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]

95 W. E MAKERS l a HOlley FOURTH QUARTER 2021 March 3, 2022 DISCLAIMER 1 Holley 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 statem ...

Financial Data and Key Metrics Changes - Holley reported net sales of $159.7 million for Q3 2021, an increase of $26.3 million or 20% compared to Q3 2020, driven by acquisitions which contributed $29.8 million to growth [20][8] - Organic sales declined by $3.4 million, or 2.6%, impacted by a cybersecurity incident that deferred approximately $7 million in sales to Q4 2021 [20][10] - Gross margin decreased from 41.7% in Q3 2020 to 40.8% in Q3 2021 due to supply chain inflation and product mix [21] - Total selling, general and administrative expenses increased by 67% in Q3 2021, influenced by acquired expenses and higher shipping costs [22] - The company recorded a net loss of $30.2 million in Q3 2021, while adjusted net income remained flat at $13.5 million compared to Q3 2020 [24] Business Line Data and Key Metrics Changes - The direct-to-consumer (DTC) channel continued to be the fastest-growing segment, with strong demand across all channels despite the impact of the cybersecurity incident on reseller channels [45] - The company is focusing on continuous innovation to attract new customers and retain existing ones, with plans to implement loyalty programs in the future [39] Market Data and Key Metrics Changes - Holley faced challenges related to supply chain constraints and raw material inflation, prompting the company to implement more frequent price adjustments to protect margins [13][14] - The company is optimistic about the stabilization of supply chain issues, which is a key variable in their guidance for the remainder of the year [72] Company Strategy and Development Direction - Holley is pursuing a robust acquisition strategy to expand into new categories and enhance profitability, with recent acquisitions including Finspeed and Classic Instruments [16][35] - The company aims to deepen its emotional connection with consumers through events and community engagement, hosting record attendance at consumer events [17][18] - Holley is also exploring opportunities in the electric vehicle (EV) market, recognizing growing consumer interest in performance-oriented EVs and powertrain conversions [85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand for products, driven by engaged enthusiast consumers and a positive industry growth outlook [30] - The company reiterated its annual guidance for net sales in the range of $648 million to $663 million, with pro forma adjusted EBITDA projected between $165 million and $170 million [25] Other Important Information - The company is taking steps to enhance cybersecurity measures to prevent future incidents, working with strategic technology partners [12] - Holley is actively monitoring global supply chain and raw material cost projections, which have influenced recent pricing actions [21] Q&A Session Summary Question: Market demand and durability - Management indicated strong demand for products, with a positive outlook for future growth driven by engaged consumers [30] Question: Future acquisition strategies - The company is targeting underpenetrated categories and expanding into adjacent markets, with a robust pipeline of acquisition opportunities [33][35] Question: Organic growth drivers - Continuous innovation and the development of a digital ecosystem are key strategies to attract and retain customers [39][42] Question: Performance across sales channels - DTC remains the fastest-growing channel, with strong demand across all channels despite challenges faced by resellers [45] Question: Pricing strategy and consumer reaction - The company is implementing more frequent price adjustments while maintaining positive consumer feedback on pricing strategies [52][54] Question: Cybersecurity incident remediation efforts - Management is enhancing monitoring and backup systems to prevent future attacks, with a modest increase in SG&A expenses anticipated [55] Question: Gross margin decline factors - The decline in gross margin is attributed to increased shipping costs and product mix, with container shipping costs being a significant pressure point [61][62] Question: Supply chain and inventory management - Supply chain stabilization is crucial for meeting guidance, with improved inventory positions being monitored closely [72][73] Question: M&A appetite and pipeline - The company has a robust pipeline for future acquisitions, focusing on expanding total addressable market and entering new categories [76][77] Question: Inflation impact on costs - Cost pressures are primarily from components and shipping, with pricing actions taken to maintain gross margins above 40% [82] Question: EV market demand - Management noted growing interest in performance-oriented EVs and powertrain conversions, viewing it as a strategic opportunity for future growth [85]