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Holley Reports Third Quarter 2022 Results

Underlying demand remains solid, direct-to-consumer sales up 11%

Supply chain pressures ease, supporting improvement in sales run-rate within the quarter

Company updates its full year 2022 outlook to reflect continued impact of supply chain and higher costs on profitability

BOWLING GREEN, Ky.–(BUSINESS WIRE)–Holley Inc. (NYSE: HLLY), the leading platform serving performance automotive enthusiasts, today announced financial results for its third quarter ended October 2, 2022.

Third Quarter Highlights vs. Prior Year Period

  • Net Sales decreased 3.1% to $154.8 million compared to $159.7 million in the prior year’s third quarter
  • Gross Profit decreased 25.8% to $48.4 million compared to $65.2 million in the prior year’s third quarter
  • Net Income of $31.6 million, or $0.27 per diluted share, compared to a Net Loss of $(30.2) million, or $(0.28) per diluted share, in the prior year’s third quarter
  • Adjusted Net Loss1 of $(4.1) million, compared to Adjusted Net Income1 of $14.6 million reported in the prior year’s third quarter
  • Adjusted EBITDA1 of $16.4 million compared to $35.5 million in the prior year’s third quarter

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

While we are encouraged by the sequential improvement we saw late in the quarter, earnings fell short of expectations. Supply chain constraints peaked in July and then began to ease, allowing us to steadily produce and ship more product in August and September. Underlying demand remained solid, direct to consumer sales were up 11%, and enthusiast engagement accelerated at our Holley-owned events. Channel inventories continued their decline in July and August, before partially recovering on the back of stronger shipments to resellers in September,” said Tom Tomlinson, Holley’s President and Chief Executive Officer.

As supply chain pressures eased throughout the quarter, we saw increased deliveries of key inputs. Our suppliers of automotive-grade microchips also began to resume shipments in the quarter which allowed us to ship more of our popular electronic products in September. These suppliers have also provided better visibility to future shipments. While challenges remain in the supply chain, we are focused on improving availability of parts and increasing shipments.”

Tomlinson continued, “Profitability was negatively impacted by lower production volumes that drove negative operating leverage and manufacturing inefficiencies, especially earlier in the quarter. We also saw higher input costs from both inflationary pressures and from the scarcity of certain automotive-grade microchips. Warranty costs were higher as resellers caught up on a backlog of warranty returns, and higher inbound freight and other overhead costs from earlier in the year are continuing to impact our results as they work their way through inventory. Pricing actions taken mid-year partially offset these cost headwinds.”

Tomlinson concluded, “In this challenging environment, we’re pleased with the solid demand we’ve seen for our products at a time when consumers are stressed by inflationary pressures. We believe we are now positioned to convert more of this demand to sales, as supply chain conditions improve, and as we continue to execute operationally. While there is still more work to do on lowering our cost structure and reducing our inventory levels, we are aggressively pursuing numerous improvement opportunities and continue to make solid progress integrating acquired businesses to drive further synergies. We remain confident in the underlying profitability and cash flow generation potential of our business, and we firmly believe that Holley’s position as an industry leader with ample runway for long-term profitable growth is unchanged.”

Third Quarter 2022 Financial Results

Net sales for the third quarter of 2022 decreased $4.9 million, or 3.1%, to $154.8 million as compared to $159.7 million for the third quarter of 2021. Non-comparable sales associated with acquisitions contributed $7.7 million, or 4.8%, of year-over-year growth. The remaining comparable sales decreased by $12.6 million, or 7.9%, compared to the prior year quarter, offsetting the impact from the acquisitions. The decline in comparable sales was primarily driven by supply chain constraints that prevented us from building and shipping to orders received from our customers. As a result, lower unit volume drove a decrease of approximately $24.0 million that was partially offset by improved price realization of approximately $11.4 million compared to the prior year period.

