Holley Inc. · NYSE:HLLY
Holley — Q4 2024 Earnings Presentation
31 slides from Holley's earnings presentation, Mar 11, 2025
Slide 1: Fourth Quarter and Full Year 2024 Financial Results Call
Fourth Quarter and Full Year 2024 Financial Results Call 1
Slide 2: Disclaimer
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
Slide 3: Agenda
Agenda Presenter: Anthony Rozmus Investor Relations Introductions & Forward-Looking Statements Matthew Stevenson Results and Highlights President & CEO Jesse Weaver Q4 and FY Financial Results, & 2025 Outlook CFO Group Q&A Matthew Stevenson Outlook President & CEO 3
Slide 4: Results and Highlights
Results and Highlights Matthew Stevenson President and CEO 4 4
Slide 5: Highlights for Q4 and FY 2024
Highlights for Q4 and FY 2024 Highlights Maintaining Out-the-Door Share Gains YTD Despite Continued Softness in Market Demand Comprehensive Improvements Across Our Consumer Journey Delivered YOY DTC growth of +8% Grew 17 Brands In Total YOY Across All Channels, 32 in DTC, and 16 in B2B Incre
Slide 6: Q4 Financial Results & Ongoing Business Highlights
Q4 Financial Results & Ongoing Business Highlights 2024 Q4 Results Business Highlights New Products Launched in Q4 Across Divisions Net Gross Sales Margin Along with many more! $140.1M 45.6% Ford Mid-Mount Accessory Drive System Small Block Chevy Hi-Ram Intake Manifolds Simpson Adventure Motorcycle
Slide 7: Transformative Progress in 2024: Advancing Growth Levers
Transformative Progress in 2024: Advancing Growth Levers Completed hiring of all critical Level 1 and Level 2 leaders Develop a High Created a Four Division structure with Centers of Excellence Performing Team Opened new offices in Bowling Green, Nashville, Tucson, & Italy Increased DTC sales by 8%
Slide 8: Framework for 2025 and Beyond
Framework for 2025 and Beyond GREAT Place to Work Premier CONSUMER DELIVER Results Journey FUND the Growth Trailblazing Trusted PARTNER Product INNOVATION Transformational M&A & Portfolio Management GLOBAL Expansion & NEW Markets 8
Slide 9: Product Innovation in Q1
Product Innovation in Q1 Modern Truck & Off-Road Euro & Import Safety Dinan S58 PCU (Performance Control Unit) Domestic Muscle NOS Octane Booster Sniper 2 EFI HyperSpark Bundles We are kicking off the year with some exciting new offerings! 9
Slide 10: Q4 Financial Results
Q4 Financial Results Jesse Weaver Chief Financial Officer 10
Slide 11: Financial Priorities
Financial Priorities Proactively Leading the Business to Drive Sustainable Results RESTORE OPTIMIZE IMPROVE FREE DELEVER HISTORICAL PROFITABILITY WORKING CAPITAL CASH FLOW BALANCE SHEET Target 40% GM & >20% Optimizing portfolio by Greater fiscal discipline Using free cash flow to Adj EBITDA reducing
Slide 12: 4Q24 Key Metric Recap
4Q24 KEY METRIC RECAP $ millions 4Q24 4Q23 B/(W) Net Sales1 $140.1 $155.7 (10.1%) Gross Margin 45.6% 38.7% 690 bps SG&A (incl. R&D) $39.4 $37.2 $(2.2) Adj. EBITDA2,3 $29.1 $28.5 $0.6 Adj. EBITDA Margin2,3 20.8% 18.3% 250 bps Interest Expense $11.5 $18.8 $7.3 Adj. Net Income (Loss)2 $12.6 $(0.5) $13.
Slide 13: Free Cash Flow Generation
Free Cash Flow1 Generation Free Cash Flow Pre-M&A ($MM) ~$42MM In 2024 $30 $29 $24 $22 $18 $9.7MM excluding AP $13 headwind of $7.9MM $3.8MM excluding AP headwind of $3 $5.9MM $2 ($1) ($1) ($2) ($8) ($11) 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 2024 Free Cash Flow of ~$42MM
Slide 14: Net Debt to EBITDA Leverage Ratio
Net Debt to EBITDA Leverage Ratio1 Net Leverage Ratio (Net Debt/TTM Covenant EBITDA) 4.89 x 5.0x 4.21 x 4.16 x 4.25 x 4.17 x 4.02 x 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 $ millions 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Revolver Drawn $0 $0 $0 $0 $0 $0 Net Debt $584.4 $553.4 $536.0 $515.3 $515.1 $511.8 Adj. EBITDA (
Slide 15: '24 FY Performance at Top End of Adj. Guidance
’24 FY Performance at Top End of Adj. Guidance Act vs. Mid point November FY24 FY24 Adjusted1 FY24 Outlook ($ millions) of Adj. Guidance Guidance Guidance Actual B/(W) Net Sales $595 – $605 $595 – $605 $602.2 $2.2 Adjusted EBITDA2 $115 – $120 $106.8 – $111.8 $110.5 $1.2 Capital Expenditures $6 – $8
Slide 16: FY24 Key Metric Recap
FY24 KEY METRIC RECAP $ millions 2024 2023 B/(W) Net Sales $602.2 $659.7 (8.7%) Gross Margin2 39.6% 38.8% 80 bps SG&A (incl. R&D) $150.9 $144.1 $(6.8) Adj. EBITDA1,2 $110.5 $130.9 $(20.4) Adj. EBITDA Margin1,2 18.3% 19.8% (150 bps) Interest Expense $50.7 $60.7 $10.0 Adj. Net Income1 $24.8 $25.0 $(0.
