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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): August 7, 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.)
 
1801 Russellville Road, 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 August 7, 2024, Holley Inc. (the “Company”) issued a press release announcing its financial results and operational highlights for the Company’s second quarter ended June 30, 2024 and providing outlook and guidance for the third 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: August 7, 2024
 
Title:  Chief Financial Officer
 
 

 

Exhibit 99.1

PRESS RELEASE                                    

 
logo.jpg

1801 Russellville Road

Bowling Green, Kentucky 42101

Holley.com

 

HOLLEY REPORTS SECOND QUARTER 2024 RESULTS;

NET INCOME UP 31% YEAR OVER YEAR

ADJUSTED EBITDA MARGIN UP 50BPS YEAR OVER YEAR

PROGRESS ACROSS ALL KEY GROWTH ELEMENTS OF THE TRANSFORMATION


 

Delivered second quarter net sales of $169.5 million

Debt and Credit Ratings upgraded by S&P Global Ratings

Exited Covenant Relief Period and continues progress on deleverage with $10MM prepayment

 

BOWLING GREEN, Ky. – August 7, 2024 – Holley Performance Brands (NYSE: HLLY), a leader in automotive aftermarket performance solutions, today announced financial results for its second quarter ended June 30, 2024.

 

Second Quarter Highlights vs. Prior Year Period

 

  Net Sales decreased 3.3% to $169.5 million compared to $175.3 million last year
 

Net Income was $17.1 million, or $0.14 per diluted share, compared to $13.0 million, or $0.11 per diluted share last year

 

Net Cash Provided by Operating Activities was $25.7 million compared to $30.7 million last year
 

Adjusted Net Income1 was $12.6 million compared to $16.0 million last year

 

Adjusted EBITDA1 was $37.4 million compared to $37.9 million last year
 

Free Cash Flow1 was $24.4 million compared to $29.0 million last year

 

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

 

“In the second quarter, amidst a challenging macroeconomic landscape, we achieved significant strides in the pivotal areas of our transformation, which may not be immediately apparent due to the broader market conditions. Through ongoing improvements in our operations, we met all of our financial priorities related to cash flow, deleveraging, and cost to serve, as well as completed the final pieces of enhancing our organization's capabilities with the addition of a new Senior Vice President of Operations and Supply Chain. We are thrilled to welcome, Alex Buccilli, SVP of Operations and Supply Chain to further strengthen our operational strategies, supporting our vision for sustained growth,” said Matthew Stevenson, President and CEO of Holley.

 

Stevenson commented, “Our focus on the transformation centered on driving growth through enhancing our digital capabilities and customer experiences, deepening distributor partnerships, product management and innovation, and strategic pricing, is beginning to bear fruit, as evident by the meaningful year-over-year growth in our direct-to-consumer channel as well as the highly successful Memorial Day campaign where we collaborated with our distribution partners to drive their out the door sales. Moreover, we're proud to continue teaming up with the industry distribution partners to drive their out the door sales. Additionally, we take pride in the innovative products we introduced during the second quarter, which span across our remarkable innovative offerings of brands.”

 

Key Operating Metrics and Strategic Highlights

 

 

Year-over-Year Order trends improving both on an annual and sequential basis
 

Total net inventory reduced to $173.5 million compared to $217.5 million Q2 of last year; inventory turns improved to 2.2x compared to 1.9x last year

 

S&P Global Ratings (S&P) upgraded Holley’s issuer credit rating to ‘B’ from ‘B-’ and senior secured issue-level rating to ‘B’ from ‘B-’ on June 13, 2024

 

Completed additional $10 million in early debt paydown against the Company’s first lien term loan facility in Q2

 

Holley’s bank-adjusted EBITDA leverage ratio1 at quarter end of 4.02x was well below the amended covenant ceiling of 5.00x for Q2 of 2024

 

Exited the Covenant Relief period

 

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

 

Jesse Weaver, Holley's CFO, added, "This quarter, we once again met our financial priorities. Our improved leverage ratio, backed by robust profitability, debt reduction, and more consistent free cash flow generation, was recognized by S&P Global Ratings with an upgraded credit and debt rating in June.  I'm incredibly proud of our team and their efforts during this transformation, which has reinvigorated the focus on organic growth and allowed us to effectively make progress on the financial priorities we set out over 18 months ago."

