and procedures and that are sufficient to satisfy regulatory requirements of a public company in the United States;

•

the accuracy of financial records of acquired companies and the application of accounting standards by acquired companies;

•

the possibility that audits of our financial statements for periods following an acquisition could result in changes to accounting items or policies of an acquired business;

•

the assumption of litigation, environmental, product liability, regulatory or other contingent obligations that were not anticipated at the time of the acquisitions;

•

the need or obligation to divest portions of the acquired companies; and

•

the potential impairment of relationships with customers.

Also, the integration of any newly acquired businesses may not achieve any anticipated cost savings or operating synergies, and we may not be able to effectively manage our operations at an increased scale of operations resulting from such acquisitions. We may also expand into new product categories that are not successful, which could harm our business. In addition, we may not be able to identify or consummate any future acquisitions on favorable terms, or at all. We may have limited opportunities to acquire businesses that we believe will enhance our product lines or our business.

Completion of the N-FAB acquisition is subject to conditions and if these conditions are not satisfied or waived, the acquisition may not be completed.

N-FAB’s and our obligations under the Acquisition Agreement are subject to the satisfaction or waiver of a number of closing conditions. If the closing conditions are not waived or satisfied within 90 days following the date of the Acquisition Agreement, any non-breaching party may terminate the Acquisition Agreement.

The failure to satisfy all of the required conditions could delay the completion of the acquisition for a significant period of time or prevent it from occurring. Any delay in completing the acquisition could prevent us from realizing some or all of the benefits that we expect to achieve if the acquisition is successfully completed within its expected timeframe. There can be no assurance that the conditions to the closing of the acquisition will be satisfied or waived, or that the acquisition will be completed. The market price for our stock may reflect an assumption that the pending acquisition will occur, and the failure to complete, or any significant delay in completing, the acquisition could result in a decline in our stock price after this offering.

If our goodwill and other intangibles become impaired, we may be required to record a significant charge to earnings.

We have a significant amount of goodwill and other intangibles. Our goodwill and other intangible asset balances as of September 30, 2015 were approximately $344.0 million and $367.5 million, respectively. We test goodwill at least annually or more frequently if indicators of impairment exist. Such assets are considered to be impaired when the carrying value of an intangible asset exceeds its estimated fair value. No impairment losses have been recorded in the consolidated financial statements included elsewhere in this prospectus. However, an impairment of a significant portion of our goodwill could materially adversely affect our financial condition and results of operations.

We are dependent upon existing members of senior management to implement key elements in our strategy for growth, and the failure to retain them or to attract appropriately qualified new personnel could affect our ability to implement these strategies successfully, which could adversely affect profitability and financial performance.

The successful implementation of our growth strategy is highly dependent on our ability to retain our highly experienced senior management team and on our ability to attract appropriately qualified new personnel. Our senior management team has an average of 11 years of industry experience and 20 years of executive experience. Our Chief Executive Officer, William J. Reminder, and Chief Operating Officer, Kelly Kneifl, are founding employees of THI who served as chief executives of our predecessor companies, Extang Corporation and TruXedo, Inc. respectively. Furthermore, management owns a significant stake in Truck Hero, Inc. The loss of any member of our senior management team could hinder our ability to implement our growth strategies effectively. Moreover, if we are unable to attract appropriately qualified new personnel as we expand over the next few years, the existing management team may not be successful in implementing our growth strategies. In either instance our financial performance could be adversely affected.

We rely on increasingly complex information systems for management of our manufacturing, distribution, sales and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, our business could suffer.

We rely extensively on information technology systems, some of which are managed by third-party service providers, in order to conduct business. These systems may include, but are not limited to, programs and processes relating to communicating internally and externally with other parties, ordering and managing materials from suppliers, marketing and sales processing, converting materials to finished products, shipping products to customers, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements and other processes involved in managing the business. We have evaluated our information technology systems, focusing on our current and long-term need to continue to support our future growth plans, and have determined that additional investments will be needed to support future growth. We are implementing hardware, software and operating systems, in order to support our existing operations and future growth. If our future technology systems and processes do not adequately support the future growth of our business, do not meet the needs of our customers or we suffer an ineffective or excessively expensive implementation, our business may be adversely impacted. Although we have network security measures in place, the systems may be vulnerable to computer viruses, security breaches, and other similar disruptions from unauthorized users. While we will have business continuity plans in place, if the systems are damaged or cease to function properly due to any number of causes, including catastrophic events, power outages, security breaches or other similar events, and if the business continuity plans do not effectively resolve such issues on a timely basis, we may suffer interruptions in the ability to manage or conduct business, which may adversely impact our business.

Significant risks in our information systems could adversely affect our results.

When reporting our financial results we rely heavily on the accuracy of the data we receive from multiple information systems. As our operations have grown, our information technology controls have not been developed and implemented across the company. As a result, there are significant risks related to the financial information stored and organized on our information systems. These risks include but are not limited to:

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risk of direct manipulation of financially significant information systems through one our databases or source code;

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risk of inappropriate access to financially significant information systems;

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risk of segregation of duties not being present in financially significant information systems;

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risk of data loss through ineffective backup controls;

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risk of inappropriate access to financially significant files on our networks; and

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risk of applying untested and unmonitored controls to financially significant information systems.

Each of these risks could cause us to misstate financial information, cause delays in our public reporting, or negatively impact our results.

We may not successfully develop and implement a new information technology infrastructure, which may prove costly.

Over the next two to three years, we will make sizable investments in information technology systems to adequately support our future growth plans. Although difficult to estimate, the investment could cost as much as $10 million over the next three years. However, if our future technology systems and processes do not adequately support the future growth of our business, we suffer inadequate or ineffective infrastructure changes, or its costs are excessively expensive, our business may be adversely impacted.

Breaches of security, unauthorized access to or disclosure of confidential information, disruption, including distributed denial of service (“DDoS”) attacks or the perception that confidential information is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.

Our subsidiaries, Auto Customs and RealTruck operate retail websites and receive, retain and transmit certain sensitive personal information that our customers provide to purchase products, register on our websites or otherwise communicate to us, including financial information and personally identifiable information. This data is often accessed through secure transmissions over public and private networks, including the internet. We cannot assure you that systems that access our services and databases will not be compromised or disrupted, whether as a result of criminal conduct, DDoS attacks or other advanced persistent attacks by malicious actors, including hackers, nation states and criminals, breaches due to employee error or malfeasance, or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events. The increasing costs associated with implementation and on-going operation of our information security systems, such as increased investment in technology (including data privacy and data security technology), the costs of compliance with privacy and information security laws, and costs resulting from potential data loss, could adversely impact our business. Also, a compromise of our data security systems or those of businesses we interact with that results in information related to our customers, employees or business being obtained by unauthorized persons could disrupt our operations, harm our brand and reputation, result in a loss of consumer confidence in us, and expose us to regulatory actions and claims from customers, financial institutions, payment card associations and other persons, any of which could adversely affect our business, financial condition and results of operations. In addition, a security breach could require us to expend additional resources related to the security of information systems and disrupt our business.

If we are unable to enforce our intellectual property rights, our reputation and sales could be adversely affected.

In order to protect our designs, we have developed a significant portfolio of intellectual property that includes more than 60 U.S. patents covering our technical innovations. While we believe that our patents, trademarks and other intellectual property have significant value, it is uncertain that this intellectual property or any intellectual property acquired or developed by us in the future will provide a meaningful competitive advantage. When appropriate, we may from time to time assert our rights against those who infringe on our patents, trademarks and trade dress. We may not, however, be successful in enforcing our patents with respect

to our product designs, and third parties may seek to oppose or challenge our patents registrations. Further, these legal efforts may not be successful in reducing sales of products by those infringing. In addition, our pending patent applications may not result in the issuance of patents, and even issued patents may be contested, circumvented or invalidated and may not provide us with proprietary protection or competitive advantages. If our efforts to protect our intellectual property are unsuccessful, or if a third party misappropriates our rights, this may adversely affect our business, financial condition or results of operations. Additionally, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our proprietary rights as fully as in the United States, and it may be more difficult for us to successfully challenge infringers.

We may face design limitations or liability associated with the use of products for which patent ownership or other intellectual property rights are claimed.

From time to time we are subject to claims or inquiries regarding alleged unauthorized use of a third party’s intellectual property and cannot be certain that the conduct of our business does not and will not infringe the intellectual property rights of others. An adverse outcome in any intellectual property litigation could subject us to significant liabilities to third parties, require us to license technology or other intellectual property rights from others, require us to comply with injunctions to cease marketing or using certain products or brands, or require us to redesign, re-engineer, or re-brand certain products or packaging, any of which could affect our business, financial condition and operating results. Third-party intellectual property rights may also make it more difficult or expensive for us to meet market demand for particular product or design innovations. If we are required to seek licenses under patents or other intellectual property rights of others, we may not be able to acquire these licenses on acceptable terms, if at all. In addition, the cost of responding to an intellectual property infringement claim, in terms of legal fees and expenses and the diversion of management resources, whether or not the claim is valid, could have a material adverse effect on our business, results of operations and financial condition.

Our substantial debt could adversely affect our financial health and ability to obtain financing in the future and to react to changes in our business, and our inability to access liquidity or capital markets could adversely affect our business, results of operations, financial position or cash flows.

As of September 30, 2015, we had approximately $449.4 million aggregate principal amount of debt outstanding under our credit facilities and approximately $14.3 million of undrawn availability under our revolving credit facility after giving effect to $0.7 million of letters of credit issued under the revolving credit facility thereunder. See “Management’s discussion and analysis of financial condition and results of operations—Credit facilities.” Our substantial debt could have significant consequences, including:

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a significant portion of our cash flow from operations will need to be dedicated to the payment of principal and interest on our debt, thereby reducing our ability to use that cash flow to fund our operations, capital expenditures and future business opportunities;

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we may be more vulnerable to adverse economic and general industry conditions, including interest rate fluctuations, because all of our borrowings are at variable rates of interest;

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we may be at a competitive disadvantage compared to our competitors who have less debt or debt at more favorable interest rates and who, as a result, may be better positioned to withstand economic downturns or to finance capital expenditures or acquisitions;

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we may be unable to make strategic acquisitions or be required to make non-strategic divestitures;

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our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements, or general corporate or other purposes may be limited;

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it may be more difficult for us to satisfy our obligations to our creditors, resulting in possible defaults on and acceleration of such debt;

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our costs of borrowing may increase;

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we may be unable to renew or refinance our debt on terms as favorable as our existing debt or at all; and

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our flexibility to adjust to changing market conditions and our ability to withstand competitive pressures could be diminished.

We largely depend on cash generated from our existing operations to support our growth, which could strain our cash flow. If we were unable to generate sufficient cash from our existing operations, changes in the credit and capital markets, including market disruptions, limited liquidity and interest rate fluctuations, may increase the cost of financing or restrict the company’s access to this potential source of future liquidity. As a result of occasional instability in the global financial markets, our liquidity may be affected or our capital resources may not be sufficient to satisfy our liquidity needs. Although we believe that our existing cash and cash equivalents, cash provided by operations and available borrowings under our existing credit facilities will be adequate to satisfy our capital needs for the next 12 months, any renewed tightening of the credit markets could make it more difficult for us to access funds, enter into an agreement for new indebtedness or obtain funding through the issuance of our securities. Our credit facilities also have financial covenants which, if not met, may further impede our ability to access funds under such facilities.

In addition, we may generally maintain significant amounts of cash and cash equivalents on deposit at FDIC-insured financial institutions that are in excess of federally-insured limits. Since the deposit insurance provision of the Dodd-Frank Wall Street Reform Act (the “Dodd-Frank Act”) expired on December 31, 2012, we cannot be assured that we will not experience losses with respect to cash on deposit in excess of federally-insured limits.

The terms of our credit facilities may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.

We are a holding company and our credit facility agreements are directly between our wholly-owned subsidiaries and the relevant banking institutions. Our credit facilities contain, and any additional debt financing we may incur would likely contain, covenants requiring us to maintain or adhere to certain covenants that restrict our operations, which include limitations on our ability to, among other things: incur additional indebtedness; create liens on property; engage in mergers, consolidations and other fundamental changes; dispose of assets; make investments, loans or advances; make certain acquisitions; engage in certain transactions with affiliates; declare or pay dividends on, or repurchase, our stock; and change our lines of business or fiscal year. Additionally, the ability of our subsidiaries to pay upstream dividends and make other distributions to us is subject to certain covenants and limitations pursuant to our credit facilities.

Complying with these covenants could adversely affect our ability to respond to changes in our business and manage our operations. In addition, these covenants could affect our ability to invest capital in new businesses and fund capital expenditures for existing businesses. Our ability to comply with these covenants and other provisions in our credit facilities and any future credit facilities or debt instruments may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events beyond our control. A failure by us to comply with the restrictive covenants and any financial ratios contained in our credit facilities and any future credit facilities or debt instruments could result in an event of default. Upon the occurrence of an event of default, the lenders could elect to declare all amounts outstanding to be due and payable and exercise other remedies as set forth in our credit facilities and any future credit facilities or debt instruments. In addition, if we are in default, we may be unable to borrow additional amounts under any such facilities to the extent that they would otherwise be

available and our ability to obtain future financing may also be impacted negatively. If the indebtedness under our credit facilities and any future credit facilities or debt instruments were to be accelerated, it would have a material adverse effect on our future financial condition.

An increase in interest rates would increase the interest costs on our credit facilities and any additional variable rate indebtedness we may incur and could adversely impact our ability to refinance our indebtedness.

Borrowings under our credit facilities are based on floating rates. An increase in interest rates would increase our debt service obligations and therefore reduce cash flow available for other corporate purposes. Further, rising interest rates could limit our ability to refinance our existing indebtedness when it matures and increase interest costs on any indebtedness that is refinanced. We have in the past, and may from time to time in the future enter into agreements such as interest rate swaps or other interest rate hedging contracts. While these agreements may lessen the impact of rising interest rates, hedging transactions may not fully protect us from interest rate risk.

We have significant operating lease obligations and our failure to meet those obligations could adversely affect our financial condition.

We lease many of our operating facilities. Our rental expense in 2014 under these operating leases was approximately $2.0 million. A failure to pay our operating lease obligations would constitute a default allowing the applicable landlord to pursue any remedy available to it under applicable law, which would include taking possession of our property and, in the case of real property, evicting us. Any failure to meet these obligations could have a negative effect upon our business, financial condition or results of operations.

Our healthcare costs for active employees may exceed our projections and may negatively affect our financial results.

