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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 8-K
 

 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): November 8, 2024
 

 
HOLLEY INC.
(Exact name of registrant as specified in its charter)
 

 
Delaware
001-39599
87-1727560
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
 
2445 Nashville Road, Suite B1, Bowling Green, KY
 
42101
(Address of principal executive offices)
 
(Zip Code)
 
(270) 782-2900
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
 

 
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common stock, par value $0.0001 per share
 
HLLY
 
New York Stock Exchange
Warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share
 
HLLY WS
 
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
 

 
 
Item 2.02
Results of Operations and Financial Condition.
 
On November 8, 2024, Holley Inc. (the “Company”) issued a press release announcing its financial results and operational highlights for the Company’s third quarter ended September 29, 2024 and providing outlook and guidance for the fourth quarter and full year 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
 
The information under Item 2.02 of this Report, including Exhibit 99.1, attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or Securities Act of 1933, as amended, expect as expressly set forth by specific reference in such a filing.
 
 
Item 9.01
Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit
No.
 
Description
99.1
 
104
 
Cover Page Interactive Data File (formatted as Inline XBRL).
 
-2-

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
 
HOLLEY INC.
     
 
By:
/s/ Jesse Weaver
   
Name:  Jesse Weaver
Date: November 8, 2024
 
Title:  Chief Financial Officer
 
 

 

Exhibit 99.1

PRESS RELEASE                                    

 
logo.jpg

2445 Nashville Road, Suite B1

Bowling Green, Kentucky 42101

Holley.com

 

HOLLEY REPORTS THIRD QUARTER 2024 RESULTS;

EXECUTION UPON STRATEGIC INITIATIVES DRIVING GROWTH IN KEY AREAS OF THE BUSINESS 

COMPLETEDANOTHER SUCCESSFUL EVENT SEASON WITH STRONG ENTHUSIAST ENGAGEMENT


 

Delivered third quarter financial results within guidance

Moodys Ratings Upgrades Holleys CFR to B2

Targeted efforts and marketing calendar event support normalizing distribution partner inventory levels

 

BOWLING GREEN, Ky. – November 8, 2024 – Holley Performance Brands (NYSE: HLLY), a leader in automotive aftermarket performance solutions, today announced financial results for its third quarter ended September 29, 2024.

 

Third Quarter Highlights vs. Prior Year Period

 

  Net Sales decreased (14.4%) to $134.0 million compared to $156.5 million last year
 

Net Loss was $(6.3) million, or $(0.05) per diluted share, compared to Net Income of $0.8 million, or $0.01 per diluted share last year

 

Net Cash Used by Operating Activities was $(1.7) million compared to Net Cash Provided by Operating Activities of $22.5 million last year
 

Adjusted Net Loss1 was $(0.5) million compared to Adjusted Net Income of $3.5 million last year

 

Adjusted EBITDA1 was $22.1 million compared to $27.9 million last year
 

Free Cash Flow1 was $(2.1) million compared to $21.7 million last year

 

1See “Use and Reconciliation of Non-GAAP Financial Measures” below.

 

“We continued our progress in our organizational transformation through the third quarter and are encouraged by the immediate impact that our new team members have made in their short time here. Our organization now operates with unprecedented capabilities and professionalism, as demonstrated by the significant advancements we've made across our business operations, even in a challenging macroeconomic environment.  Of note, digital modernization and customer service optimization, B2B sales capabilities, new and targeted product launches and revamped pricing strategy have all been upgraded within the last year and well positioned to drive our organic growth engine,” said Matthew Stevenson, President and CEO of Holley.

 

Stevenson commented, "We are pleased to report that our well-executed marketing calendar helped drive a 16% year-over-year increase in our direct-to-consumer channel and a 10% median lift in B2B out-the-door sales during the event windows. Our marketing events helped our B2B customers align their inventory positions with overall market demand. Also, through focused effort, strategy, and execution, we are seeing significant growth in some of our power brands year to date, such as ADS, Stilo, Dinan, APR, and Simpson, some up as much as over 30%.

 

However, overall quarterly sales were impacted by distributor inventory normalization driven by two significant factors: alignment to overall macro demand and our greatly improved order fulfillment capability. Our lead times are significantly better than a year ago, so our major customers are reducing their required safety stock.

 

Our operational efforts also contributed to the quarter's success, with year-over-year improvements in Gross Margin, a 133% increase in revenue per SKU year-to-date, and a 25% rise in new product revenue year-to-date. Additionally, we concluded the event season with strong attendance at our flagship LS Fest East event in Bowling Green, which attracted record attendance of 45,000 enthusiasts."

