Core Viewpoint - Holley Inc. (HLLY) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The upgrade in Holley's rating reflects an improvement in the company's underlying business, suggesting that investors may respond positively by driving the stock price higher [4][9]. - Holley is projected to earn $0.26 per share for the fiscal year ending December 2025, representing a year-over-year increase of 30% [7]. Analyst Sentiment and Consensus - Over the past three months, the Zacks Consensus Estimate for Holley has increased by 7.7%, indicating a positive trend in analyst sentiment [7]. - The Zacks Rank system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, positioning Holley favorably for potential market-beating returns [8][9].

Core Viewpoint - Kaskela Law LLC is investigating Holley Inc. for potential securities fraud on behalf of long-term shareholders, following a complaint that alleges misleading statements made by the company during a specified class period [1][2]. Summary by Sections Investigation Details - A securities fraud complaint was filed against Holley for misleading investors about its business and growth prospects between July 21, 2021, and February 6, 2023 [2]. - The complaint highlights that Holley excluded resellers from promotions, leading them to promote competitors' products, and failed to enforce minimum advertised pricing on most products [3]. Financial Impact - Following disclosures of the alleged misconduct, Holley's stock price fell from over $12.50 per share in July 2022 to below $3.00 per share by February 2023 [3]. Legal Rights and Options - Holley shareholders who acquired shares before May 12, 2022, are encouraged to contact Kaskela Law LLC for information regarding their legal rights and options [4].

J.P. Morgan analyst Christian Carlino reiterated the Neutral rating on Holley Inc. HLLY.Carlino has expressed concerns over a lack of catalysts for growth and the ongoing macroeconomic challenges affecting the company.While the 2025 guidance suggests that Holley could achieve its target of a 20% EBITDA margin, the analyst notes that the overall sentiment may be impacted by a “softer” top-line outlook.The valuation is strongest at the top of the income statement, but the softer revenue projections are likely ...

