Holley Inc - Ordinary Shares - Class A Aktienkurs
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📘 Marktkapitalisierung
📈 Was ist das?
Die Marktkapitalisierung zeigt, wie viel ein Unternehmen laut Börse aktuell wert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft Unternehmen in Größenklassen (Large, Mid, Small Cap) einzuordnen und gibt Hinweise auf Marktmacht und Stabilität.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Große Unternehmen gelten als stabiler, zahlen oft Dividenden, wachsen aber langsamer.
- Kleine Firmen können stärker wachsen, sind aber schwankungsanfälliger.
- Die Marktkapitalisierung ist ein guter Indikator für Unternehmensgröße, aber kein Maß für Unter- oder Überbewertung.
📘 Enterprise Value (Unternehmenswert)
📈 Was ist das?
Der Enterprise Value (EV) zeigt, was ein Unternehmen tatsächlich kostet, wenn man es komplett übernehmen würde – inklusive Schulden und abzüglich Cash.
🧮 Wie wird es berechnet?
(= Marktkapitalisierung + Nettoverschuldung)
🏛️ Wofür ist es wichtig?
Der EV ist eine realistischere Bewertungsbasis als die Marktkapitalisierung, da er die Kapitalstruktur berücksichtigt. Er ist Grundlage für Kennzahlen wie EV/FCF oder EV/Sales.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Der Enterprise Value zeigt, was ein Unternehmen tatsächlich wert ist – unabhängig davon, wie es finanziert ist.
- Er ist besonders wichtig für professionelle Investoren, da er eine objektivere Grundlage für Bewertungsvergleiche bietet als die Marktkapitalisierung allein.
- Ein Unternehmen mit hoher Verschuldung erscheint im EV teurer, eines mit viel Cash günstiger – auch wenn sie an der Börse gleich viel wert sind.
📘 Nettoverschuldung
📈 Was ist das?
Die Nettoverschuldung zeigt, wie viele Schulden nach Abzug des verfügbaren Cashs tatsächlich verbleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie zeigt, wie stark ein Unternehmen von Fremdkapital abhängig ist – und wie gut es in der Lage ist, seine Schulden kurzfristig zu bedienen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige oder negative Nettoverschuldung bedeutet hohe finanzielle Stabilität.
- Unternehmen mit viel Cash und geringer Verschuldung sind besser gerüstet für Krisen.
- Eine hohe Nettoverschuldung erhöht das Risiko – besonders bei steigenden Zinsen oder konjunkturellen Schwächen.
📘 Cash
📈 Was ist das?
Der Cashbestand zeigt, wie viele liquide Mittel einem Unternehmen sofort zur Verfügung stehen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Er gibt Auskunft über die finanzielle Flexibilität: Ein hoher Cashbestand ermöglicht Investitionen, Rückkäufe oder Krisenresistenz.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Cashbestand zeigt finanzielle Stärke und Handlungsspielraum.
- Cash kann für Investitionen, Schuldentilgung oder Aktienrückkäufe genutzt werden.
- Allerdings: Zu viel ungenutztes Kapital kann auch auf mangelnde Investitionsideen hinweisen.
📘 Anzahl ausstehender Aktien
📈 Was ist das?
Die Anzahl ausstehender Aktien gibt an, wie viele Aktien eines Unternehmens aktuell im Umlauf sind und von Investoren gehalten werden.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die Grundlage für viele Kennzahlen wie Gewinn je Aktie (EPS), Marktkapitalisierung oder KGV.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Je weniger Aktien im Umlauf sind, desto höher fällt z. B. der Gewinn je Aktie aus – wichtig für Bewertung und Dividendenrendite.
- Aktienrückkäufe verringern die Anzahl ausstehender Aktien – und steigern den Wert je Aktie.
- Kapitalerhöhungen haben den gegenteiligen Effekt: mehr Aktien → Verwässerung der bestehenden Anteile.
📘 Kurs-Gewinn-Verhältnis (KGV)
📈 Was ist das?
Das KGV zeigt, wie oft der Gewinn pro Aktie im aktuellen Aktienkurs enthalten ist – also wie „teuer“ eine Aktie im Verhältnis zum Gewinn ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KGV gehört zu den bekanntesten Bewertungskennzahlen. Es hilft Anlegern einzuschätzen, ob eine Aktie im Vergleich zu ihrem Gewinn eher günstig oder teuer erscheint.
🧮 Berechnung
📊 KGV (TTM) = bezogen auf den Gewinn der letzten 12 Monate (Trailing Twelve Months):🎯 Was bedeutet das für Anleger?
- Ein niedriges KGV kann auf eine günstige Bewertung hindeuten – oder auf Probleme im Geschäftsmodell.
- Ein hohes KGV kann Wachstumserwartungen widerspiegeln – oder eine überbewertete Aktie.
📘 Kurs-Umsatz-Verhältnis (KUV)
📈 Was ist das?
Das KUV zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen – unabhängig vom Gewinn.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KUV ist besonders bei wachstumsstarken oder noch nicht profitablen Unternehmen hilfreich. Es zeigt, wie hoch der Umsatz an der Börse bewertet wird.
🧮 Berechnung
Marktkapitalisierung = 291,94 Mio. $ | Umsatz (TTM) = 613,15 Mio. $
Marktkapitalisierung = 291,94 Mio. $ | Umsatz erwartet = 637,65 Mio. $
🎯 Was bedeutet das für Anleger?
- Ein niedriges KUV kann auf Unterbewertung hindeuten – oder auf schwache Margen.
- Ein hohes KUV kann hohe Erwartungen widerspiegeln – oder übermäßigen Optimismus.
- Besonders sinnvoll bei Wachstumsunternehmen, bei denen der Gewinn oder Free Cashflow (noch) keine Aussagekraft hat.
📘 Unternehmenswert zu Umsatz (EV/Sales)
📈 Was ist das?
EV/Sales zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen, wenn man auch Schulden und Cash berücksichtigt – es ist eine kapitalstrukturbereinigte Version des KUV.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl eignet sich besonders für den Vergleich von Unternehmen mit unterschiedlicher Verschuldung – sie zeigt, wie teuer ein Unternehmen tatsächlich im Verhältnis zum Umsatz ist.
🧮 Berechnung
Enterprise Value = 749,73 Mio. $ | Umsatz (TTM) = 613,15 Mio. $
Enterprise Value = 749,73 Mio. $ | Umsatz erwartet = 637,65 Mio. $
🎯 Was bedeutet das für Anleger?
- EV/Sales ist neutral gegenüber der Kapitalstruktur und eignet sich gut für Unternehmensvergleiche.
- Ein niedriges Verhältnis kann auf eine günstig bewertete Aktie hindeuten – ein hohes Verhältnis auf hohe Erwartungen oder Überbewertung.
- Besonders nützlich bei wachstumsstarken, noch nicht profitablen Firmen.
📘 Unternehmenswert zu Free Cashflow (EV/FCF)
📈 Was ist das?
EV/FCF zeigt, wie viele Jahre es dauern würde, bis ein Unternehmen seinen Unternehmenswert durch freien Cashflow „zurückverdient”.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Unternehmen auf Basis ihrer tatsächlichen Cash-Erträge zu bewerten – unabhängig von Bilanzierungsregeln oder buchhalterischem Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriges EV/FCF deutet auf eine günstige Bewertung bei starker Cashgenerierung hin.
- Ein hohes EV/FCF kann entweder auf Optimismus oder auf temporär schwachen Cashflow hindeuten.
- Besonders hilfreich bei reifen, profitablen Unternehmen mit stabilen Cashflows.
📘 Kurs-Buchwert-Verhältnis (KBV)
📈 Was ist das?
Das KBV zeigt, wie hoch der Marktwert eines Unternehmens im Verhältnis zu seinem bilanziellen Eigenkapital ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KBV ist besonders bei Substanzwerten (z. B. Banken, Industrie) relevant. Es hilft Anlegern zu erkennen, ob ein Unternehmen unter oder über seinem buchhalterischen Vermögen bewertet ist.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein KBV unter 1 kann auf Unterbewertung oder schwache Rentabilität hindeuten.
- Ein KBV über 1 zeigt, dass der Markt dem Unternehmen Mehrwert über den Buchwert hinaus zuschreibt (z. B. Marken, Patente, Wachstum).
- Das KBV eignet sich besonders gut für Unternehmen mit stabilen, materiellen Vermögenswerten.
📘 Eigenkapitalquote
📈 Was ist das?
Die Eigenkapitalquote zeigt, wie hoch der Anteil des Eigenkapitals an der Bilanzsumme eines Unternehmens ist – also wie stark es sich aus eigenen Mitteln finanziert.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Eine hohe Eigenkapitalquote steht für finanzielle Stabilität, Krisenfestigkeit und gute Bonität. Sie ist besonders relevant bei der Beurteilung der Verschuldung.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalquote signalisiert finanzielle Stabilität – besonders in Krisenzeiten.
- Ein niedriger Wert kann auf ein höheres Risiko oder eine aggressive Verschuldung hinweisen.
- Wichtig: Die Eigenkapitalquote sollte immer gemeinsam mit der Eigenkapitalrendite betrachtet werden. Nur so lässt sich beurteilen, ob ein Unternehmen nicht nur solide, sondern auch effizient wirtschaftet.
📘 Eigenkapitalrendite (ROE)
📈 Was ist das?
Die Eigenkapitalrendite zeigt, wie effizient ein Unternehmen mit dem Kapital seiner Aktionäre arbeitet – also wie viel Gewinn es pro Euro Eigenkapital erwirtschaftet.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Eigenkapitalrendite ist eine zentrale Rentabilitätskennzahl. Sie hilft Anlegern zu erkennen, ob das Unternehmen eine attraktive Verzinsung auf das eingesetzte Eigenkapital erwirtschaftet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalrendite spricht für ein starkes, effizientes Geschäftsmodell.
- Besonders interessant ist sie bei kapitalintensiven Firmen oder solchen mit hoher Eigenkapitalquote.
- Wichtig: Ein sehr hoher ROE kann auch auf hohe Schulden hinweisen – daher sollte sie immer im Kontext mit der Eigenkapitalquote betrachtet werden.
📘 Return on Capital Employed (ROCE)
📈 Was ist das?
ROCE misst die Gesamtrentabilität eines Unternehmens – also wie effizient es das eingesetzte Kapital (Eigen- und Fremdkapital) zur Gewinnerzielung nutzt.
🧮 Wie wird es berechnet?
Das eingesetzte Kapital ist das gesamte betriebsnotwendige Kapital, unabhängig von der Finanzierungsquelle.
🏛️ Wofür ist es wichtig?
ROCE eignet sich besonders gut für den Vergleich unterschiedlich finanzierter Unternehmen. Es zeigt, wie effektiv ein Unternehmen Kapital investiert – unabhängig von der Kapitalstruktur.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROCE zeigt, dass ein Unternehmen sein Kapital effizient einsetzt – unabhängig davon, ob es durch Eigen- oder Fremdkapital finanziert ist.
- Je höher der ROCE im Vergleich zu ähnlichen Unternehmen, desto mehr Wert schafft das Unternehmen mit seinem investierten Kapital.
- Besonders wichtig ist der ROCE bei Firmen mit hohen Investitionen – z. B. in Industrie, Energie oder Infrastruktur.