Cost of goods sold for the third quarter of 2022 increased $11.9 million, or 12.6%, to $106.4 million, as compared to $94.5 million, for the third quarter of 2021. The increase in cost of goods sold during the third quarter reflects compression in gross profit margin primarily due to manufacturing inefficiencies driven by supply chain constraints, higher warranty costs, which increased $4.5 million compared to the prior year period, and inflationary pressures on certain other costs.

Selling, general and administrative costs for the third quarter of 2022 increased $3.0 million, or 10.5%, to $31.9 million, as compared to $28.9 million for the third quarter of 2021. When expressed as a percentage of sales, selling, general and administrative costs increased to 20.6% of sales for the third quarter of 2022 as compared to 18.1% of sales in the third quarter of 2021. The increase in selling, general and administrative costs was driven by a $2.6 million increase in outbound shipping and handling costs related to inflationary pressures from domestic shipping companies and an increase of $1.0 million attributable to recent acquisitions. Partially offsetting these increases was a decrease of $1.6 million in administrative and sales personnel costs, reflecting the Company’s implementation of recent cost saving initiatives.

Net income for the third quarter of 2022 was $31.6 million compared to a net loss of $(30.2) million in the third quarter of 2021. Net income for the third quarter of 2022 was favorably impacted by a $37.6 million non-cash decrease in liabilities for warrants and earn-out shares, while net loss for the third quarter of 2021 was negatively impacted by a $24.1 million non-cash increase in the liabilities for warrants and earn-out shares and $23.3 million of related party acquisition and management fee costs.

Adjusted for non-cash items, Adjusted Net Loss was $(4.1) million, compared to last year’s Adjusted Net Income of $14.6 million. Reconciliation to GAAP Net Income (Loss) is included in the “Use and Reconciliation of Non-GAAP Financial Measures” table below.

Adjusted EBITDA was $16.4 million in the third quarter of 2022 compared to $35.5 million in the third quarter last year. Reconciliation to GAAP Net Income (Loss) is included in the “Use and Reconciliation of Non-GAAP Financial Measures” table below.

Diluted EPS of $0.27 for the third quarter of 2022 compared to $(0.28) in 2021.

Holley ended the quarter with $16.6 million in cash on the balance sheet, and the $125 million revolving credit facility remains undrawn.

Full Year 2022 Outlook

Holley revised its outlook for 2022 to the following:

  • Net Sales in the range of $695-$710 million
  • Adjusted EBITDA of $118-$124 million
  • Capital Expenditures in the range of $14-$15 million
  • Depreciation and Amortization Expense of $24-$26 million
  • Interest Expense in the range of $33-$35 million

While we are encouraged by the improvement we saw in September, challenges with the supply chain, manufacturing inefficiencies, freight costs, and elevated expenses continue into the fourth quarter,” said Stephen Trussell, Vice President of Finance and Interim Chief Financial Officer. “Consequently, we are reducing our revenue and Adjusted EBITDA guidance range for the year. Our balance sheet remains healthy, and we have maintained ample liquidity through our cash balance and undrawn revolver. We are focused on improving financial results and working capital management, towards the goal of healthy cash generation.”

Conference Call

A conference call and audio webcast has been scheduled for 4:30 p.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 13733382.

For those unable to participate, a telephone replay recording will be available until Monday, November 21, 2022. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13733382. A web-based archive of the conference call will also be available at the Company’s website.

About Holley Inc.

Holley Inc. (NYSE: HLLY) is a leading designer, marketer, and manufacturer of high-performance products for car and truck enthusiasts. Holley offers the largest 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 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 to recognize the anticipated benefits of the business combination with Empower LTD, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 2) costs related to the business combination and Holley becoming a public company; 3) disruptions to Holley’s operations, including as a result of cybersecurity incidents; 4) changes in applicable laws or regulations; 5) the outcome of any legal proceedings that may be instituted against Holley; 6) general economic and political conditions, including political tensions and war (such as the ongoing conflict in Ukraine); 7) the possibility that Holley may be adversely affected by other economic, business and/or competitive factors; 8) Holley’s estimates of its financial performance; 9) the impact of the novel coronavirus disease pandemic and its effect on business and financial conditions; 10) our 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 11) 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, 2021 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2022, and that are otherwise described or updated from time to time in Holley’s 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 any duty to update these forward-looking statements, except as otherwise required by law.