Slide 17: Early Indicators Showing Downward Trend to Start '25
Early Indicators Showing Downward Trend to Start ‘25 Consumer Sentiment deteriorated at its sharpest pace in 3.5 years in February Confidence Board Consumer Confidence Index University of Michigan Consumer Confidence Index 160 110 -6.3% 120 -9.8% 90 80 70 40 0 50 Jan '07 Jan '09 Jan '11 Jan '13 Jan
Slide 18: 2025 Base Represents Core Operations Without Divestitures & Product Discontinuations
2025 Base Represents Core Operations Without Divestitures & Product Discontinuations & Product ‘25 Lines FY Net Sales Removed Walk ($MM) from Portfolio in 2024 ‘25 FY Adj. EBITDA Walk ($MM) $121.5 Mid-Point $590 ~2.5% Mid-Point 1 2 Core Business Growth Anticipated in Challenging Market 1) Divested B
Slide 19: Financial Guidance – Full Year 2025
FINANCIAL GUIDANCE – FULL YEAR 2025 Outlook ($ millions) FY25 Net Sales $580 – $600 YOY Growth%1 0.8% - 4.3% Adjusted EBITDA2 $113 – $130 Capital Expenditures $12 – $16 Depreciation and Amortization $22 – $24 Interest Expense $47 – $52 (excluding Mark-to-Market on Collar) Expect Modest Net Sales Gro
Slide 20: Q&A
Q&A Matt Stevenson Jesse Weaver Chief Executive Officer Chief Financial Officer 20 20
Slide 21: Working Together to Drive Financial Success
Working Together to Drive Financial Success Large base of passionate and highly engaged enthusiast consumers with attractive demographics Mid-Single Digit Massive $39B U.S. market with decades of uninterrupted growth1 Organic Top Line Growth Powerhouse of product innovation with iconic brands ~40% G
Slide 22: Appendix
Appendix EEE Holley
Slide 23: Net Sales Breakdown
Net Sales Breakdown Quarterly Net Sales Breakdown ($MM) $169 $3 $159 $6 $4 $7 $140 $134 $3 $3 $0 $161 $1 $148 $137 $130 Q1 Q2 Q3 Q4 Core Strat. Prod. Rat. Divested Businesses $13MM of Net Sales from Divested Businesses and $14MM from Strat. Prod. Rationalization Note: Divested Non-Core Businesses in
Slide 24: Orders and Past Due Balances
Orders and Past Due Balances Orders ($MM) $211 $185 $182 $173 $185 $184 $162 $159 $149 $163 $132 $152 $147 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Past Due Orders ($MM) $56 $51 $47 $36 $27 $26 $22 $14 $9 $8 $9 $6 $7 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
Slide 25: Inventory Levels Improving
Inventory Levels Improving Inventory Turnover (Turns/Year) 3.0 x 3.0 x 2.7 x 2.8 x 2.7 x 2.5 x 2.5 x 2.2 x 2.2 x 2.2 x 2.2 x 2.1 x 2.1 x 2.0 x 2.0 x 2.0 x 1.9 x 1.9 x 1.9 x 1.9 x 1.9 x 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Year-over-
Slide 26: Interest Rate Collar #1 Feb 2023 to Feb 2026 Summary
Interest Rate Collar #1 Feb 2023 to Feb 2026 Summary Key Terms Effective Date 2/18/2023 Maturity Date 2/18/2026 Holley Inc. Buys a Cap 5.000% Holley Inc. Sells a Floor 2.811% Index 3 Month Term SOFR Premium Zero With the collar in place, YTD effective cash interest rate of ~8.2% 26
Slide 27: Interest Rate Collar #2 Feb 2026 to Nov 2028 Summary
Interest Rate Collar #2 Feb 2026 to Nov 2028 Summary Key Terms Effective Date 2/18/2026 Maturity Date 11/18/2028 Holley Inc. Buys a Cap 4.990% Holley Inc. Sells a Floor 3.350% Index 3 Month Term SOFR Premium Zero 27
Slide 28: TTM EBITDA and Adjusted EBITDA Reconciliation
TTM EBITDA and Adjusted EBITDA Reconciliation HOLLEY INC. and SUBSIDIARIES USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) TTM 1Q24 2Q24 3Q24 4Q24 Net Income $ 18.7 $ 22.8 $ 15.7 $ (23.2) Adjustments: Interest Expense 53.5 56.7 58.0 50.7 Income Taxes 5.9 3.9 0.3 (3.0)
Slide 29: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation HOLLEY INC. and SUBSIDIARIES USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) For the thirteen weeks ended For the year ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net I
Slide 30: Quarterly Free Cash Flow Reconciliation
Quarterly Free Cash Flow Reconciliation HOLLEY INC. and SUBSIDIARIES USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Net cash provided by (used in) operating activities
Slide 31: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net income and Adjusted diluted EPS Reconciliation HOLLEY INC. and SUBSIDIARIES USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions, except per share data) (Unaudited) For the thirteen weeks ended For the year ended December 31, 2024 December 31, 2023 December 31, 2024 Decemb