We maintain a range of healthcare benefits for our active employees which are subject to various cost-sharing features. If our costs under our benefit programs for active employees exceed our projections, our business and financial results could be materially adversely affected. Additionally, foreign competitors and many domestic competitors provide fewer benefits to their employees, and this difference in cost could adversely impact our competitive position. In addition, our business has been and will continue to be affected by changes in health care laws, including without limitation, the Patient Protection and Affordable Care Act (“ACA”), which was enacted in March 2010 and whose legality was recently upheld by the U.S. Supreme Court. ACA is changing how health care services are covered, delivered and reimbursed through expanded coverage of individuals, changes in Medicare program spending and insurance market reforms. The ACA, along with possible other related changes at the state level, will affect both public programs and privately-financed health insurance arrangements. Both the new federal law and the state proposals will increase the number of insured persons by expanding the eligibility levels for public programs and compelling individuals and employers to purchase health coverage. Complying with the ACA has forced us to incur greater healthcare costs, and we cannot predict how our business will be affected by the full implementation of these and future actions. The ACA, in connection with state initiatives, may increase our costs, decrease our revenues, expose us to expanded liability or require us to revise the ways in which we conduct our business, any of which could adversely affect our operating

results and financial condition. Additionally, if any other employee benefit costs, such as workers’ compensation costs increase, our financial results may be negatively affected.

New laws, regulations or rules or changes in existing laws, regulations or rules could negatively affect our business.

Generally, the manufacturing, packaging, storage, distribution, advertising and labeling of our products and our business operations all must comply with extensive federal, state and foreign laws and regulations and consumer protection laws. Governmental regulations also affect taxes and levies, capital markets, healthcare

costs, energy usage, international trade, immigration and other labor issues, all of which may have a direct or indirect negative effect on our business and our customers’ and suppliers’ businesses. We cannot predict the substance or impact of pending or future legislation, regulations or rules, or the application thereof. Changes in these laws, regulations or rules, the interpretation thereof or the introduction of new laws, regulations and rules, could increase the costs of doing business for us or our customers or suppliers or restrict our actions, harm our reputation or distract management, and therefore negatively affect our business, financial condition or results of operations.

We are subject to environmental laws and regulation and potential exposure for environmental costs and liabilities.

Our operations, facilities and properties are subject to a variety of federal, state, local and foreign laws and regulations relating to health, safety and the protection of the environment. These environmental, health and safety laws and regulations include those relating to, among other things, the generation, storage, handling, use and transportation of hazardous materials; the emission and discharge of hazardous materials into the environment; and the health and safety of our employees. Specifically, we are subject to environmental laws and regulations related to paint, fiberglass, or ABS resin composite which are used in our truck caps and truck bed covers. Failure to comply with such laws and regulations can result in significant fines, penalties, costs, liabilities or restrictions on operations that could negatively affect our business, financial condition or results of operations.

Our manufacturing operations involve the handling of materials and wastes, some of which are or may be regulated as hazardous substances. We could be subject to requirements related to the remediation of, or the liability for, substances that have been or are released to the environment at properties currently or formerly owned or operated by us, at or from adjacent properties, or at properties to which we send substances for treatment or disposal. Such remediation requirements and liability may be imposed without regard to fault and damage from releases can be substantial.

Additional environmental issues relating to presently known or unknown matters could give rise to investigations, assessments or expenditures. Furthermore, through acquisitions over the years, we have acquired a number of facilities, and we could incur material costs and liabilities relating to activities that predate our ownership. In addition, future events, such as changes in existing laws and regulations or their interpretation could give rise to additional compliance costs, capital expenditures or liabilities. Compliance with more stringent laws or regulations as well as different interpretations of existing laws, more vigorous enforcement by regulators or unanticipated events could require additional expenditures that may materially affect our business, financial condition or results of operations.

Changes in privacy laws, regulations and standards may cause our business to suffer.

Personal privacy and data security have become significant issues in the United States and the framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws and regulations affecting data privacy and the use of the Internet as a commercial medium. Industry organizations also regularly adopt and advocate for new standards in this area. In the United States, these include rules and regulations promulgated under the authority of federal agencies and state attorneys general and legislatures and consumer protection agencies. In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us. One example of such self-regulatory standards to which we may be contractually bound is the Payment Card Industry Data Security Standard (“PCI DSS”). To the extent we accept and handle credit card numbers related to our online business, we may be subject to various aspects of the PCI DSS. In the

event we fail to be compliant with the PCI DSS, fines and other penalties could result. Further, our customers may require us to comply with more stringent privacy and data security requirements. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, regulations, and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business.

Our quarterly results of operations are subject to fluctuations due to the moderate seasonality of our business and other events.

Our business is moderately seasonal. Our sales can be lower during winter months as weather conditions can have an impact on consumer spending on discretionary purchases, like our products. For example, an abnormally wet and/or cold spring throughout North America such as that experienced in 2014 or any sustained period of extreme weather, could negatively impact our sales and financial results.

Fluctuations in foreign currency exchange rates could adversely affect demand for our products.

Foreign currency risk is the risk to our results of operations that arises from fluctuations in foreign currency exchange rates. A large increase in the value of the U.S. dollar relative to foreign currencies, particularly the Canadian dollar, may make our products relatively more expensive in international markets and therefore may decrease the demand and sales of our products internationally. Currently, all of our net sales and costs, including domestic and international, are denominated in U.S. dollars. However, to the extent our sourcing strategy changes or we commence generating net sales outside of the United States and Canada that are denominated in currencies other than the U.S. dollar, our results of operations could be impacted by changes in exchange rates.

We may be increasingly exposed to risks associated with conducting business internationally.

We currently have a small international presence, but we may look to grow in international markets in the future. If we do increase our presence in international markets, we will be exposed to increased risks inherent in conducting business outside of the United States. In addition to foreign currency risks, these risks include:

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increased difficulty in protecting our intellectual property rights and trade secrets;

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changes in tax laws and the interpretation of those laws;

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exposure to local economic conditions;

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unexpected government action or changes in legal or regulatory requirements;

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geopolitical regional conflicts, terrorist activity, political unrest, civil strife, acts of war and other political uncertainty;

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changes in tariffs, quotas, trade barriers and other similar restrictions on sales;

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the effects of any anti-American sentiments on our brands or sales of our products;

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increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions, including but not limited to the U.S. Foreign Corrupt Practices Act, local international environmental, health and safety laws, and increasingly complex regulations relating to the conduct of international commerce;

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increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for our foreign operations; and

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increased difficulty in staffing and managing foreign operations or international sales.

Any adverse change in any of these conditions could have a negative effect upon our business, financial conditions or results of operations.

We are subject to taxation risks and could be subject to additional income tax liabilities.

We are subject to income taxes in the United States (federal and state) and Canada. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our effective tax rates could be adversely affected by a tax authority challenging a position taken by the company, earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, losses incurred in jurisdictions for which we are not able to realize the related tax benefit, entry into new businesses and geographies and changes to our existing businesses, acquisitions (including integrations) and investments, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. We are also subject to audit in various jurisdictions, and such jurisdictions may assess additional income tax liabilities against us.

Although we believe our tax estimates are reasonable, the final outcome of any tax audits, investigations, and related litigation could be materially different from our historical income tax provisions and accruals. Developments in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.

Our business and users may be subject to sales tax and other taxes.

The application of indirect taxes (such as sales and use tax, value-added tax, goods and services tax, business tax and gross receipt tax) to e-commerce businesses and to our customers is a complex and evolving issue. Many of the fundamental statutes and regulations that impose these taxes were established before the adoption and growth of the internet and e-commerce. In many cases, it is not clear how existing statutes apply to the internet or e-commerce. In addition, governments are increasingly looking for ways to increase revenues, which has resulted in discussions about tax reform and other legislative action to increase tax revenues, including through indirect taxes.

Several proposals have been made at the U.S. federal and state and local levels that would impose additional taxes on the sale of goods and services over the internet. These proposals, if adopted, could substantially impair the growth of e-commerce and our brands, and could diminish our opportunity to derive financial benefit from our activities. While the U.S. federal government’s moratorium on state and local taxation of internet access or multiple or discriminatory taxes on e-commerce has been extended through December 2015, this moratorium does not prohibit federal, state or local authorities from collecting taxes on our income or from collecting certain taxes that were in effect prior to the enactment of the moratorium and/or one of its extensions. It is also possible that national legislation may be enacted requiring online retailers with greater than $1 million in sales in a state, but without any physical presence in the state, to begin collecting sales taxes for that state. The enactment of any such state or federal laws may impair the growth of e-commerce and discourage the registration or renewal of domain names for e-commerce.

In certain jurisdictions, we collect and remit indirect taxes. However, tax authorities may raise questions about our obligation to collect and remit such taxes, as well as the proper calculation of such taxes. Should any new taxes become applicable or if the taxes we pay are found to be deficient, our business could be harmed.

A taxing authority may seek to impose a tax collection, reporting or record-keeping obligation on companies that engage in or facilitate e-commerce. Any failure by us to meet these requirements could result in substantial monetary penalties and other sanctions and could harm our business. Taxing authorities may also seek to impose tax collection or reporting obligations based on the location of the product or service being sold or provided in an e-commerce transaction, regardless of where the respective users are located. Some jurisdictions could assert that we are responsible for tax on the underlying goods or services sold on our sites. Imposition of a discriminatory record keeping or tax collecting requirement could decrease seller activity on our sites and would harm our business.

Changes to accounting rules and regulations may adversely affect our results of operations, financial position and cash flows.

Changes to existing accounting rules or regulations may impact our future results of operations. New accounting rules or regulations and varying interpretations of existing accounting rules and regulations have occurred and may occur in the future. For instance, accounting regulatory authorities have indicated that they may begin to require lessees to capitalize operating leases in their financial statements in the next few years. If adopted, such a change would require us to record a significant amount of lease-related assets and liabilities on our balance sheet and make other changes to the recording and classification of lease-related expenses in the consolidated statements of operations and cash flows, and may cause the perception that we are more highly leveraged. In addition, as discussed in Note 2 to our consolidated financial statements included elsewhere in this prospectus, accounting authorities issued a new revenue standard during 2014 and we are still evaluating the impact of this new standard. These and other future changes to accounting rules or regulations, or the questioning of current accounting practices, may adversely affect our results of operations, financial position and cash flows.

Acts of terrorism, effects of war, public health, natural disasters, other catastrophes or political unrest could have a material adverse effect on our business.

The threat, or actual acts, of terrorism continue to be a risk to the global economy. Terrorism and potential military responses, political unrest, earthquakes and other natural disasters, pandemics or other health issues have disrupted or could disrupt commerce, impact our ability to operate our businesses in the affected areas or impact our ability to provide critical functions or services necessary to the operation of our business. A disruption of commerce, or an inability to recover critical functions or services from such a disruption, could interfere with the production, shipment or receipt of our merchandise in a timely manner or increase our costs to do so, which could have a material adverse impact on our results of operations, financial position and cash flows. In addition, any of the above disruptions could undermine consumer confidence, which could negatively impact consumer spending, and thus have an adverse effect on our results of operations.

Risks related to this offering and ownership of our common stock

There has been no prior market for our common stock and an active market may not develop or be sustained, and you may not be able to resell your shares at or above the initial public offering price, if at all.

There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined through negotiations among the representatives of the underwriters, the selling stockholders and us and may vary from the market price of our common stock following this offering. If you purchase shares of our common stock in this offering, you may not be able to resell those shares at or above the initial public offering price. An active or liquid market in our common stock may not develop upon closing of this offering or, if it does develop, it may not be sustainable, which could adversely affect your ability to sell your shares and could depress the market price of our common stock.

Our stock price may be volatile and may decline regardless of our operating performance, resulting in substantial losses for investors purchasing shares in this offering.

The stock market in general, and the trading prices of securities of growth companies in particular, have been extremely volatile. Any fluctuations in the price of our common stock may be unrelated to our operating performance. The market price of our common stock could be subject to significant fluctuations in response to many factors, including:

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actual or anticipated fluctuations in our operating results;

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the financial guidance we may provide to the public, any changes in this guidance or our failure to meet this guidance;

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failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

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ratings changes by any securities analysts who follow our company;

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announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

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changes in macroeconomic conditions, pickup truck sales or fuel prices;

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changes in operating performance and stock market valuations of other companies in our industry or related industries in general;

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price and volume fluctuations in the overall stock market from time to time, including as a result of trends in the economy as a whole;

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changes in accounting standards, policies, guidelines, interpretations, or principles;

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actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;

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developments or disputes concerning our intellectual property or our products, or third-party proprietary rights;

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new laws or regulations or new interpretations of existing laws, or regulations applicable to our business;

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any change in our board of directors or management;

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sales, or anticipated sales, of shares of our common stock by us or our stockholders;

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lawsuits threatened or filed against us; and

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other events or factors, including those resulting from war, incidents of terrorism, or responses to these events.

Historically, securities class action litigation has increased following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business.

We identified two material weaknesses in our internal controls over financial reporting in connection with our 2014 audit and the review of our unaudited financial results as of and for the nine months ended September 30, 2015. If we fail to remediate these material weaknesses and otherwise establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), these material weaknesses could have a material adverse effect on our business and stock price.

In connection with our 2014 audit and the review of our unaudited financial results as of and for the nine months ended September 30, 2015, we identified two material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The first identified material weakness in our internal controls over financial reporting was a weakness in our accounting for complex transactions, including accounting for business combinations, stock-based compensation and uncertain tax positions. The second identified material weakness was a weakness in our information technology systems with respect to financial information and our controls over user access to such systems, segregation of duties, backup controls and change management with respect to such systems. As a result of these material weaknesses, our ability to report our financial results on a timely and accurate basis may be adversely affected and investors may lose confidence in our financial information, which in turn could adversely affect the market price of our common stock.

We are in the process of developing a remediation plan with respect to each of these material weaknesses along with developing and evaluating our other internal controls. We cannot predict the success of our remediation plan or the outcome of our review at this time. During the course of the review we may identify additional control deficiencies, which could give rise to other material weaknesses in addition to the two previously identified.

As a public company, we will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404, which will require, beginning with our Annual Report on Form 10-K for the year ended December 31, 2016, annual management assessments of the effectiveness of our internal control over financial reporting. Additionally, as of the later of the filing of such Annual Report and the date we are no longer an “emerging growth company” we will require a report by our independent registered public accounting firm that addresses the effectiveness of our internal control over financial reporting. During the course of our testing, we may identify deficiencies that we may not be able to remediate in time to meet our deadline for compliance with Section 404.

Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. We also expect the regulations to increase our legal and financial compliance costs, make it more difficult to attract and retain qualified executive officers and members of our board, particularly to serve on our audit committee, and make some activities more difficult, time-consuming and costly. We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 and, when applicable to us, our independent registered public accounting firm may not be able to issue an unqualified report on the effectiveness of our internal control over financial reporting. If we conclude that our internal control over financial reporting is not effective, we cannot give any assurance as to the timing of completion of our evaluation, testing and remediation actions or their effect on our operations.

The unaudited pro forma condensed consolidated financial information included in this prospectus contains financial information that has not been audited or reviewed by an independent registered public accounting firm, and accordingly may differ significantly from the actual consolidated financial information had it been so audited or reviewed.

The unaudited pro forma condensed consolidated financial information presented in this prospectus contains a variety of adjustments, assumptions and estimates, is subject to numerous other uncertainties and the assumptions and adjustments as described in the notes thereto, and should not be relied upon as being indicative of our results of operations had the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions occurred on the date assumed.

In addition, the financial information of THI E-Commerce for the year ended December 31, 2014 and for the period between January 1, 2015 and March 9, 2015 (the date of acquisition), A.R.E. for the period between January 1, 2015 and April 29, 2015 (the date of acquisition), and RealTruck for the year ended December 31, 2014 and period between January 1, 2015 and April 21, 2015 (the date of acquisition) has not been audited or reviewed by an independent registered public accounting firm, but is derived from the pre-acquisition accounting records of such entities. Accordingly, the financial information of THI E-Commerce, A.R.E. and RealTruck for those periods that has been used to calculate the pro forma financial information contained in this prospectus may differ significantly from any actual consolidated financial information had it been audited or reviewed by an independent registered public accounting firm. See “Unaudited pro forma condensed consolidated financial information.”

We will incur significant expenses as a result of being a publicly traded company, and our management will be required to devote substantial time to new compliance matters, which could reduce our earnings or make it more difficult to run our business.

As a public company we expect to incur significant legal, accounting, insurance and other expenses that we do not currently incur as a private company. Compliance with the Sarbanes-Oxley Act of 2002 and the rules implemented by the SEC and the stock exchanges requires changes to our corporate governance practices that did not apply to us before becoming a public company. In addition, the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will require, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. Our compliance with these laws, rules and regulations has increased, and will continue to increase, our expenses, including legal and accounting costs, and has made, and will continue to make, some of our operations more costly and time consuming. Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements. In addition, it may also be more difficult for us to find and retain qualified persons to serve on our board of directors or as executive officers and to obtain director and officer liability insurance. Further, any additional expenses in legal, accounting, insurance and other related expenses could reduce our earnings and have a material adverse effect on our financial condition and results of operations. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

If securities or industry analysts do not publish, or cease publishing, research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by whether industry or securities analysts publish research and reports about us, our business, our market or our competitors and, if any analysts do publish such reports, what they publish in those reports. We may not obtain analyst coverage in the future. Any analysts that do cover us may make adverse recommendations regarding our stock, adversely change their recommendations from time to time or provide more favorable relative recommendations about our

competitors. If any analyst who may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, or if analysts fail to cover us or publish reports about us at all, we could lose, or never gain, visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Concentration of ownership among a small group of investors and their affiliates and our New Stockholders Agreement with TA Associates may prevent new investors from influencing significant corporate decisions.

Following this offering, TA Associates will own approximately 52.0% of our issued and outstanding common stock, (or 48.8% if the underwriters exercise their option to purchase additional shares in full). As a result, TA Associates has, and will retain, the ability to exercise a significant level of control over the appointment of our management, the entering into of mergers, sales of substantially all of our assets and other significant corporate transactions and amendments to our certificate of incorporation, among other things. This concentration of our ownership may delay or deter possible changes in control of the company, which may reduce the value of an investment in our common stock. The interests of these stockholders could conflict with the interests of other holders of our common stock.

In addition, we and entities affiliated with TA Associates intend to enter into the New Stockholders Agreement in connection with this offering. Under our New Stockholders Agreement, TA Associates will have the right to nominate three of the members of our board of directors if TA Associates owns at least 50% or more of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares, two members of our board of directors if TA Associates owns between 25% and 50% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares and one member of our board of directors if TA Associates owns between 12.5% and 25% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares.

Our New Stockholders Agreement will also provide that so long as the entities affiliated with TA Associates hold at least 25% of the shares they hold immediately following the consummation of this offering regardless of the percentage such shares represent of our total outstanding shares, we, and our subsidiaries, shall not take the following actions (or enter into an agreement to or commit to take such actions) without the approval of at least one director nominated by TA Associates:

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increase or decrease the authorized number of members of our board of directors;

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amend our amended and restated certificate of incorporation or amended and restated bylaws or the organizational documents of any of our subsidiaries;

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issue, create or assume any debt or equity security or debt obligation of the company or any of its subsidiaries or the assets of either, or refinance, repurchase or prepay any security (other than repurchases of our common stock in accordance with agreements previously approved by our board of directors, including at least one director nominated by TA Associates) or debt obligation;

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pay or declare any dividend or make any distribution on, or repurchase or redeem shares of our common stock (other than repurchases of our common stock in accordance with agreements previously approved by our board of directors, including at least one director nominated by TA Associates);

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effect any sale, liquidation or dissolution of the company, or sell, transfer or otherwise dispose of any of the material assets or properties of the company or any of its subsidiaries, or merge with or into, or consolidate with, another entity or effect any recapitalization, reorganization, change of form of organization, forward or reverse split, dividend or similar transaction;

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acquire any corporation, business concern or other material assets or property for consideration in excess of $15,000,000, whether by acquisition of assets, capital stock or otherwise, and whether in consideration of the payment of cash, the issuance of capital stock or otherwise or make any investment in any person or entity in an amount in excess of $15,000,000;

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hire or terminate any of our executive officers, or enter into, amend or modify, extend or waive or fail to enforce any material term of any employment agreement or material term of employment with any of our executive officers; or

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take any action to initiate, to cause or that would result in, the voluntary bankruptcy, insolvency, dissolution, liquidation or winding up or termination of the company or any of its subsidiaries (or the business or affairs thereof) or confess judgment against the company or any of its subsidiaries or make an assignment for the benefit of the creditors of all or substantially all of the assets of the company or its subsidiaries.

Accordingly, our New Stockholders Agreement may limit our ability to engage in significant transactions, such as a merger, acquisition or liquidation. Conflicts of interest could arise between us and TA Associates, and any conflict of interest may be resolved in a manner that does not favor us. Any decision that TA Associates may make at some future time regarding their ownership of us will be in their absolute discretion.

In the ordinary course of their business activities, TA Associates and its affiliates may engage in activities where their interests conflict with our interests or those of our stockholders. TA Associates and its affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, TA Associates may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution in the pro forma net tangible book value per share after giving effect to this offering of $28.28 per share as of September 30, 2015, based on an assumed initial public offering price of $18.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, because the price that you pay will be substantially greater than the pro forma as adjusted net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. You will experience additional dilution upon exercise of options to purchase common stock under our equity incentive plans, if we issue restricted stock to our employees under our equity incentive plans or if we otherwise issue additional shares of our common stock. For a further description of the dilution that you will experience immediately after this offering, see “Dilution.”

Future sales, or the perception of future sales, of our common stock by our existing stockholders could depress the market price of our common stock.

The market price for our common stock could decline as a result of the sale of substantial amounts of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares. Based on the number of shares outstanding as of September 30, 2015, upon completion of this offering, we will have outstanding approximately 39,431,536 shares of common stock. Of the outstanding shares, 11,111,112 shares sold or issued in this offering (or 12,777,778 shares if the underwriters exercise their option to purchase additional shares) will be freely tradeable without

restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”) , except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, may be sold only in compliance with the limitations described in “Shares eligible for future sale.”

The remaining outstanding 28,320,424 shares of our common stock held by our existing stockholders after this offering will be subject to certain restrictions on resale. We, our executive officers, directors and all our existing stockholders, including the selling stockholders, have signed lock-up agreements more fully described in “Underwriting” with the underwriters that will, subject to certain limited exceptions, restrict the sale of the shares of our common stock and certain other securities convertible into or exchangeable or exercisable for shares of our common stock for 180 days following the date of this prospectus. J.P. Morgan Securities LLC may, in its sole discretion and at any time without notice, permit our officers, directors and existing stockholders to sell their shares prior to the expiration of the lock-up agreements.

Upon the expiration of the lock-up agreements described above, all of such 28,320,424 shares will be eligible for resale in a public market, subject, in the case of shares held by our affiliates, to volume, manner of sale and other limitations under Rule 144. We expect that TA Associates will be considered an affiliate 180 days after this offering based on their expected share ownership (consisting of 20,509,426 shares), as well as their board nomination rights. Certain other of our stockholders may also be considered affiliates at that time.

Upon completion of this offering, holders of an aggregate of 28,320,424 shares of our common stock as of September 30, 2015 or their transferees, will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or our stockholders. Substantially all of these shares are subject to the 180-day contractual lock-up agreements referred to above. In addition, the shares of common stock subject to outstanding options under our equity incentive plans and the shares reserved for future issuance under our equity incentive plans will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. We intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of our common stock that may be issued or reserved under our equity incentive plans. See “Shares eligible for future sale” for a more detailed description of sales that may occur in the future.

If a substantial number of shares are sold, or if it is perceived that they will be sold, in the public market before or after the expiration of the 180-day contractual lock-up period, the trading price of our common stock could decline substantially. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

Because we do not anticipate paying any dividends on our common stock in the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than the price you paid.

We currently intend to retain our future earnings to support operations and to finance expansion and, therefore, we do not anticipate paying any cash dividends to holders of our common stock in the foreseeable future. Further, our existing credit facility contains certain limitations on our ability to pay such dividends. In addition, any future financing or credit agreements may prohibit us from paying any type of dividends. The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors. Our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our existing credit facility and other indebtedness we may incur, and such other factors as our board of directors may deem relevant.

As a result, any gain on an investment in shares of our common stock will depend upon any future appreciation in its value. Investors may need to sell all or part of their holdings of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. Investors seeking cash dividends should not purchase our common stock.

We are a holding company and rely on dividends and other payments, advances and transfers of funds from our subsidiaries to meet our obligations and pay any dividends.

We have no direct operations and no significant assets other than ownership of 100% of the capital stock of our subsidiaries. Because we conduct our operations through our subsidiaries, we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations, and to pay any dividends with respect to our common stock. Legal and contractual restrictions in our credit facilities and other agreements which may govern future indebtedness of our subsidiaries, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. The earnings from, or other available assets of, our subsidiaries might not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or other obligations. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and cash flows.

Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

In addition to the concentration of ownership described under “—Concentration of ownership among a small group of investors and their affiliates and our New Stockholders Agreement with TA Associates may prevent new investors from influencing significant corporate decisions,” which will limit any attempt to acquire control of our company not supported by these significant stockholders, our certificate of incorporation, bylaws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors. Our organizational documents provide the following:

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authorize “blank check” preferred stock, which could be issued by the board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

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create a classified board of directors whose members serve staggered three-year terms;

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specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of the board, the chief executive officer or the president;

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prohibit stockholder action by written consent;

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establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

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provide that our directors may be removed with or without cause and only by the affirmative vote of 75% or more of the outstanding shares then entitled to vote in the election of directors;

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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

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specify that no stockholder is permitted to cumulate votes at any election of directors;

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authorize our board of directors to modify, alter or repeal our amended and restated bylaws; and

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require supermajority votes of the holders of our common stock to amend specified provisions of our charter documents.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we will also be subject to provisions of Delaware law, including Section 203 of the General Corporation Law of the State of Delaware. Section 203 prevents some stockholders holding more than 15% of our voting stock from engaging in certain business combinations unless the business combination or the transaction that resulted in the stockholder becoming an interested stockholder was approved in advance by our board of directors, results in the stockholder holding more than 85% of our voting stock, subject to certain restrictions, or is approved at an annual or special meeting of stockholders by the holders of at least 66 2/3% of our voting stock not held by the stockholder engaging in the transaction. Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation will provide that, with certain limited exceptions, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any stockholder (including any beneficial owner) to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of, or a claim based on, breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder to us or our stockholders, (iii) any action asserting a claim against us or any current or former director, officer, employee or stockholder arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws or (iv) any action asserting a claim against us or any current or former director, officer, employee or stockholder (including any beneficial owner of stock) governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the foregoing provisions. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

Failure to raise additional equity capital if needed could reduce our ability to compete and could harm our business, while any successful equity financings will result in dilution of our current stockholders’ ownership interests.

We may need to raise additional capital in the future, and we may not be able to obtain additional equity financing on favorable terms, if at all. To the extent that we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests, and the per share value of our common stock could decline. If we need to raise additional capital and to the extent that we cannot raise it on acceptable terms, we may not, among other things, be able to:

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continue to expand our product development operations and sales and marketing organization;

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expand operations both organically and through acquisitions; or

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respond to competitive pressures or unanticipated working capital requirements.

Any one of these factors could materially adversely affect our business, results of operations and financial condition.

Our management will have broad discretion over the use of the net proceeds from this offering and might not apply the proceeds of this offering in ways that increase the value of your investment.

Our management will have broad discretion over the use of the net proceeds from this offering. We expect to use the net proceeds from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds to expand our current business through acquisitions of other businesses, products and technologies or investments. We have not entered into any agreements or commitments with respect to any acquisitions or investments at this time. Until we use the net proceeds from this offering, we plan to invest them in short-term investments, and these investments may not yield a favorable rate of return. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

We are an “emerging growth company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements to obtain a non–binding advisory vote on executive compensation and stockholder approval of any golden parachute arrangements. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest to occur of: the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; the date we qualify as a “large accelerated filer”, with at least $700 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or the last day of the fiscal year ending after the fifth anniversary of this public offering.