[Financial Tables to Follow]

HOLLEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

For the thirteen weeks ended

 

 

For the thirty-nine weeks ended

 

 

 

October 2,

 

September 26,

 

Variance

 

 

Variance

 

 

October 2,

 

 

September 26,

 

 

Variance

 

 

Variance

 

 

 

2022

 

2021

 

($)

 

 

(%)

 

 

2022

 

 

2021

 

 

($)

 

 

(%)

 

Net Sales

 

$

154,775

 

$

159,673

 

$

(4,898

)

 

 

-3.1

%

 

$

534,250

 

 

$

513,046

 

 

$

21,204

 

 

 

4.1

%

Cost of Goods Sold

 

 

106,383

 

 

94,475

 

 

11,908

 

 

 

12.6

%

 

 

327,849

 

 

 

300,969

 

 

 

26,880

 

 

 

8.9

%

Gross Profit

 

 

48,392

 

 

65,198

 

 

(16,806

)

 

 

-25.8

%

 

 

206,401

 

 

 

212,077

 

 

 

(5,676

)

 

 

-2.7

%

Selling, General, and Administrative

 

 

31,921

 

 

28,891

 

 

3,030

 

 

 

10.5

%

 

 

102,532

 

 

 

79,093

 

 

 

23,439

 

 

 

29.6

%

Research and Development Costs

 

 

6,039

 

 

7,133

 

 

(1,094

)

 

 

-15.3

%

 

 

22,396

 

 

 

20,167

 

 

 

2,229

 

 

 

11.1

%

Amortization of Intangible Assets

 

 

3,662

 

 

3,553

 

 

109

 

 

 

3.1

%

 

 

10,985

 

 

 

10,391

 

 

 

594

 

 

 

5.7

%

Impairment of Indefinite-Lived Intangible Assets

 

 

2,395

 

 

 

 

2,395

 

 

 

nm

 

 

 

2,395

 

 

 

 

 

 

2,395

 

 

 

nm

 

Acquisition and Restructuring Costs

 

 

1,266

 

 

368

 

 

898

 

 

 

244.0

%

 

 

3,247

 

 

 

21,877

 

 

 

(18,630

)

 

 

-85.2

%

Related Party Acquisition and Management Fee Costs

 

 

 

 

23,250

 

 

(23,250

)

 

 

-100.0

%

 

 

 

 

 

25,789

 

 

 

(25,789

)

 

 

-100.0

%

Other Operating (Income) Expense

 

 

47

 

 

89

 

 

(42

)

 

 

-47.2

%

 

 

594

 

 

 

3

 

 

 

591

 

 

 

nm

 

Operating Expense

 

 

45,330

 

 

63,284

 

 

(17,954

)

 

 

-28.4

%

 

 

142,149

 

 

 

157,320

 

 

 

(15,171

)

 

 

-9.6

%

Operating Income

 

 

3,062

 

 

1,914

 

 

1,148

 

 

 

60.0

%

 

 

64,252

 

 

 

54,757

 

 

 

9,495

 

 

 

17.3

%

Change in Fair Value of Warrant Liability

 

 

(30,171)

 

 

17,273

 

 

(47,444

)

 

 

nm

 

 

 

(51,112

)

 

 

17,273

 

 

 

(68,385

)

 

 

nm

 

Change in Fair Value of Earn-Out Liability

 

 

(7,429)

 

 

6,866

 

 

(14,295

)

 

 

nm

 

 

 

(9,282

)

 

 

6,866

 

 

 

(16,148

)

 

 

nm

 

Interest Expense

 

 

10,428

 

 

9,851

 

 

577

 

 

 

5.9

%

 

 

26,780

 

 

 

31,096

 

 

 

(4,316

)

 

 