 

Key Operating Metrics and Strategic Highlights

 

 

Growth in significant areas of the business, including DTC and multiple key power brands
 

Total net inventory reduced to $179.3 million compared to $207.2 million Q3 of last year; inventory turns improved to 2.2x compared to 1.9x last year
 

Moody’s Ratings (Moody’s) upgraded Holley's corporate family rating (CFR) to B2 from B3, probability of default rating to B2-PD from B3-PD and senior secured ratings to B2 from B3, noting that the outlook remains stable and the speculative grade liquidity (SGL) rating is unchanged at SGL-2 on August 8, 2024
  Holley’s bank-adjusted EBITDA leverage ratio1 at quarter end of 4.25x was well below covenant ceiling of 5.00x  

 

1See “Use and Reconciliation of Non-GAAP Financial Measures” below.

 

Jesse Weaver, Holley's CFO, added, "We continued to make progress with our financial priorities in the third quarter. We were, once again, recognized by the ratings agencies for the work we have done to strengthen our balance sheet shown by the Moody’s ratings upgrades in August.”

 

Weaver added, "While our sales were at the low end of the guidance range, this was largely due to continued softness in the industry and our distribution partners taking advantage of the successful out-the-door sales events to clean up their inventories going into the back half of the year. Overall, we're encouraged by our out-the-door sales numbers relative to the overall market and believe that, despite being down, our efforts to partner more closely with distribution partners and investments in DTC are allowing us to maintain our share gains in this challenging environment. Given the performance in Q3 and the continued softness impacting our consumer base, we have lowered our expectations for the full year. While we’re excited about continuing our expanded channel partnership going into Holley Days, we believe this revised outlook is warranted given current industry trends and the current level of uncertainty around distribution partner inventory adjustments going into 2025."

 

Outlook

Holley is providing the following outlook for the fourth quarter and full-year 2024:

 

Metric

Fourth Quarter 2024 Outlook

Full Year 2024 Outlook

Net Sales

$133 - $143 million

$595 - $605 million

Adjusted EBITDA*

$24 - $29 million

$115 - $120 million

Capital Expenditures

 

$6 - $8 million

Depreciation and Amortization Expense

 

$23 - $25 million

Interest Expense

 

$50 - $55 million

Bank-adjusted EBITDA Leverage Ratio*

 

4.35x - 4.15x

 

*     Holley is not providing reconciliations of forward-looking fourth quarter 2024 and full year 2024 Adjusted EBITDA outlook and full year 2024 Bank-adjusted EBITDA Leverage Ratio outlook because certain information necessary to calculate the most comparable GAAP measure, net income, is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, Holley is unable to provide these forward-looking reconciliations without unreasonable effort. Accordingly, Holley is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations.

 

Holley notes that its outlook for the fourth quarter and full-year 2024 may vary due to changes in assumptions or market conditions and other factors described below under “Forward-Looking Statements.”

 

Conference Call

 

A conference call and audio webcast has been scheduled for 8:30 a.m. Eastern Time today to discuss these results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call available on the investor relations portion of the Company’s website at investor.holley.com. For those that cannot join the webcast, you can participate by dialing 877-407-4019 (Toll Free) or 201-689-8337 (Toll) using the access code of 13748642.

 

For those unable to participate, a telephone replay recording will be available until Friday, November 15, 2024. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13748642. A web-based archive of the conference call will also be available on the Company’s website.

 

Additional Financial Information

 

The Investor Relations page of Holley’s website, investor.holley.com contains a significant amount of financial information about Holley, including our earnings presentation, which can be found under Events & Presentations. Holley encourages investors to visit this website regularly, as information is updated, and new information is posted.

 

About Holley Inc.

 

Holley Performance Brands (NYSE: HLLY) is a leading designer, marketer, and manufacturer of high-performance products for car and truck enthusiasts. Holley offers a leading portfolio of iconic brands that deliver innovation and inspiration to a large and diverse community of millions of avid automotive enthusiasts who are passionate about the performance and personalization of their classic and modern cars. Holley has disrupted the performance category by putting the enthusiast consumer first, developing innovative new products, and building a robust M&A process that has added meaningful scale and diversity to its platform. For more information on Holley, visit https://www.holley.com.