Under Section 107(b) of the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Special note regarding forward-looking statements

This prospectus contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus include, but are not limited to, statements about:

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our future financial performance, including net sales, cost of goods sold, gross profit, gross profit percentage, operating expenses, ability to generate positive cash flow and ability to maintain positive net income;

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changes in fuel prices, consumer confidence, consumer discretionary spending and general economic conditions;

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our ability to respond effectively to changes in market trends and consumer preferences;

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our ability to maintain our network of sales and distribution channels;

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our ability to successfully maintain relationships with key customers and suppliers;

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competition in our markets and our ability to successfully compete for new and existing customers;

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our ability to innovate and improve our products to meet customer needs and expectations;

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the availability and volatility of raw materials and labor;

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our assumptions regarding product recalls, product liability and warranty claims, taxes, litigation and other contingent liabilities and our ability to manage these risks;

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our ability to maintain, protect and enhance our intellectual property;

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our dependence on senior management and ability to attract and retain qualified employees and key personnel;

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our use of the net proceeds of this offering;

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our principal stockholders’ ability to exert significant influence over us;

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the increased expenses and administrative workload associated with being a public company;

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our ability to remediate the material weaknesses in our internal controls over financial reporting;

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our substantial indebtedness and the restrictions imposed by our indebtedness on current and future operations; and

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changes in laws and regulations applicable to our business.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “could,” “would,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “target,” “potential,” “continue,” “likely,” “seek” or the negative of these terms or other

comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk factors” and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.

Corporate structure

The diagram below depicts our organizational structure immediately after the consummation of this offering.

LOGO

Use of proceeds

We estimate that the net proceeds to us from the sale of 5,555,556 shares of common stock in this offering will be approximately $88.0 million based upon an assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

A $1.00 increase (decrease) in the assumed initial public offering price of $18.00 per share would increase (decrease) the net proceeds to us from this offering by approximately $5.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015). Similarly, each increase (decrease) of one million shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $16.7 million, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock and facilitate our future access to the public equity markets.

We intend to use approximately $57.0 million of the net proceeds that we receive from this offering to repay all of the indebtedness outstanding under our Second Lien Credit Facility, including accrued interest, applicable prepayment premium payments and related costs and expenses. We intend to use approximately $3.0 million of the net proceeds that we receive from this offering to repay a portion of the indebtedness outstanding under the revolving credit facility under our First Lien Credit Facility.

Our First Lien Credit Facility matures on July 28, 2020. Loans under the revolving credit facility of our First Lien Credit Facility bear interest at (i) LIBOR plus 3.0% or (ii) the prime rate plus 4.0%, with a LIBOR rate floor of 1.00% and a prime rate floor of 1-month LIBOR plus 1.00%. Loans under the term loan facility of our First Lien Credit Facility bear interest at (i) LIBOR plus 5.5% or (ii) the prime rate plus 4.5%, with a LIBOR rate floor of 1.00%. On April 24, 2015, we amended our First Lien Credit Facility to increase our borrowings under that facility by $38.0 million and we used the net proceeds from those additional borrowings in connection with the 2015 Acquisitions. Our Second Lien Credit Facility matures on January 28, 2021. Loans under the Second Lien Credit Facility bear interest, at our option, at (i) LIBOR plus 8.75% or (ii) the prime rate plus 7.75%, with a LIBOR rate floor of 1.00% and a prime rate floor of 1-month LIBOR plus 1.00%.

We currently intend to use $28 million of net proceeds that we receive from this offering to pay the applicable cash consideration in connection with our acquisition of N-FAB. We currently intend to use any remaining net proceeds that we receive from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds for future acquisitions or investments, however we have not entered into any agreements or commitments with respect to any acquisitions or investments at this time, other than our planned acquisition of N-FAB.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit, or direct or guaranteed obligations of the U.S. government.

Dividend policy

Except as described below, we have not declared or paid a cash dividend on our capital stock. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. The credit agreements governing our Credit Facilities prohibit the payment of any cash dividends without obtaining the prior written consent of the lenders representing a majority of the outstanding principal under the applicable credit agreements.

In March 2014, the Predecessor made a $75.0 million distribution to its stockholders in connection with additional borrowings under the Predecessor’s credit facility.

We do not currently intend to declare or pay any cash dividends in the foreseeable future.

Capitalization

The following table sets forth our cash, cash equivalents and capitalization as of September 30, 2015:

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on an actual basis;

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on an as adjusted basis to give effect to (i) the conversion of all outstanding shares of convertible preferred stock as of September 30, 2015 into an aggregate of 32,043,061 shares of common stock (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus)), which conversion shall occur immediately prior to the completion of this offering, as if such conversion had occurred on September 30, 2015 and (ii) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the closing of this offering; and

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on an as further adjusted basis to give effect to the adjustments above and to (i) the issuance by us of shares and the sale by us and the selling stockholders of 11,111,112 shares of common stock in this offering at an assumed initial public offering price of $18.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus and (ii) the application of the net proceeds received by us from this offering as described under “Use of Proceeds,” after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

You should read the following table together with “Summary consolidated financial and other data,” “Selected consolidated financial data,” “Management’s discussion and analysis of financial condition and results of operations,” “Risk factors,” “Description of capital stock,” and the consolidated financial statements and related notes appearing elsewhere in this prospectus.


	As of September 30, 2015
	Actual			As adjusted(1)(2)			As further adjusted(1)(2)(3)
(in thousands, except share and per share amounts)	(unaudited)
Cash and cash equivalents	$	22,645		$	22,645		$	22,645

Debt(4)
Revolving facility(5)		15,000			15,000			12,033
First lien facility		377,910			377,910			377,910
Second lien facility(5)		56,500			56,500			—
Unamortized debt discount		(10,178	)		(10,178	)		(8,907	)

Total debt		439,232			439,232			381,036

Convertible preferred stock (Series A and Series A-1), $0.001 par value; 20,195,000 shares authorized and 19,592,342 shares issued and outstanding, actual; no shares authorized, issued or outstanding, as adjusted and as further adjusted		224,112			—			—

Stockholders’ equity (deficit):
Non-controlling interest		4,445			4,445			4,445
Preferred stock, $0.001 par value; no shares authorized, issued or outstanding, actual; 10,000,000 shares authorized and no shares issued or outstanding, as adjusted and as further adjusted		—			—			—
Common stock, $0.001 par value; 22,820,000 shares authorized, 1,832,919 issued and outstanding, actual; 22,820,000 shares authorized and 33,875,980 shares issued and outstanding, as adjusted; 300,000,000 shares authorized and 39,431,536 shares issued and outstanding, as further adjusted		—			32			38
Additional paid-in capital		1,359			225,439			311,733
Retained earnings(6)		16,093			16,093			14,257

Total stockholders’ equity (deficit)		21,897			246,009			330,473

Total capitalization	$	685,241		$	685,241		$	711,509

(1)

The as adjusted and as further adjusted columns in the table above excludes (i) 4,400,000 shares of our common stock reserved for future issuance under our 2015 Stock Option and Incentive Plan, which will become effective upon completion of this offering, (ii) 43,400 shares of our common stock issuable upon exercise of options to purchase shares of our common stock granted after September 30, 2015, with an exercise price of $16.91 per share and (iii) 118,238 shares of our common stock issuable to the sellers of N-FAB upon the closing of the N-FAB acquisition.

(2)

Assumes the Conversion of all of our convertible preferred stock into common stock at an initial public offering price per share of $18.00 (the midpoint of the estimated price range set forth on the cover page of this prospectus). See “Prospectus summary—The offering” for additional information.

(3)

The as further adjusted information above is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the amount of cash and cash equivalents, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization on an as further adjusted basis by approximately $5.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015). Similarly, each increase (decrease) of one million shares offered by us would increase (decrease) cash and cash equivalents, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization on an as further adjusted basis by approximately $16.7 million, assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

(4)

As of September 30, 2015, there were $15 million in borrowings under our revolving credit facility and $14.3 million was available for borrowing after taking into account $0.7 million of outstanding letters of credit. Our revolving credit facility matures on July 28, 2020.

(5)

(6)

The As further adjusted column reflects (i) $1.3 million of unamortized debt discount expensed in connection with the repayment of our Second Lien Credit Facility and (ii) $0.6 million in prepayment premium payments to be paid in connection with the repayment of our Second Lien Credit Facility.

Dilution

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Dilution results from the fact that the per share offering price of our common stock is substantially in excess of the book value per share attributable to our existing investors. We calculate net tangible book value per share by dividing the net tangible book value (total tangible assets less total liabilities) by the number of outstanding shares of our common stock.

The historical net tangible book value of our common stock as of September 30, 2015 was $(465.4) million, or $(253.92) per share, based on 1,832,919 shares of common stock outstanding as of September 30, 2015.

The pro forma net tangible book value of our common stock as of September 30, 2015 was $(465.4) million, or approximately $(13.74) per share of common stock, based on 33,875,980 shares of our common stock outstanding, after giving effect to the conversion of all 19,592,342 outstanding shares of convertible preferred stock into 32,043,061 shares of common stock immediately prior to the closing of this offering, based on the assumed initial public offering price of $18.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus.

After giving further effect to our sale of 5,555,556 shares in this offering at an assumed initial public offering price of $18.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015), our pro forma as adjusted net tangible book value as of September 30, 2015 would be $(405.4) million, or $(10.28) per share. This represents an immediate increase in net tangible book value of $3.46 per share to existing stockholders and an immediate dilution in net tangible book value of $28.28 per share to purchasers of common stock in this offering, as illustrated in the following table:


Assumed initial public offering price per share				$	18.00
Pro forma net tangible book value per share as of September 30, 2015	$	(13.74	)
Increase in net tangible book value per share attributable to new investors		3.46

Pro forma as adjusted net tangible book value per share at September 30, 2015 after giving effect to the offering				$	(10.28	)

Dilution in pro forma as adjusted net tangible book value per share to new investors				$	28.28

A $1.00 increase (decrease) in the assumed initial public offering price of $18.00 per share would increase (decrease) the dilution to new investors by $0.87 per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015). Similarly, each increase (decrease) of one million shares offered by us would increase (decrease) the dilution to new investors by $(0.67) per share, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

The following table summarizes, on a pro forma as adjusted basis as of September 30, 2015, the differences between the number of shares of common stock purchased from us, the total consideration and the average price per share paid by existing stockholders and by investors participating in this offering, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015), at an assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus.


	Shares purchased				Total consideration				Average price / share
	Number		Percent		Amount		Percent		Average price / share
Existing stockholders		33,875,980		85.9%	$	224,243,634		69.2%	$	6.62
New investors		5,555,556		14.1		100,000,008		30.8		18.00

Total		39,431,536		100%	$	324,243,642		100%	$	8.22

The above discussion and tables are based on 33,875,980 shares of common stock issued and outstanding as of September 30, 2015 and also reflects the conversion of all outstanding shares of convertible preferred stock into an aggregate of 32,043,061 shares of common stock (assuming an initial public offering price of $18.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus)) immediately prior to the completion of this offering, and excludes (i) 4,400,000 shares of our common stock reserved for future issuance under our 2015 Stock Option and Incentive Plan, which will become effective upon completion of this offering, (ii) 43,400 shares of our common stock issuable upon exercise of options to purchase shares of our common stock granted after September 30, 2015, with an exercise price of $16.91 per share and (iii) 118,238 shares of our common stock issuable to the sellers of N-FAB upon the closing of the N-FAB acquisition.

A $1.00 increase (decrease) in the assumed initial public offering price of $18.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by approximately $5.6 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us (excluding $1.7 million of offering expenses paid by us prior to September 30, 2015).

If the underwriters exercise their option to purchase additional shares in full, the number of shares of common stock held by existing stockholders will be reduced to 67.4% of the total number of shares of common stock to be outstanding after this offering, and the number of shares of common stock held by investors participating in this offering will be further increased to 12,777,778, or 31.1% of the total number of shares of common stock to be outstanding after this offering.

To the extent that outstanding options are exercised, you will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our stockholders.

Unaudited pro forma condensed consolidated financial information

The unaudited pro forma condensed consolidated statements of income for the fiscal year ended December 31, 2014 and the nine months ended September 30, 2014 and 2015 present our consolidated results of operations giving pro forma effect to the BAK Acquisition on March 12, 2014, the TA Acquisition on July 28, 2014, and the 2015 acquisitions (collectively, the “2015 Acquisitions”) of A.R.E. on April 24, 2015, THI E-Commerce (parent of Auto Customs) on March 9, 2015 and RealTruck on April 21, 2015, as if such transactions had occurred on January 1, 2014. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions on the historical financial information of our Predecessor and Successor entities, as applicable. Our management is continuing to review the amounts and allocations to finalize these amounts with respect to the 2015 Acquisitions. We have a maximum of one year from the date of completion of a transaction to finalize these amounts with respect to such transaction and are therefore continuing to review the valuations and contractual obligations of the 2015 Acquisitions. The unaudited pro forma condensed consolidated financial information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and the historical consolidated financial statements and related notes included elsewhere in this prospectus.

The unaudited pro forma consolidated financial information is included for informational purposes only and does not purport to reflect the results of operations of Truck Hero, Inc. that would have occurred had each of the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions occurred on January 1, 2014. The unaudited pro forma consolidated financial information contains a variety of adjustments, assumptions and estimates, is subject to numerous other uncertainties and the assumptions and adjustments as described in the accompanying notes hereto and should not be relied upon as being indicative of our results of operations had the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations for any future period or date.

The pro forma adjustments give effect to the following items in connection with the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions:

•

the asset and liability valuations associated with the TA Acquisition and the 2015 Acquisitions;

•

the effect of the incurrence of a $343.5 million First Lien Credit Facility and a $56.5 million Second Lien Credit Facility in connection with the TA Acquisition;

•

the incurrence of an incremental $38.0 million under the First Lien Credit Facility increasing the First Lien Credit Facility to $381.5 million and the incurrence of $20 million borrowing under our revolving facility, each as part of the 2015 Acquisitions;

•

the effect of sales that would have been intercompany eliminations had the 2015 Acquisitions occurred at the beginning of 2014;

•

the acquisition costs associated with the BAK Acquisition, the TA Acquisition and the 2015 Acquisitions;

•

the BAK management fees related to the management agreement that was terminated in conjunction with the BAK Acquisition;

•

the elimination of the non-controlling interest in BAK that existed prior to the acquisition of BAK;

•

the compensation expense of the Predecessor that would not have been incurred if the TA Acquisition occurred at the beginning of the period; and

•

the associated income tax expense effect of the above adjustments.

The unaudited pro forma consolidated financial information does not give effect to the proposed acquisition of N-FAB.

TRUCK HERO, INC.

