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 ...

March 9, 2023 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 are forward-looking statements. In some cases, you can identify forward-looking statements b ...

Financial Data and Key Metrics Changes - Holley reported net sales of $154.8 million in Q3 2022, a 3.1% decrease from $159.7 million in Q3 2021 [29] - Gross profit decreased by $16.8 million or 25.8% to $48.4 million, with gross margin dropping to 31.3% from 40.8% year-over-year [33] - Adjusted EBITDA decreased to $16.4 million in Q3 2022, down from $35.5 million in Q3 2021, primarily due to supply chain challenges and increased costs [38] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales increased by 11% year-over-year, despite supply chain challenges [17][18] - Noncomparable sales from acquisitions contributed $7.7 million or 4.8% of year-over-year growth, while comparable sales decreased by $12.6 million or 7.9% [30] Market Data and Key Metrics Changes - Past due orders remained elevated at $30.6 million at the end of the quarter, although excess past due orders were reduced by $11.1 million during Q3 [16] - Channel inventory decreased by $8.4 million in the quarter, but stronger shipments in September allowed for some rebuilding of inventory [14] Company Strategy and Development Direction - The company is focused on improving supply chain conditions and operational efficiencies to convert demand into sales [19] - Holley aims to restore gross margins to historical levels and is pursuing strategies to drive higher productivity and lower costs [70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing risks in the supply chain, particularly regarding the availability of microchips, despite some improvements [50] - The company remains confident in its underlying profitability and cash flow generation potential, believing it is well-positioned for long-term growth [22][75] Other Important Information - The company appointed Brian Applegate as Interim Chief Operating Officer to focus on supply chain, manufacturing, and engineering improvements [20][21] - Holley completed five strategic acquisitions over the past 12 months, enhancing its product range and operational efficiencies [25] Q&A Session Summary Question: Follow-up on September trends and supply chain issues - Management noted improvements in supply chain but highlighted ongoing risks, particularly with microchip availability [50][51] Question: Warranty costs and future expectations - Management indicated that warranty costs were impacted by a backlog of claims and provisions have been made for future warranty expenses [55] Question: Inventory levels and reseller destocking - Management confirmed improvements in channel inventory as shipping capabilities increased in September [56][57] Question: Industry insights and promotional activity - Management reported that competitors are also facing supply chain issues, but Holley's performance remains strong relative to peers [59][60] Question: Gross margin expectations for Q4 - Management expects similar gross margin compression in Q4 due to ongoing inflationary pressures and higher freight costs [68] Question: Long-term gross margin restoration - Management expressed intent to restore margins to historical levels, emphasizing ongoing integration efforts from recent acquisitions [70]

Holley Inc. (NYSE:HLLY) Q2 2022 Earnings Conference Call August 11, 2022 8:30 AM ET Company Participants Ross Collins - Investor Relations Tom Tomlinson - Chief Executive Officer Dominic Bardos - Chief Financial Officer Vinny Nimmagadda - Executive Vice President, Corporate Development and New Ventures Conference Call Participants Joe Altobello - Raymond James Ryan Sundby - William Blair Joe Feldman - Telsey Advisory Anna Glaessgen - Jefferies Alex Perry - Bank of America John Lawrence - Benchmark Christian ...

