Holley (US:HLLY)2022-03-03 18:08Financial 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]