Holley Inc. · NYSE:HLLY
Holley — Debt Investor Presentation (October 2021)
31 slides from Holley's debt investor presentation, Oct 18, 2021
Slide 1: October 2021 Lender Presentation
October 2021 Lender Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this Presentation may be considered forward-looking statements. Forward-looking statements generally relate to future events or the future financial or operating performance of Holley Inc. (“Holley”). For example, statements regarding the potential re
Slide 3: Presenters
Presenters Tom Tomlinson President and Chief Executive Officer Dominic Bardos Chief Financial Officer Vinny Nimmagadda EVP of Corporate Development & New Ventures Previous Experience Previous Experience 18 Years of Holley Experience
Slide 4: Table of Contents
Transaction Overview 4 Company Overview 9 Key Credit Highlights 16 Historical Financial Overview 27 Q&A 30 Table of Contents
Slide 5: Transaction Overview
rion TRANSACTION OVERVIEW
Slide 6: Executive Summary
Executive Summary Per management estimates. As of 10/15/21. Holley, Inc. (“Holley” or the “Company”), is the largest and fastest growing platform in the performance enthusiast automotive aftermarket space reaching consumers with the most iconic brands, continuous product innovation and a powerful di
Slide 7: Sources & Uses and Pro Forma Capitalization
Sources & Uses and Pro Forma Capitalization Cash balances are pro forma for Empower LTD transaction. Market capitalization as of 10/15/21. ($Millions)
Slide 8: Key summary terms
Key summary terms Revolving Credit Facility First Lien Term Loan / Delayed Draw Term Loan Borrower(1) Holley Inc. (the “Borrower”) Guarantors(1) Holley Intermediate Holdings, Inc. (“Holdings”) and all wholly-owned domestic subsidiaries, subject to customary exclusions Lead Arranger Wells Fargo Secur
Slide 9: Pro forma corporate structure
Pro forma corporate structure Holley Parent Holdings, LLC PIPE Investors Empower Sponsor Holdings, LLC Empower Funding, LLC Public Stockholders Holley Intermediate Holdings LLC Holley Purchaser, Inc. High Performance Industries, Inc. Holley High Performance Holdings, Inc. Holley Performance Products
Slide 10: Company Overview
foligy COMPANY OVERVIEW
Slide 11: The ultimate enthusiast platform
The ultimate enthusiast platform Source: Third-party report created by market leading consulting firm; 2020. Note: Historical financials are pro forma for acquisitions, excluding AEM. Management estimate. Represents ~14% of 2020 PF gross sales. (PF Adjustedf EBITDA less PF Capex) / PF Adjusted EBITD
Slide 12: We focus on our consumers
We focus on our consumers Direct digital and experiential engagement with enthusiasts DTC strategy is core to what we do Inspired by consumer wants and desires ~$600M of PF net sales Primarily focused on B2B Transactional, with limited consumer interaction Limited DTC capability Less informed by con
Slide 13: Powerhouse & Category Creator in Performance Aftermarket
As a leader in its current categories, Holley is well positioned to expand into the broader performance auto aftermarket Powerhouse & Category Creator in Performance Aftermarket Management estimate. Electronic Fuel Injection Electronic Tuning Electronic Ignition #1 Market Positioning #1 Market Posit
Slide 14: Successfully Owning the Eyes & Hearts of Enthusiasts Across All Channels
Successfully Owning the Eyes & Hearts of Enthusiasts Across All Channels Powerful marketing strategy with multiple consumer touch points Continued digital evolution, combined with effective data capture, drives significant growth Building the “Holley Tribe” Digital “Owning the Eyes & Hearts” Website
Slide 15: Proven, Efficient and Well-Invested Operating Platform
Proven, Efficient and Well-Invested Operating Platform Best-Value Sourcing Model Distribution Expertise In-House Manufacturing Tightly Integrated Business We leverage a “best value sourcing” model to create operational flexibility and optimal responsiveness Automated Order Processing Exceptional DTC
Slide 16: Proven Track Record of Success
COVID Trends Secular aftermarket tailwinds (e.g. rebound in vehicle miles traveled, average vehicle age, used vehicle transactions) Consecutive quarters of sales and adjusted EBITDA growth highlight the resilient business model Proven Track Record of Success Across the Platform and economic enviro
Slide 17: Key credit highlights
Key credit highlights
Slide 18: Key credit highlights