📘 Return on Invested Capital (ROIC)
📈 Was ist das?
ROIC zeigt, wie effizient ein Unternehmen das Kapital investiert, das langfristig im operativen Geschäft gebunden ist – unabhängig davon, ob es aus Eigen- oder Fremdkapital stammt.
🧮 Wie wird es berechnet?
- NOPAT = „Net Operating Profit After Taxes“
- Investiertes Kapital = operatives Vermögen abzüglich nicht-verzinster Schulden
🏛️ Wofür ist es wichtig?
ROIC ist eine der präzisesten Kennzahlen zur Bewertung der Kapitalrendite – besonders im Vergleich zur Eigenkapitalrendite, weil es Verzerrungen durch Schulden vermeidet. Er zeigt, ob ein Unternehmen Mehrwert für alle Kapitalgeber schafft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROIC zeigt, wie gut ein Unternehmen mit dem tatsächlich investierten (betriebsnotwendigen) Kapital wirtschaftet.
- Im Unterschied zu ROCE wird nur Kapital betrachtet, das wirklich zur Finanzierung operativer Aktivitäten dient – und verzinst werden muss.
- Besonders hilfreich, um die Kapitalrendite von Unternehmen mit viel „überschüssigem“ Kapital oder zinsfreien Verbindlichkeiten realistisch zu vergleichen.
📘 Verschuldungsgrad (Leverage Ratio)
📈 Was ist das?
Der Verschuldungsgrad zeigt, wie stark ein Unternehmen durch verzinsliche Schulden (z. B. Kredite und Anleihen) im Verhältnis zum Eigenkapital finanziert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Kennzahl hilft, das finanzielle Risiko und die Abhängigkeit von Fremdkapital zu beurteilen. Ein hoher Verschuldungsgrad kann die Eigenkapitalrendite steigern – birgt aber auch erhöhte Risiken bei Zinsanstiegen oder Liquiditätsengpässen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Verschuldungsgrad steht für finanzielle Stabilität und Unabhängigkeit.
- Ein hoher Wert kann auf erhöhte Risiken hinweisen – insbesondere bei schwankenden Zinsen oder konjunkturellen Schwächen.
- Wichtig: Immer im Kontext zur Branche und Kapitalintensität bewerten.
📘 Umsatz
📈 Was ist das?
Der Umsatz zeigt, wie viel ein Unternehmen insgesamt mit seinen Produkten und Dienstleistungen verdient – also den Bruttoerlös vor Abzug von Kosten.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Umsatz ist eine der zentralen Kennzahlen zur Einschätzung der Unternehmensgröße, Marktstellung und Wachstumskraft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein wachsender Umsatz zeigt eine steigende Nachfrage und kann ein guter Frühindikator für Gewinnsteigerungen sein.
- Vergleiche von aktuellem und erwartetem Umsatz geben Hinweise auf das Marktumfeld und Analystenerwartungen.
- Wichtig: Starker Umsatz allein genügt nicht – auch Margen und Profitabilität zählen.
📘 EBITDA
📈 Was ist das?
EBITDA steht für „Earnings Before Interest, Taxes, Depreciation and Amortization“ – also Gewinn vor Zinsen, Steuern und Abschreibungen. Es zeigt das operative Ergebnis eines Unternehmens, bereinigt um bilanztechnische und finanzierungsbedingte Effekte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBITDA ist eine verbreitete Kennzahl zur Beurteilung der operativen Leistungsfähigkeit – insbesondere bei kapitalintensiven Unternehmen oder im internationalen Vergleich.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes oder wachsendes EBITDA spricht für starke operative Erträge – unabhängig von Bilanzierung oder Steuerlast.
- EBITDA ist besonders nützlich, um Unternehmen branchenübergreifend zu vergleichen.
- Wichtig: EBITDA ist keine offizielle Gewinnkennzahl – Abschreibungen und Finanzierungskosten werden ausgeklammert.
📘 EBIT
📈 Was ist das?
EBIT steht für „Earnings Before Interest and Taxes“ – also Gewinn vor Zinsen und Steuern. Es zeigt das operative Ergebnis eines Unternehmens nach Abschreibungen, aber vor Finanzierungs- und Steueraufwand.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBIT ist eine zentrale Kennzahl zur Beurteilung der Profitabilität aus dem Kerngeschäft – unabhängig von Kapitalstruktur oder Steuersystem.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes EBIT deutet auf ein profitables Kerngeschäft hin – vor Zinslasten oder steuerlichen Effekten.
- Es erlaubt objektivere Vergleiche zwischen Unternehmen mit unterschiedlicher Finanzierung.
- Im Vergleich mit EBITDA zeigt EBIT bereits den Einfluss von Abschreibungen auf das operative Ergebnis.
📘 Nettogewinn
📈 Was ist das?
Der Nettogewinn ist der verbleibende Jahresüberschuss (oder -fehlbetrag) eines Unternehmens – nach Abzug aller Kosten, Steuern, Zinsen und Abschreibungen
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Nettogewinn ist die zentrale Erfolgskennzahl – er zeigt, wie profitabel ein Unternehmen nach allen Kosten tatsächlich arbeitet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein steigender Nettogewinn zeigt, dass das Unternehmen effizient wirtschaftet – trotz aller Kosten.
- Die Entwicklung des Gewinns beeinflusst z. B. direkt das KGV und weitere Kennzahlen.
- Im Zeitverlauf lässt sich ablesen, wie stabil und profitabel ein Geschäftsmodell wirklich ist.
📘 Free Cashflow (FCF)
📈 Was ist das?
Der Free Cashflow gibt Aufschluss über die echte finanzielle Stärke eines Unternehmens – unabhängig von Bilanzierungsregeln. Er zeigt, wie viel Spielraum für Dividenden, Aktienrückkäufe oder Schuldenabbau besteht.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow bedeutet, dass ein Unternehmen echte Finanzkraft besitzt – unabhängig vom bilanzierten Gewinn.
- Er ist oft die solideste Grundlage für nachhaltige Dividenden und Aktienrückkäufe.
- Sinkender FCF kann ein Warnsignal sein – auch wenn der Gewinn stabil aussieht.
📘 Umsatzwachstum
📈 Was ist das?
Das Umsatzwachstum zeigt, wie stark sich die Erlöse eines Unternehmens im Vergleich zum Vorjahr verändert haben – tatsächlich (TTM) und auf Prognosebasis (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (Umsatz erwartet ÷ Umsatz Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein wachsender Umsatz ist ein zentrales Signal für steigende Nachfrage, Geschäftsausweitung und Marktanteilsgewinne – besonders bei Wachstumsunternehmen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachstum ist der Motor langfristiger Wertsteigerung – besonders bei Technologie- und Wachstumsaktien.
- Wichtig ist nicht nur das aktuelle Wachstum, sondern auch dessen Nachhaltigkeit.
- Prognosen zeigen, ob Analysten weiteres Potenzial erwarten – oder eine Verlangsamung.
📘 EBITDA-Wachstum
📈 Was ist das?
Das EBITDA-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens vor Zinsen, Steuern und Abschreibungen im Vergleich zum Vorjahr gestiegen oder gesunken ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBITDA ÷ EBITDA Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein steigendes EBITDA ist ein Zeichen für verbesserte operative Ertragskraft – unabhängig von Finanzierungsstruktur oder Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Starkes EBITDA-Wachstum signalisiert operative Effizienz und Skalierung – besonders relevant in Wachstumsphasen.
- EBITDA-Wachstum ist ein Frühindikator für Margen- und Gewinnentwicklung – sollte aber stets im Zusammenhang mit Umsatz und EBIT betrachtet werden.
📘 EBIT Wachstum
📈 Was ist das?
Das EBIT-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens (nach Abschreibungen, aber vor Zinsen und Steuern) im Vergleich zum Vorjahr gewachsen ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBIT ÷ EBIT Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Das EBIT-Wachstum ist ein direkter Indikator für die wirtschaftliche Entwicklung des operativen Geschäfts – unter Berücksichtigung der Kapitalintensität (Abschreibungen).
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Steigendes EBIT signalisiert wachsende operative Rentabilität – auch unter Berücksichtigung von Abschreibungen.
- Das EBIT-Wachstum ist ein wichtiges Maß zur Beurteilung von Geschäftsmodellen mit hohen Investitionskosten.
- Im Zusammenspiel mit Umsatz- und EBITDA-Wachstum ergibt sich ein umfassendes Bild zur operativen Entwicklung.
📘 Nettogewinn-Wachstum
📈 Was ist das?
Das Nettogewinn-Wachstum zeigt, wie stark der Jahresüberschuss eines Unternehmens gegenüber dem Vorjahr gestiegen oder gesunken ist – sowohl tatsächlich (TTM) als auch auf Basis von Prognosen (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (erwarteter Nettogewinn ÷ Nettogewinn Vorjahr − 1) × 100
Der erwartete Wert basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Der Gewinn ist die entscheidende Ergebnisgröße für ein Unternehmen. Ein wachsender Nettogewinn deutet auf steigende Effizienz, stabile Kostenkontrolle und nachhaltige Ertragskraft hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachsender Nettogewinn stärkt die Bewertung, Dividendenfähigkeit und Kursfantasie.
- Stagnierender oder rückläufiger Gewinn trotz Umsatzwachstum kann auf Margendruck hinweisen.
📘 Free Cashflow-Wachstum
📈 Was ist das?
Das Free-Cashflow-Wachstum zeigt, wie sich der freie Mittelzufluss eines Unternehmens im Vergleich zum Vorjahr verändert hat – also der Betrag, der nach allen operativen Ausgaben und Investitionen übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Free Cashflow ist der echte, verfügbare Geldzufluss. Wachstum in diesem Bereich ist ein Zeichen für finanzielle Stärke und steigende Flexibilität bei Dividenden, Rückkäufen oder Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Sinkender Free Cashflow kann auf steigende Investitionen, höhere Kosten oder stagnierende operative Erträge hindeuten.
- Besonders bei Dividendenwerten ist das FCF-Wachstum wichtig – denn Dividenden werden letztlich aus dem verfügbaren Cash gezahlt.
- Ein negativer Trend sollte genauer analysiert werden – er ist nicht zwangsläufig schlecht, aber potenziell ein Warnsignal.
📘 Bruttomarge
📈 Was ist das?
Die Bruttomarge zeigt, wie viel vom Umsatz nach Abzug der direkten Herstellungskosten (Material, Produktion) als Bruttogewinn übrig bleibt – also der „Rohgewinn“ eines Unternehmens.
🧮 Wie wird es berechnet?
Auch: Bruttomarge = Bruttogewinn ÷ Umsatz × 100
🏛️ Wofür ist es wichtig?
Die Bruttomarge gibt Aufschluss über die Profitabilität eines Produkts oder Geschäftsmodells vor Fixkosten, Steuern und Zinsen. Sie zeigt, wie effizient ein Unternehmen produzieren oder einkaufen kann.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Bruttomarge deutet auf starke Preissetzungsmacht und effiziente Herstellung hin.
- Sinkende Bruttomargen können auf Kostensteigerungen oder Preisdruck hindeuten.
- Besonders im Vergleich zu Wettbewerbern liefert die Bruttomarge wertvolle Einblicke in die Geschäftsqualität.