Financial Data and Key Metrics Changes - Holley reported net sales of $200.1 million in Q1 2022, an increase of $39.7 million or 24.8% from Q1 2021 [14] - Organic sales contributed $21.6 million or 13.5% of year-over-year growth, driven by improved price realization and higher unit sales volume [15] - Gross margin increased to 41.3% from 41.0% in Q1 2021, reflecting higher price realization that offset significant freight expense increases [16] - Net income for Q1 2022 was $16.9 million, with adjusted net income increasing to $21.5 million from $15.1 million in Q1 2021 [21] - Adjusted EBITDA rose to $46 million in Q1 2022, up from $43.8 million in 2021 [22] Business Line Data and Key Metrics Changes - Sales associated with acquisitions contributed $18.1 million or 11.3% of year-over-year growth, highlighting the strength of Holley's platform [13] - The electronic fuel injection and safety product categories drove higher unit sales volume, contributing to organic growth [15] Market Data and Key Metrics Changes - Supply chain challenges continue to limit the ability to fully satisfy consumer demand, but the company managed to capture growth despite these challenges [10] - Direct-to-consumer sales remained strong, outpacing organic growth [42] Company Strategy and Development Direction - M&A remains a pivotal piece of Holley's growth strategy, with a focus on attractive companies to expand market share and drive shareholder value [12] - The company is committed to developing innovative products for enthusiast consumers while managing supply chain and inflationary headwinds [11][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that supply chain and inflationary challenges are top of mind, but they remain focused on product development and consumer engagement [11][25] - The company reaffirmed its guidance for annual net sales in the range of $765 million to $790 million and adjusted EBITDA between $186 million and $194 million [23] Other Important Information - Total selling, general and administrative expenses increased by 43% in Q1 2022, driven by equity compensation and public company expenses [18] - Interest expense decreased by 27% to $7.4 million, benefiting from a $100 million paydown on debt [20] Q&A Session Summary Question: Impact of freight costs on growth and guidance - Management noted that freight costs have moderated but remain elevated, with expectations of continued high costs in Q2 before lapping begins [30] Question: Correlation between fuel prices and demand - Management indicated that while fuel prices can impact discretionary income, automotive enthusiasts are likely to continue pursuing their interests despite higher costs [35] Question: Changes in consumer demand - Direct-to-consumer sales remained strong, while some resellers reduced inventory in response to economic concerns [42][43] Question: Inventory position and ability to meet demand - Management expressed that current inventory levels are insufficient to meet consumer demand due to supply chain challenges [49] Question: Integration of recent acquisitions - Management confirmed that supply chain issues have not significantly impacted the integration of recent acquisitions, with a focus on completing the Simpson integration in Q2 [56]

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, 2021 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) (State or other jurisdiction of incorporation or org ...

Financial Data and Key Metrics Changes - Holley's net sales grew by 30% in Q4 2021, with 17% from acquisitions and 13% organic growth [8] - For the full year 2021, net sales increased by 37%, with 23% from acquisitions and 14% organic growth [8][27] - Gross margin improved from 39.4% in Q4 2020 to 41.6% in Q4 2021, attributed to pricing and higher sales volume [22] - Net income for Q4 2021 was a loss of $18 million, compared to a net income of $2 million in Q4 2020 [25] - Adjusted net income for Q4 2021 was $9 million, up from $2 million in 2020 [26] - Full year 2021 net loss was $27.1 million, compared to a net income of $32.9 million in 2020 [31] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales were $113 million for the full year 2021, up 35% from 2020, representing 16% of total sales [11] - DTC sales growth is expected to continue at or above the overall business growth rate [12] Market Data and Key Metrics Changes - Holley hosted five consumer events in 2021 with total attendance of 93,000, showing an average annual attendance growth of 37% since 2015 [13] - The company launched the Holley High Voltage experience, targeting electric vehicle enthusiasts [14] Company Strategy and Development Direction - Holley aims to develop innovative products and deepen relationships with consumers [9] - The company has a robust pipeline of acquisition opportunities to expand into new markets [20] - Focus on enhancing digital capabilities to drive DTC revenues and consumer engagement [10][12] Management's Comments on Operating Environment and Future Outlook - Management noted strong consumer demand despite supply chain challenges [8] - The company expects to maintain solid gross profit margins through pricing strategies [9] - Guidance for 2022 projects net sales between $765 million and $790 million, with adjusted EBITDA between $186 million and $194 million [35] Other Important Information - Holley closed four acquisitions in Q4 2021, enhancing its product offerings [18] - The company is focused on integrating recent acquisitions to unlock profitability [67] Q&A Session Summary Question: Impact of recent acquisitions on sales and EBITDA - Management confirmed that the four acquisitions had a negligible impact on Q4 sales and EBITDA due to their timing [38] Question: Surprises in sales and operating expenses - Positive surprise in sales due to strong consumer demand; increased professional fees impacted OpEx [41] Question: 2022 guidance and margin expectations - Guidance implies flat EBITDA margins; management expects to balance increased SG&A with gross profit margin expansion [42][50] Question: Contribution of acquisitions to 2022 estimates - Estimated impact of $30 million from acquisitions in 2022 [46] Question: Pricing actions and their effects - Price increases were broadly applied; further off-cycle pricing actions will be evaluated based on cost pressures [49] Question: Trends in new versus old customers - Strong new customer acquisition; focus on enhancing digital capabilities for retention [61] Question: Changes in product categories and integration of acquisitions - Continued strength in fuel injection and electronic tuning categories; integration of AEM and other acquisitions is ongoing [66][67]