Key credit highlights Large base of passionate and highly engaged enthusiast consumers with attractive demographics 1 Massive $35B U.S. market with decades of uninterrupted growth 2 Powerhouse of product innovation with iconic brands driving long-term organic growth 3 Transformational digital and DT
Slide 19: Large base of passionate and highly engaged enthusiast consumers
Large base of passionate and highly engaged enthusiast consumers with attractive demographics 1 50M consumers in the US see their cars and trucks as more than a means of transportation; 15M of them are frequent purchasers 69% of enthusiasts own more than one car; perpetuating their exceptionally str
Slide 20: Massive $35B U.S. market with decades of uninterrupted growth
~50M Car & Truck Enthusiasts Massive $35B U.S. market with decades of uninterrupted growth… 2 2007 – 2010 CAGR: 3% Stability During the Great Recession 6.0% 20 year CAGR ~$1.5B expansion during Great Recession (industry revenue in $ billions) The Performance Automotive Aftermarket Shows No Signs of
Slide 21: Providing Tremendous Room to Grow in our Market
… Providing Tremendous Room to Grow in our Market 2 Source: Third-party report created by market leading consulting firm, 2019; management estimates. Note: Category leadership based on sales. U.S. Addressable Performance Aftermarket by Product Group (2019 Revenue in Billions) Core Categories As a le
Slide 22: Powerhouse of product innovation with iconic brands
Powerhouse of product innovation with iconic brands driving long term organic growth 3 new products introduced in 2020 ~1,850 of potential sales in pipeline $340M+ average annual spend on R&D over the last 5 years ~$17M purchase driver is new products #1 dedicated engineers 135 $87M $606M $87M $606M
Slide 23: New Product Development Initiatives Limiting ICE Exposure
Source: Third-Party Market Research. …with New Product Development Initiatives Limiting ICE Exposure 3 Modification of Electric Vehicles We are one of the only performance aftermarket companies with the scale and expertise to meaningfully attack the performance EV opportunity Electric Powertrain Con
Slide 24: Transformational digital and DTC opportunity with omni-channel distribution
DTC is our highest margin channel 4 Transformational digital and DTC opportunity with omni-channel distribution Source: Third-party report created by market leading consulting firm; 2020. Note: Metrics as of December 2020, unless otherwise notes. Historical financials are pro forma for acquisitions,
Slide 25: Proven acquisition platform with a robust M&A pipeline
20+ Hundreds near-term high priority acquisitions identified of targets identified; ~80 of which are priority and actionable $35M Highly Accretive Acquisitions cost saving synergies realized since 2014 driven by exceptional cost discipline and ability to integrate new systems 9 Focused on Highly Syn
Slide 26: Proven acquisition platform with a robust M&A pipeline
Proven acquisition platform with a robust M&A pipeline Source: Holley management Note: Historical financials are pro forma for acquisitions, excluding AEM. 5 (2015) (2018) (2019) (2020) (2020) (2020) (2021) Creating Highly Synergistic Outcomes $ in Millions 2014 – 2020 Total CAGR: ~39% Acquired AEM
Slide 27: Experienced team with a track record of execution
Experienced team with a track record of execution 6 Tom Tomlinson Chief Executive Officer Dominic Bardos Chief Financial Officer Sean Crawford Chief Marketing Officer Vinny Nimmagadda EVP of Corporate Development & New Ventures Steve Trussell VP of Finance Jason Bruce VP of Business Development (Res
Slide 28: Historical Financial Overview
Historical Financial overview
Slide 29: Historical Financial summary
Historical Financial summary Note: Historical financials are pro forma for acquisitions, including Range Technologies (acquired October 2019), Drake (acquired November 2020), Simpson (acquired November 2020) and Detroit Speed (acquired December 2020). These numbers do not include acquisition of AEM.
Slide 30: EBITDA Reconciliation
EBITDA Reconciliation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ($Millions) Acquisition Initiatives and Restructuring: Acquisition activities and normalization for 2021 Simpson acquisition earnout One-Time Exit Costs of Driven California Facilities: Costs related to the disposal of PP&E at the Company’s West
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