📘 EBITDA-Marge
📈 Was ist das?
Die EBITDA-Marge zeigt, wie viel vom Umsatz als operativer Gewinn vor Zinsen, Steuern und Abschreibungen (EBITDA) übrig bleibt. Sie misst die operative Effizienz – ohne Verzerrungen durch Finanzierung oder Buchwerte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBITDA-Marge hilft zu verstehen, wie viel operativer Gewinn ein Unternehmen aus jedem Euro Umsatz erzielt – unabhängig von Kapitalstruktur oder steuerlichem Umfeld.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBITDA-Marge zeigt starke operative Ertragskraft – unabhängig von Bilanzierungseffekten.
- Die Marge ermöglicht gute Vergleiche zwischen Unternehmen und Branchen.
- Ein stabiler oder wachsender Wert kann auf effiziente Kostenkontrolle und Skalierbarkeit hindeuten.
📘 EBIT-Marge
📈 Was ist das?
Die EBIT-Marge zeigt, wie viel Prozent des Umsatzes als operativer Gewinn nach Abschreibungen, aber vor Zinsen und Steuern übrig bleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBIT-Marge misst die operative Ertragskraft eines Unternehmens unter Berücksichtigung der Kapitalintensität (z. B. Maschinen, Anlagen). Sie eignet sich gut zum Vergleich von Geschäftsmodellen mit unterschiedlich hohen Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBIT-Marge zeigt, dass ein Unternehmen auch nach Abschreibungen effizient arbeitet.
- Sie ist besonders relevant in kapitalintensiven Branchen.
- Langfristig stabile oder steigende Margen sind ein Zeichen wirtschaftlicher Stärke und Preissetzungsmacht.
📘 Nettomarge
📈 Was ist das?
Die Nettomarge zeigt, wie viel vom Umsatz am Ende als „Reingewinn“ übrig bleibt – also nach Abzug aller Kosten, Zinsen, Steuern und Abschreibungen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Nettomarge gibt an, wie effizient ein Unternehmen über alle Stufen hinweg wirtschaftet. Sie zeigt, wie viel Gewinn tatsächlich je Euro Umsatz übrig bleibt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Nettomarge zeigt, dass ein Unternehmen nicht nur operativ stark ist, sondern auch seine Finanzierung und Steuerbelastung im Griff hat.
- Vergleiche mit Wettbewerbern geben Einblicke in die wirtschaftliche Qualität.
- Sinkende Nettomargen trotz Umsatzwachstum können ein Warnsignal sein – etwa für steigende Kosten oder sinkende Effizienz.
📘 Free Cashflow Marge
📈 Was ist das?
Die Free-Cashflow-Marge zeigt, wie viel vom Umsatz nach Abzug aller operativen Ausgaben und Investitionen tatsächlich als freier Mittelzufluss übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Marge misst die echte Liquidität, die ein Unternehmen erwirtschaftet – unabhängig von Bilanzierungsregeln oder Abschreibungen. Sie ist besonders relevant für Dividenden, Rückkäufe und Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Free-Cashflow-Marge zeigt, dass ein Unternehmen nachhaltig liquide Mittel erwirtschaftet.
- Sie ist ein starkes Signal für finanzielle Stabilität und Ausschüttungspotenzial.
- Wichtig ist der langfristige Trend – sinkende Werte können auf steigende Investitionen oder rückläufige operative Effizienz hindeuten.
📘 Ergebnis je Aktie (EPS)
📈 Was ist das?
Das Ergebnis je Aktie (EPS) zeigt, wie viel Gewinn auf eine einzelne Aktie entfällt – und ist eine der wichtigsten Kennzahlen zur Bewertung von Unternehmen.
🧮 Wie wird es berechnet?
Die verwässerte Aktienanzahl berücksichtigt auch potenzielle neue Aktien, etwa durch Optionen, Wandelanleihen oder andere Umtauschrechte.
🏛️ Wofür ist es wichtig?
EPS bildet die Basis für viele Bewertungskennzahlen wie KGV, PEG oder Payout Ratio. Es macht den Gewinn für Aktionäre vergleichbar – unabhängig von der Unternehmensgröße.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- EPS hilft, die Profitabilität pro Aktie zu erfassen – und ist besonders wichtig im Zeitvergleich oder im Vergleich mit Analystenschätzungen.
- Steigendes EPS kann ein Zeichen für stabiles Wachstum oder Aktienrückkäufe sein.
- Wichtig: Verwende verwässertes EPS für realistische Bewertungen – besonders bei stark aktienbasierten Vergütungssystemen.
📘 Free Cashflow je Aktie (FCF je Aktie)
📈 Was ist das?
Der Free Cashflow je Aktie zeigt, wie viel freier Mittelzufluss einem Unternehmen pro Aktie zur Verfügung steht – nach Investitionen, aber vor Dividenden oder Schuldentilgung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der FCF je Aktie zeigt, wie viel liquide Mittel pro Aktie tatsächlich im Unternehmen verbleiben – wichtig für Dividenden, Aktienrückkäufe oder Schuldentilgung. Im Gegensatz zum Gewinn ist er schwerer manipulierbar und daher besonders aussagekräftig.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow je Aktie ist ein Zeichen für hohe finanzielle Flexibilität.
- Er zeigt, wie viel Kapital ein Unternehmen effektiv einsetzen oder ausschütten kann.
- Besonders relevant für dividendenstarke Unternehmen oder solche mit starker Kapitalrendite.
📘 Short Interest
📈 Was ist das?
Short Interest zeigt, wie viele Aktien eines Unternehmens aktuell leerverkauft wurden – also von Investoren geliehen und verkauft, in der Erwartung fallender Kurse.
🧮 Wie wird es berechnet?
Der Wert zeigt den Anteil der Aktien, der aktuell auf fallende Kurse spekuliert wird.
🏛️ Wofür ist es wichtig?
Short Interest dient als Stimmungsindikator: Ein hoher Wert deutet auf Skepsis oder negative Erwartungen gegenüber dem Unternehmen hin – kann aber auch zu einem „Short Squeeze“ führen, wenn der Kurs plötzlich steigt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Short Interest deutet auf Vertrauen in das Unternehmen hin.
- Ein hoher Wert kann ein Warnsignal sein – oder eine Chance, wenn sich die Stimmung dreht.
- Besonders spannend in volatilen Märkten oder vor wichtigen Quartalszahlen.
📘 Employees
📈 Was ist das?
Die Mitarbeiteranzahl zeigt, wie viele Personen ein Unternehmen weltweit beschäftigt – ein Indikator für Größe, Struktur und Geschäftsmodell.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft bei der Einschätzung von Skaleneffekten, Effizienz und Personalkosten. Zusammen mit Umsatz und Gewinn lassen sich Kennzahlen wie Produktivität je Mitarbeiter ableiten.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Viele Mitarbeiter bedeuten große operative Komplexität – aber auch hohes Umsatzpotenzial.
- Produktivität je Mitarbeiter ist ein wichtiger Indikator für Effizienz.
- Besonders spannend bei stark wachsenden Tech- oder Industrieunternehmen.
📘 Umsatz je Mitarbeiter
📈 Was ist das?
Der Umsatz je Mitarbeiter zeigt, wie viel Erlös ein Unternehmen durchschnittlich pro Beschäftigtem erwirtschaftet – eine Kennzahl für Effizienz und Produktivität.
🧮 Wie wird es berechnet?
Die Mitarbeiterzahl stammt in der Regel aus dem letzten verfügbaren Jahresbericht.
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Geschäftsmodelle zu vergleichen – insbesondere zwischen arbeitsintensiven und technologiegetriebenen Unternehmen. Ein hoher Wert deutet auf Automatisierung, Effizienz oder hohen Wertschöpfungsanteil hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Umsatz je Mitarbeiter spricht für ein skalierbares und margenstarkes Geschäftsmodell.
- Ein niedriger Wert kann auf arbeitsintensive Prozesse oder geringere Wertschöpfung hinweisen.
- Besonders hilfreich beim Vergleich von Tech- vs. Industrieunternehmen.
Holley Inc - Ordinary Shares - Class A Aktie Analyse
Analystenmeinungen
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Analystenmeinungen
15 Analysten haben eine Holley Inc - Ordinary Shares - Class A Prognose abgegeben:
Holley Inc - Ordinary Shares - Class A Events
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Holley Inc - Ordinary Shares - Class A — Q2 2026 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the conference call to discuss Holley's second quarter 2026 earnings results. [Operator Instructions] Please be advised that reproduction of this call, in whole or in part, is not permitted without written authorization of Holley. And as a reminder, this call is being recorded and will be made available for future playback.
I would now like to introduce your host for today's call, Anthony Rozmus with Investor Relations. Please go ahead.
Good morning, and welcome to Holley's second quarter of 2026 earnings conference call. On the call with me today are President and Chief Executive Officer Matthew Stevenson; and Chief Financial Officer Jesse Weaver. This webcast and the presentation materials, including non-GAAP reconciliation, are available on our Investor Relations website. Our discussion today includes forward-looking statements that are based off our best view of the world and of our businesses as we see them today and are subject to risks and uncertainties, including the ones described in our SEC filings. This morning, we'll review our financial results for the second quarter 2026. At the end -- at the conclusion of the prepared remarks, we'll open up the line for questions.
With that, I'll turn the call over to our CEO, Matthew Stevenson.
Thank you, Anthony, and good morning to everyone joining us today. Before we get into our second quarter results, I'd like to build on the context we provided last quarter. As we discussed on our previous call, the first quarter was impacted by two temporary headwinds, elevated distributor inventories and a slower start to the spring selling season due to unfavorable weather. We also noted at the time that those headwinds were already beginning to wane, evidenced by a strong year-over-year growth in April, and that we expected the general momentum to carry through the rest of the quarter.
I'm pleased to say that's what happened, and it carried throughout the second quarter as well, resulting in a return to net sales growth. In fact, three of our four divisions delivered double-digit core sales growth year-over-year. That's a meaningful acceleration from where we began the year and reflects both the underlying strength and breadth of our portfolio, as well as the disciplined execution of our strategic priorities. We also made significant progress on our portfolio rebalancing initiative during the quarter, completing the divestiture of our non-core restoration brands.
While the transaction resulted in a GAAP net loss for the quarter, it further simplifies our operation and allows us to focus our resources and capital on the areas of the business with the greatest long-term growth potential. Excluding this one-time impact, the underlying profitability of the business improved substantially, with adjusted net income up year-over-year. At the same time, we generated strong free cash flow, reduced leverage to its lowest level in four years, and returned capital to shareholders through share repurchases. We believe this combination of returning to growth, improving profitability, strengthening our balance sheet, and executing our strategic initiatives positions us well as we move into the second half of the year.
With that, let's turn to Slide 5 to review the key highlights from the quarter, as well as important developments that occurred after quarter end. Net sales increased 3.2% to $172 million. Core business net sales, which excludes the impact of our portfolio rebalancing initiatives and divestitures, grew 4.9%, with three of our four divisions delivering double-digit core growth.