 

Weaver added, "While we are making significant strides in our transformation, the overall macroeconomic environment remains fraught with uncertainty. Consequently, we believe adopting a conservative stance in our outlook for the latter half of the year is a prudent measure. Nonetheless, we are confident in the trajectory we have set and remain enthusiastic about the company's growth prospects. Our ability to capture market share, even in a softening market, reinforces our optimism for the future."


 

 

Outlook

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

 

Metric

Third Quarter 2024 Outlook

Full Year 2024 Outlook

Net Sales

$133 - $153 million

$605 - $645 million

Adjusted EBITDA*

$20 - $30 million

$117 - $132 million

Capital Expenditures

 

$6 - $8 million

Depreciation and Amortization Expense

 

$24 - $26 million

Interest Expense

 

$50 - $55 million

Bank-adjusted EBITDA Leverage Ratio*

 

3.75x - 4.25x

 

*     Holley is not providing reconciliations of forward-looking third 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 third 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 13747636.

 

For those unable to participate, a telephone replay recording will be available until Wednesday, August 14, 2024. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13747636. 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 twenty-six weeks ended

 
   

June 30,

   

July 2,

   

Variance

   

Variance

   

June 30,

   

July 2,

   

Variance

   

Variance

 
   

2024

   

2023

   

($)

   

(%)

   

2024

   

2023

   

($)

    (%)  

Net Sales

  $ 169,496     $ 175,262     $ (5,766 )     -3.3 %   $ 328,132     $ 347,467     $ (19,335 )     -5.6 %

Cost of Goods Sold

    99,203       105,514       (6,311 )     -6.0 %     205,780       210,006       (4,226 )     -2.0 %

Gross Profit

    70,293       69,748       545       0.8 %     122,352       137,461       (15,109 )     -11.0 %

Selling, General, and Administrative

    34,570       29,101       5,469       18.8 %     67,566       59,118       8,448       14.3 %

Research and Development Costs

    4,311       6,182       (1,871 )     -30.3 %     9,123       12,835       (3,712 )     -28.9 %

Amortization of Intangible Assets

    3,435       3,674       (239 )     -6.5 %     6,871       7,353       (482 )     -6.6 %

Restructuring Costs

    (3 )     352       (355 )     nm       612       1,691       (1,079 )     -63.8 %

Other Operating Expense (Income)

    102       485       (383 )     -79 %     94       536       (442 )     -82.5 %

Operating Expense

    42,415       39,794       2,621       6.6 %     84,266       81,533       2,733       3.4 %

Operating Income

    27,878       29,954       (2,076 )     -6.9 %     38,086       55,928       (17,842 )     -31.9 %

Change in Fair Value of Warrant Liability

    (3,402 )     2,017       (5,419 )     nm       (6,529 )     3,452       (9,981 )     nm  

Change in Fair Value of Earn-Out Liability

    (1,058 )     961       (2,019 )     nm       (1,707 )     1,389       (3,096 )     nm  

Loss on Early Extinguishment of Debt

                -       nm       141             141       nm  

Interest Expense, Net

    13,178       9,899       3,279       33.1 %     24,182       28,197       (4,015 )     -14.2 %

Non-Operating Expense

    8,718       12,877       (4,159 )     -32.3 %     16,087       33,038       (16,951 )     nm  

Income Before Income Taxes

    19,160       17,077       2,083       12.2 %     21,999       22,890       (891 )     -3.9 %

Income Tax Expense (Benefit)

    2,055       4,098       (2,043 )     nm       1,164       5,664       (4,500 )     -79.4 %

Net Income

  $ 17,105     $ 12,979     $ 4,126       31.8 %   $ 20,835     $ 17,226     $ 3,609       21.0 %

Comprehensive Income:

                                                               

Foreign Currency Translation Adjustment

    44       272       (228 )     -83.8 %     (142 )     73       (215 )     nm  

Total Comprehensive Income

  $ 17,149     $ 13,251     $ 3,898       29.4 %   $ 20,693     $ 17,299     $ 3,394       19.6 %

Common Share Data:

                                                               

Basic Net Income per Share

  $ 0.14     $ 0.11     $ 0.03       27.3 %   $ 0.18     $ 0.15     $ 0.03       20.0 %

