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]

PERFORMANCE BRANDS 1 Third Quarter 2024 Financial Results Call Disclaimer Certain statements in this presentation 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 ...

Company Performance - Holley Inc. reported a quarterly loss of $0.01 per share, missing the Zacks Consensus Estimate of $0.02, and down from earnings of $0.03 per share a year ago, representing an earnings surprise of -150% [1] - The company posted revenues of $134.04 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 6.17%, and down from $156.53 million in the same quarter last year [2] - Holley has not surpassed consensus EPS estimates over the last four quarters, although it has topped consensus revenue estimates twice during that period [2] Stock Performance - Holley shares have declined approximately 43.3% since the beginning of the year, contrasting with the S&P 500's gain of 25.2% [3] - The current Zacks Rank for Holley is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $154.11 million, and for the current fiscal year, it is $0.19 on revenues of $625.08 million [7] - The outlook for the Automotive - Original Equipment industry, to which Holley belongs, is currently in the bottom 32% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Net Sales decreased by 14.4% to $134.0 million compared to $156.5 million last year[2] - 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[2] - Adjusted EBITDA was $22.1 million compared to $27.9 million last year[2] - Gross profit for the thirteen weeks ended September 29, 2024, was $52,306,000, down 10.4% from $58,374,000 year-over-year[14] - Operating income decreased by 71.2% to $5,563,000 for the thirteen weeks ended September 29, 2024, compared to $19,320,000 in the prior year[14] - Net income for the thirteen weeks ended September 29, 2024, was a loss of $6,288,000, a significant decline from a profit of $752,000 in the same period last year, representing a 936.2% decrease[14] - Adjusted EBITDA for the thirty-nine weeks ended September 29, 2024, was $90,201 thousand, down from $101,574 thousand for the thirty-nine weeks ended October 1, 2023, indicating a decrease of approximately 11.5%[20] - Net Cash Provided by Operating Activities for the thirteen weeks ended September 29, 2024, was $(1,748), compared to $22,480 for the same period last year, indicating a substantial decline[29] Inventory and Assets - Total net inventory reduced to $179.3 million compared to $207.2 million in Q3 of last year, with inventory turns improving to 2.2x from 1.9x[6] - Total assets as of September 29, 2024, were $1,184,234,000, a decrease from $1,203,343,000 as of December 31, 2023[15] - Cash and cash equivalents increased to $50,751,000 as of September 29, 2024, compared to $41,081,000 at the end of 2023[15] - Total liabilities decreased to $725,491,000 as of September 29, 2024, from $762,192,000 at the end of 2023[15] Future Outlook - Fourth quarter 2024 net sales outlook is projected between $133 million and $143 million, while full-year 2024 outlook is between $595 million and $605 million[8] - Adjusted EBITDA for the fourth quarter 2024 is expected to be between $24 million and $29 million, with full-year 2024 expected between $115 million and $120 million[8] Cost Management - Research and development costs for the thirteen weeks ended September 29, 2024, were $4,620,000, down 24.3% from $6,100,000 year-over-year[14] - The company reported a restructuring cost increase of 129.9% to $954,000 for the thirteen weeks ended September 29, 2024, compared to $415,000 in the prior year[14] Debt and Leverage - Bank-adjusted EBITDA leverage ratio at quarter end was 4.25x, well below the covenant ceiling of 5.00x[7] - The bank-adjusted EBITDA leverage ratio was reported at 4.25x, indicating the company's debt levels relative to its adjusted EBITDA[22] - The net change in debt for the thirty-nine weeks ended September 29, 2024, was $(28,832) thousand, compared to $(40,437) thousand for the thirty-nine weeks ended October 1, 2023[16] Brand Performance - Direct-to-consumer channel saw a 16% year-over-year increase, while B2B out-the-door sales experienced a 10% median lift during event windows[4] - Significant growth observed in power brands year to date, with some brands increasing by over 30%[4] Margins and Earnings - The company reported a net income margin of -4.7% for the thirteen weeks ended September 29, 2024, compared to 0.5% for the thirteen weeks ended October 1, 2023[20] - Adjusted Gross Margin for the thirty-nine weeks ended September 29, 2024, was 39.7%, compared to 38.7% for the thirty-nine weeks ended October 1, 2023, showing an improvement[24] - Adjusted Diluted EPS for the thirty-nine weeks ended September 29, 2024, was $0.10, compared to $0.22 for the thirty-nine weeks ended October 1, 2023, a decrease of 54.5%[27]

Core Viewpoint - Natural Gas Services Group, Inc. has appointed Jean Holley as a new Director, expanding its Board from six to seven members, which is expected to enhance the company's growth strategy and operational efficiency [1][2][3]. Company Overview - Natural Gas Services Group, Inc. is a leading provider of natural gas compression equipment, technology, and services to the energy industry, involved in manufacturing, renting, selling, and maintaining natural gas compressors [3]. Board Appointment Details - Jean Holley brings extensive experience in digital transformations, operational efficiency, M&A, and cybersecurity, which will be valuable as the company focuses on expanding its large horsepower rental fleet and optimizing operations [2][3]. - The addition of Holley is seen as a strategic move to support the company's long-term growth and success, particularly in the large horsepower and infrastructure segments of the industry [2][3]. Executive Insights - CEO Justin Jacobs expressed confidence in Holley's ability to contribute to the company's growth and operational strategies, emphasizing her background in technology and data analytics [2]. - Chairman Stephen Taylor highlighted that Holley's expertise will complement the existing board members and support the company's vision and strategy [2].