-13.9

%

Non-Operating (Income) Expense

 

 

(27,172)

 

 

35,415

 

 

(62,587

)

 

 

-176.7

%

 

 

(33,614

)

 

 

56,660

 

 

 

(90,274

)

 

 

nm

 

Income (Loss) Before Income Taxes

 

 

30,234

 

 

(33,501)

 

 

63,735

 

 

 

nm

 

 

 

97,866

 

 

 

(1,903

)

 

 

99,769

 

 

 

nm

 

Income Tax Expense (Benefit)

 

 

(1,345)

 

 

(3,301)

 

 

1,956

 

 

 

-59.3

%

 

 

8,866

 

 

 

7,255

 

 

 

1,611

 

 

 

22.2

%

Net Income (Loss)

 

$

31,579

 

$

(30,200)

 

$

61,779

 

 

 

nm

 

 

$

89,000

 

 

$

(9,158

)

 

$

98,158

 

 

 

nm

 

Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency Translation Adjustment

 

 

516

 

 

(31)

 

 

547

 

 

 

nm

 

 

 

1,258

 

 

 

(12

)

 

 

1,270

 

 

 

nm

 

Total Comprehensive Income (Loss)

 

$

32,095

 

$

(30,231)

 

$

62,326

 

 

 

nm

 

 

$

90,258

 

 

$

(9,170

)

 

$

99,428

 

 

 

nm

 

Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Net Income (Loss) per Share

 

$

0.27

 

$

(0.28)

 

$

0.55

 

 

 

nm

 

 

$

0.76

 

 

$

(0.11

)

 

$

0.87

 

 

 

nm

 

Diluted Net Income (Loss) per Share

 

$

0.27

 

$

(0.28)

 

$

0.55

 

 

 

nm

 

 

$

0.32

 

 

$

(0.11

)

 

$

0.43

 

 

 

nm

 

Weighted Average Common Shares Outstanding – Basic

 

 

117,120

 

 

106,285

 

 

10,835

 

 

 

10.2

%

 

 

116,637

 

 

 

80,736

 

 

 

35,901

 

 

 

44.5

%

Weighted Average Common Shares Outstanding – Diluted

 

 

117,138

 

 

106,285

 

 

10,853

 

 

 

10.2

%

 

 

117,274

 

 

 

80,736

 

 

 

36,538

 

 

 

45.3

%

nm – not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOLLEY INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

(Unaudited)

 

 

 

As of

 

 

As of

 

 

 

October 2,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

Total Current Assets

 

$

325,315

 

 

$

291,717

 

Property, Plant and Equipment, Net

 

 

54,768

 

 

 

51,495

 

Goodwill

 

 

417,298

 

 

 

411,383

 

Other Intangibles, Net

 

 

428,404

 

 

 

438,461

 

Right-of-Use Assets

 

 

31,274

 

 

 

 

Total Assets

 

$

1,257,059

 

 

$

1,193,056

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Total Current Liabilities

 

$

96,396

 

 

$

91,795

 

Long-Term Debt, Net of Current Portion

 

 

635,627

 

 

 

637,673

 

Deferred Taxes

 

 

65,826

 

 

 

70,045

 

Other Noncurrent Liabilities

 

 

40,925

 

 

 

89,056

 

Total Liabilities

 

 

838,774

 

 

 

888,569

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

12

 

 

 

12

 

Additional Paid-In Capital

 

 

353,245

 

 

 

329,705

 

Accumulated Other Comprehensive Gain (Loss)

 

 

1,002

 

 

 

(256

)

Retained Earnings (Accumulated Deficit)

 

 

64,026

 

 

 

(24,974

)

Total Stockholders’ Equity

 

 

418,285

 

 

 

304,487

 

Total Liabilities and Stockholders’ Equity

 

$

1,257,059

 

 

$

1,193,056

 

HOLLEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

For the thirteen weeks ended

 

 

For the thirty-nine weeks ended

 

 

 

October 2,

 

 

September 26,

 

 