Diluted Net Income per Share

  $ 0.14     $ 0.11     $ 0.03       27.3 %   $ 0.17     $ 0.15     $ 0.02       13.3 %

Weighted Average Common Shares Outstanding - Basic

    118,470       117,221       1,249       1.1 %     118,171       117,187       984       0.8 %

Weighted Average Common Shares Outstanding - Diluted

    119,261       117,869       1,392       1.2 %     119,383       117,557       1,826       1.6 %

nm - not meaningful

                                                               

 

 

 

 

 

HOLLEY INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

(Unaudited)

 

    As of  
    June 30,     December 31,  
   

2024

   

2023

 

Assets

               

Cash and cash equivalents

  $ 53,080     $ 41,081  

Accounts receivable

    56,061       48,360  

Inventory

    173,518       192,260  

Prepaids and other current assets

    16,348       15,665  

Assets held for sale

    2,096       -  

Total Current Assets

    301,103       297,366  

Property, Plant and Equipment, Net

    43,491       47,206  

Goodwill

    419,056       419,056  

Other Intangibles, Net

    403,483       410,465  

Other Noncurrent Assets

    30,958       29,250  

Total Assets

  $ 1,198,091     $ 1,203,343  
                 

Liabilities and Stockholders’ Equity

               

Accounts payable

  $ 58,595     $ 43,692  

Accrued interest

    359       455  

Accrued liabilities

    41,130       42,129  

Current portion of long-term debt

    7,437       7,461  

Total Current Liabilities

    107,521       93,737  

Long-Term Debt, Net of Current Portion

    548,698       576,710  

Deferred Taxes

    48,642       53,542  

Other Noncurrent Liabilities

    30,061       38,203  

Total Liabilities

    734,922       762,192  
                 

Common Stock

    12       12  

Additional Paid-In Capital

    375,194       373,869  

Accumulated Other Comprehensive Loss

    (852 )     (710 )

Retained Earnings

    88,815       67,980  

Total Stockholders’ Equity

    463,169       441,151  

Total Liabilities and Stockholders’ Equity

  $ 1,198,091     $ 1,203,343  

 

 

 

HOLLEY INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

   

For the thirteen weeks ended

   

For the twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Operating Activities

                               

Net Income

  $ 17,105     $ 12,979     $ 20,835     $ 17,226  

Adjustments to Reconcile to Net Cash

   

3,621

      109       14,592       13,983  

Changes in Operating Assets and Liabilities

    4,952       17,656       9,094       3,174  

Net Cash Provided by Operating Activities

    25,678       30,744       44,521       34,383  
                                 

Investing Activities

                               

Capital Expenditures, Net of Dispositions

    (1,325 )     (1,699 )     (2,416 )     (2,382 )

Net Cash Provided by (Used in) Investing Activities

    (1,325 )     (1,699 )     (2,416 )     (2,382 )
                                 

Financing Activities

                               

Net Change in Debt

    (11,857 )     (6,788 )     (28,605 )     (14,072 )

Deferred financing fees

          (310 )           (1,427 )

Payments from Stock-Based Award Activities

    (516 )     (39 )     (1,437 )     (73 )

Net Cash Provided by (Used in) Financing Activities

    (12,373 )     (7,137 )     (30,042 )     (15,572 )
                                 

Effect of Foreign Currency Rate Fluctuations on Cash

    (27 )     16       (64 )     161  
                                 

Net Change in Cash and Cash Equivalents

    11,953       21,924       11,999       16,590  
                                 

Cash and Cash Equivalents

                               

Beginning of Period

    41,127       20,816       41,081       26,150  

End of Period

  $ 53,080     $ 42,740     $ 53,080     $ 42,740  

 

 

 

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, 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 twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income

  $ 17,105     $ 12,979     $ 20,835     $ 17,226  

Adjustments:

                               

Interest Expense, Net

    13,178       9,899       24,182       28,197  

Income Tax Expense

    2,055       4,098       1,164       5,664  

Depreciation

    2,669       2,468       5,133       4,953  

Amortization

    3,435       3,674       6,871       7,353  

EBITDA

    38,442       33,118       58,185       63,393  

Restructuring Costs

    (3 )     352       612       1,691  

Change in Fair Value of Warrant Liability

    (3,402 )     2,017       (6,529 )     3,452  

Change in Fair Value of Earn-Out Liability

    (1,058 )     961       (1,707 )     1,389  

Equity-Based Compensation Expense

    1,621       1,806       2,762       2,200  

Inventory Charges (Gains)