We also saw core growth across 27 brands, and both our direct-to-consumer and B2B channels, highlighting the strength and breadth of the portfolio. We generated strong free cash flow during the quarter and remain on track to end the year with leverage below 3.5x. Our strategic initiatives contributed $13.4 million in revenue while delivering $8.3 million in cost savings through purchasing, tariffs, and operational improvements.
We also completed a transformation of our marketing organization over the past 120 days. We significantly reduced our reliance on outside agencies, hired more than 20 marketing professionals, and embedded those resources directly within our operating divisions. This brings our teams closer to the enthusiasts, enables faster responses to market trends, and strengthens brand activation. While still early, we're already seeing meaningful improvements in consumer engagement, marketing effectiveness, and direct-to-consumer sales. Given where our shares have been trading, we also opportunistically repurchased approximately $2 million of common stock during the quarter.
Although our repurchase window is limited due to the blackout period at the end of Q2, this action reflects our confidence in the long-term value creation opportunity we see in Holley. We also continue to execute on the portfolio rebalancing initiative we introduced last quarter. During the quarter, we completed the divestiture of our non-core restoration brands, including Brothers Trucks and Scott Drake. We now have just one remaining business to divest from the five businesses identified in the program and we continue to have strong interest in that from multiple potential buyers.
Following the close of the quarter, we made additional progress in our highest capital allocation priority, reducing leverage by making another $15 million voluntary debt repayment. This brings our total voluntary debt reduction to $115 million since September of 2023. Looking ahead, we believe we are well positioned for the second half of the year, supported by new national retailer placements, an accelerating pipeline of product launches, and continued execution of our strategic initiatives. I'll discuss those opportunities in more detail later in my remarks.
Slide 6 provides additional detail on our second quarter financial results, along with several of the key commercial and operational highlights from the quarter. Net sales were $172 million. Gross margin was 41%, down 72 basis points from the prior year, while adjusted EBITDA was 19.6%, down 223 basis points year-over-year. The decline primarily reflects the impact of tariffs compared to the second quarter of last year.
Free cash flow increased versus the prior year. The improvement reflects continued operational discipline, strong working capital management, and the benefits of refunds related to IEEPA tariffs. Our GAAP results reflect the net loss for the quarter due to that divestiture of our non-core restoration brands. Adjusted net income increased to $24 million, more than double the $10.6 million reported in the prior year period. Even when adjusting for IEEPA tariff refunds, we believe adjusted net income more accurately reflects the underlying operating performance and earning power of the business.
Product innovation remained a key driver of our commercial momentum during the quarter. Across our American Performance division, we continued expanding our highly successful engine swap portfolio with new applications for the GM LS and LT platforms, while also extending the Cataclean product family into the growing diesel performance market.
Within our Safety & Racing division, Simpson introduced new retro-inspired Bandit motorcycle helmets that build on one of the industry's most iconic models while appealing to both on and off-road enthusiasts. In our Modern Truck & Off-Road division, we launched a new Range RA010 module for full-size General Motors trucks and SUVs, giving customers enhanced control over cylinder deactivation, auto start-stop functionality, and throttle response. Operational execution also remained a key focus. During the quarter, we generated $5 million of purchasing and tariff-related savings and an additional $3.3 million from operational improvement initiatives, delivering a total of $8.3 million in savings. These results reflect a continuous improvement culture we have established across the organization and our ongoing focus on improving our cost structure while investing for future growth.
Finally, the examples at the bottom of Slide 6 highlight the impact of our newly embedded divisional marketing teams. By placing marketing resources directly within each business, we've moved closer to our enthusiast communities and significantly increased the speed, relevance, and authenticity of our brand engagement. Our teams are creating content that resonates with consumers where they spend their time, across enthusiast forums, social media, events, and grassroots communities. And we're also seeing encouraging improvement in engagement and direct-to-consumer performance.
Slide 7 highlights the performance of our four operating divisions. Three of the four divisions delivered double-digit core growth during the quarter, reflecting the strength of our innovation pipeline, disciplined execution, and early benefits of our enhanced brand activation strategy.
Beginning with American Performance, net sales declined 2.1% in the quarter. But as we discussed previously, the business continued to work through elevated channel inventory levels, which we believe have now normalized. In addition, we also intentionally moved out product categories from our Q2 marketing calendar into the second half of the year, creating more challenging year-over-year comparisons. Despite those temporary factors, the business improved significantly on a sequential basis, with the decline narrowing from 9.7% in the first quarter to 2.1% in the second. With channel inventories now normalized, key product placements at national retailers, and increasing marketing activity, we expect American Performance to continue improving through the balance of the year.
Modern Truck & Off-Road delivered another outstanding quarter with net sales increasing 15.7%, accelerating from 3.8% growth in the first quarter. The division continues to benefit from strong consumer demand and a highly successful cadence of new product introductions that are gaining meaningful traction across both retail and enthusiast channels.
Euro & Import grew 13.1% at a significant acceleration from 1% growth in the first quarter. Earlier supply constraints have been resolved, allowing us to meet consumer demand and capitalize on the continued strength of the European enthusiast vehicle market. The division continues to benefit from a passionate and resilient enthusiast community supported by strong demand across our core brands. Safety & Racing continue to be a standout performer, with net sales increasing 13.8% year-over-year, building on the 10.2% growth delivered in the first quarter. Growth was driven by a strong cadence of new product introductions, continued innovation across our Stilo and Simpson brands, and sustained demand associated with the Snell 2025 helmet certification cycle.
We also continue to see strong momentum in the motorcycle safety market where recent product launches are expanding our reach and reinforcing the strength of our portfolio. Overall, these results demonstrate the strength and balance of our portfolio. Three of our four divisions delivered double-digit growth, while our largest business continued to improve sequentially as temporary headwinds subsided. More importantly, we believe the underlying drivers of our performance are becoming increasingly durable. We believe that our divisional operating model, combined with greater decision-making authority, dedicated marketing resources, and a robust innovation pipeline is enabling our teams to respond faster to market opportunities, strengthening engagement with enthusiasts, and position each division for sustainable long-term growth.
Slide 8 outlines our long-term strategic framework, which many of you have seen before. While the framework itself hasn't changed, our execution against it continues to accelerate. It remains the blueprint for how we allocate capital, prioritize investments, and operate the business every day. The framework is built around eight strategic pillars, beginning with making Holley a great place to work, strengthening the premier consumer journey, becoming a trailblazing trusted partner, driving product innovation and portfolio management, expanding into global markets, pursuing transformational M&A, funding the growth, and ultimately delivering results for our shareholders.
The value of the framework is it creates alignment across the organization and ensures every initiative supports a broader strategic objective. As you already heard throughout this morning's remarks, our teams have remained highly focused on execution, and that discipline is translating into measurable progress across the business. As a reminder, Slide 9 highlights the key focus areas for 2026 that are embedded in the eight pillars of our strategic plan.
We are making progress across each of these priorities, and you will see that reflected in the detailed initiative tracker on the next slide, which brings us to Slide 10. The Strategic Initiative Tracker gives you a clearer view of our second quarter performance across each pillar of the framework. Trailblazing trusted partner contributed $1.5 million in revenue. Our midsize B2B accounts remain balanced and healthy with a broad number of customers now contributing over $1 million each in the first half. And our national retailer channel continues to grow, supported by planogram wins, expanded SKU distribution, and stronger online traffic conversion. Premier consumer journey contributed $1.1 million in revenue. Our direct-to-consumer channel showed real strength, with Modern Truck & Off-Road posting approximately 17% year-over-year growth in June alone. And third-party marketplaces in Q2 grew by more than 25% year-over-year, led by strength across all our divisions.
Product innovation contributed approximately $4.5 million in revenue, once again led by strong performances in Safety & Racing and Modern Truck & Off-Road. Global expansion in new markets contributed $1.6 million in revenue, and our international strategy generated approximately $760,000 of incremental revenue in the quarter through distributor growth and global expansion. We also saw growth through our OE dealer channel availment programs with new customer wins, and new dealers coming on board.
Transformational M&A contributed $4.7 million of revenue, reflecting HRX revenue contribution in the quarter. HRX continues to perform well as it is now a meaningful contributor to both growth and earnings. And as discussed earlier, fund the growth delivered $8.3 million in savings, $5 million from purchasing and tariff-related actions, and $3.3 million from operational improvements. Altogether, our strategic initiatives contributed $13.4 million in revenue and $8.3 million in cost savings this quarter, disciplined execution across every pillar of the framework.
Slide 11 revisits our portfolio rebalancing initiative, which we introduced last quarter and remains an important driver of our long-term value creation strategy. The framework begins with actively evaluating our portfolio and divesting brands or businesses that no longer meet our growth profitability strategic criteria. These businesses often require disproportionate time and capital relative to the value they create. By monetizing these assets, we generate capital that can be redeployed into higher return opportunities while sharpening our strategic focus.
Those actions naturally lead to facility and complexity reduction, which we believe simplify the organization, improve our cost structure, and enhance free cash flow generation. We then plan to redeploy both the capital resources and the higher growth opportunities through disciplined internal investment and targeted bolt-on acquisitions. Our acquisition of HRX is an excellent example of the type of business we are looking to add, one with attractive growth prospects, strong margins, solid cash flow generation, and that complements our existing portfolio.
Over time, we believe this disciplined approach of monetizing non-core assets, simplifying the business, and reinvesting in higher return opportunities will strengthen earnings, improve cash generation, accelerate debt reduction, and create greater long-term shareholder value. The divestiture of our non-core restoration brands, including Brothers Trucks and Scott Drake, completed during the second quarter is continued progress of the strategy in action.
Now let's turn to Slide 12, where I'll provide an update on the progress we made to date on the portfolio rebalancing initiative, as well as other activities to lower our overall cost base. Through our portfolio rebalancing initiative, we made meaningful progress simplifying the business. Year-to-date, we have divested four brands, eliminated two facilities, reduced our warehouse footprint by approximately 95,000 square feet, lowered our workforce by approximately 5% through divestitures, and removed roughly 7,000 low margin SKUs, or about 16% of the portfolio. These actions are reducing complexity, improving our cost structure, generating capital, and allowing us to focus resources on our highest return growth opportunities.
In addition to these portfolio actions, we are continuing to take decisive steps to optimize our cost structure across both our operating divisions and shared services. As our operational distribution efficiency improves, we are aligning our manufacturing footprint and organizational structure, along with our cost base, with the current needs of the business. During the second quarter alone, we completed two manufacturing site consolidations, reduced our employee and contractor base by more than 115 positions, lowered non-value-added SG&A spending, and strategically reduced production and distribution activity during seasonal demand slowdowns.
These actions are creating a leaner, more efficient operating model while preserving our ability to support future growth. On an annualized basis, we expect these two work streams to deliver more than $12 million of one-time net cash, 150 to 200 basis points of EBITDA margin expansion, an additional $3 million to $5 million of annualized benefit, 0.2 to 0.3 turns of deleverage acceleration, and roughly a 5% improvement in inventory returns. Taken together, we believe these actions position us with a simpler, more focused portfolio, stronger growth potential, higher margins, improved free cash flow, and a faster path to deleveraging.
Slide 13 summarizes why we remain constructive on the second half of 2026. While we continue to operate in a dynamic macroeconomic environment, we believe the business is entering the back half of the year with improving momentum. Three of our four operating divisions delivered double-digit core growth during the second quarter, while American Performance improved significantly on a sequential basis. Just as importantly, we believe the elevated channel inventories that impacted our largest business over the past several quarters have now normalized, providing a much stronger foundation as we move through the balance of the year.