Unaudited pro forma condensed consolidated statement of income

For the year ended December 31, 2014


	Historical															Pro forma
	Predecessor			Successor			BAK(1)
	January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			January 1, 2014 to March 12, 2014			2015 Acquired Companies(2)			Pro forma adjustments			Year ending December 31, 2014
(In thousands, except share and per share information)
Net sales	$	131,249			$117,208		$	11,330		$	197,067		$	(20,624	)(3)		$436,230
Cost of goods sold		83,656			71,070			7,573			161,171			(20,624	)(3)		302,846

Gross profit		47,593			46,138			3,757			35,896			—			133,384
Selling, general and administrative expenses		39,233			26,894			1,051			29,156			(4,161	)(4)		92,173
Owner’s compensation		—			—			10,218			—			(10,218	)(5)		—

Income from operations		8,360			19,244			(7,512	)		6,740			14,379			41,211

Other income (expense):
Interest expense		(10,065	)		(11,441	)		—			(579	)		(10,993	)(6)		(33,078	)
Other income (expense)		251			507			(3	)		(4,383	)		—			(3,628	)

Income before taxes		(1,454	)		8,310			(7,515	)		1,778			3,386			4,505
Income tax expense (benefit)		3,005			3,929			2,200			24			1,286	(7)		10,444

Net income (loss)		(4,459	)		4,381			(9,715	)		1,754			2,100			(5,939	)
Net income (expense) attributable to non-controlling interest		—			—			(720	)		127			720	(8)		127

Net income (expense) attributable to THI stockholders		(4,459	)		4,381			(8,995	)		1,627			1,380			(6,066	)

Basic and diluted earnings (loss) per share	$	(44,590	)	$	0.21											$	(0.29	)(10)
Basic and diluted weighted-average shares outstanding		100			21,178,814									70,000	(9)		21,248,814	(10)
Supplemental diluted loss per share																$	(0.18	)(11)
Supplemental diluted weighted-average shares outstanding																	33,699,533	(11)

(1)

The amounts in this column represent the historical results of operations for BAK for the period from January 1, 2014 to March 12, 2014. The Predecessor acquired all of the issued and outstanding capital stock and other equity interests of BAK on March 12, 2014. The results of operations of BAK for all periods subsequent to March 12, 2014 are included within the Predecessor and Successor consolidated historical results of operations, as applicable.

(2)

The amounts in this column represent the historical results of operations of THI E-commerce, RealTruck and A.R.E. (the “2015 Acquired Companies”) for the full year ended December 31, 2014. As each of the acquisitions occurred subsequent to December 31, 2014, no portion of the 2015 Acquisitions are included within the Predecessor and Successor consolidated historical results of operations in 2014. Certain items have been reclassified to conform with the company’s financial statement presentation.

(3)

This adjustment reflects sales between the Predecessor or Successor and the companies acquired in the 2015 Acquisitions. Such sales would have represented intercompany eliminations had the 2015 Acquisitions occurred at the beginning of the period.

(4)

This adjustment reflects $11.1 million of incremental amortization expense associated with the allocation of purchase price to finite-lived identifiable intangible assets consisting of customer relationships, technology and trade names. This adjustment is offset by the elimination of $9.5 million of compensation expenses specific to the Predecessor that would not have been incurred had the TA Acquisition occurred at the beginning of the period and non-recurring BAK Acquisition and TA Acquisition-related expenses of $3.8 million and $2.0 million, respectively.

(5)

This adjustment reflects the exclusion of owner’s compensation specific to BAK that were associated with a management agreement which was terminated through the BAK Acquisition.

(6)

This adjustment reflects the following adjustments to increase interest expense as a result of the $343.5 million First Lien Credit Facility and the $56.5 million Second Lien Credit Facility in connection with the TA Acquisition; the incurrence of the incremental $38.0 million borrowing to the First Lien Credit Facility and the incurrence of $20.0 million borrowing under the revolving facility, each as part of the 2015 Acquisitions:



Pro forma interest expense components:
Aggregate $381.5 million First Lien Credit Facility, $56.5 million Second Lien Facility, and $20.0 million revolving loan interest expense (weighted-average rate of 6.8% based on one-month LIBOR)	$	31,014
Amortization of debt discount associated with the credit facilities amortized over six years		2,064

Total pro forma interest expense		33,078
Less: actual interest expense for the period		22,085

Net pro forma adjustment to interest expense	$	10,993

(7)

Reflects the estimated statutory tax rate of 38%.

(8)

This adjustment reflects the removal of BAK non-controlling interest for periods prior to the acquisition.

(9)

As part of the RealTruck acquisition consideration, Truck Hero, Inc. issued 70,000 Series A-1 Preferred shares to the previous owner.

(10)

Amounts for the successor and pro forma periods represent diluted earnings per share only. Basic earnings (loss) per share are not presented as there would have been no common shares outstanding due to contingent repurchase provisions if the TA Acquisition had occurred on January 1, 2014. See footnote 1 to our audited consolidated financial statements included elsewhere in this prospectus.

(11)

Supplemental diluted weighted-average shares outstanding gives effect to the issuance of 12,450,719 shares relating to the conversion of preferred shares in connection with the offering based on an assumed initial public offering price of $18.00 per share. Supplemental pro-forma earnings per share does not include the assumed proceeds of the offering.

TRUCK HERO, INC.

Unaudited pro forma condensed consolidated statement of income

For the nine months ended September 30, 2015


	Historical									Pro forma
	Nine months ended September 30, 2015(1)			2015 Acquired Companies(2)			Pro forma adjustments			Nine months ended September 30, 2015
(In thousands, except share and per share information)
Net sales		$322,989		$	59,917		$	(4,515	)(3)		$378,391
Cost of goods sold		211,231			48,423			(4,515	)(3)		255,139

Gross profit		111,758			11,494			—			123,252
Selling, general and administrative expenses		69,477			8,893			(601	)(4)		77,769

Income from operations		42,281			2,601			601			45,483

Other income (expense):
Interest expense		(24,075	)		(185	)		(337	)(5)		(24,597	)
Other income		(420	)		32			—			(388	)

Income before taxes		17,786			2,448			264			20,498
Income tax expense (benefit)		5,601			13			101	(6)		5,715

Net income		12,185			2,435			163			14,783
Net income (expense) attributable to non-controlling interest		473			71			—			544

Net income (expense) attributable to THI stockholders		11,712			2,364			163			14,239

Diluted earning per share	$	0.55								$	0.67	(8)
Diluted weighted-average shares outstanding		21,302,645						28,462	(7)		21,331,107	(8)
Supplemental diluted earnings per share										$	0.42	(9)
Supplemental diluted weighted-average shares outstanding											33,781,826	(9)

(1)

The amounts in this column represent our Successor’s historical results of operations for the nine months ended September 30, 2015.

(2)

The amounts in this column represent the historical results of operations for THI E-Commerce for the period from January 1, 2015 to March 9, 2015; RealTruck for the period from January 1, 2015 to April 21, 2014; and A.R.E. for the period from January 1, 2015 to April 24, 2015. The Successor acquired 75% of the issued and outstanding capital stock and other equity interests of THI E-Commerce and all of the issued and outstanding capital stock and other equity interests of RealTruck and A.R.E. on March 9, April 21, and April 24, 2015, respectively. The results of operations of THI E-Commerce, RealTruck and A.R.E. for all periods subsequent to March 9, April 21, and April 24, 2015, respectively, are included within the Successor consolidated historical results of operations, as applicable. Certain items have been reclassified to conform with the company’s financial statement presentation.

(3)

This adjustment reflects sales between the Successor and the companies acquired in the 2015 Acquisitions. Such sales would have represented intercompany eliminations had the 2015 Acquisitions occurred at the beginning of the period.

(4)

This adjustment reflects $1.0 million of incremental amortization expense associated with the allocation of purchase price to finite-lived identifiable intangible assets consisting of customer relationships, technology, and trade names. This is offset by the elimination of non-recurring 2015 Acquisitions-related expenses of $1.6 million.

(5)



Pro forma interest expense components:
Aggregate $381.5 million First Lien Credit Facility, $56.5 million Second Lien Facility, and $20 million revolving loan interest expense (weighted-average rate of 6.8% based on one-month LIBOR)	$	23,049
Amortization of debt discount associated with the credit facilities amortized over six years		1,548

Total pro forma interest expense		24,597
Less: actual interest expense for the period		24,260

Net pro forma adjustment to interest expense	$	337

(6)

Reflects the estimated statutory tax rate of 38%.

(7)

As part of the RealTruck acquisition consideration, THI issued 70,000 Series A-1 Preferred shares to the previous owner. This adjustment reflects the weighted-average number of shares issued.

(8)

Amount for the pro forma period represents diluted earnings per share only. Basic earnings per share are not presented as there is no income available to common shareholders because the amount of dividends to which the preferred shareholders are entitled before common shareholders exceeds the Company’s earnings. See footnote 1 to our unaudited consolidated financial statements included elsewhere in this prospectus.

(9)

TRUCK HERO, INC.

Unaudited pro forma condensed consolidated statement of income

For the nine months ended September 30, 2014


	Historical
	Predecessor(1)		Successor(1)			BAK(2)			2015 Acquired Companies(3)						Pro forma
	January 1, 2014 to July 28, 2014		July 29, 2014 to September 30, 2014			January 1, 2014 to March 12, 2014			Nine months ended September 30, 2014			Pro forma adjustments			Nine months ended September 30, 2014
(In thousands, except share and per share information)
Net sales	$	131,249	$	49,683		$	11,330		$	144,352			$(14,620	)(4)		$321,994
Cost of goods sold		83,656		29,211			7,573			117,708			(14,620	)(4)		223,528

Gross profit		47,593		20,472			3,757			26,644			—			98,466
Selling, general and administrative expenses		39,233		12,392			1,051			20,180			(4,643	)(5)		68,213
Owner’s compensation		—		—			10,218			—			(10,218	)(6)		—

Income from operations		8,360		8,080			(7,512	)		6,464			14,861			30,253

Other income (expense):
Interest expense		(10,065)		(4,687	)		—			(423	)		(9,656	)(7)		(24,831	)
Other income (expense)		251		274			(3	)		(4,377	)		—			(3,855	)

Income before taxes		(1,454)		3,667			(7,515	)		1,664			5,205			1,567
Income tax expense (benefit)		3,005		688			2,200			18			1,978	(8)		7,889

Net income	$	(4,459)	$	2,979		$	(9,715	)	$	1,646		$	3,227		$	(6,322	)
Net income (expense) attributable to non-controlling interest	$	—	$	—		$	(720	)	$	282		$	720	(9)	$	282

Net income expense attributable to THI stockholders	$	(4,459)	$	2,979		$	(8,995	)	$	1,364		$	2,507		$	(6,604	)

Basic and diluted earnings (loss) per share	$	(44,590)	$	0.14											$	(0.31	)(11)
Basic and diluted weighted-average shares outstanding		100		21,170,890									70,000	(10)		21,240,890	(11)

(1)

The amounts in this column represent our Predecessor’s and Successor’s historical results of operations for the nine months ended September 30, 2014.

(2)

The amounts in this column represent the historical results of operations for BAK for the period from January 1, 2014 to March 12, 2014. The Predecessor acquired all of the issued and outstanding capital stock and other equity interests of BAK on March 12, 2014. The results of operations of BAK for all periods subsequent to March 12, 2014 are included within the Predecessor consolidated historical results of operations, as applicable. Certain items have been reclassified to conform with the company’s financial statement presentation.

(3)

The amounts in this column represent the historical results of operations of THI E-Commerce, RealTruck and A.R.E. for the nine months ended September 30, 2014. As each of the acquisitions occurred subsequent to 2014, no portion of the 2015 Acquisitions are included within the Predecessor consolidated historical results of operations in the nine months ended September 30, 2014.

(4)

(5)

This adjustment reflects $10.6 million of incremental amortization expense associated with the allocation of purchase price to finite-lived identifiable intangible assets consisting of customer relationships, technology, and trade names. This adjustment is offset by the elimination of $9.5 million of compensation expenses specific to the Predecessor that would not have been incurred had the TA Acquisition occurred at the beginning of the period and non-recurring BAK Acquisition and TA Acquisition-related expenses of $3.8 million and $2.0 million, respectively.

(6)

This adjustment reflects the exclusion of owner’s compensation specific to BAK that were associated with a management agreement which was terminated through the BAK Acquisition.

(7)



Pro forma interest expense components:
Aggregate $381.5 million First Lien Credit Facility, $56.5 million Second Lien Facility, and $20 million revolving loan interest expense (weighted-average rate of 6.8% based on one-month LIBOR)	$	23,283
Amortization of debt discount associated with the credit facilities		1,548

Total pro forma interest expense		24,831
Less: actual interest expense for the period		15,175

Net pro forma adjustment to interest expense	$	9,656

(8)

Reflects the estimated statutory tax rate of 38%.

(9)

This adjustment reflects the removal of BAK non-controlling interest that was acquired in connection with the BAK Acquisition.

(10)

As part of the RealTruck acquisition consideration, Truck Hero, Inc. issued 70,000 shares of Series A-1 convertible preferred stock to the previous owner.

(11)

Amount for the pro forma period represents diluted earnings per share only. Basic earnings (loss) per share are not presented as there would have been no common shares outstanding due to contingent repurchase provisions if the TA Acquisition had occurred on January 1, 2014. See footnote 1 to our unaudited consolidated financial statements included elsewhere in this prospectus.

Selected consolidated financial data

The following tables summarize our historical consolidated financial data. We have derived the selected (1) statements of income data for the year ended December 31, 2013 and the period from January 1, 2014 to July 28, 2014 for the Predecessor and for the period from July 29, 2014 to December 31, 2014 for the Successor and (2) balance sheet data as of December 31, 2013 for the Predecessor and December 31, 2014 for the Successor from our audited consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the selected (1) statements of income data for the period from July 29, 2014 to September 30, 2014 and the nine months ended September 30, 2015 for the Successor and (2) balance sheet data as of September 30, 2015 for the Successor from our unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus. Our unaudited interim condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in management’s opinion, all normal recurring adjustments necessary for the fair presentation of the financial information set forth in those statements included elsewhere in this prospectus.

The Predecessor and Successor financial data has been prepared on different accounting bases and therefore the sum of the data for the two reporting periods should not be used as an indicator of our full year performance. We applied Financial Accounting Standards Board’s, (“FASB”), Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations” on July 28, 2014, the closing date of the TA Acquisition, and as a result, the merger consideration in the TA Acquisition was allocated to the respective fair values of the assets acquired and liabilities assumed from the Predecessor. The fair value of identifiable intangibles was recorded at $352.5 million. For the period from July 29, 2014 to December 31, 2014, the Successor’s general and administrative expenses increased by $4.7 million as a result of the additional amortization that was recorded during the period. For the nine months ended September 30, 2015, amortization expense was $17.8 million. As a result of the application of acquisition method accounting, the Successor balances and amounts presented in the audited consolidated financial statements and footnotes are not comparable with those of the Predecessor. Our historical results are not necessarily indicative of the results that may be expected in the future, and our interim results are not necessarily indicative of the results to be expected for the full year or any other period.