 

Forward-Looking Statements

 

Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley’s future financial or operating performance. For example, projections of future revenue and adjusted EBITDA and other metrics, along with statements regarding the impact of organizational changes, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “or” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Holley and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the ability of Holley to grow and manage growth profitably which may be affected by, among other things, competition; to maintain relationships with customers and suppliers; and to retain its management and key employees; 2) Holley’s ability to compete effectively in our market; 3) Holley’s ability to successfully design, develop, and market new products; 4) Holley’s ability to respond to changes in vehicle ownership and type; 5) Holley’s ability to maintain and strengthen demand for our products; 6) Holley’s ability to effectively manage our growth; 7) Holley’s ability to attract new customers in a cost-effective manner; 8) Holley’s ability to expand into additional consumer markets; 9) costs related to Holley being a public company; 10) disruptions to Holley’s operations, including as a result of cybersecurity incidents; 11) changes in applicable laws or regulations; 12) the outcome of any legal proceedings that have been or may be instituted against Holley; 13) general economic and political conditions, including the current macroeconomic environment, political tensions, and war (including the conflict in Ukraine, the conflict in the Middle East, and the possible expansion of such conflicts and potential geopolitical consequences); 14) the possibility that Holley may be adversely affected by other economic, business, and/or competitive factors, including recent events affecting the financial services industry (such as the closures of certain regional banks); 15) Holley’s estimates and expectations of its financial performance and future growth prospects; 16) Holley’s ability to anticipate and manage through disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of certain company products in distribution channels; and 17) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 14, 2024, and/or disclosed in any subsequent filings with the SEC. Although Holley believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements or projections set forth herein will be achieved or that any of the contemplated results of such forward looking statements or projections will be achieved. There may be additional risks that Holley presently does not know or that Holley currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Holley undertakes no duty to update these forward-looking statements, except as otherwise required by law.

 

Investor Relations:

Anthony Rozmus / Neel Sikka

Solebury Strategic Communications

203-428-3324

holley@soleburystrat.com

 

Media Relations Contacts:
Jordan Moore, jmoore@tinymightyco.com / Rachel Withers, rwithers@tinymightyco.com

Tiny Mighty Communications

615-454-2913

 

[Financial Tables to Follow]

 

 

 

 

HOLLEY INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

Variance

   

Variance

   

September 29,

   

October 1,

   

Variance

   

Variance

 
   

2024

   

2023

   

($)

   

(%)

   

2024

   

2023

   

($)

   

(%)

 

Net Sales

  $ 134,038     $ 156,530     $ (22,492 )     -14.4 %   $ 462,170     $ 503,997     $ (41,827 )     -8.3 %

Cost of Goods Sold

    81,732       98,156       (16,424 )     -16.7 %     287,512       308,162       (20,650 )     -6.7 %

Gross Profit

    52,306       58,374       (6,068 )     -10.4 %     174,658       195,835       (21,177 )     -10.8 %

Selling, General, and Administrative

    30,109       28,880       1,229       4.3 %     97,675       87,998       9,677       11.0 %

Research and Development Costs

    4,620       6,100       (1,480 )     -24.3 %     13,743       18,935       (5,192 )     -27.4 %

Amortization of Intangible Assets

    3,436       3,687       (251 )     -6.8 %     10,307       11,040       (733 )     -6.6 %

Restructuring Costs

    954       415       539       129.9 %     1,566       2,106       (540 )     -25.6 %

Write-down of assets held-for-sale

    7,505       -       7,505       100.0 %     7,505       -       7,505       100.0 %

Other Operating Expense (Income)

    119       (28 )     147       nm       213       508       (295 )     -58.1 %

Operating Expense

    46,743       39,054       7,689       19.7 %     131,009       120,587       10,422       8.6 %

Operating Income

    5,563       19,320       (13,757 )     -71.2 %     43,649       75,248       (31,599 )     -42.0 %

Change in Fair Value of Warrant Liability

    (1,041 )     2,064       (3,105 )     nm       (7,570 )     5,516       (13,086 )     -237.2 %

Change in Fair Value of Earn-Out Liability

    (634 )     700       (1,334 )     nm       (2,341 )     2,089       (4,430 )     -212.1 %

Loss on Early Extinguishment of Debt

                -       nm       141             141       100.0 %

Interest Expense, Net

    15,010       13,712       1,298       9.5 %     39,192       41,909       (2,717 )     -6.5 %

Non-Operating Expense

    13,335       16,476       (3,141 )     -19.1 %     29,422       49,514       (20,092 )     -40.6 %

Income Before Income Taxes

    (7,772 )     2,844       (10,616 )     -373.3 %     14,227       25,734       (11,507 )     -44.7 %