Against that backdrop, there are five additional factors that support our outlook for the second half. First, our portfolio rebalancing and operational improvement initiatives have created a simpler, more focused organization. By exiting non-core businesses, reducing complexity, and aligning our cost structures with the needs of the business, we've strengthened our operating foundation while creating additional capacity to invest in our highest return growth opportunities. Second, we've secured approximately $12 million of new national retailer placements scheduled to launch during the third quarter, expanding distribution and increasing visibility for our brands with consumers.
Third, we have a strong pipeline of new product introductions planned across multiple divisions during the second half year. Innovation remains one of our core competitive advantages, and we believe these launches will provide additional opportunities to drive growth. Fourth, we've completed the transformation of our marketing organization with dedicated marketing teams now embedded within each division. We're already seeing stronger brand activation, deeper engagement with our enthusiast communities, and better alignment between our marketing investments and growth priorities.
Finally, HRX continues to perform well and is expected to make another meaningful contribution to both growth and earnings through the remainder of the year. Taken together, these factors provide a solid foundation for the second half while recognizing that we continue to operate in a dynamic market environment. Before I turn the call over to Jesse, I'd like to thank our more than 1,300 team members around the world. Their dedication, resilience, and commitment to executing our strategy have been instrumental in the progress we've made this year. While there's still work ahead, I'm proud of what the team has accomplished and appreciative of everything they continue to do for our customers, our brands, and our shareholders.
With that, I'll turn the call over to Jesse to walk through our financial results in more details and provide additional perspective on our outlook for the balance of 2026. Jesse?
Thank you, Matt. As you've heard today, we're continuing to make progress across a number of key operational and strategic initiatives. I'll now walk through our financial results for the quarter and provide an update on our key financial priorities, including profitability, cash flow generation, balance sheet strength, and capital allocation. As we move through '26, we're continuing to execute against the operational roadmap we've outlined over the past several quarters. The work we've done to simplify the business, improve efficiency, strengthen cash generation, and enhance financial flexibility is producing tangible results.
While there is still more to accomplish, we're encouraged by the momentum across the organization, and we believe the actions we've taken are building a stronger foundation for profitable growth. Starting with profitability, we're continuing to realize meaningful benefits from our operational improvement initiatives. Through the first half of the year, these actions have delivered approximately $6 million of savings, driven by optimized staffing levels, manufacturing and distribution efficiencies, and targeted facility and network cost reductions.
These efforts are creating a leaner, more efficient operating model and supporting sustainable margin improvement across the organization. For the full year '26, we expect these cost reduction initiatives to deliver at or above the top end of our $5 million to $7 million range by the end of the year. An equally important area of focus has been working capital management. Inventory improved during the quarter, reflecting the benefits of the actions we've taken throughout the year. Our inventory reduction initiatives have delivered more than $10 million of inventory reduction year-to-date after adjusting for portfolio rebalancing efforts, representing meaningful progress toward our full-year objective.
While we're pleased with the results achieved so far, inventory reduction remains a key management priority, and we believe we remain on track to achieve our targeted reduction range for the year. That progress is also contributing to continued balance sheet strengthening. We ended the quarter with a leverage ratio of 3.74x, reflecting the benefits of free cash flow generation, disciplined capital allocation, and operational execution. While we've made meaningful progress over the last year, we remain committed to further deleveraging and increasing our financial flexibility as we move through the remainder of 2026.
The progress we're making across profitability, working capital, and leverage is strengthening the foundation of the business and improving our financial flexibility, we're building a more efficient organization, generating strong free cash flow, and positioning Holley to capitalize on growth opportunities across our portfolio.
On Slide 16, we'll walk through our key financial metrics for the second quarter. Net sales for the second quarter was $172 million versus $166.7 million in the same period a year ago. The increase was primarily driven by $4.7 million of incremental net sales from acquisitions and improved price realization of approximately $10 million, partially offset by lower sales volume of approximately $9.4 million compared to the prior year. On a core business basis, which adjusts for the impacts of our portfolio rebalancing efforts, net core sales grew 4.9%. Gross profit was $70.5 million in the second quarter compared to $69.6 million in the same period last year. Gross margin for the quarter was 41%, a decrease of 72 basis points versus 41.7% in the prior year.
The margin compression was driven by higher tariff-related costs and fixed cost deleverage on lower net sales volume, partially offset by pricing actions and improvements in operating efficiency. It's also worth noting that the comparison is affected by a one-time non-cash benefit in the prior year quarter from the capitalization of tariff costs into inventory that did not repeat this year, which makes the year-over-year change look larger than the actual shift in our underlying cost structure.
SG&A, including R&D expenses for the second quarter, was $44.2 million versus $38 million in the same period last year. The increase in SG&A included $4.4 million related to a combination of legal expenses associated with the finalization of securities class action settlement and portfolio rebalancing costs associated with our ongoing efforts to simplify our portfolio, each of which is excluded from adjusted EBITDA. Additionally, SG&A reflected incremental costs from the HRX acquisition integration, which is not part of the business in the same period last year.
Net loss for the second quarter was down $2.4 million, compared to net income of $10.9 million in the second quarter of '25. Adjusted net income in the second quarter was $24 million versus $10.6 million in the same period of last year. Adjusted EBITDA for the second quarter was $33.8 million versus $36.4 million in the prior year. An adjusted EBITDA margin was 19.6%, which represents a 223 basis point decline versus 21.9% in the second quarter of '25. As I mentioned on gross margin, that compares to the gross margin of the second quarter of 2025, which is affected by the same prior year non-cash tariff capitalization benefit that did not repeat this year. Adjusting for that item, we believe adjusted EBITDA performance was roughly flat year-over-year, which we think is more accurate reflection of underlying operating performance of the business.
On Slide 17, we generated quarterly free cash flow of $40.9 million in the second quarter, which represented a $5.2 million increase year-over-year. This performance reflects continued improved operational execution, disciplined working capital management, and progress across our profitability initiatives, as well as a one-time benefit from IEEPA refunds that occurred in the quarter. Strong cash generation enabled us to continue executing our balanced capital allocation strategy, including debt reduction, share repurchases, and strategic investments in M&A.
On Slide 18, I'd like to spend a moment on capital allocation, which remains a core component of our strategy and reflects our commitment to creating long-term shareholder value. Our framework is straightforward and disciplined. First, we prioritize investments in the core business, including product innovation, operational improvements, and initiatives that we believe enhance our competitive position and support long-term growth.
Second, we evaluate strategic acquisitions that we believe strengthen our portfolio, expand our capabilities, and meet our return thresholds. Third, we remain focused on reducing leverage and improving financial flexibility. Finally, as our balance sheet allows, we look to return capital to shareholders through share repurchases when we believe our shares represent an attractive value. Over the past year, we've executed against each of these priorities. The acquisition of HRX added a highly complimentary business to our portfolio and is continuing to contribute to both growth and earnings.
At the same time, we've remained committed to strengthening the balance sheet through debt reduction, including paying down borrowings under our revolving credit facility and further reducing leverage to 3.74x at quarter end. In addition, as Matt mentioned previously, during the quarter, we repurchased approximately $2 million of our shares. While deleveraging remains a priority, we believe our share repurchase activity demonstrates confidence in the underlying value of our business and our ability to generate cash flow while continuing to invest in growth and improve balance sheets.
Looking ahead, we expect to maintain this balanced and disciplined approach. Our strong cash flow generation provides flexibility to continue investing in the business, pursuing strategic opportunities that create shareholder value, further reduce debt, and opportunistically repurchase shares when appropriate. Overall, we believe the progress we've made across acquisitions, debt reduction, and capital returns demonstrates both the strength of our cash generation profile and our commitment to thoughtful capital allocation.
Turning to Slide 19, we ended the quarter with total leverage of 3.74x, its lowest level in the last four years, reflecting strong free cash flow generation and continued operational discipline, keeping us on track to end the year below our targeted leverage ratio of 3.5x. Our liquidity profile remains strong as we ended the quarter at $69 million of cash on hand and have paid back the $10 million drawn on our revolving credit facility in the first quarter. And since the quarter ended, we proactively prepaid another $15 million on our debt, bringing our total prepayments since September of '23 to $115 million. We remain committed to further deleveraging while continuing to invest in initiatives that we believe drive strong long-term shareholder value.
Turning to our 2026 outlook, as we look to the balance of the year, we continue to see a relatively resilient consumer environment, supported by stable demand trends across our enthusiast customer base. At the same time, we recognize that the macroeconomic backdrop remains uncertain, with inflationary pressures, higher fuel and transportation costs, and the evolving tariff landscape creating potential headwinds. We're closely monitoring these external factors as we move through the second half of the year and will continue to take actions as necessary to protect the health of the business.
Against that backdrop, we're encouraged by the trajectory coming out of the second quarter, and we believe channel inventories in our largest division have now normalized. That momentum carries into the back half. As Matt mentioned, we've already secured approximately $12 million of new national retailer placements for the third quarter. Our product pipeline remains robust going into the second quarter and third quarter, with a host of exciting new launches to help continue to drive growth into the back half of the year. We're proud of the discipline our team showed to deliver this quarter and equally grateful for the partnerships of our distributors and retail partners whose confidence in our brands is what makes placements like these possible. Taken together, these factors give us the confidence to reaffirm the full-year guidance we issued last quarter.
And with that, we will open the line up for questions.
[Operator Instructions] Our first question comes from Philip Blee with William Blair.
2. Question Answer
This is Olivia Witte on for Philip Blee. So you've discussed recently aligning portions of your marketing strategy. Can you elaborate on what those changes entail, the key performance indicators you're tracking to measure success, and whether you've seen any early signs of improvement in traffic, conversion, customer acquisition, or overall sales productivity?
Olivia, this is Matt. The changes in my prepared remarks I commented on, I'll go into some more detail, there is a reliance on outside agencies, probably a significant portion of some of our marketing, so it was over 20 positions that we then took from outside agencies and put those positions internally into our division marketing team, so our division marketing teams now have full staffs. Now we also have a center of excellence that still works on some things that are universally applicable across all our four divisions.
But what that enables the teams to do is just be closer to the enthusiasts, create content faster, interact more to the forums, social media, and the different means that they engage with enthusiasts. And Modern Truck & Off-Road has had the complete marketing team the longest, and you can see some of the great growth there and the content they're generating. And then we're tracking that all through a performance marketing funnel, from awareness consideration all the way -- through the various steps on the activations, the number, the quantity, and the quality they activate, and then how that impacts ultimately the purchase and reorders down through that complete marketing funnel.
So that's how we track it, and it's going really well. It was a lot of work, as you can imagine, hiring that many people in a fairly short amount of time, but it's great seeing the results already starting to come through.
And then you've been very optimistic about the momentum you're seeing with national retail partners. You recently announced the addition of a new major partner. So how do you view the runway for further retail expansion? Is the larger opportunity today entering new retail accounts or increasing shelf space and distribution within existing partners? And additionally, what do you believe is driving these wins and how did their approach differ from competitors?