You should read the following selected consolidated financial and other data in conjunction with “Management’s discussion and analysis of financial condition and results of operations,” “Risk factors,” “Capitalization,” “Unaudited pro forma condensed consolidated financial information” and all of our consolidated financial statements and related notes included elsewhere in this prospectus.


	Predecessor						Successor			Successor			Successor
	Year ended December 31, 2013			January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			July 29, 2014 to September 30, 2014			Nine months ended September 30, 2015
(in thousands, except share, per share and percentage information)

Statement of Income Data:
Net sales	$	159,394			$131,249		$	117,208		$	49,683		$	322,989
Cost of goods sold		101,090			83,656			71,070			29,211			211,231

Gross profit		58,304			47,593			46,138			20,472			111,758
Sales, general & administrative expenses		30,731			39,233			26,894			12,392			69,477

Income from operations		27,573			8,360			19,244			8,080			42,281

Other income (expense)
Interest expense		(7,019	)		(10,065	)		(11,441	)		(4,687	)		(24,075	)
Other income (expense)		(198	)		251			507			274			(420	)

Total other income (expense)		(7,217	)		(9,814	)		(10,934	)		(4,413	)		(24,495	)
Income before taxes		20,356			(1,454	)		8,310			3,667			17,786
Income tax expense (benefit)		6,385			3,005			3,929			688			5,601

Net income (loss)		13,971			(4,459	)		4,381			2,979			12,185
Non-controlling interests’ share in earnings		—			—			—			—			473
Net income (expense) attributable to THI stockholders		13,971			(4,459	)		4,381			2,979			11,712

Basic and Diluted earnings (loss) per share(1)		139,710			(44,590	)		0.21			0.14			0.55
Basic and Diluted weighted-average shares outstanding(1)		100			100			21,178,814			21,170,890			21,302,645
Cash dividends declared per share		—			750			—			—			—

Cash Flow Data:
Cash from operating activities		15,254			10,842			16,273			9,376			27,545
Cash used in investing activities		(26,738	)		(126,456	)		(610,930	)		(609,509	)		(71,513	)
Cash from financing activities	$	17,752		$	110,928		$	612,261		$	613,892		$	49,009

(1)

The amount for the Successor periods represent diluted earnings per share only as the Company had no basic earnings per share for the Successor period. See Note 1 to our audited consolidated financial statements and Note 1 to our unaudited consolidated financial statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted earnings per share.


	Predecessor		Successor
(in thousands)	At December 31, 2013		At December 31, 2014		At September 30, 2015

Balance Sheet Data:
Cash and cash equivalents	$	8,787	$	17,604	$	22,645
Working capital(1)		19,868		37,919		20,463
Property and equipment-net		15,061		16,814		31,747
Total assets		142,231		754,660		848,706
Total indebtedness		118,888		388,898		439,232
Total stockholder’s equity	$	3,995	$	5,389	$	21,897

(1)

Working capital is the sum of current assets less current liabilities.

Management’s discussion and analysis of financial condition and results of operations

You should read the following discussion in conjunction with the audited consolidated financial statements and accompanying notes, as well as the “Risk factors” and “Selected consolidated financial and other data” included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on our management’s current expectations, estimates and projections about our business and operations and are subject to a number of risks and uncertainties. These forward-looking statements are not guarantees of future performance, and our actual results may differ materially from the results referred to in the forward-looking statements. See “Special note regarding forward-looking statements” and “Risk factors.”

Overview

We were formed in November 2007 when Kinderhook Industries, a private equity investment firm, acquired and merged Extang Corporation and TruXedo, Inc., both leading manufacturers of pickup truck accessories. Below are significant corporate events since that time:

•

in April 2009, we acquired BedRug, Inc., the leading manufacturer of custom-fit, rugged polypropylene bed liners in North America;

•

in June 2010, we acquired UnderCover, Inc., a leading manufacturer of ABS composite one-piece truck bed covers;

•

in November 2010, we acquired Advantage Truck Accessories, Inc., a leading manufacturer of hard and soft truck bed covers for pickup truck manufacturers and their dealerships;

•

in October 2013, we acquired Applied Products, Inc., also known as Retrax Holdings, LLC, a leading manufacturer of premium, retractable truck bed covers;

•

in March 2014, we acquired Laurmark Enterprises, Inc., also known as BAK Industries, a leading manufacturer of hard quad-folding truck bed covers, which also manufactures retractable aluminum slat and hard-rolling truck bed covers, bed rails and storage boxes;

•

in July 2014, a majority of our stock was acquired by funds managed by TA Associates, a private equity investment firm in the TA Acquisition;

•

in March 2015, we acquired approximately 75% of THI E-Commerce (parent of Auto Customs), a high-growth online marketer of a wide variety of vehicle accessories made by us and others that differentiates itself by offering in-depth product expertise to consumers;

•

in April 2015, we acquired A.R.E Accessories, Inc., a top selling brand of custom-made fiberglass and aluminum truck caps and fiberglass truck bed covers sold to consumer and commercial markets; and

•

in April 2015, we acquired RealTruck, a high-growth online marketer of a wide variety of vehicle accessories made by us and others.

For the nine months ended September 30, 2015, we reported net sales of $323.0 million, net income of $12.2 million and Adjusted EBITDA of $66.2 million. For the Combined Pro Forma Year Ended December 31, 2014 (Unaudited), we reported net sales of $259.8 million, net loss of $4.2 million and Adjusted EBITDA of $65.5 million.

Trends impacting our business

We believe the following trends are driving demand in our industry and may influence our performance:

•

the number of registered pickup trucks in North America is large and expanding, with approximately 50 million registered pickup trucks in 2014 in North America, where over 97% of our products were sold in 2014;

•

the penetration rate of truck bed covers, our largest product by net sales, on the installed base of existing trucks, was estimated by Sterling Associates Group to be approximately 20-25% in 2014, representing a significant opportunity for growth;

•

pickup truck designs have evolved in recent years to make pickup trucks more suitable as family and lifestyle vehicles, thus increasing the number of consumers that may consider purchasing a pickup truck and growing our total addressable market for selling pickup truck accessories generally;

•

the recent decline in oil prices in North America, coupled with better average fuel economy of recently introduced pickup truck models (such as the new aluminum-alloy body 2015 Ford F-150 pickup truck) have made pickup trucks more attractive to consumers than in historical periods with higher oil prices and less fuel efficient pickup truck models, since consumers can now pay less in average fuel costs to operate pickup trucks;

•

as a result of the foregoing factors and other market dynamics, recent periods have seen strong volumes of new and used pickup truck transactions in North America, which we believe are a catalyst for consumers to purchase pickup truck accessories as new owners of pickup trucks look to accessorize and personalize their newly purchased vehicles; and

•

the average selling prices of our primary products throughout the industry have been increasing in recent periods due to a shift in consumer preference from soft to hard truck bed covers, which generally have higher price points.

Meanwhile, we believe the following trends are affecting, or have the potential to affect, demand in our industry and may influence our performance:

•

the global economy generally, and consumer confidence in North America in particular, have seen significant volatility since the financial crisis in 2008, and because our products are typically discretionary purchases by consumers, changes in the economy or consumer confidence (particularly in North America) are likely to have a greater impact on our financial results than on the financial results of other companies that produce consumer staples or other non-discretionary goods;

•

oil prices in North America have been historically volatile and may increase in the future, which could make pickup trucks less attractive to consumers relative to lighter and smaller passenger cars, which could reduce our total addressable market for pickup truck accessories;

•

the costs to us of raw materials and components that we source from third party suppliers has been increasing in recent periods and we expect they will continue to increase in the future, putting continuing pressure on our profitability; and

•

many financial commentators expect an increase in interest rates in the United States in the near future, which would increase the interest costs on our current or future indebtedness under our credit facilities and put pressure on our profitability.

While these positive and negative trends have been observed, there can be no certainty that any such trends, either positive or negative, will continue in the future. Both the short-term and the long-term impacts of such trends, and the magnitude of any such potential impacts, are presently unknown.

Key factors affecting our performance

Our net sales for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) were approximately 1.6 times our net sales for the year ended December 31, 2013. This was attributable to a number of factors, including among other things, the acquisition of complementary businesses, which has resulted in a more extensive product line and additional distribution channels, as well as organic growth and increased penetration of our products on a growing base of registered pickup trucks in North America. Growth of our net sales in future periods will be dependent upon (i) our ability to continue to innovate and provide new products that are attractive to consumers, (ii) our ability to successfully integrate businesses that we have acquired or may acquire in the future and (iii) macroeconomic factors such as those described above in “—Trends impacting our business.”

Our historical financial results and pro forma financial results have been impacted by a number of acquisitions. See “—Overview.” In 2013, we acquired Retrax and in 2014, we acquired BAK. These acquisitions contributed a substantial amount to our aggregate net sales for 2014. Our historical financial results and pro forma financial results have also been impacted by the TA Acquisition, which was consummated in July 2014 and resulted in higher depreciation and amortization charges as well as increased interest expense related to the borrowings in connection with the TA Acquisition. In addition, in 2015 we acquired (i) approximately 75% of THI E-Commerce (parent of Auto Customs), (ii) A.R.E. and (iii) RealTruck.

We expect to make additional acquisitions in the future. The impact of any acquisitions on our results of operations, particularly on a GAAP reported basis, may make it difficult for investors to evaluate the underlying performance of our business on an organic basis from period to period. Our results may fluctuate for reasons related to acquisition accounting requirements under GAAP or the SEC’s rules and regulations relating to the required presentation of pro forma financial statements in documents filed with the SEC. For example, the assets we acquire in an acquisition are adjusted to their fair market values as of the closing date of such acquisition. The increase in carrying value results in an increase in depreciation and amortization charges, as well as higher cost of goods sold until the acquired inventory is turned.

Our financial results in any particular period may be affected by the mix of the types of our products that we sell in that period. For example, our hard truck bed cover products generally have a higher average selling price and higher gross margin than our soft truck bed cover products. In addition, our gross margin on net sales through our two online retailers, THI E-Commerce and RealTruck, is generally lower than the gross margin on net sales from our manufacturing operations. As a result, in periods during which we sell a larger percentage of hard truck bed cover products compared to soft truck bed cover products, our aggregate gross margins are more likely to increase; by contrast, in periods during which we produce a larger percentage of sales through our two online retailers, our aggregate gross margins are more likely to decrease. In recent periods, our net sales of hard truck bed cover products have been growing faster than our net sales of soft truck bed cover products, and we have seen an increasing percentage of our net sales through our online retailers. The impacts of these two trends on our aggregate gross margins will partially counteract one another, if the impacts are similarly sized and observed in the same period.

We expect our costs to increase in future periods as we expend substantial financial resources to manage and support our recent growth as well as future expansion plans. These investments may include hiring additional personnel, including senior level personnel, purchasing additional facilities and production infrastructure, developing additional operational resources, improving and further automating our production processes and procedures, implementing more rigorous and systematic procedures around our sales, marketing, customer service and other processes, and training, managing and appropriately sizing our work force. We expect that these anticipated cost increases will be offset in part by efficiencies that develop as our business matures and as we continue to work to integrate acquired businesses.

We continue to increase headcount, particularly in our management and finance departments, to support our continued growth. We expect our selling, general and administrative expenses to continue to increase in absolute terms as we incur increased costs related to the growth of our business such as the implementation of hardware, software and operating systems beginning within the next year. In addition, we expect to incur additional general and administrative expenses as a result of operating as a public company following this offering, including expenses related to compliance with the rules and regulations of the SEC and the New York Stock Exchange, additional insurance expenses, investor relations activities and other administrative and professional services. We expect to incur incremental annual costs related to operating as a public company in the range of $3.0 million to $6.0 million. In future periods, we may also issue long-term equity incentive awards to our directors, officers and employees, which may result in an increase in our expenses.

Our Adjusted EBITDA for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) was approximately 1.8 times our Adjusted EBITDA for the year ended December 31, 2013. Growth of our Adjusted EBITDA in future periods will be dependent upon our ability to (i) grow our net sales, both organically and through acquisitions, (ii) maintain and/or enhance our gross margins and (iii) manage increasing costs in our business.

Recent Developments

On October 29, 2015, we entered into the Acquisition Agreement to acquire N-FAB. N-FAB is a manufacturer of tubular accessories for pickup trucks and SUVs, including nerf bars, running boards and off-roading accessories. We believe that the potential acquisition of N-FAB diversifies our product offering and provides valuable intellectual property with respect to N-FAB pickup truck accessories. The acquisition of N-FAB is expected to close in November or December 2015 after the completion of this offering. The consummation of the transactions contemplated by the Acquisition Agreement is subject to the satisfaction or waiver of a number of closing conditions. Therefore, it is not certain that we will successfully close the N-FAB acquisition on the timeline we currently expect, or at all. For the nine months ended September 30, 2015, N-FAB generated net sales of approximately $14.4 million. We expect that if we successfully acquire N-FAB, that N-FAB will generate financial results that are consistent with or accretive to our pro forma Adjusted EBITDA Margin.

Components of results of operations

Net sales

We generate net sales from the sale of our products to installers/retailers, warehouse distributors, online retailers, pickup truck dealerships, pickup truck OEMs and consumers. Our products are sold primarily in the United States, with some international sales. Sales are recorded net of discounts and allowances that we offer to our customers. Such amounts are estimated and recorded as a reduction in total gross sales in order to arrive at reported net sales. Our net sales are periodically influenced by the introduction and discontinuance of sales and promotion incentives. We anticipate that promotional activities will continue to impact our net sales and that changes in such activities will continue to impact period-over-period results.

Cost of goods sold

We manufacture and assemble all of our products at our 12 operating facilities located across the United States. Cost of goods sold includes all of the costs to manufacture our products, such as raw materials, third-party vendor-supplied components, accessories and products, direct labor and benefits, indirect labor and benefits, other factory overhead, supplies and depreciation and equity-based compensation costs for employees associated with this portion of the organization, as applicable. Shipping and handling costs and product warranty costs are also included in cost of goods sold.

We expect that our costs of goods sold will increase in aggregate terms in future periods due to our recent acquisitions and anticipated increasing costs of components from third-party suppliers. We also expect gross margins to decrease due to the THI E-Commerce (parent of Auto Customs) and RealTruck acquisitions, as these online retailers operate at lower gross margins than our historical manufacturing operations. Additionally, the A.R.E. acquisition will have a dilutive effect on our gross margins.

