Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39599 HOLLEY INC. (Exact name of registrant as specified in its charter) Delaware 87-1727560 (State or other jurisdiction of in ...

Holley Inc. (NYSE:HLLY) Q4 2023 Earnings Call Transcript February 28, 2024 8:30 AM ET Company Participants Ross Collins - IR Matt Stevenson - President and CEO Jesse Weaver - CFO Conference Call Participants Brian McNamara - Canaccord Genuity Joe Altobello - Raymond James Christian Carlino - JPMorgan John Lawrence - The Benchmark Company Joe Feldman - Telsey Advisory Group Operator Greetings and welcome to the Holley Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a liste ...

Fourth Quarter 2023 Financial Results Call February 28, 2024 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 t ...

PRESS RELEASE Exhibit 99.1 1801 Russellville Road Bowling Green, Kentucky 42101 Holley.com HOLLEY REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS; EARLY STAGES OF TRANSFORMATION YIELDING POSITIVE YEAR-OVER-YEAR IMPROVEMENT IN Q4 PROFITABILITY Year Over Year Fourth Quarter Net Income Improvement of $16.4 Million and Adjusted EBITDA Growth of 89% Continued strong cash generation and debt paydown further reduces net leverage Provides outlook and guidance for Q1 and full year 2024 BOWLING GREEN, Ky. – Februar ...

Financial Data and Key Metrics Changes - Net sales for Q3 2023 were $156 million, up 1% year-over-year [13] - Gross margins improved by 600 basis points to 37.3% compared to 31.3% last year [39] - EBITDA margins increased by 840 basis points to 19% from 11% in Q3 2022 [42] - Free cash flow was $21.7 million for the quarter, a $32 million improvement year-over-year [7][43] - Year-to-date free cash flow reached $54 million, up $53 million compared to the same period in 2022 [36] Business Line Data and Key Metrics Changes - The electronics category saw a 13% increase in net sales, driven by proactive chip procurement efforts [38] - Over 65 new products were introduced in Q3, including the Sniper 2 EFI system [14] - Significant reductions in past dues were noted, with electronics past dues down nearly 50% to $5.5 million [39] Market Data and Key Metrics Changes - Attendance at four major events in Q3 increased by over 12% year-over-year, hosting over 75,000 enthusiasts [15] - The company is focusing on modern truck, Euro, and off-road segments, which represent significant growth opportunities [31] Company Strategy and Development Direction - The company is undergoing a transformation to become more consumer-centric, with a new organizational structure aimed at unlocking growth [4][10] - Focus on enhancing product development and customer experience through new leadership and a structured phase-gate system [17][27] - The long-term goal includes achieving gross margins of approximately 40% and EBITDA margins greater than 20% [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transformation efforts and their impact on financial performance [34] - The company anticipates continued strong free cash flow to support further debt paydown [44] - There is a focus on maintaining operational efficiency and cost containment to support future growth [41] Other Important Information - The company won several awards at SEMA, including for the Holley Easy-Level Fuel Level Sender [18][19] - A costless interest rate collar was entered to hedge $500 million of debt against interest rate fluctuations [45] Q&A Session Summary Question: How has Sniper 2 been received, particularly at SEMA? - Management reported excitement about Sniper 2's reception, noting significant attention and awards at the show [54] Question: Can you provide more detail on gross margin expansion? - The gross margin increase was primarily driven by improvements in freight and lower warranty expenses [58] Question: What is the current health of the enthusiast customer? - Management noted that Q3 is typically the lowest for order demand, but they expect normalization in Q4 as enthusiasts prepare for winter builds [70] Question: How should we think about the path to 40% gross margin and 20% EBITDA margin targets? - Management indicated that while growth is part of the equation, operational efficiencies can also drive margin improvements [71] Question: What is the capital allocation strategy moving forward? - The primary focus will be on paying down debt with excess free cash flow, while maintaining a capital-light business model [80]

Yes. Nothing to discuss specifically today, Brett. But yes, progress continues and there's really two focuses for EV for us. One is providing aftermarket performance parts for EV vehicles that come out of the factory OE as well as looking at some retrofit applications for EV components for classic and modern cars. So some exciting things we're looking at, and I'd just say more to come in the future. Okay. And then one real quick question. I think somebody asked earlier, but just -- do you have any color on ...