Okay, maybe start with the end of that. So what differentiates Holley Performance Brands than many of our competitors, we are a one-stop shop performance for national retailers. So the breadth and depth of our product line and the professionalism that we operate as an organization, they can come to us for the majority or vast majority all their performance needs. And that's inventory they like to differentiate, to bring enthusiasts into their locations. Now, for us, we see it highly accretive because although we run a omni-channel approach, if you get up on a Saturday or Sunday morning and want to do some car modifications, really the national retailer brick and mortar is your best alternative to get that product there and then.
And so for us, there are long lead sales cycles. There's a lot of partnerships, a lot of discussions, a lot of investigation that goes into the proper planogram to get the results they're looking for on turns on their shelf space. And so we've been working on these partnerships for over two years. You know, we're seeing growth in all our national retailers. The one specifically was a retailer we've been working with for some time to just take more of their category leadership on key performance. But it's definitely a growth category for us, not only in the U.S., but in the national retailer footprint outside of the U.S. So we're pretty excited about it. Teams worked really hard, and it is great seeing the results coming through.
Our next question comes from Joe Altobello with Raymond James. Please go ahead.
This is Mitch Ingles on for Joe Altobello. My first question is given the recent retail wins that we're talking about and the continued product launches, how are you thinking about pricing for the balance of the year?
Yes, it's a great question. And from a pricing perspective, I think we did -- I know we announced just recently a modest price increase just facing the freight headwinds that we're seeing in terms of surcharges related to fuel and some of the memory chip challenges that globally everyone is experiencing. We have great partnerships with our national retailers, and the majority of them understand this, and we give them the right heads up in order to make those changes accordingly in their portfolios, so outside of that, no additional pricing expected for the year.
Got it. That's helpful. And then my follow-up is on the -- you noted the year-over-year EBITDA comparison was impacted by last year's one-time tariff capitalization benefit. Could you help us size that impact and bridge the EBITDA progression?
Yes, it's about $3 million to $3.5 million. So if you add that back, you would see that we'd be a slight EBITDA dollar-wise better than last year with a decent pickup on the margin rate, which would be much closer to par or much closer to last year on the EBITDA margin rate.
Our next question comes from Brian McNamara with Canaccord Genuity. Please go ahead.
Matt, on Slide 13, I thought it was a helpful slide here. You guys obviously identified five key factors that give you guys optimism for H2 here. Which one of these do you expect to have the largest impact and any color on the new national retailer partnership you guys announced yesterday would be helpful. Thank you.
Brian, it's Matt. Yes, we're excited about the back half of the year and the five calls we had here. I think generally speaking, they're listed here because they're all impactful relative to how we see the back half. No doubt simplifying the operation with the divestiture of those brands and getting out a large chunk of, generally speaking, unproductive inventory makes the operations that much more efficient. Commented a bit on the national retailers, but that's been a long time coming and developing those partnerships.
And that was in our focus forecast for Q3, as well as we're seeing some great product innovations get some nice take rate in the market. There's two big ones planned for late in Q4 that we're also very excited about. And then one of the earlier questions, Olivia had asked on this marketing empowerment relative to the division structure and putting those resources in. It's just enabling them to be much closer to the enthusiasts and react a lot faster to trends and comments they're seeing in the marketplace. We're seeing all that culminate and then in addition the HRX continues to outperform the original estimates. The team's doing a great job continuing to expand their portfolio. So we're excited about all these factors and looking forward to the back half of the year.
Great. Secondly, the gap between your core and your net sales is different than we had it probably because HRX was higher than we expect, at least that contribution. Jesse, can you quantify the sales you had last year that didn't repeat due to divestitures? And is it fair to run rate HRX's Q2 performance for a full year? Obviously not this full year, or is there seasonality?
There's definitely seasonality in that, Brian. You're asking for like what's the base that we've worked off of, like if I was stripping out the prior year quarter items. Let's look at this real quick for you. So just as we talked about on the last quarter, whenever you kind of adjust all of the items in it, restoration was a big part of the down, the adjustment. I think to break that out, Brian, it's probably a more nuanced piece that we probably don't want to get into on the call, but we can definitely kind of give you the impact for Q3, Q4 that we discussed on the last quarter, which when you look on a year-over-year basis, you're looking at about $6 million to $7 million on a year-over-year basis that you'd want to pull out of last year and that takes into account everything we've divested plus HRX.
Understood. And then finally, maybe one for Matt, but Jesse, you can opine here. From our vantage point, you did your first deal in March since 2022. You authorized an inaugural share repurchase program. You continue to pay down debt. It feels like there's a lot of good stuff going on in your base business here and the market's not giving your stock the credit here. I'm just curious any thoughts here, guys?
Yes, I mean Brian, as you pointed out, there's a lot of great initiatives going on, and those have been in the work for some time. And we see that continued momentum and what the team's been working on and now executing in the market. We just continue to do what we do and make sure we're having the right priorities relative to our capital allocation, first and foremost, continue to pay down debt. But we also have a robust pipeline of M&A targets there that we continue to look at, but we're very selective on what we're going to choose.
And we want that criteria to be much like HRX, founder-led, double-digit growth, positive free cash flow, very complementary to the portfolio. We remain opportunistic where we see that share price just disconnected from what we feel the results are of the company, we're going to take that opportunity to buy back some shares. So it's, like you said, there's a lot happening and we're excited about the back half.
Our next question comes from Michael Baker with D.A. Davidson. Please go ahead.
I wanted to start by asking you about Slide 12. Some of the numbers have changed since the last quarter. For instance, the annualized impact is now $12 million net cash versus $15 million before. Is that because of buybacks? Would that be when you say net cash generation, is that after the buybacks? I'm just wondering why that's the case. That's down, whereas the EBITDA benefit is up now, right? $3 million to $5 million. It was $1 million to $2 million.
Yes, great question, Michael. And just to kind of clarify, whenever we did that the last time, it was just focused on financial impact of the box on the far left, and it was our original estimation. So our original estimation is we get $15 million. And all of that clearly excludes cash tax benefits, which obviously you guys had seen. As we took a write-down on that, we'll be getting even more from a cash tax perspective. So we've generated $12 million of the $15 million as Matt had called out or we discussed. There's some other things that we're looking at that could get us to close the gap on the $15 million, but we generally feel like $12 million was a pretty good result relative to our forecast.
And then the difference on the EBITDA piece, that takes into account the additional work that we've done since the last call when it comes to just lowering the overall operating cost of the organization. Since that time, we've decided to close a couple of other facilities. Obviously, the team member and contractor impacts play a big role as well, and those kind of increase the impact overall.
Okay, makes sense. Then a follow-up, I suppose, would be why not -- first of all, was that $12 million from the new retail deal that you talked about, was that in the previous guidance? And then EBITDA savings are greater, why does the EBITDA guidance not change?
Yes, I think on the $12 million that we talked about, that's been a part of the guidance from the beginning, and just it's a de minimis change on the EBITDA change from what we'd shown before. And also keep in mind that's an annualized impact. That's not all going to impact this year. And to your previous comment, Michael, on shared buyback, that's not even contemplated in here.
[Operator Instructions] Our next question comes from Joe Feldman with Telsey Advisory Group.
At a higher level, can you share some thoughts on the industry and what kind of growth you're seeing in the industry? It seems like you guys are starting to really perform a bit better, just curious what you see there and how you're thinking about it as you kind of head into next year from an industry growth rate standpoint.
Joe, it's Matt. Generally speaking, the industry, it's an imperfect science in our industry based without industry sponsored index, but generally speaking, as we track out the doors at our larger partners, both of our products and our overall business, we see the business generally flat to low single digits. So obviously you're seeing outperformance in three of our verticals are significantly up double digits plus. And then on American Performance, really there was just two things there. It was some hangover, still a bit of inventory that we believe we're now through, as well as changing on our marketing calendar for our Memorial Day event which we excluded some of the biggest product lines in American Performance for a number of strategic reasons and decided to put those into the calendar in the back half. So that's really why you saw that division performance the way it was.
And then maybe Jesse as a follow up, can you talk a bit more about the gross margin in the second half? Are there any other puts and takes that we should think about? Like obviously there was that capitalization cost of tariffs from last year in the second quarter. Anything else that we should be aware of in third and fourth quarters?
Not anything like that, obviously, Joe. I mean, that in particular was a one-time thing as last year the tariffs were coming in and we needed to capitalize all of those in Q2. And obviously, that continued accounting treatment, continued throughout the back half of last year as it has throughout this year, so it just kind of started in Q2, so there's nothing of note on that.
Got it. Okay. So we should -- and is the 41% kind of how we should think about the gross for the second half then? Or any adjustments that we can make? Or actually it goes up a bit -- yes, sorry, usually it's 43%, even higher, 46%.
Yes, you would expect it to slightly tick up a little bit, just like you have in previous years between first half and back half. And as we talked about, some of the pricing that we've taken into account here will play a bit of a role there, but clearly that was to offset some cost increases we're seeing. But you should see a slight uptick.
Our next question is from Michael Baker with D.A. Davidson.
Sorry, I figured I'd jump back in the queue just to follow up on Joe's tariff question. You talked about refunds this quarter. Two-part question here. One, can you talk about how much of a refund did you get? Do you expect that to continue? And then maybe more interestingly, one of your -- I suppose they're a competitor, they're another auto parts manufacturer at least, talked about price reductions that they're going to pass through to their retail partners as they get tariff refunds. You're talking about price increases. Can you talk about that dynamic of whether you'll share any of the tariff refunds with some of your retail partners?
So Michael, I think it's worth clarifying the IEEPA refund is a one-time thing. As you're very well aware, as that was repealed and no longer available as a tool for tariffs, the other tariffs that came in more than offset that. So it's not an ongoing cost savings that we've been able to benefit from. The refund that we received, you can see it kind of broken out in the 10-Q around $10 million to $11 million, but it's a one-time thing. Obviously those costs we've already borne in our P&L and so it's not anything that we're benefiting from other than the one-time cash infusion and something that we've kind of used to kind of offset other costs. Had we not received it, certainly pricing would have gone up even more than we actually passed it through at this point. So in some way we did share in that with our national retail partners, distribution partners, and customers. So again, it's a one-time thing. It was offset by other tariffs.
We have reached the end of our question-and-answer session. I would like to turn the floor back over to Matthew for closing comments.
All right, thank you, Dylan. Slide 22 highlights the compelling investment narrative we see surrounding Holley Performance Brands. Our enthusiast marketplace represents a vast, resilient, addressable market approaching $40 billion, and Holley's portfolio of story brands positions us to lead it. This quarter reinforced that confidence. We returned to net sales growth with three of our four divisions delivering double-digit core growth. We made real progress simplifying our portfolio through the restoration brand divestiture, strengthened our balance sheet with leverage at its lowest level in 4 years, and generated a strong free cash flow, all while continuing to invest in innovation and marketing capabilities that drive our brands forward.
As we look to the back half of the year, we're carrying that momentum with us. Normalizing channel inventories, new national retailer placements, a robust new product pipeline and the continued contribution from HRX all give us confidence in reaffirming our full year of guidance. Our long-term commitment remains the same, stable organic top-line growth of at least 6%, 40% gross margins, and greater than 20% adjusted EBITDA margins, underpinned by sustainable free cash flow generation.