October 2,

 

 

September 26,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

31,579

 

 

$

(30,200

)

 

$

89,000

 

 

$

(9,158

)

Adjustments to Reconcile to Net Cash

 

 

(23,955

)

 

 

36,533

 

 

 

(22,620

)

 

 

71,703

 

Changes in Operating Assets and Liabilities

 

 

(16,291

)

 

 

(27,813

)

 

 

(54,216

)

 

 

(37,628

)

Net Cash from Operating Activities

 

 

(8,667

)

 

 

(21,480

)

 

 

12,164

 

 

 

24,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures, Net of Dispositions

 

 

(1,907

)

 

 

(3,289

)

 

 

(11,272

)

 

 

(10,145

)

Acquisitions

 

 

 

 

 

(7,775

)

 

 

(14,077

)

 

 

(61,786

)

Net Cash from Investing Activities

 

 

(1,907

)

 

 

(11,064

)

 

 

(25,349

)

 

 

(71,931

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Change in Debt

 

 

(1,691

)

 

 

(101,493

)

 

 

(4,790

)

 

 

(103,032

)

Recapitalization

 

 

 

 

 

132,299

 

 

 

 

 

 

132,299

 

Payments from Stock-Based Award Activities

 

 

(1,050

)

 

 

 

 

 

(1,050

)

 

 

 

Proceeds from Issuance of Common Stock Due to Exercise of Warrants

 

 

 

 

 

 

 

 

383

 

 

 

 

Net Cash from Financing Activities

 

 

(2,741

)

 

 

30,806

 

 

 

(5,457

)

 

 

29,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Foreign Currency Rate Fluctuations on Cash

 

 

(634

)

 

 

 

 

 

(1,077

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Change in Cash and Cash Equivalents

 

 

(13,949

)

 

 

(1,738

)

 

 

(19,719

)

 

 

(17,747

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of Period

 

 

30,555

 

 

 

55,665

 

 

 

36,325

 

 

 

71,674

 

End of Period

 

$

16,606

 

 

$

53,927

 

 

$

16,606

 

 

$

53,927

 

Holley believes EBITDA, Adjusted EBITDA, Adjusted Net Income, and Organic Sales are useful to investors in evaluating the Company’s financial performance. In addition, Holley uses these measures internally to establish forecasts, budgets and operational goals to manage and monitor its business. Holley believes that these non-GAAP and other financial measures help to depict a more realistic representation of the performance of the underlying business, enabling the Company to evaluate and plan more effectively for the future.

HOLLEY INC.

USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

(Unaudited)

 

 

 

For the thirteen weeks ended

 

 

For the thirty-nine weeks ended

 

 

 

October 2,

 

 

September 26,

 

 

October 2,

 

 

September 26,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net Income (Loss)

 

$

31,579

 

 

$

(30,200

)

 

$

89,000

 

 

$

(9,158

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

10,428

 

 

 

9,851

 

 

 

26,780

 

 

 

31,096

 

Income Taxes

 

 

(1,345

)

 

 

(3,301

)

 

 

8,866

 

 

 

7,255

 

Depreciation

 

 

2,837

 

 

 

2,875

 

 

 

7,500

 

 

 

7,328

 

Amortization

 

 

3,662

 

 

 

3,553

 

 

 

10,985

 

 

 

10,391

 

EBITDA

 

 

47,161

 

 

 

(17,222

)

 

 

143,131

 

 

 

46,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and Restructuring Costs

 

 

1,266

 

 

 

368

 

 

 

3,247

 

 

 

4,704

 

Earn-Out from Simpson Acquisition

 

 

 

 

 

 

 

 

 

 

 

17,173

 

Impairment of Indefinite-Lived Intangible Assets

 

 

2,395

 

 

 

 

 

 

2,395

 

 

 

 

Change in Fair Value of Warrant Liability

 

 

(30,171

)

 

 

17,273

 

 

 

(51,112

)

 

 

17,273

 

Change in Fair Value of Earn-Out Liability

 