Holley remains steadfast in its vision to inspire and enable enthusiasts in their automotive adventures by bringing innovation, discovery, and fun to motor life. Our team of enthusiasts supports the journeys of our enthusiast customers by focusing on five key pillars of our strategy. Those are: One, prioritizing key categories and platforms; Two, product innovation; Three, mergers and acquisitions; Four, our customer-focused channel strategy; and Five, engaging and inspiring the enthusiasts. IÂ'd like to up ...

| --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------|-------|----------------|----------------|----------------|---------------| | Net Income (Loss) | | 2Q22 \n$ 9.2 | 3Q22 \n$71.0 | 4Q22 \n$73.8 | 1Q23 \n$ 61.2 | | | | | | | | | Adjustments: | | | | | | | Interest Expense 34.2 34.8 40.2 51.1 | | | | | | | Income Taxes 10.1 12.1 4.5 (1.1) | | | | | | | Depreciation 11.8 11.7 10.1 10.4 | | | | | | | Amortization 14.5 14.6 14.7 14.7 | | | | | | | EBITDA 79.8 ...

Innovation and Product Development - Approximately 34% of the company's 2022 sales came from products introduced since 2017, highlighting the importance of innovation in its growth strategy[166] Debt and Interest Rates - The company has $659.4 million of floating-rate debt outstanding as of December 31, 2022, with a hypothetical 100 basis point change in interest rates impacting annual interest expense by approximately $6.6 million[241] Bad Debt and Inventory Reserves - The company's bad debt reserve increased from $956,000 in 2021 to $1,162,000 in 2022, reflecting changes in uncollectible accounts[262] - The expired and obsolete inventory reserve grew significantly from $26.28 million in 2021 to $38.53 million in 2022, indicating challenges in inventory management[262] Business Combination and Equity Issuance - The company completed a business combination on July 16, 2021, resulting in the issuance of 67,673,884 shares of common stock at a deemed value of $10.00 per share[333] - As part of the business combination, the company raised $240 million through a PIPE (Private Investment in Public Equity) offering, with $100 million used to partially pay off debt[333] - The company issued 5,000,000 shares of common stock and 1,666,667 warrants to investors as part of the Amended and Restated Forward Purchase Agreement, with warrants exercisable at $11.50 per share[334] - The Business Combination resulted in net cash contributions of $132,299 from Business Combination and PIPE Financing[337] Financial Reporting and Internal Controls - The company's internal control over financial reporting was deemed effective as of December 31, 2022, based on an assessment using the COSO framework[250] Accounting Standards and Policies - The company adopted ASU 2019-12 on January 1, 2022, which simplified accounting for income taxes but did not have a material impact on financial statements[328] - The company has not adopted any expedients or exceptions under ASU 2020-04 related to the transition from LIBOR to alternative reference rates[330] Warrants and Equity Holdings - The Company assumed 8,333,310 Public Warrants and 4,666,667 Private Warrants, each exercisable at $11.50 per share, expiring on July 16, 2026[335] - Empower Sponsor Holdings LLC received 2,187,500 shares of the Company's common stock, with 1,093,750 shares vested in Q1 2022, valued at $14,689[335] - Holley Stockholder and Sponsor collectively own approximately 55% of Common Stock (57% including warrants)[137] - Warrants can be redeemed at $0.01 per Warrant if Common Stock price exceeds $18.00 per share[138] Acquisitions and Goodwill - The Company completed 14 acquisitions over three years, enhancing its automotive aftermarket and safety solutions portfolio[338] - In 2022, the Company acquired John's Ind., Inc., Southern Kentucky Classics, and RaceQuip for $14,863, resulting in $9,618 in goodwill and intangibles[341] - In 2021, the Company acquired Finspeed, Classic Instruments, ADS, Rocket, and Speartech for $19,909, resulting in $13,247 in goodwill and intangibles[344] - The Company acquired Baer, Inc. for $22,170, resulting in $18,989 in goodwill and intangibles[347] - The Company acquired Brothers Mail Order Industries, Inc. for $26,135, resulting in $24,835 in goodwill and intangibles[350] - The Company acquired Advance Engine Management Inc. for $51,243, resulting in $44,486 in goodwill and intangibles[354] - The fair value of acquired