In closing, I would like to thank our team members for their dedication and execution this quarter, our consumers for their continued passion for our brands and our distribution partners, many of whom have supported Holley for many decades, for their continued confidence in us. We're excited about the momentum we're building and the opportunities ahead as we finish out 2026. Thank you for joining us this morning and have a great day.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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Holley Inc - Ordinary Shares - Class A — Q2 2026 Earnings Call
Holley Inc - Ordinary Shares - Class A — Q1 2026 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the conference call to discuss Holley's First Quarter 2026 Earnings Results. [Operator Instructions] Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Holley. And as a reminder, this call is being recorded and will be made available for future playback. I would now like to introduce your host for today's call, Anthony Rozmus, with Investor Relations. Please go ahead.
Good morning, and welcome to Holley's First Quarter 2026 Earnings Conference Call. On the call with me today are President and Chief Executive Officer, Matthew Stevenson; and Chief Financial Officer, Jesse Weaver. This webcast and the presentation materials, including non-GAAP reconciliations, are available on our Investor Relations website. Our discussion today includes forward-looking statements that are based on our best view of the world and our businesses as we see them today and are subject to risks and uncertainties, including the ones described in our SEC filings. This morning, we will review our financial results for the first quarter of 2026. At the conclusion of the prepared remarks, we will open the call up for questions. With that, I'll turn the call over to our CEO, Matthew Stevenson.
Thank you, Anthony, and good morning to everyone joining us today. Before we get into the first quarter details, I wanted to provide some context for the quarter. As discussed on our last earnings call, Q1 began with a couple of temporary headwinds. Distributor inventories were elevated coming into the year as partners work towards their year-end rebate targets and stocked up in advance of our January 1 price increase. We expected this inventory to normalize through January and February, but more severe winter weather slowed retail activity and delayed that process, shifting some demand out of the quarter. That said, here's the key takeaway for Q1. Beginning in week 8, as weather conditions improve and channel dynamics normalize, we saw steady improvement in purchasing patterns. We exited the quarter with momentum and early Q2 trends are encouraging with healthier inventory levels across the channel and improving order activity. The spring selling season is building. More importantly, the underlying business performed solidly. Adjusted EBITDA remained essentially flat year-over-year at $27.3 million despite the revenue decrease, reflecting disciplined execution. Net income increased, margins expanded, and free cash flow improved. We are also making progress on key strategic initiatives, including advancing our new portfolio rebalancing efforts and closing the acquisition of HRX. While we're investing in innovation, deepening our connection with enthusiasts and competing to gain share, we're also prioritizing cost control and portfolio optimization. We believe that this combination positions us well for the balance of the year. Let's please turn to Slide 5. Net sales were $147.3 million, down 3.7% versus the prior year, reflecting the elevated partner inventory levels and weather impacts we just discussed. Adjusted EBITDA was $27.3 million, in line with the prior year period. Holding EBITDA flat on lower revenue reflects the progress we've made in our continuous improvement efforts, as adjusted EBITDA expanded 71 basis points year-over-year to 18.5%. Free cash flow was negative $6.3 million, an improvement of approximately $4.5 million year-over-year, still negative for the quarter, but trending in the right direction, and we expect meaningful improvement through the remainder of the year. We delivered $6.5 million in cost savings in Q1 through purchasing discipline, tariff mitigation and operational improvements. Three of the 4 divisions grew, and 12 brands performed positively across B2B and D2C. That reflects the breadth of the portfolio working as intended. Strategically, we closed HRX, and we are advancing our portfolio rebalancing initiative, which we expect to generate more than $15 million of proceeds to reinvest in higher growth areas of the business. Slide 6 provides additional insight into recent highlights across the business. Since our last earnings call, we've introduced several new products, including our engine swap solution packages and the Holley performance car care line, both of which have been well received by our enthusiast customer base. On the operational front, we continue to make solid progress. We maintained approximately a 92% in-stock rate on our top 2,500 SKUs and delivered $3.8 million in purchasing and tariff savings and $2.7 million in operational improvements during the quarter. We also reengaged our M&A efforts with the closing of HRX, -- in further slides, I'll provide more detail on its strategic importance and the broader approach we're taking to rebalance our portfolio. Slide 7 breaks out the Q1 divisional performance, and I think the story here is clear once you understand the context. American Performance declined 9.7% in the quarter. This segment saw the most impact from weather and some temporary inventory dynamics at a small number of key partners. As conditions improved over the course of the quarter, demand trends strengthened, and we expect the business to return to growth. Truck and Off-Road was up 3.8%, a solid result given the market dynamics. The truck category continues to have real momentum and the product introductions we've been building out over the past year are gaining commercial traction. Euro and Import was up 1%. This business would have been stronger, but some product availability constraints earlier in the quarter, which have since been addressed, limited performance. Safety and Racing grew 10.2%, driven by the Snell 2025 helmet certification cycle, strong demand for our Stelo brand and continued strength in motorcycle safety. There is a solid foundation here as we move through the year. Three of our 4 divisions delivered growth, with the fourth impacted by a defined set of weather and inventory-related factors that are normalizing and are actively improving. Our divisional operating model anchored in clear prioritization, accountability and resource alignment continues to support consistent progress across the company. Slide 8, which we have shared in the past, outlines our long-term strategic framework, which continues to guide how we operate and allocate resources. It's built around 8 pillars, starting with making Holley great place to work, then premier consumer journey, Trailblazing and trusted partner, product innovation and portfolio management, global expansion in new markets, transformational M&A, funding the growth, our operational improvements, all culminating with delivering results. The value of a framework like this is how it keeps the organization aligned and focused, particularly in a more dynamic environment. Through the first quarter, our teams remain disciplined, stay focused on execution and continue to deliver against our priorities. You'll see that reflected in our initiative progress. Slide 9 outlines some of the highlights for each of these initiatives within the strategic framework for 2026, which we introduced on our last call. There was solid underlying progress across these initiatives in the first quarter. This includes innovative new products such as our package engine swap solutions and the new car care line, along with continued momentum in national retail accounts and international markets. On the operations side, the team is tracking ahead of our 2026 targets, delivering meaningful material cost savings, mitigating tariff exposure and driving improved efficiency and productivity across our manufacturing facilities. Overall, these efforts position us well to continue execution against our plan and delivering on our objectives for 2026. With that, let's turn to the detailed initiative tracker on Slide 10. The strategic initiative tracker provides a clear view of our Q1 performance, highlighting both areas of progress and those impacted by temporary external factors. Trailblazing trusted partner was down $7.9 million versus the prior year, reflecting elevated inventory levels at a handful of larger accounts and slower seasonal sell-through due to weather. Encouragingly, roughly half of the B2B portfolio delivered positive momentum, and our national retailer channel grew approximately 10%, supported by improved SKU penetration, enhanced product data, expanded e-commerce presence and enhanced in-store placement. Now, as inventory levels are normalizing and seasonal demand builds, we are seeing growth in the B2B channel. Premier consumer journey was essentially flat to the prior year. Direct-to-consumer performance was impacted by weather early in the quarter, but improved as conditions normalized, returned to year-over-year growth in March. Third-party marketplaces led by Amazon delivered growth of approximately 3%. The improvement in March is a positive indicator as we move into the next quarter. Product innovation contributed approximately $3.6 million, driven by solid performance in safety with new motorcycle helmets and the Snell 2025 motorsports offerings as well as in modern Truck and Off-road with new tuning solutions. Global expansion in new markets contributed approximately $2 million, including $1.4 million from international distributor growth with continued expansion planned in Q2 and approximately $0.6 million from the globalization of powersports and safety categories, led by the Simpson brand and motorcycle helmets. Fund the Growth delivered approximately $6.5 million in savings, including $3.8 million from purchasing initiatives and tariff mitigations and $2.7 million from operational improvements. Our focus on managing input costs and tariffs continues to contribute positively to results. Overall, the tracker highlights our disciplined execution and strategic progress, effectively navigating near-term external pressures while delivering strong performance across new product innovations, expansion into new markets and cost reduction initiatives, all progressing as expected. Now Slide 11 outlines our new portfolio rebalancing initiative, which we view as an important driver of long-term value creation. The first step is to exit brands that are not meeting our growth, profitability or strategic criteria. These businesses tend to consume a disproportionate amount of time and capital relative to their returns. Second, these actions along with facility consolidations help simplify the portfolio, reduce complexity and improve free cash flow and cost structure. Third, we redeploy that capital into disciplined bolt-on acquisitions. Our focus is on businesses with attractive growth profile, strong margins and positive cash flow characteristics. The recent HRX acquisition is a good example of this approach in action. Finally, over time, we anticipate these higher growth additions will contribute to improved earnings and cash generation, supporting further reinvestment and balance sheet strength. We are targeting 5 to 10 bolt-on acquisitions over the next 24 months. While this is a focused goal, we believe we have the pipeline and processes in place to execute effectively. Overall, portfolio rebalancing is a key component of how we are positioning the business for sustained long-term growth. Slide 12 outlines our site and brand optimization program, which represents the operational component of our broader portfolio rebalancing efforts. As part of this initiative, we are in the process of exiting 5 brands and consolidating 5 facilities, and we are approximately halfway through this work. This includes reducing our warehouse footprint by approximately 100,000 square feet and streamlining our workforce by about 9%. We are also rationalizing roughly 11,000 SKUs, about 25% of our portfolio by count, reflecting a focus on reducing complexity while maintaining core capabilities. From a financial standpoint, we expect our portfolio rebalancing efforts to generate more than $15 million of one-time net cash, along with adjusted EBITDA margin expansion of approximately 75 to 150 basis points, including at least $1 million in annualized benefits. We also expect a modest improvement in leverage of around 0.15x and approximately a 5% improvement in inventory turns. Overall, we are creating a more streamlined and focused operating model, enhancing efficiency, strengthening margins and improving cash generation while positioning the business around its strongest opportunities for growth. Slide 13 outlines our M&A acquisition profile, reflecting a disciplined and thoughtful approach to bolt-on acquisitions as well as how these efforts connect to our broader portfolio optimization work. As we streamline the business through our site and brand optimization initiatives, reducing complexity and generating incremental cash, we are focused on redeploying that capital into higher growth opportunities that we can scale over time. Within M&A, we are primarily targeting founder-led businesses. These companies often bring strong brand equity, deep customer relationships and a proven operating capability. Our role is to support and accelerate that foundation through our distribution network, commercial infrastructure and broader customer reach. We structure transactions with alignment in mind, including shared business plans and incentives that encourage continued growth post close. Our financial criteria is consistent and disciplined. Typically, $5 million to $10 million in revenue at acquisition, established double-digit revenue growth and the ability to achieve EBITDA margins of 20% or greater post synergies with positive free cash flow. These are not turnaround situations, but rather businesses with solid fundamentals where we believe that we can help unlock additional value. Strategic fit is equally important. We prioritize businesses that align well with our existing portfolio, where we can leverage shared customers, channels and capabilities to drive incremental growth. Overall, we believe that this approach allows us to take the benefits of our optimization efforts and reinvest them in scalable, higher-growth brands. Slide 14 provides additional detail on the HRX acquisition, which is a strong example of the M&A framework I just outlined in action. HRX is based in Turin, Italy and specializes in premium racing apparel and safety equipment, including suits, gloves, shoes and teamwear. Product line is FIA homologated and the business has developed a proprietary digital platform that enables scalable customization, an important differentiator in a category where fit, performance and certification are critical to the customer. The company is founder-led with established double-digit revenue growth, strong EBITDA margin characteristics and positive free cash flow. It also has a growing international presence, particularly in Europe, with additional opportunities as we leverage Holley's broader distribution and commercial capabilities. From a strategic standpoint, HRX is a strong fit within our Safety division. It enhances our position in motorsport safety, adds premium manufacturing capabilities and expands our presence in the European market, an area we see meaningful opportunity for growth. More broadly, HRX reflects the type of disciplined strategic aligned acquisition we are targeting. It demonstrates how we can deploy capital generated through our optimization efforts into higher growth opportunities, and we expect to continue pursuing similar transactions over time. So stepping back, while Q1 was impacted by temporary external factors, primarily weather and channel inventory, the underlying business performed well. We expanded margins, improved cash flow and made meaningful progress on our strategic priorities. And as conditions normalized, demand improved, and we exited the quarter with momentum that's carrying into Q2. With that, I'll turn it over to Jesse to walk through the full financials and provide additional perspective on the 2026 outlook. Jesse?