Financial Performance - Net sales for the year ended December 31, 2024, decreased by $57.5 million, or 8.7%, to $602.2 million compared to $659.7 million in 2023[216]. - Cost of goods sold for the year ended December 31, 2024, decreased by $39.9 million, or 9.9%, to $363.7 million compared to $403.6 million in 2023[220]. - Gross profit for the year ended December 31, 2024, decreased by $17.5 million, or 6.9%, to $238.5 million compared to $256.1 million in 2023[216]. - Selling, general, and administrative expenses increased by $11.9 million, or 9.9%, to $132.1 million in 2024 compared to $120.2 million in 2023[216]. - Research and development costs decreased by $5.1 million, or 21.5%, to $18.7 million in 2024 compared to $23.8 million in 2023[216]. - Impairment of goodwill amounted to $40.9 million in 2024, representing a 100% increase from zero in 2023[216]. - Net income for the year ended December 31, 2024, was a loss of $23.2 million compared to a net income of $19.2 million in 2023, reflecting a decrease of $42.4 million or 221.1%[216]. - Total comprehensive loss for the year ended December 31, 2024, was $23.7 million compared to a comprehensive income of $19.4 million in 2023, a change of $43.1 million or 222.0%[216]. - The company incurred a loss on the sale of assets amounting to $9.2 million in 2024, which was not present in 2023[216]. - Interest expense decreased by $10.1 million, or 16.6%, to $50.7 million in 2024 compared to $60.7 million in 2023[216]. Market Position and Strategy - The top five brands of Holley accounted for 55% of total sales in 2024, with Holley EFI representing 14%, Holley 15%, MSD 10%, Simpson 10%, and Flowmaster 6%[34][40]. - Holley plans to expand its market share by entering new product categories and implementing sales and marketing strategies aimed at revenue growth[30]. - The company operates in a highly fragmented performance automotive aftermarket industry, which has seen consistent growth over the last two decades[32]. - Holley has identified opportunities for growth in adjacent markets such as Performance Suspension, Braking, and Powertrain Conversion Systems[37]. - E-tailers and warehouse distributors accounted for 55% of Holley's sales in 2024, with the top ten distribution partners contributing 42% of total sales[46]. - The DTC channel allows Holley to directly interact with customers, enhancing brand engagement and generating attractive margins[45]. - Holley has established long-term relationships with distribution partners, allowing for pricing discipline that supports profit margins[47]. - The company relies on brand reputation and quality to attract and retain customers, which is critical for ongoing demand[84]. - Holley reported a commitment to innovation, focusing on developing new products and expanding product lines to adapt to evolving consumer needs[200]. - The company has pursued a growth strategy through both organic growth and acquisitions, targeting market leaders to enhance profitability and stockholder value[204]. Operational Challenges - The company is exposed to risks related to labor shortages, supply chain disruptions, and the need to adopt new technologies like artificial intelligence[22]. - Significant reductions or fluctuations in demand for products could adversely impact sales and financial condition[72]. - Inflation has led to increased costs of raw materials, including steel, aluminum, and precious metals, which may not be fully passed on to customers[74]. - Disruptions in supply chains and shortages of raw materials have resulted in higher manufacturing costs and could harm profitability[76]. - Labor shortages and increased labor costs could materially affect the company's operations and financial results, necessitating effective management of workforce dynamics[102]. - The company faces significant pricing pressure due to unfavorable economic conditions, intense competition, and changes in consumer demand, which could adversely impact margins and profitability[94]. - Competition from larger companies and original equipment manufacturers may pressure pricing and market share[80]. - The company must continue to innovate and develop new products to meet changing consumer preferences and maintain sales growth[82]. - Expansion into international markets presents challenges, including competition and consumer acceptance of premium products[90]. - The company is exposed to political and country risks due to its operations in various countries, including China, which may disrupt markets and supply chains[143]. Human Resources and Workplace Culture - Holley employed 1,467 full-time employees and 53 temporary employees as of December 31, 2024, with 46% based in Bowling Green, KY[54]. - Approximately 39% of Holley's workforce were women in 2024, reflecting the company's commitment to closing the gender gap[61]. - Holley aims to create a premier workplace to attract and retain skilled personnel, which is critical for its innovation and growth strategy[29]. - The company suspended its 401(k) match effective July 2024, but continues to offer competitive benefits including an HSA-eligible health plan introduced in 2024[56][57]. - The company’s future success depends on the ability to attract and retain skilled personnel, with competition for talent being intense[101]. Financial Obligations and Risks - As of December 31, 2024, the company had $560.9 million in principal outstanding under its credit facility, requiring quarterly payments of principal plus accrued interest[115]. - The Credit Agreement imposes various restrictions, including limitations on dividends, additional indebtedness, and acquisitions, which may hinder the company's ability to invest in business needs[117]. - The company may need to raise additional capital to support growth initiatives, which could lead to dilution of existing stockholders' ownership if financing is not available on satisfactory terms[110]. - The company’s ability to obtain additional financing may be restricted due to its current indebtedness and the conditions of the Credit Agreement[120]. - The company faces increasing scrutiny regarding its environmental, social, and governance (ESG) practices, which may impose additional costs and risks[140]. - The company is subject to various legal and regulatory compliance risks, which could lead to lawsuits, fines, and penalties that may harm its financial condition[148]. - Intellectual property claims could result in significant costs or prohibit the company from selling its products, impacting its operations[149]. - The company is subject to environmental regulations that could increase costs or restrict operations, with potential liabilities for environmental cleanups[152]. - Changes in tax laws and regulations could adversely affect the company's effective income tax rate and profitability[158]. - The concentration of stock ownership by certain stakeholders may limit other stockholders' influence and could affect the company's ability to pursue mergers or acquisitions[160]. Technology and Innovation - The company must effectively adopt new technologies like artificial intelligence and machine learning to remain competitive, as failure to do so could adversely affect its market position[144]. - Significant investments are required for developing and integrating new technologies, with no assurance that these efforts will yield the intended results[145]. - The company is exposed to cybersecurity risks that could disrupt operations and lead to unauthorized access to sensitive information, potentially harming reputation and financial performance[105]. - The company has identified a material weakness in its internal control over financial reporting, which could lead to misstatements in financial statements if not remediated[124]. - The company’s management team lacks extensive experience managing a public company, which may affect its ability to comply with regulatory obligations[133]. Stockholder Considerations - As of December 31, 2024, there are 14,633,311 Warrants outstanding, each exercisable for one share of Common Stock at an exercise price of $11.50, which could lead to dilution for stockholders[163]. - The company may redeem outstanding Warrants at a price of $0.01 per Warrant if the Common Stock price exceeds $18.00, potentially disadvantaging Warrant holders[169]. - Approximately 43% of Common Stock is beneficially owned by the Holley Stockholder and the Sponsor, which could impact market price if these shares are sold[168]. - The company does not intend to pay cash dividends for the foreseeable future, focusing instead on business development and expansion[174]. - The company qualifies as an "emerging growth company," allowing it to take advantage of certain reporting exemptions until December 31, 2025[175]. - Future issuances of debt or equity securities may dilute existing stockholders and adversely affect the market price of Common Stock[173]. - The trading price of Common Stock has experienced significant volatility, which could lead to potential securities class action litigation[166]. - The NYSE may delist the company's securities if it fails to meet continued listing standards, which could limit stockholder transactions and reduce liquidity[171]. - The company has the ability to amend the terms of the Warrants with the approval of at least 50% of the holders, which could adversely affect Warrant holders[164]. - The market price of Common Stock and Warrants may be influenced by analyst reports and projections, which can vary widely from actual results[167].