Selling, general and administrative expenses

Selling, general and administrative expenses include salaries and benefits for our executive, sales and marketing, research and development, engineering, product support, finance, human resources, information systems and other corporate and administrative employees, including equity-based compensation costs for employees associated with this portion of the organization, as applicable. In addition, selling, general and administrative expenses include fees for third-party professional services, including consulting, legal and accounting services and other expenses such as non-manufacturing overhead, rent, depreciation, travel and entertainment, advertising, insurance. Our growth in headcount and operations has resulted in increased salaries and benefits as well as additional expenses related to employee recruitment.

Interest expense

Interest expense consists of interest on our First Lien Credit Facility, Second Lien Credit Facility and revolving credit facility. See “—Credit facilities.”

Other income (expense)

Other income (expense) consists primarily of income associated with the increase in an indemnification asset related to the uncertain tax position and other non-operating items.

Income tax expense

Income tax expense consists primarily of federal and state income taxes in the United States and income taxes in Canada, and also includes interest and penalties related to uncertain tax positions.

Results of operations

Combined Pro Forma Year Ended December 31, 2014 (Unaudited)

Our fiscal year 2014 consists of two separate and distinct accounting periods that do not overlap, the Predecessor period from January 1, 2014 to July 28, 2014 and the Successor period from July 29, 2014 to December 31, 2014, which have been prepared on different bases of accounting due to the TA Acquisition, as described in “Selected consolidated financial data.” Accordingly, in order to facilitate the comparative discussion of our results of operations for the years 2014 and 2013 and the nine months ended September 30, 2015 and 2014 that follows, we have prepared the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) and the Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) statement of income, which represents the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2014 and the nine months ended September 30, 2014 after giving pro forma effect to the TA Acquisition and the BAK Acquisition. Because this information is intended to facilitate comparison of our results of operations for 2014 and 2013 and the nine months ended September 30, 2015 and 2014, the statement of income information set forth below for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) and the Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) does not give pro forma effect to the 2015 Acquisitions, in contrast to the pro forma financial information set forth above under “Unaudited pro forma condensed consolidated financial information.”

The Combined Pro Forma Year Ended December 31, 2014 (Unaudited) and the Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) statement of income is included for informational purposes only and does not purport to reflect the results of operations of Truck Hero, Inc. that would have occurred had the TA Acquisition and the BAK Acquisition occurred on January 1, 2014. The Combined Pro Forma Year Ended December 31, 2014 (Unaudited) and the Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) statement of income contains a variety of adjustments, assumptions and estimates, is subject to numerous other uncertainties and the assumptions and adjustments as described in the accompanying notes and should not be relied upon as being indicative of our results of operations had the TA Acquisition and the BAK Acquisition occurred on the date assumed. The Combined Pro Forma Year Ended December 31, 2014 (Unaudited) and the Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) statement of income also does not project our results of operations for any future period or date.

The following table presents our Combined Pro Forma Year Ended December 31, 2014 (Unaudited) statement of income:


	Historical									Combined Pro Forma
		Predecessor		Successor		BAK(1)

		January 1, 2014 to July 28, 2014		July 29, 2014 to December 31, 2014		January 1, 2014 to March 12, 2014		Pro Forma Adjustments			Year Ending December 31, 2014
(In thousands, except share and per share information)
Net sales		$131,249		$117,208		$11,330		—			$259,787
Cost of goods sold		83,656		71,070		7,573		—			162,299

Gross profit		47,593		46,138		3,757		—			97,488
Selling, general and administrative expenses		39,233		26,894		1,051		(6,926	)(2)		60,252
Owner’s compensation		—		—		10,218		(10,218	)(3)		—

Income from operations		8,360		19,244		(7,512	)	17,144			37,236
Other income (expense):
Interest expense		(10,065	)	(11,441	)	—		(8,073	)(4)		(29,579	)
Other income (expense)		251		507		(3	)	—			755

Income before taxes		(1,454	)	8,310		(7,515	)	9,071			8,412
Income tax expense (benefit)		3,005		3,929		2,200		3,447	(5)		12,581

Net income (loss)		(4,459	)	4,381		(9,715	)	5,624			(4,169	)

Net income (expense) attributable to non-controlling interest		—		—		(720	)	720	(6)		—

Net income (expense) attributable to THI stockholders		(4,459	)	4,381		(8,995	)	4,904			(4,169	)

(1)

(2)

This adjustment reflects $8.4 million of incremental amortization expense associated with the allocation of purchase price to finite-lived identifiable intangible assets consisting of customer relationships, technology and trade names. This adjustment is offset by the elimination of $9.5 million of compensation expenses specific to the Predecessor that would not have been incurred had the TA Acquisition occurred at the beginning of the period and non-recurring BAK Acquisition and TA Acquisition-related expenses of $3.8 million and $2.0 million, respectively.

(3)

This adjustment reflects the exclusion of management fees specific to BAK that were associated with a management agreement which was terminated through the BAK Acquisition.

(4)



Pro forma interest expense components:
Aggregate $343.5 million First Lien Credit Facility and $56.5 million Second Lien Facility (weighted average rate of 6.96% based on one-month LIBOR)	$	27,744
Amortization of debt discount associated with the credit facilities amortized over six years		1,835

Total pro forma interest expense		29,579
Less: actual interest expense for the period		21,506

Net pro forma adjustment to interest expense	$	8,073

(5)

Reflects the estimated statutory tax rate of 38%.

(6)

This adjustment reflects the removal of BAK non-controlling interest for periods prior to the acquisition.

The following table presents our Combined Pro Forma Nine Months Ended September 30, 2014 (Unaudited) statement of income:


				Historical									Combined Pro Forma
	Predecessor			Successor			BAK (1)
	January 1, 2014 to July 28, 2014			July 29, 2014 to September 30, 2014			January 1, 2014 to March 12, 2014			Pro Forma Adjustments			Nine Months Ended September 30, 2014
In thousands, except per share information
Net sales	$	131,249		$	49,683		$	11,330			—		$	192,262
Cost of goods sold		83,656			29,211			7,573			—			120,440

Gross profit		47,593			20,472			3,757			—			71,822
Selling, general and administrative expenses		39,233			12,392			1,051			(6,718	)(2)		45,958
Owner’s compensation		—			—			10,218			(10,218	)(3)		—

Income from operations		8,360			8,080			(7,512	)		16,936			25,864

Other income (expense):
Interest expense		(10,065	)		(4,687	)		—			(7,455	)(4)		(22,207	)
Other income (expense)		251			274			(3	)		—			522

Income before taxes		(1,454	)		3,667			(7,515	)		9,481			4,179
Income tax expense (benefit)		3,005			688			2,200			3,603	(5)		9,496
Net income (loss)		(4,459	)		2,979			(9,715	)		5,878			(5,317	)

Net income (expense) attributable to non-controlling interest		—			—			(720	)		720	(6)		—

Net income (expense) attributable to THI stockholders		(4,459	)		2,979			(8,995	)		5,158			(5,317	)

(1)

(2)

This adjustment reflects $8.6 million of incremental amortization expense associated with the allocation of purchase price to finite-lived identifiable intangible assets consisting of customer relationships, technology and trade names. This adjustment is offset by the elimination of $9.5 million of compensation expenses specific to the Predecessor that would not have been incurred had the TA Acquisition occurred at the beginning of the period and non-recurring BAK Acquisition and TA Acquisition-related expenses of $3.8 million and $2.0 million, respectively.

(3)

This adjustment reflects the exclusion of management fees specific to BAK that were associated with a management agreement which was terminated through the BAK Acquisition.

(4)



Pro forma interest expense components:
Aggregate $343.5 million First Lien Credit Facility, $56.5 million Second Lien Facility (weighted average rate of 6.96% based on one-month LIBOR)	$	20,831
Amortization of debt discount associated with the credit facilities amortized over six years		1,376

Total pro forma interest expense		22,207
Less: actual interest expense for the period		14,752

Net pro forma adjustment to interest expense		7,455

(5)

Reflects the estimated statutory tax rate of 38%.

(6)

This adjustment reflects the removal of BAK non-controlling interest for periods prior to the acquisition.

Statements of income

The following tables set forth our statements of income for the periods presented in dollars and as a percentage of our net sales:


	Predecessor			Successor			Combined Pro Forma						Successor
	January 1, 2014 to July 28, 2014			July 29, 2014 to September 30, 2014			Nine months ended September 30, 2014			% of Net Sales			Nine months ended September 30, 2015			% of Net Sales
(in thousands, except percentage information)
Net sales	$	131,249		$	49,683		$	192,262			100%		$	322,989			100%
Cost of goods sold		83,656			29,211			120,440			63%			211,231			65%

Gross profit		47,593			20,472			71,822			37%			111,758			35%
Sales, general & administrative expenses		39,233			12,392			45,958			24%			69,477			22%

Operating income		8,360			8,080			25,864			13%			42,281			13%
Interest expense		(10,065	)		(4,687	)		(22,207	)		(12%	)		(24,075	)		(7%	)
Other income (expense)		251			274			522			0%			(420	)		0%

Pre-tax income		(1,454	)		3,667			4,179			2%			17,786			6%
Income tax expense (benefit)		3,005			688			9,496			5%			5,601			2%

Net income		(4,459	)		2,979			(5,317	)		(3%	)		12,185			4%
Net income (expense) attributable to non-controlling interest		—			—			—			0%			473			0%

Net income (expense) attributable to THI stockholders		(4,459	)		2,979			(5,317	)		(3%	)		11,712			4%

Other Financial Information (Non-GAAP):
Adjusted EBITDA(1)		30,187			14,853			47,750			25%			66,249			21%

(1)

See “—Non-GAAP financial measures” for more information and a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Comparison of the nine months ended September 30, 2014 and 2015


	Predecessor			Successor			Combined Pro Forma			Successor			Change
	January 1, 2014 to July 28, 2014			July 29, 2014 to September 30, 2014			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2015			$			%
(in thousands, except percentage information)
Net sales	$	131,249		$	49,683		$	192,262		$	322,989			130,727			68%
Cost of goods sold		83,656			29,211			120,440			211,231			90,791			75%

Gross profit		47,593			20,472			71,822			111,758			39,936			56%
Sales, general & administrative expenses		39,233			12,392			45,958			69,477			23,519			51%

Operating income		8,360			8,080			25,864			42,281			16,417			63%
Interest expense		(10,065	)		(4,687	)		(22,207	)		(24,075	)		(1,868	)		8%
Other income (expense)		251			274			522			(420	)		(942	)		(180)%

Pre-tax income		(1,454	)		3,667			4,179			17,786			13,607			326%
Income tax expense (benefit)		3,005			688			9,496			5,601			(3,895	)		(41)%

Net income		(4,459	)		2,979			(5,317	)		12,185			17,502			329%
Non-controlling interests’ share in earnings		—			—			—			473			473			100%

Net income attributable to THI stockholders		(4,459	)		2,979			(5,317	)		11,712			17,029			320%

Other Financial Information (Non-GAAP):
Adjusted EBITDA(1)	$	30,187			14,853			47,750			66,249			18,499			39%

(1)

Net sales

Net sales increased $130.7 million, or 68%, from $192.3 million for the Combined Pro Forma nine months ended September 30, 2014 to $323.0 million for the nine months ended September 30, 2015. Our net sales growth has been driven by both acquisitions and organic growth. The 2015 Acquisitions contributed $95.4 million. The remaining sales increase of $35.3 million, which represents organic growth of 18.4%, was primarily driven by growth in our other products, including 22% growth in hard truck bed cover products. Overall, volume increases contributed $30.0 million to the organic sales growth while price increases contributed $5.3 million.

Cost of goods sold

Cost of goods sold increased $90.8 million, or 75%, from $120.4 million for the Combined Pro Forma nine months ended September 30, 2014 to $211.2 million for the nine months ended September 30, 2015, primarily due to increased sales and the 2015 Acquisitions. The 2015 Acquisitions contributed $70.0 million of this increase. The remaining difference was driven by an increase in direct materials and warehouse costs of $13.8 million and $5.5 million, respectively.

Gross profit

Gross profit increased $40.0 million, or 56%, from $71.8 million for the Combined Pro Forma nine months ended September 30, 2014 to $111.8 million for the nine months ended September 30, 2015. The increase primarily related to the sales increases discussed above. Gross profit as a percentage of net sales decreased approximately 280 basis points, from 37.4% for the Combined Pro Forma nine months ended September 30, 2014 to 34.6% for the nine months ended September 30, 2015. The decrease in gross profit as a percentage of net sales was primarily a result of the 2015 Acquisitions, each of which operates at a lower margin percentage than the Company’s historical business. Gross margin percentage of the Company’s historical business increased 60 basis points, primarily driven by a volume shift from soft truck bed covers to hard truck bed covers which generate a higher margin.

Sales, general and administrative expenses

Sales, general and administrative expenses increased $23.5 million, or 51%, from $46.0 million for the Combined Pro Forma nine months ended September 30, 2014 to $69.5 million for the nine months ended September 30, 2015. The sales, general and administrative expenses of the 2015 Acquisitions following the date of their respective acquisition contributed $18.9 million to the increase. The remaining increase in sales, general, and administrative expenses was primarily driven by increased salaries and wages resulting from a growing workforce.

Operating income

Operating income increased $16.4 million, or 63% from $25.9 million for the Combined Pro Forma nine months ended September 30, 2014 to $42.3 million for the nine months ended September 30, 2015. Operating income as a percentage of net sales decreased 40 basis points from 13.5% for the Combined Pro Forma nine months ended September 30, 2014 to 13.1% for the nine months ended September 30, 2015. The decrease in operating income as a percentage of net sales was primarily a result of the 2015 Acquisitions, each of which operates at a lower margin percentage than the Company’s historical business.

Interest expense

Interest expense increased by $1.9 million, or 8%, from $22.2 million for the Combined Pro Forma nine months ended September 30, 2014 to $24.1 million for the nine months ended September 30, 2015. The increase in interest expense was a result of an increase in outstanding debt related to the incurrence of additional indebtedness in connection with the 2015 Acquisitions. The effective interest rate for the nine months ended September 30, 2015 was 6.83% compared to 7.15% for the Combined Pro Forma nine months ended September 30, 2014.

Income tax expense

Our effective tax rate was 227.2% for the Combined Pro Forma nine months ended September 30, 2014 and 31.5% for the nine months ended September 30, 2015. The effective tax rate for the Combined Pro Forma nine months ended September 30, 2014 was driven by compensation expenses that received no income tax benefit.