customer relationships and tradenames was estimated using the excess earnings and relief from royalty methods, respectively[343][348] - The company's net sales from AEM since the date of acquisition were $16,593, with net income of $2,664[357] - The company incurred transaction costs of $2,264 related to the acquisition, reflected in operating expenses for the year ended December 31, 2021[357] - The purchase price for Drake Automotive Group LLC was $49,104, with $47,104 paid in cash and an earn-out payment of $2,000[358] - The acquisition of Simpson Performance Products, Inc. resulted in goodwill and intangibles totaling $105,882, with a purchase price of $117,409[361] - The fair value of the contingent payment for Simpson was adjusted to $24,373, resulting in a $17,173 adjustment recognized in acquisition and restructuring costs[362] Pro Forma Financials - The company's pro forma net sales for the year ended December 31, 2021, were $727,369, with a pro forma net loss of $16,248[369] Customer Concentration - Customer A accounted for 19.2% of the company's net sales in 2022 and 19.3% in 2021[446] Acquisition and Restructuring Costs - Total acquisition, restructuring, and management fee costs for 2021 were $49,457, including a $17,173 earn-out adjustment[447] - Acquisition costs include a fee of $23,275 paid to Sentinel Capital Partners in 2021 upon the Closing of the Business Combination[453] Warranty Costs - The company's accrued product warranty costs for 2022 were $12,261, with an ending balance of $3,584[451] Credit Agreements and Amendments - The company amended its Credit Agreement in February 2023, increasing the consolidated net leverage ratio financial covenant level to 7.25:1.00 for the Covenant Relief Period[452] - The company entered into a Credit Agreement dated November 18, 2021, with Wells Fargo Bank, N.A. as administrative agent[457] - An Amendment to the Credit Agreement was executed on March 3, 2023, involving Holley Inc. and certain subsidiaries[457] Director Compensation - Director compensation of $180 and $90 was paid to Sentinel Capital Partners for Mr. Basham's and Mr. Coady's service on Holley's Board of Directors for the years ended December 31, 2022 and 2021[453] Stock and Market Value - The aggregate market value of the company's common stock held by non-affiliates was approximately $560 million as of July 1, 2022[5] - There were 118,241,747 shares of Common Stock, including 1,093,750 restricted earn-out shares, issued and outstanding as of March 10, 2023[6] Agreements and Contracts - The company filed an Amended and Restated Forward Purchase Agreement dated March 11, 2021, with Empower Ltd. and Empower Funding LLC[457] - A Sponsor Agreement was established on March 11, 2021, involving Empower Ltd., Empower Sponsor Holdings LLC, and Holley Parent Holdings, LLC[457] - The company has management contracts and compensatory plans, including indemnity agreements and performance stock unit grants[457] Company Classification and Reporting - The company is classified as an accelerated filer and an emerging growth company as of the filing date[5] - Emerging growth company status allows exemptions from certain reporting requirements[144] - Extended transition period for adopting new accounting standards as an emerging growth company[145] NYSE Listing and Delisting Risks - NYSE listing requires maintaining minimum stockholders' equity and financial standards[139] - Delisting from NYSE could lead to over-the-counter trading and reduced liquidity[140] Future Financing and Dividends - Future debt or equity issuances may dilute existing stockholders and affect stock price[141] - No cash dividends planned for the foreseeable future[142] Facilities and Operations - Corporate headquarters occupies 200,000 square feet, including 69,000 square feet of office space[154] - 14 manufacturing facilities and 18 R&D/Engineering facilities globally[155]

Holley Inc. (NYSE:HLLY) Q4 2022 Earnings Conference Call March 9, 2023 8:30 AM ET Company Participants Ross Collins - Investor Relations Matt Rubel - Executive Chairman Michelle Gloeckler - Interim President and Chief Executive Officer Jesse Weaver - Chief Financial Officer Vinny Nimmagadda - Executive Vice President, Corporate Development and New Ventures Conference Call Participants Joe Altobello - Raymond James John Lawrence - Benchmark Company Anna Glaessgen - Jefferies Mike Swartz - Truist Christian Ca ...