Holley (HLLY) Q4 2024 Earnings Call March 11, 2025 05:46 PM ET Company Participants Anthony Rozmus - Managing DirectorMatthew Stevenson - President & Chief Executive OfficerJesse Weaver - CFO & Head of Information TechnologyChristian Carlino - Equity Research AssociateBret Jordan - Managing Director Conference Call Participants Joseph Altobello - MD & Senior AnalystBrian McNamara - MD & Senior Analyst - ConsumerPhillip Blee - Equity Research Analyst Operator Good morning, ladies and gentlemen, and welcome t ...

Holley Inc. (NYSE:HLLY) Q4 2024 Earnings Conference Call March 11, 2025 8:30 AM ET Company Participants Anthony Rozmus - IR Matt Stevenson - President and CEO Jesse Weaver - CFO Conference Call Participants Christian Carlino - JPMorgan Joe Altobello - Raymond James Brian McNamara - Canaccord Genuity Bret Jordan - Jefferies Phillip Blee - William Blair Operator Good morning, ladies and gentlemen. And welcome to the conference call to discuss Holley's Fourth Quarter and Full Year 2024 Earnings Results. At thi ...

Holley Inc. (HLLY) came out with quarterly earnings of $0.11 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 450%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced a loss of $0.01, delivering a surprise of -150%.Over the last four quarters, the company has sur ...

Financial Performance - Net Sales for Q4 2024 decreased by 10.1% to $140.1 million compared to $155.7 million in Q4 2023[6] - Full Year 2024 Net Sales decreased by 8.7% to $602.2 million compared to $659.7 million in 2023[6] - Net Loss for Q4 2024 was $(37.8) million, or $(0.32) per diluted share, compared to Net Income of $1.2 million, or $0.01 per diluted share in Q4 2023[6] - Adjusted Net Income for Q4 2024 was $12.6 million compared to an Adjusted Net Loss of $(0.5) million in Q4 2023[6] - Net loss for the thirteen weeks ended December 31, 2024, was $37,782 thousand, compared to a net income of $1,202 thousand for the same period in 2023[32] - Adjusted EBITDA for the year ended December 31, 2024, was $110,493 thousand, down from $130,885 thousand in 2023, reflecting a decrease of approximately 15.6%[32] - The Adjusted EBITDA Margin for the year ended December 31, 2024, was 18.3%, compared to 19.8% in 2023, indicating a decline in operational efficiency[32] - The net income margin for the year ended December 31, 2024, was -3.9%, compared to a positive margin of 2.9% in 2023[32] - Adjusted Net Income for the year ended December 31, 2024, was $24,838 thousand, compared to $25,040 thousand in 2023, showing a slight decrease[36] Cash Flow and Assets - The company reported a net cash provided by operating activities of $4.126 million for the thirteen weeks ended December 31, 2024, compared to $31.229 million in the prior year[27] - Net cash provided by operating activities for the year ended December 31, 2024, was $46,899 thousand, down from $88,092 thousand in 2023[38] - Cash and cash equivalents increased to $56.087 million as of December 31, 2024, compared to $41.081 million at the end of 2023[25] - Total assets decreased to $1,133.320 million as of December 31, 2024, down from $1,203.343 million as of December 31, 2023[25] - Total liabilities decreased to $712.168 million as of December 31, 2024, from $762.192 million as of December 31, 2023[25] Operational Metrics - Adjusted EBITDA for Full Year 2024 was $110.5 million, down from $130.9 million in 2023[11] - Free Cash Flow for the year ended December 31, 2024, was $41,821 thousand, a decrease from $83,639 thousand in 2023, representing a decline of approximately 50%[38] - The Bank-adjusted EBITDA Leverage Ratio as of December 31, 2024, was 4.17x, indicating a significant level of debt relative to earnings[34] - Research and development costs for the year ended December 31, 2024, were $18.710 million, a decrease of 21.5% from $23.844 million in 2023[23] - Inventory turns improved to 2.0x compared to 1.9x last year[13] Strategic Developments - A perpetual exclusive license agreement with Cataclean for the North American market was announced for a total purchase price of $23.8 million[13] - Full Year 2025 revenue guidance indicates expected growth of 0.8% to 4.3%, with projected Net Sales of $580 - $600 million[12] - Direct-to-Consumer (DTC) and National Retailer growth was 8% and 12%, respectively, in 2024[5] - Revenue per SKU for new product launches increased by 75%, with eCommerce sales surpassing $100 million[5] Impairments and Restructuring - The company reported an impairment of goodwill amounting to $40,906 thousand for the year ended December 31, 2024[34] - The company incurred restructuring costs of $1,372 thousand for the year ended December 31, 2024[34] Income and Loss Analysis - Operating income for the thirteen weeks ended December 31, 2024, was a loss of $28.981 million, a decline of 254.2% from an operating income of $18.790 million in 2023[23] - Gross profit increased by 6.0% to $63.886 million for the thirteen weeks ended December 31, 2024, compared to $60.254 million in the prior year[23]