 

(7,429

)

 

 

6,866

 

 

 

(9,282

)

 

 

6,866

 

Loss on Early Extinguishment of Debt

 

 

 

 

 

1,425

 

 

 

 

 

 

1,425

 

Equity-Based Compensation Expense

 

 

2,873

 

 

 

2,486

 

 

 

9,518

 

 

 

2,748

 

Related Party Acquisition and Management Fee Costs

 

 

 

 

 

23,250

 

 

 

 

 

 

25,789

 

Notable Items

 

 

213

 

 

 

938

 

 

 

1,097

 

 

 

10,513

 

Other (Income) Expense

 

 

47

 

 

 

89

 

 

 

594

 

 

 

3

 

Adjusted EBITDA

 

$

16,355

 

 

$

35,473

 

 

$

99,588

 

 

$

133,406

 

 

 

For the thirteen weeks ended

 

 

For the thirty-nine weeks ended

 

 

 

October 2,

 

 

September 26,

 

 

October 2,

 

 

September 26,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net Income (Loss)

 

$

31,579

 

 

$

(30,200

)

 

$

89,000

 

 

$

(9,158

)

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjust for Impairment of Indefinite-Lived Intangible Assets

 

 

1,892

 

 

 

 

 

 

1,892

 

 

 

 

Adjust for: Change in Fair Value of Warrant Liability

 

 

(30,171

)

 

 

17,273

 

 

 

(51,112

)

 

 

17,273

 

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

 

 

(7,429

)

 

 

6,866

 

 

 

(9,282

)

 

 

6,866

 

Adjust for: Earn-Out from Simpson Acquisition

 

 

 

 

 

 

 

 

 

 

 

17,173

 

Adjust for: Loss on Early Extinguishment of Debt

 

 

 

 

 

1,126

 

 

 

 

 

 

1,126

 

Adjust for: Fees paid related to the Business Combination

 

 

 

 

 

19,561

 

 

 

 

 

 

19,561

 

Adjusted Net Income (Loss)

 

$

(4,129

)

 

$

14,626

 

 

$

30,498

 

 

$

52,841

 

 

 

13 Weeks Ended

 

 

 

October 2, 2022

 

Net Sales

 

 

154,775

 

Less: Sales from Acquisitions within 365 Days of Purchase (Non-Comparable to Prior Year)

 

 

(7,723

)

Organic Sales (Comparable to Prior Year Period Net Sales)

 

$

147,052

 

 

 

Full Year 2022

 

 

 

2022 Forecast

 

 

2022 Forecast

 

 

 

Low Range

 

 

High Range

 

Net Sales

 

$

695,000

 

 

$

710,000

 

Adjusted EBITDA

 

 

118,000

 

 

 

124,000

 

Depreciation and Amortization

 

 

24,000

 

 

 

26,000

 

Interest Expense

 

 

33,000

 

 

 

35,000

 

Capital Expenditures

 

 

14,000

 

 

 

15,000

 

Holley defines EBITDA as earnings before (a) interest expense, (b) income taxes and (c) depreciation and amortization. Holley defines Adjusted EBITDA as EBITDA plus (i) acquisition integration and restructuring costs, (ii) an adjustment in 2021 due to a change in the fair value of the Simpson acquisition contingent consideration payable, (iii) impairment of indefinite-lived intangible assets (iv) changes in the fair value of the warrant liability, (v) changes in the fair value of the earn-out liability, (vi) loss on the early extinguishment of debt (vii) compensation expense related to equity awards, (viii) related party acquisition and management fee costs, (ix) notable items that in 2022 consist primarily of non-cash adjustments related to the adoption of ASC 842, “Leases,” and in 2021 consist primarily of the amortization of the fair market value increase in inventory due to acquisitions, and (x) other expenses, which includes losses from disposal of fixed assets and foreign currency transactions.

Contacts

Investor Relations:
Ross Collins / Stephen Poe

Alpha IR Group

312-445-2870

HLLY@alpha-ir.com

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