Income Tax Expense (Benefit)

    (1,484 )     2,092       (3,576 )     nm       (320 )     7,756       (8,076 )     -104.1 %

Net Income

  $ (6,288 )   $ 752     $ (7,040 )     -936.2 %   $ 14,547     $ 17,978     $ (3,431 )     -19.1 %

Comprehensive Income:

                                                               

Foreign Currency Translation Adjustment

    386       (176 )     562       -319.3 %     244       (103 )     347       -336.9 %

Total Comprehensive Income

  $ (5,902 )   $ 576     $ (6,478 )     -1124.7 %   $ 14,791     $ 17,875     $ (3,084 )     -17.3 %

Common Share Data:

                                                               

Basic Net Income per Share

  $ (0.05 )   $ 0.01     $ (0.06 )     -600.0 %   $ 0.12     $ 0.15     $ (0.03 )     -20.0 %

Diluted Net Income per Share

  $ (0.05 )   $ 0.01     $ (0.06 )     -600.0 %   $ 0.12     $ 0.15     $ (0.03 )     -20.0 %

Weighted Average Common Shares Outstanding - Basic

    118,694       117,397       1,297       1.1 %     118,345       117,257       1,088       0.9 %

Weighted Average Common Shares Outstanding - Diluted

    118,694       119,246       (552 )     -0.5 %     119,154       118,120       1,034       0.9 %

nm - not meaningful

                                                               

 

 

 

 

 

HOLLEY INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

(Unaudited)

 

    As of  
    September 29,     December 31,  
   

2024

   

2023

 

Assets

               

Cash and cash equivalents

  $ 50,751     $ 41,081  

Accounts receivable

    44,492       48,360  

Inventory

    179,285       192,260  

Prepaids and other current assets

    16,332       15,665  

Assets held for sale

    7,696       -  

Total Current Assets

    298,556       297,366  

Property, Plant and Equipment, Net

    42,718       47,206  

Goodwill

    413,245       419,056  

Other Intangibles, Net

    398,804       410,465  

Other Noncurrent Assets

    30,911       29,250  

Total Assets

  $ 1,184,234     $ 1,203,343  
                 

Liabilities and Stockholders’ Equity

               

Accounts payable

  $ 52,738     $ 43,692  

Accrued interest

    487       455  

Accrued liabilities

    41,164       42,129  

Current portion of long-term debt

    7,479       7,461  

Total Current Liabilities

    101,868       93,737  

Long-Term Debt, Net of Current Portion

    548,905       576,710  

Deferred Taxes

    45,008       53,542  

Other Noncurrent Liabilities

    29,710       38,203  

Total Liabilities

    725,491       762,192  
                 

Common Stock

    12       12  

Additional Paid-In Capital

    376,670       373,869  

Accumulated Other Comprehensive Loss

    (466 )     (710 )

Retained Earnings

    82,527       67,980  

Total Stockholders’ Equity

    458,743       441,151  

Total Liabilities and Stockholders’ Equity

  $ 1,184,234     $ 1,203,343  

 

 

 

HOLLEY INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Operating Activities

                               

Net Income

  $ (6,288 )   $ 752     $ 14,547     $ 17,978  

Adjustments to Reconcile to Net Cash

   

12,879

      15,463       26,832       29,446  

Changes in Operating Assets and Liabilities

    (8,339 )     6,265       1,394       9,439  

Net Cash Provided by (Used in) Operating Activities

    (1,748 )     22,480       42,773       56,863  
                                 

Investing Activities

                               

Capital Expenditures, Net of Dispositions

    (311 )     (743 )     (2,727 )     (3,125 )

Net Cash Used in Investing Activities

    (311 )     (743 )     (2,727 )     (3,125 )
                                 

Financing Activities

                               

Net Change in Debt

    (227 )     (26,365 )     (28,832 )     (40,437 )

Deferred financing fees

                      (1,427 )

Payments from Stock-Based Award Activities

    (45 )     (1,061 )     (1,482 )     (1,134 )

Net Cash Used in Financing Activities

    (272 )     (27,426 )     (30,314 )     (42,998 )
                                 

Effect of Foreign Currency Rate Fluctuations on Cash

    2       (218 )     (62 )     (57 )
                                 

Net Change in Cash and Cash Equivalents

    (2,329 )     (5,907 )     9,670       10,683  
                                 

Cash and Cash Equivalents

                               

Beginning of Period

    53,080       42,740       41,081       26,150  

End of Period

  $ 50,751     $ 36,833     $ 50,751     $ 36,833  

 