Core Insights - The article discusses the mixed outcomes of companies going public, highlighting that while some achieve significant success, others, like Holley (NYSE: HLLY), have underperformed [1]. Group 1 - The public offering is a significant milestone for companies, with varying results in terms of shareholder wealth creation [1].

Financial Data and Key Metrics Changes - Net sales decreased by 14.4% to $134 million compared to $156.5 million in the same period last year [20][65] - Adjusted gross margins increased by 170 basis points year-over-year to 39% [20][67] - Free cash flow for the quarter was negative $2.1 million, a decrease of $23.8 million compared to the prior year [21] - Net loss for the third quarter was $6.3 million compared to net income of $800,000 in the same period last year [69] Business Line Data and Key Metrics Changes - Direct-to-consumer sales saw a remarkable 110% lift during the third quarter due to effective marketing efforts [14] - B2B sales capabilities improved, with national retailer sales up 12% year-over-year [37] - New product revenue increased by 25% this year through better product adoption with distributors [38] Market Data and Key Metrics Changes - Overall consumer demand in the industry remains soft, with the performance aftermarket estimated to have declined by roughly 4% to 5% year-to-date [63][64] - Out-the-door sales of Holley Performance Brands at distribution partners were only down 3%, indicating market share gains [64] Company Strategy and Development Direction - The company is focused on becoming a multibillion-dollar enthusiast platform by enhancing consumer experiences and supporting distribution partners [8][10] - Strategic pricing initiatives and MAP enforcement have been implemented to build trust with distributors and optimize pricing [34][88] - The company aims to maintain rigorous financial discipline while driving growth through innovative products and improved operational performance [11][39] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation concerns and economic volatility are impacting consumer confidence, leading to cautious spending [13][61] - The company expects to see organic growth starting in Q1 of 2025, driven by improved market conditions and effective partnerships with distributors [94][115] - Management remains optimistic about stabilizing revenue trends as distributor inventories normalize [17][73] Other Important Information - The company achieved a 55% year-over-year reduction in past due metrics and saved $2.5 million in costs this quarter [18] - The company has received credit upgrades from Moody's and S&P, reflecting improved financial health [60][76] Q&A Session Summary Question: Could you speak to your direct and indirect exposure to China and tariffs? - Management indicated they have been working on reducing tariffs and do not foresee significant impacts going forward [82] Question: How much of the national retailer sales increase is due to better brand positioning? - Management believes there is significant growth potential in partnering with national retailers and improving product placement [84] Question: What is the expected impact of pricing initiatives? - Management confirmed that pricing initiatives are positive and have built trust with distribution partners [88] Question: What are the expected savings from cost to serve initiatives? - Management expects total savings from cost to serve initiatives to be around $7 million to $8 million for the year [90] Question: Will distributor inventory normalization be completed by year-end? - Management anticipates that most inventory adjustments will be completed by the end of the year [93] Question: How will the election results impact the business? - Management believes the election results will create a more favorable environment for their industry [100] Question: What was the feedback from the recent SEMA event? - Management reported positive feedback from distributors and noted a significant presence at the event [102] Question: What is the health of the distributor channel? - Management indicated that the industry remains stable and optimistic for 2025 [104] Question: How does the company plan to drive growth in 2025? - Management stated that all consumer verticals are being focused on for growth, with a balanced approach [110]