Financial Performance - Net sales for the 13-week period ended June 30, 2024 decreased by $5.8 million, or 3.3%, to $169.5 million compared to $175.3 million for the same period in 2023[101] - Net sales for the 26-week period ended June 30, 2024 decreased by $19.3 million, or 5.6%, to $328.1 million compared to $347.4 million for the same period in 2023[117] - Gross profit increased by $0.6 million, or 0.8%, to $70.3 million, with a gross margin of 41.5%, up from 39.8% in the prior year[104] - Gross profit for the 26-week period ended June 30, 2024 decreased by $15.1 million, or 11.0%, to $122.4 million, with a gross margin of 37.3% compared to 39.6% in the prior year[121] - Operating income for the period decreased by $2.1 million, or 6.9%, to $27.9 million compared to $30.0 million in the prior year[109] - Operating income for the 26-week period ended June 30, 2024 decreased by $17.8 million, or 31.9%, to $38.1 million compared to $55.9 million for the same period in 2023[126] - Net income for the period was $17.1 million, compared to $13.0 million for the same period in 2023, marking a 31.8% increase[116] - Net income for the 26-week period ended June 30, 2024 increased by $3.6 million, or 21.0%, to $20.8 million compared to $17.2 million for the same period in 2023[132] Costs and Expenses - Cost of goods sold for the same period decreased by $6.3 million, or 6.0%, to $99.2 million, influenced by lower freight costs and product mix[103] - Selling, general, and administrative costs rose by $5.5 million, or 18.8%, to $34.6 million, representing 20.4% of sales compared to 16.6% in the previous year[105] - Research and development costs decreased to $4.3 million, down from $6.2 million, primarily due to headcount reductions[106] - Research and development costs for the 26-week period ended June 30, 2024 decreased to $9.1 million from $12.8 million in the prior year, primarily due to headcount reductions[123] - Selling, general, and administrative costs increased by $8.4 million, or 14.3%, to $67.6 million, with costs as a percentage of sales rising to 20.6% from 17.0%[122] Interest and Debt - Interest expense increased by $3.3 million, or 33.1%, to $13.2 million, reflecting a higher effective interest rate on outstanding debt[113] - Interest expense for the 26-week period ended June 30, 2024 decreased by $4.0 million, or 14.2%, to $24.2 million compared to $28.2 million in the prior year[129] - As of June 30, 2024, the company had $564.2 million in term loan and revolver borrowings subject to variable interest rates, with a weighted average borrowing rate of 9.2%[152] - A hypothetical 100 basis point increase in interest rates would result in an approximately $0.7 million increase in annual interest expense, while a decrease would lead to a $3.9 million reduction in annual interest expense[152] Cash Flow and Liquidity - Free Cash Flow for the 13-week period ended June 30, 2024, was $24,353, down from $29,045 in the same period of 2023, a decrease of 16.5%[141] - Net cash provided by operating activities for the 26-week period ended June 30, 2024, was $44.5 million, an increase of 29.3% compared to $34.4 million for the same period in 2023[147] - Cash used in investing activities remained stable at $2.4 million for both the 26-week periods ended June 30, 2024, and July 2, 2023, primarily due to capital expenditures[148] - Cash used in financing activities increased to $30.0 million for the 26-week period ended June 30, 2024, compared to $15.6 million for the same period in 2023, mainly due to $28.6 million in principal payments on long-term debt[148] - As of June 30, 2024, the company had cash of $53.1 million and availability of $122.9 million under its revolving credit facility[143] - The company had $2.2 million in letters of credit outstanding under its revolving credit facility as of June 30, 2024[143] Strategic Outlook - The company plans to continue evaluating opportunities for strategic acquisitions to complement its current business and expand its addressable market[93] - The company expects capital expenditures in the range of $6 million to $8 million for fiscal year 2024[144] Comprehensive Income - Total comprehensive income for the period was $17.2 million, up from $13.3 million in the prior year, including foreign currency translation adjustments[116] - Total comprehensive income for the 26-week period ended June 30, 2024 was $20.7 million, an increase of $3.4 million, or 19.6%, from $17.3 million in the prior year[132] Adjusted Metrics - Adjusted Gross Margin for the 26-week period ended June 30, 2024 was 40.0%, up from 39.3% in the prior year after adjusting for product rationalization initiatives[121] - Adjusted Gross Profit for the 13-week period ended June 30, 2024, was $69,415, compared to $68,948 in the same period of 2023, reflecting a 0.7% increase[138] - Adjusted EBITDA for the 13-week period ended June 30, 2024, was $37,418, slightly down from $37,923 in the same period of 2023, indicating a decrease of 1.3%[137] Risk Factors - The company is exposed to credit risk associated with cash and cash equivalents and trade receivables, with significant customers increasing potential credit risk during economic downturns[153] - The company is exposed to foreign currency exchange rate fluctuations, primarily related to transactions in Euros and Canadian dollars, although most sales and expenses are in U.S. Dollars[154] - The company does not currently hedge foreign currency exposure but may consider strategies to mitigate this risk in the future if necessary[154] Other Financial Metrics - The company’s net income margin for the 13-week period ended June 30, 2024, was 10.1%, up from 7.4% in the same period of 2023[137] - The company successfully exited the Covenant Relief Period after June 30, 2024, following an amendment to its Credit Agreement[143] - The company recognized a gain of $6.5 million from the change in fair value of the warrant liability for the 26-week period ended June 30, 2024, compared to a loss of $3.5 million in the prior year[127]