 

 

We present certain information with respect to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Bank-adjusted EBITDA Leverage Ratio, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow as supplemental measures of our operating performance and believe that such non-GAAP financial measures are useful to investors in evaluating our financial performance and in comparing our financial results between periods because they exclude the impact of certain items that we do not consider indicative of our ongoing operating performance. We believe that the presentation of these non-GAAP financial measures enhances the usefulness of our financial information by presenting measures that management uses internally to establish forecasts, budgets, and operational goals to manage and monitor our business. We believe that these non-GAAP financial measures help to depict a more realistic representation of the performance of our underlying business, enabling us to evaluate and plan more effectively for the future.

 

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Bank-adjusted EBITDA Leverage Ratio, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow are not prepared in accordance with generally accepted accounting principles (“GAAP”) and may be different from non-GAAP and other financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing our financial performance. These metrics should not be considered as alternatives to net income, gross profit, net cash provided by operating activities, or any other performance measures, as applicable, derived in accordance with GAAP.

 

We define EBITDA as earnings before depreciation, amortization of intangible assets, interest expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude, to the extent applicable, restructuring costs, which includes operational restructuring and integration activities, write-down of assets held-for-sale, termination related benefits, facilities relocation, and executive transition costs; changes in the fair value of the warrant liability; changes in the fair value of the earn-out liability; equity-based compensation expense; inventory charges primarily due to product rationalization initiatives that are part of a portfolio transformation aimed at eliminating unprofitable or slow-moving SKUs; gain or loss on the early extinguishment of debt; notable items that we do not believe are reflective of our underlying operating performance, including litigation settlements and certain costs incurred for advisory services related to identifying performance initiatives; and other expenses or gains, which includes gains or losses from disposal of fixed assets, franchise taxes, and gains or losses from foreign currency transactions. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.

 

HOLLEY INC. and SUBSIDIARIES

USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

(Unaudited)

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income

  $ (6,288 )   $ 752     $ 14,547     $ 17,978  

Adjustments:

                               

Interest Expense, Net

    15,010       13,712       39,192       41,909  

Income Tax Expense (Benefit)

    (1,484 )     2,092       (320 )     7,756  

Depreciation

    2,231       2,785       7,364       7,738  

Amortization

    3,436       3,687       10,307       11,040  

EBITDA

    12,905       23,028       71,090       86,421  

Restructuring Costs

    954       415       1,566       2,106  

Change in Fair Value of Warrant Liability

    (1,041 )     2,064       (7,570 )     5,516  

Change in Fair Value of Earn-Out Liability

    (634 )     700       (2,341 )     2,089  

Equity-Based Compensation Expense

    1,521       2,970       4,283       5,170  

Write-down of Assets Held-for-Sale

    7,505       -       7,505       -  

Strategic Product Rationalization Charge

                8,835       (800 )

Loss on Early Extinguishment of Debt

                141        

Notable Items

    785       556       6,479       564  

Other Expense (Income)

    119       (28 )     213       508  

Adjusted EBITDA

  $ 22,114     $ 29,705     $ 90,201     $ 101,574  

Net Sales

  $ 134,038     $ 156,530     $ 462,170     $ 503,997  

Net Income Margin

    -4.7 %     0.5 %     3.1 %     3.6 %

Adjusted EBITDA Margin

    16.5 %     19.0 %     19.5 %     20.2 %

 

 

 

We define the Bank-adjusted EBITDA Leverage Ratio as Net Debt divided by our Bank-adjusted EBITDA for the trailing twelve-month ("TTM") period, as defined under our Credit Agreement entered into in November 2021, as amended, which is used in calculating covenant compliance.

 

   

TTM September 29, 2024

 

Net Income

  $ 15,749  

Adjustments:

       

Interest Expense, Net

    58,029  

Income Tax Expense (Benefit)

    323  

Depreciation

    9,934  

Amortization

    13,824  

EBITDA

    97,859  

Restructuring Costs

    2,101  

Change in Fair Value of Warrant Liability

    (8,975 )

Change in Fair Value of Earn-Out Liability

    (2,127 )

Equity-Based Compensation Expense

    6,404  

Write-down of Assets Held-for-Sale

    7,505  

Strategic Product Rationalization Charge

    8,835  

Gain on Early Extinguishment of Debt

    (560 )

Notable Items

    7,200  

Other Expense

    470  

Adjusted EBITDA

    118,712  

Additional Permitted Charges

   

2,441

 

Adjusted EBITDA per Credit Agreement

  $ 121,153  

Total Debt

  $ 565,126  

Less: Permitted Cash and Cash Equivalents

    50,000  

Net Indebtedness per Credit Agreement

  $ 515,126  

Bank-adjusted EBITDA Leverage Ratio

 

4.25 x

 

 

We define adjusted gross profit as gross profit excluding inventory charges primarily due to product rationalization initiatives that are part of a portfolio transformation aimed at eliminating unprofitable or slow-moving SKUs. We define Adjusted Gross Margin as Adjusted Gross Profit divided by net sales. 