    (878 )     (800 )     8,835       (800 )

Loss on Early Extinguishment of Debt

                141        

Notable Items

    2,594       (16 )     5,694       8  

Other Expense

    102       485       94       536  

Adjusted EBITDA

  $ 37,418     $ 37,923     $ 68,087     $ 71,869  

Net Sales

  $ 169,496     $ 175,262     $ 328,132     $ 347,467  

Net Income Margin

    10.1 %     7.4 %     6.3 %     5.0 %

Adjusted EBITDA Margin

    22.1 %     21.6 %     20.7 %     20.7 %

 

 

 

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 June 30, 2024

 

Net Income

  $ 22,789  

Adjustments:

       

Interest Expense, Net

    56,731  

Income Tax Expense

    3,899  

Depreciation

    10,488  

Amortization

    14,075  

EBITDA

    107,982  

Restructuring Costs

    1,562  

Change in Fair Value of Warrant Liability

    (5,870 )

Change in Fair Value of Earn-Out Liability

    (793 )

Equity-Based Compensation Expense

    7,853  

Inventory Charges

    8,835  

Gain on Early Extinguishment of Debt

    (560 )

Notable Items

    6,971  

Other Expense

    323  

Adjusted EBITDA

    126,303  

Additional Permitted Charges

   

1,903

 

Adjusted EBITDA per Credit Agreement

  $ 128,206  

Total Debt

  $ 565,317  

Less: Permitted Cash and Cash Equivalents

    50,000  

Net Indebtedness per Credit Agreement

  $ 515,317  

Bank-adjusted EBITDA Leverage Ratio

 

4.02 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 twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Gross Profit

  $ 70,293     $ 69,748     $ 122,352     $ 137,461  

Adjust for: Inventory Charges (Gains)

    (878 )     (800 )     8,835       (800 )

Adjusted Gross Profit

  $ 69,415     $ 68,948     $ 131,187     $ 136,661  

Net Sales

  $ 169,496     $ 175,262     $ 328,132     $ 347,467  

Gross Margin

    41.5 %     39.8 %     37.3 %     39.6 %

Adjusted Gross Margin

    41.0 %     39.3 %     40.0 %     39.3 %

 

 

 

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, 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 twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income

  $ 17,105     $ 12,979     $ 20,835     $ 17,226  

Special items:

                               

Adjust for: Change in Fair Value of Warrant Liability

    (3,402 )     2,017       (6,529 )     3,452  

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

    (1,058 )     961       (1,707 )     1,389  

Adjust for: Loss on Early Extinguishment of Debt

                111        

Adjusted Net Income

  $ 12,645     $ 15,957     $ 12,710     $ 22,067  

 

 

 

   

For the thirteen weeks ended

   

For the twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Net Income per Diluted Share

  $ 0.14     $ 0.11     $ 0.17     $ 0.15  

Special items:

                               

Adjust for: Change in Fair Value of Warrant Liability

    (0.03 )     0.02       (0.05 )     0.03  

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

    (0.01 )     0.01       (0.01 )     0.01  

Adjust for: Loss on Early Extinguishment of Debt

                       

Adjusted Diluted EPS

  $ 0.10     $ 0.14     $ 0.11     $ 0.19  

 

 

 

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 twenty-six weeks ended

 
   

June 30,

   

July 2,

   

June 30,

   

July 2,

 
   

2024

   

2023

   

2024

   

2023

 

Net Cash Provided by Operating Activities

  $ 25,678     $ 30,744     $ 44,521     $ 34,383  

Capital Expenditures, Net of Dispositions

    (1,325 )     (1,699 )     (2,416 )     (2,382 )

Free Cash Flow

  $ 24,353     $ 29,045     $ 42,105     $ 32,001  

 

 

 

 
v3.24.2.u1
Document And Entity Information
Aug. 07, 2024
Document Information [Line Items]  
Entity, Registrant Name HOLLEY INC.
Document, Type 8-K
Document, Period End Date Aug. 07, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 001-39599
Entity, Tax Identification Number 87-1727560
Entity, Address, Address Line One 1801 Russellville Road
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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