Financial Data and Key Metrics Changes - Net sales decreased by 3.3% in Q2 2024, an improvement from nearly 8% decline in Q1 2024 [9] - Adjusted gross margins increased by 170 basis points year-over-year to 41% [9] - Adjusted EBITDA margins rose by 50 basis points to 22.1% [9] - Free cash flow for the quarter was robust at $24.4 million, with year-to-date free cash flow improving by $10 million compared to the previous year [9][33] - Inventory levels were reduced by $44 million year-over-year, improving inventory turns from 1.9x to 2.2x [8][28] Business Line Data and Key Metrics Changes - The performance aftermarket remains soft due to reduced consumer spending, but the company is confident in gaining market share through strategic initiatives [6][7] - Direct-to-consumer sales have shown significant growth year-over-year, driven by improved promotional strategies and product launches [7][11] - New product revenue increased by over 25% compared to 2023, reflecting successful product management and innovation processes [19] Market Data and Key Metrics Changes - The overall market for performance aftermarket is estimated to have declined by 5% year-to-date, while the company's direct-to-consumer and B2B sales figures showed a smaller decline of 2.8% [30] - Economic factors such as high inflation, slow wage growth, and increased debt are impacting consumer spending [29] Company Strategy and Development Direction - The company aims to enhance its organizational capabilities by recruiting top-tier talent and streamlining operations to strengthen cash flow [5][4] - Strategic initiatives include improving digital capabilities, refining promotional strategies, and launching innovative products [7][8] - The company is focused on optimizing its acquisitions and enhancing customer experience across all channels [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the current economic environment but remains optimistic about the company's ability to gain market share [6][29] - The company has adjusted its full-year guidance for net sales to a range of $605 million to $645 million, reflecting cautious optimism amid market conditions [35] - Management emphasizes the importance of maintaining strong free cash flow and reducing debt while navigating the current consumer landscape [28][34] Other Important Information - The company ended the quarter with over $53 million in cash after paying down an additional $10 million in debt [8] - S&P upgraded the company's credit rating in June, indicating improved financial stability [9] Q&A Session Summary Question: What was the price realization in Q2 and expectations for the year? - Price realization in Q2 was about 3%, consistent with Q1, with ongoing strategic price increases planned for the back half of the year [38] Question: What were the drivers of gross margin expansion in Q2? - Gross margin expansion was driven by pricing, cost to serve initiatives, and some fixed cost leverage despite lower sales [39] Question: Are there signs of worsening trends in July and August? - Both consumer demand and distributor inventory management are contributing to a cautious outlook, with observed slowdowns in sales [41] Question: Will R&D spending increase in the second half? - R&D spending is expected to remain efficient, with no significant increase anticipated, as new product revenue is up 25% year-over-year [42] Question: What factors are influencing the wide range in guidance? - The guidance range reflects macroeconomic impacts and consumer health, with the bottom and top ends depending on industry trends and distributor responses [43] Question: How is the health of distribution partners? - Overall, distribution partners remain strong, but there is some softness in certain areas, with a focus on monitoring receivables [46] Question: Are there outperforming sectors within the verticals? - The safety and racing vertical is showing strength, driven by lifestyle engagement and product innovations [47] Question: How might interest rates impact the business? - A 100 basis point decline in interest rates could benefit free cash flow by $5 million to $6 million, but consumer sensitivity remains a concern [49][51] Question: What is the current state of distribution partner inventory? - Distribution partner inventory levels are elevated, with destocking expected as they prepare for consumer behavior changes [64]

Company Performance - Holley Inc. reported quarterly earnings of $0.10 per share, matching the Zacks Consensus Estimate, but down from $0.14 per share a year ago [1] - The company posted revenues of $169.5 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.49% and down from $175.26 million year-over-year [2] - Holley has not surpassed consensus EPS estimates in the last four quarters and has experienced a 29.8% decline in share price since the beginning of the year [3][6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $161.34 million, and for the current fiscal year, it is $0.25 on revenues of $654.7 million [7] - The trend for earnings estimate revisions for Holley is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - Holley operates within the Automotive - Original Equipment industry, which is currently ranked in the bottom 14% of over 250 Zacks industries, suggesting a challenging environment [8] - The performance of Holley’s stock may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [8]