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Gross Profit

  $ 52,306     $ 58,374     $ 174,658     $ 195,835  

Adjust for: Strategic Product Rationalization Charge

                8,835       (800 )

Adjusted Gross Profit

  $ 52,306     $ 58,374     $ 183,493     $ 195,035  

Net Sales

  $ 134,038     $ 156,530     $ 462,170     $ 503,997  

Gross Margin

    39.0 %     37.3 %     37.8 %     38.9 %

Adjusted Gross Margin

    39.0 %     37.3 %     39.7 %     38.7 %

 

 

 

We define Adjusted Net Income as earnings excluding the after-tax effect of changes in the fair value of the warrant liability, changes in the fair value of the earn-out liability, write-downs of assets held-for-sale, and gain or loss on the early extinguishment of debt. We define Adjusted Diluted EPS as Adjusted Net Income on a per share basis. Management uses these measures to focus on on-going operations and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present consolidated operating results. We believe that using this information, along with net income and net income per diluted share, provides for a more complete analysis of the results of operations.  

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income

  $ (6,288 )   $ 752     $ 14,547     $ 17,978  

Special items:

                               

Adjust for: Change in Fair Value of Warrant Liability

    (1,041 )     2,064       (7,570 )     5,516  

Adjust for: Change in Fair Value of Earn-Out Liability

    (634 )     700       (2,341 )     2,089  

Adjust for: Write-down of Assets Held-for-Sale

    7,505             7,505        

Adjust for: Loss on Early Extinguishment of Debt

                111        

Adjusted Net Income

  $ (458 )   $ 3,516     $ 12,252     $ 25,583  

 

 

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income per Diluted Share

  $ (0.05 )   $ 0.01     $ 0.12     $ 0.15  

Special items:

                               

Adjust for: Change in Fair Value of Warrant Liability

    (0.01 )     0.02       (0.06 )     0.05  

Adjust for: Change in Fair Value of Earn-Out Liability

    (0.01 )     0.01       (0.02 )     0.02  

Adjust for: Write-down of Assets Held-for-Sale

    0.06             0.06        

Adjust for: Loss on Early Extinguishment of Debt

                       

Adjusted Diluted EPS

  $ (0.01 )   $ 0.04     $ 0.10     $ 0.22  

 

 

 

We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of dispositions. Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations. 

 

   

For the thirteen weeks ended

   

For the thirty-nine weeks ended

 
   

September 29,

   

October 1,

   

September 29,

   

October 1,

 
   

2024

   

2023

   

2024

   

2023

 

Net Cash Provided by (Used in) Operating Activities

  $ (1,748 )   $ 22,480     $ 42,773     $ 56,863  

Capital Expenditures, Net of Dispositions

    (311 )     (743 )     (2,727 )     (3,125 )

Free Cash Flow

  $ (2,059 )   $ 21,737     $ 40,046     $ 53,738  

 

 

 

 
v3.24.3
Document And Entity Information
Nov. 08, 2024
Document Information [Line Items]  
Entity, Registrant Name HOLLEY INC.
Document, Type 8-K
Document, Period End Date Nov. 08, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 001-39599
Entity, Tax Identification Number 87-1727560
Entity, Address, Address Line One 2445 Nashville Road, Suite B1
Entity, Address, City or Town Bowling Green
Entity, Address, State or Province KY
Entity, Address, Postal Zip Code 42101
City Area Code 270
Local Phone Number 782-2900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company true
Entity, Ex Transition Period false
Amendment Flag false
Entity, Central Index Key 0001822928
CommonStockParValue00001PerShare Custom [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common stock, par value $0.0001 per share
Trading Symbol HLLY
Security Exchange Name NYSE
WarrantsEachExercisableForOneShareOfCommonStockAtAnExercisePriceOf1150PerShare Custom [Member]  
Document Information [Line Items]  
Title of 12(b) Security Warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share
Trading Symbol HLLY WS
Security Exchange Name NYSE

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