Net income

As a result of the factors described above, net income increased $17.5 million from a net loss of $5.3 million for the Combined Pro Forma nine months ended September 30, 2014 to net income of $12.2 million for the nine months ended September 30, 2015.

Adjusted EBITDA

Adjusted EBITDA increased $18.5 million, or 39%, from $47.8 million for the Combined Pro Forma nine months ended September 30, 2014 to $66.3 million for the nine months ended September 30, 2015. Adjusted EBITDA as a percentage of net sales decreased from 24.8% in the Combined Pro Forma nine months ended September 30, 2014 to 20.5% in the nine months ended September 30, 2015. This decrease was driven primarily by the 2015 Acquisitions, each of which operates at a lower Adjusted EBITDA margin than the company’s historical business. See “—Non-GAAP financial measures” for more information and a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Comparison of year ended December 31, 2013 and combined pro forma year ended December 31, 2014 (unaudited)


	Predecessor			Combined Pro Forma			Predecessor			Successor			Change
	Year ended December 31, 2013			Year ended December 31, 2014			January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			$			%
(in thousands, except percentage information)
Net sales	$	159,394		$	259,787		$	131,249		$	117,208		$	100,393			63%
Cost of goods sold		101,090			162,299			83,656			71,070			61,209			61%

Gross profit		58,304			97,488			47,593			46,138			39,184			67%
Sales, general & administrative expenses		30,731			60,252			39,233			26,894			29,521			96%

Operating income		27,573			37,236			8,360			19,244			9,663			35%
Interest expense		(7,019	)		(29,579	)		(10,065	)		(11,441	)		(22,560	)		321%
Other income (expense)		(198	)		755			251			507			953			481%

Pre-tax income		20,356			8,412			(1,454	)		8,310			(11,944	)		(59%	)
Income tax expense (benefit)		6,385			12,581			3,005			3,929			6,196			97%

Net income (loss)		13,971			(4,169	)		(4,459	)		4,381			(18,140	)		(130%	)

Other Financial Information (Non-GAAP):
Adjusted EBITDA(1)	$	37,088		$	65,471		$	30,187		$	32,581		$	28,383			77%

(1)

Net sales

Net sales increased $100.4 million, or 63%, from $159.4 million for the year ended December 31, 2013 to $259.8 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Our net sales growth has been driven by both acquisitions and organic growth. The inclusion of the BAK Acquisition contributed $62.3 million to sales for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Sales increases were additionally driven by the inclusion of a full year of sales for Retrax, which was acquired on October 11, 2013, resulting in an increase in sales of $19.4 million. The remaining sales increase of $18.7 million, which represents organic growth of 11.7%, was primarily driven by growth in our other products attributable to increased volumes across our soft and hard truck bed covers and bed liners. Overall, volume increases contributed $12.3 million to the organic sales growth while price increases contributed $6.4 million.

Cost of goods sold

Cost of goods sold increased $61.2 million, or 61%, from $101.1 million for the year ended December 31, 2013 to $162.3 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase was due primarily to the BAK Acquisition, which contributed $40.2 million to cost of goods sold for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Additionally, cost of goods sold increased by $11.7 million due to a full year of expenses for Retrax. The remaining increase was driven by a $6.8 million increase in material costs and $2.9 million increase in warehouse costs primarily due to increased sales volume.

Gross profit

Gross profit increased $39.2 million, or 67%, from $58.3 million for the year ended December 31, 2013 to $97.5 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase primarily related to the increase in net sales. Gross profit as a percentage of net sales increased from 36.6% for the year ended December 31, 2013 to 37.5% for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase in margin was primarily driven by product mix shift between truck bed cover products.

Sales, general and administrative expenses

Sales, general and administrative expenses increased $29.6 million, from $30.7 million for the year ended December 31, 2013 to $60.3 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase was partially due to the BAK Acquisition, which contributed $4.6 million to sales, general and administrative expense for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Pro forma intangible asset amortization also increased $8.4 million relating to the TA Acquisition. The remaining increase in sales, general and administrative expenses was primarily due to a full year of Retrax sales, general and administrative expense and the increase in organic sales. Sales, general and administrative expenses as a percentage of net sales increased from 19.3% for the year ended December 31, 2013 to 23.2% for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase was a result of the factors described above.

Operating income

As a result of the factors above, operating income increased by $9.6 million from $27.6 million for the year ended December 31, 2013 to $37.2 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Operating income as a percentage of net sales decreased from 17.3% in the year ended December 31, 2013 to 14.3% in the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) as a result of higher intangible asset amortization.

Interest expense

Interest expense was $7.0 million for the year ended December 31, 2013 compared to $29.6 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Interest expense increased due to the Credit Facilities established to execute the TA Acquisition and the 2015 Acquisitions. The effective interest rate for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) was 6.96%.

Income tax expense

The effective tax rate for the year ended December 31, 2013 was 31.4%. The effective tax rate for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) was 149.6%. The effective tax rate for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited) was driven by compensation expenses that received no income tax benefit.

Net income

Net income decreased $18.2 million, or 130%, from $14.0 million for the year ended December 31, 2013 to a net loss of $4.2 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). This decrease is attributable to increased intangible asset amortization and increased interest expense.

Adjusted EBITDA

Adjusted EBITDA increased $28.4 million, or 77%, from $37.1 million for the year ended December 31, 2013 to $65.5 million for the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). Adjusted EBITDA as a percentage of net sales increased 190 basis points from 23.3% in the year ended December 31, 2013 to 25.2% in the Combined Pro Forma Year Ended December 31, 2014 (Unaudited). The increase is attributable to favorable pricing and product mix shift between truck bed cover products. See “—Non-GAAP financial measures” for more information and a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Non-GAAP financial measures

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are financial performance measures that are not calculated in accordance with GAAP. We define Adjusted EBITDA as net income adjusted to exclude, when appropriate, interest expense, income tax expense, depreciation, amortization of intangible assets, expenses related to moving operating facilities, expenses related to our predecessor owners (“Kinderhook expenses”), recall expenses, acquisition expenses, equity-based compensation expenses, bank fees and other non-operational items. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.

We include Adjusted EBITDA and Adjusted EBITDA Margin in this prospectus because they are important measures upon which our management assesses our operating performance and because we believe including Adjusted EBITDA and Adjusted EBITDA Margin facilitates operating performance comparisons from period-to-period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of depreciation and amortization expense on our fixed assets and the impact of equity-based compensation expense. Because Adjusted EBITDA and Adjusted EBITDA Margin facilitate internal comparisons of our historical operating performance on a more consistent basis, we also use these metrics for business planning purposes, to incentivize and compensate our management personnel, and in evaluating acquisition opportunities. In addition, we believe Adjusted EBITDA and Adjusted EBITDA Margin and similar measures are widely used by investors, securities analysts, ratings agencies and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.

Our use of Adjusted EBITDA and Adjusted EBITDA Margin has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•

Adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect capital expenditure requirements for such replacements;

•

Adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; and

•

other companies, including companies in our industry, may calculate Adjusted EBITDA and other non-GAAP measures differently, which reduces their usefulness as a comparative measure.

In evaluating our Adjusted EBITDA and Adjusted EBITDA Margin, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by these expenses or any other expenses, whether or not they are unusual or non-recurring items. When evaluating our performance, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including our net income and other GAAP results.

The following table presents a reconciliation of Adjusted EBITDA to our net income, the most directly comparable GAAP measure, for each of the periods indicated:


	Predecessor					Successor			Combined Pro forma			Successor			Combined Pro forma			Successor
	Year ended December 31, 2013		January 1, 2014 to July 28, 2014			July 29, 2014 to December 31, 2014			Year ended December 31, 2014			July 29, 2014 to September 30, 2014			Nine months ended September 30, 2014			Nine months ended September 30, 2015
(in thousands, except percentages)

Adjusted EBITDA reconciliation:
Net income	$	13,971	$	(4,459	)	$	4,381		$	(4,169	)	$	2,979		$	(5,317	)	$	12,185
Depreciation and amortization		5,680		6,151			10,474			24,979			4,088			18,807			21,408
Interest expense		7,019		10,065			11,441			29,579			4,687			22,207			24,075
Income taxes		6,385		3,005			3,929			12,581			688			9,496			5,601

EBITDA		33,055		14,762			30,225			62,970			12,442			45,193			63,269
Moving costs(1)		195		—			—			—			—			—			—
Kinderhook expenses(2)		675		506			—			506			—			506			—
Recall expenses(3)		—		350			—			350			—			350			—
Acquisition expenses(4)		2,909		5,235			2,461			1,895			2,437			1,872			1,625
Equity-based compensation(5)		—		9,479			—			—			—			—			228
Bank fees(6)		254		—			—			—			—			—			33
Other adjustments(7)		—		(145	)		(105	)		(250	)		(26	)		(171	)		1,094

Adjusted EBITDA	$	37,088	$	30,187		$	32,581		$	65,471		$	14,853		$	47,750		$	66,249

Adjusted EBITDA Margin		23.3%		23.0%			27.8%			25.2%			29.9%			24.8%			20.5%

(1)

Represents cost associated with moving the Advantage facility into Extang facility.

(2)

Represents management fees and board of director fees paid to Kinderhook.

(3)

Represents expenses related to the Extang Encore truck bed cover recall.

(4)

Represents expenses related to the acquisition of Retrax on October 11, 2013 and expenses related to the acquisition of BAK on March 12, 2014.

(5)

(6)

Represents bank fees related to refinancing costs and annual fees for our Credit Facilities (as defined in “—Credit facilities”).

(7)

Represents income associated with the increase in an indemnification asset related to an uncertain tax position, a loss in connection with a disposal of an asset of A.R.E. in 2014 of $4.2 million and a loss in connection with a disposal of an asset and non-operational expenses at RealTruck in 2015 of $0.5 million.

Quarterly results of operations

The following unaudited quarterly statements of income data for each of the seven quarters ended September 30, 2015 have been prepared on a basis consistent with our audited annual financial statements and

include, in the opinion of management, all normal recurring adjustments necessary for the fair statement of the financial information contained in those statements. These quarterly results of operations are not necessarily indicative of the results of operations that may be expected in the future and the results of operations in the periods presented are not necessarily indicative of results to be expected for any other period. The following quarterly financial data should be read in conjunction with all of our consolidated financial statements and the related notes included elsewhere in this prospectus.

Quarterly trends

Our historical financial results have varied significantly from quarter to quarter, primarily due to the impact of a number of completed acquisitions. We expect that we will continue to make additional acquisitions in the future and that this quarterly variability may continue. Our business is moderately seasonal. Our sales can be lower during winter months as weather conditions can have an impact on consumer spending on discretionary purchases, like our products. For example, an abnormally wet and/or cold spring throughout North America such as that experienced in 2014 or any sustained period of extreme weather, could negatively impact our sales and financial results. We occasionally experience modest increases in volume around particular holidays (such as Father’s Day), but we believe that these increases are not substantial enough to result in material quarterly trends that follow a predictable pattern. In addition, in some instances we have experienced greater quarterly net sales around the time of specific merchandising and promotional activities by us or our customers. The timing of any specific merchandising and promotional activities is difficult to predict and can depend on many factors which are outside of our control. Accordingly, our results of operations for any particular quarter may not be indicative of the results we expect for the full year or any other period.


	Predecessor								Successor
	Three months ended March 31, 2014(2)			Three months ended June 30, 2014		July 1, 2014 to July 28, 2014(3)			July 29 to September 30, 2014		Three months ended December 31, 2014		Three months ended March 31, 2015(4)		Three months ended June 30, 2015(5)		Three months ended September 30, 2015
(in thousands, except percentages)
Net sales		45,134			68,831		17,284			49,683		67,525		68,827		120,385		133,777
Gross profit		16,347			25,901		5,345			20,472		25,666		25,467		41,380		44,911
Sales, general & administrative expenses		14,693			12,339		12,201			12,392		14,502		16,176		24,001		29,300
Operating income		1,654			13,562		(6,856	)		8,080		11,164		9,291		17,379		15,611
Net income		(921	)		5,017		(8,555	)		2,979		1,402		1,139		6,246		4,800
Other Financial Information (Non-GAAP):
Adjusted EBITDA(1)		9,605			17,901		2,681			14,853		17,728		16,697		24,987		24,565

Percentage of Net Sales:
Net sales		100%			100%		100%			100%		100%		100%		100%		100%
Gross profit		36%			38%		31%			41%		38%		37%		34%		34%
Sales, general, & administrative expenses		33%			18%		71%			25%		21%		24%		20%		22%
Operating income		4%			20%		(40%	)		16%		17%		13%		14%		12%
Net income		(2%	)		7%		(49%	)		6%		2%		2%		5%		4%
Other Financial Information:

Adjusted EBITDA(1)		21%			26%		16%			30%		26%		24%		21%		18%

(1)

See “—Non-GAAP financial measures” above for more information about Adjusted EBITDA, and see “—Adjusted EBITDA” below for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the periods presented above.

(2)

The three months ended March 31, 2014 includes the results of operations of the BAK business from its acquisition date on March 12, 2014.

(3)

The Predecessor period from July 1, 2014 to July 28, 2014 includes a stock compensation charge of $8.3 million relating to payments made to the Predecessor’s management.

(4)

The three months ended March 31, 2015 includes the results of operations of the THI E-Commerce business from its acquisition date on March 9, 2015.

(5)

The three months ended June 30, 2015 includes the results of operations of the RealTruck business from its acquisition date on April 21, 2015 and the A.R.E. business from its acquisition date on April 24, 2015.

Adjusted EBITDA

The following table presents a reconciliation of Adjusted EBITDA to our net income, the most directly comparable GAAP measure, for each of the periods indicated below. See “—Non-GAAP financial measures” for more information on our use and the limitations of Adjusted EBITDA as a measure of our financial performance.


	Predecessor								Successor
	Three months ended March 31, 2014			Three months ended June 30, 2014		July 1, 2014 to July 28, 2014			July 29 to September 30, 2014		Three months ended December 31, 2014		Three months ended March 31, 2015		Three months ended June 30, 2015		Three months ended September 30, 2015
(in thousands)
Net income	$	(921	)	$	5,017	$	(8,555	)	$	2,979	$	1,402	$	1,139	$	6,246	$	4,800
Depreciation and amortization		2,028			3,127		996			4,088		6,386		6,801		6,995		7,612
Interest expense		3,594			5,441		1,030			4,687		6,754		7,564		8,029		8,482
Income taxes		(963	)		3,247		721			688		3,241		701		3,249		1,651

Truck Hero, Inc. S-1/A