Thank you, Matt. Picking up on Matt's comments, the weather and channel inventory dynamics played out as he previously described. And even with those factors, we delivered strong financial performance in the quarter. This result reflects our consistent commitment as an organization to our financial priorities. Let's take a look at these on Slide 16. Our financial priorities for '26 remain consistent: restore historical profitability, improve working capital discipline and continue to deleverage. On profitability, we continue to see tangible progress from disciplined operational execution. In the first quarter, continuous improvement initiatives delivered $2.7 million of benefit, supporting continued year-over-year adjusted EBITDA margin expansion for the quarter. These efforts are centered on optimized staffing, manufacturing and distribution efficiencies and targeted facility and network cost actions. For full year '26, we continue to expect $5 million to $7 million of additional operational improvements, reinforcing structural margin expansion. Turning to working capital. Inventory was up modestly in Q1, primarily reflecting Q1 sales performance. The actions we put in place starting in January around improved forecasting, right-sized safety stock and a more just-in-time approach on high velocity SKUs are starting to pay off in Q2, and we continue to target $10 million to $15 million in inventory reduction for the year. On the balance sheet, deleveraging remains a core focus. We ended the first quarter at 3.84x net leverage, down 0.48x from a year ago. Based on current trends, we expect steady progress toward our year-end target of below 3.5x. Our actions across operations, working capital and the balance sheet are strengthening the fundamentals of the business. We believe this positions us well to drive sustained profitability, generate free cash flow and further enhance balance sheet flexibility over the course of 2026. On Slide 17, we'll walk through our key financial metrics for the first quarter. Net sales for the first quarter were $147.3 million versus $153 million in the same period a year ago. Gross profit was $60.7 million in the quarter compared to $64.1 million in the same period last year. Gross margin for the quarter was 41.2%, a decrease of 65 basis points versus 41.9% in the prior year. Margin compression was driven by fixed cost deleverage, partially offset by operational efficiency gains. SG&A, including R&D for the first quarter was $39.4 million versus $40.8 million in the same period last year. The decrease reflects improved efficiency in legal and marketing spend as well as reduced outbound freight from lower sales volumes. Net income for the first quarter was $7.3 million, a $4.4 million improvement compared to $2.8 million in the first quarter of '25. Adjusted net income in the first quarter was $5.7 million versus $2.6 million in the same period last year. Adjusted EBITDA for the first quarter was $27.3 million, in line with the prior year. Adjusted EBITDA margin was 18.5%, a 71 basis point improvement versus 17.8% in the first quarter of '25. On Slide 18, we improved our free cash flow in the first quarter year-over-year by $4.5 million. Similar to last year, first quarter free cash flow is expected to be the low point in the year. And with the elevated inventory levels in the quarter anticipated to come back in line in the second quarter, we expect Q2 free cash flow to meaningfully improve quarter-over-quarter, furthering our progress on leverage, which I'll walk you through on Slide 19. Covenant net leverage ended the first quarter at 3.84x, down from 4.32x a year ago. We exited 2025 below the 4 turn target we set during the year, and we expect to be below 3.5 turns at the end of '26. This progress reflects a sustained commitment to margin improvement, working capital discipline and disciplined capital allocation rather than reliance on any onetime actions. I note that leverage moved up modestly from year-end, reflecting the seasonal working capital build in the HRX acquisition. We expect the trajectory to resume downward through the balance of the year as the team's initiatives on working capital are expected to begin generating incremental free cash flow. We ended the quarter with $33.1 million of cash on hand and $10 million drawn on the revolving credit facility. The revolver draw was taken proactively to fund the final [indiscernible] payment and the HRX acquisition. We retain substantial availability under the facility and ample liquidity to run the business, and we plan to fully repay the revolver in the coming weeks with cash on hand. Overall, we have come a long way in strengthening the balance sheet with continued progress expected during the remainder of the year. We remain committed to a conservative financial position using free cash flow to continue deleveraging while preserving flexibility to support disciplined bolt-on acquisitions. Turning to our '26 outlook. Our core business revenue range is unchanged. We are updating full year net sales guidance to $610 million to $640 million which reflects the net $15 million revenue reduction tied to the portfolio optimization actions that previously discussed. Importantly, our '26 adjusted EBITDA guidance is unchanged at $127 million to $137 million. The portfolio optimization is expected to be slightly accretive to adjusted EBITDA on a net basis while generating more than $15 million of incremental cash and reducing operational complexity through the SKU rationalization Matt outlined. Capital expenditures, depreciation and amortization and interest expense ranges are also unchanged. Q2 is starting out on a positive note with mid-single-digit growth in April, supported by winter being behind us and normalizing inventory at our distribution partners. We view that as a constructive signal for the balance of the quarter. And with that, we will open the line up for questions.
[Operator Instructions] We take the first question from the line of Brian McNamara from Canaccord Genuity.
2. Question Answer
Apologies if I missed this in the prepared remarks, but what was the gap in Q1 sell-in versus out-the-door sales? And what was the actual Q1 core sales growth?
So Brian, we didn't talk about the core because in this particular quarter, all the sales were core. We weren't rolling over anything in Q1. So what you're seeing reported in the down 3.7% is all core. I would say versus out-the-door sales, out-the-door sales were very strong within the quarter for our distribution partners. And we're probably in the plus 4% range. And I think that kind of gets to some of the remarks Matt and I had on the call, which is between the combination of weather, which we're estimating probably accounts for 3% and then the inventory kind of coming into the quarter a little stronger or heavier than we would have liked, that gets you to another 4% that kind of bridges the gap there.
Great. That's helpful. And then on the portfolio optimization, I'm sure you guys consistently review the portfolio. But I guess what drove this decision in terms of the next set of brand and SKU exits? And what brands are you culling if you care to reveal them?
Yes, Brian, thanks. This is Matt. Yes, we constantly look at the portfolio just to see where business has taken a disproportionate amount of resources compared to the contribution they offer. And there were some things on the bubble and just the changing environment relative to freight rates, tariffs, we monitor that closely. And these businesses do not fall in the bucket of performance or offer that true competitive differentiation and scalability that we look for in the market. So we've been looking at these. There was nothing previously that really stood out. But I'd say over the last 6 months, these businesses came more into focus as well as the growth opportunities on the other end to reinvest those proceeds into these higher-growth businesses.
And then just finally on M&A. Your renewed commitment there is pretty noteworthy. I think HR was your first deal in like 3.5 years. I'm assuming that doesn't happen unless you have confidence in your base business? And is the sales contribution from HRX this year material and then I'm done there.
Yes. On HRX, we're really excited. It's a great business and fills an opportunity in our portfolio. For competitive dynamics, we're not giving specifics into the size of that business. But generally speaking, Brian, in the prepared remarks that those types of businesses that are in that range, the $5 million to $10 million of top line revenue, double-digit EBITDA, high growth rates, et cetera, that it squarely fits in that bucket.
We take the next question from the line of Christian Carlino from JPMorgan Chase & Company.
You had talked about the difficult channel inventory position and the storms pressuring some of the orders from the distribution partners when you reported in early March. So I guess, could you talk through more, I guess, what drove the miss versus your expectations? Did you expect a more healthy ramp of orders into March that didn't materialize maybe due to the headline shock of gas prices and consumer sentiment? Just any further color on that.
Yes. Thanks for the question, Christian. Yes, as Jesse mentioned on Brian's question there, I think it was the Q&A in the last call, we talked about, hey, we think about 2% to 3% of the growth in Q4 normally would have fell into Q1 due to more working days and some of our distribution partners leaning in to hit their rebate targets. That ended up being from what we surmised here, probably north of 4%. And although, as Jesse just commented, the out-the-doors were healthy, those weeks really impacted the sellout rates in late January and early February at some of our key partners based on the weather. You got to remember, there's a bit of a seasonality effect in our business. People start working on their cars a lot more earlier in the South that really had unprecedented weather conditions. And we saw that by state in our D2C business as well and of course, impacted our D2C business in those weeks.
Got it. That's really helpful. And I know it's small, but one of the businesses you sold was Arizona Desert Shocks, -- and I think that's been a priority growth vertical in the past couple of years. So is it that maybe the vertical simply isn't growing what it was in the post-COVID days? Or is it still a priority, but there was something specific about that business that didn't make sense? And I guess more broadly, it seems like with the bolt-ons that you're planning, it's more about maybe filling in gaps in the portfolio versus expanding the TAM and growing into new verticals. So I guess could you just talk a bit more about the broader M&A philosophy and sort of what multiples are you looking to pay for these bolt-ons?
Yes. So on Arizona Desert Shocks, I mean, great brand, great team. But effectively, what we found is the scalability of that business where they concentrated on really high-end racing shocks was just something that was not scalable. And so when we looked at that business and the great team down there, it just made sense to return that business back to its former owner. But that is a segment that the core more of OE replacement plus that you see in Fox and King and Bilstein and other things, it is a nice growing segment. We were just at the very upper end of that and we're just missing the meat of what that market truly is. Now when you take a look at HRX, I mean, you saw it in the numbers here, and you saw it in the fourth quarter of '25, our safety business is growing really nicely. And when you look at our portfolio, one of the things that was really an extension of it here was getting into more European kind of fit design racing suits that really are the preferred cut and look of racers around the world. We have, of course, racing suits with Simpson, and those are more of the Americana, NHRA, NASCAR-type suits and HRX filled an opportunity for us for FIA suits in that aesthetic around the world. So we're very excited about the business. It's growing really nicely. We've got a great team over there. We're happy to have part of the family.
We take the next question from the line of Phillip Blee from William Blair.
This is Olivia Witte on for Phillip. First, I wanted to ask, could you talk about your exposure to rising transportation costs as well as changes in tariff policy? Do you have any concerns there? And are you embedding any price increases into your guide to help offset?
Olivia, thanks for the question here. Yes, just based on what's going on in the kind of the macro environment, we're seeing some increases relative to freight and some other PPV coming through on resins and other components driven by some of the increases in oil prices. So we'll be looking to take a moderate price increase. We're still finalizing the exact number, somewhere around the mid-June time frame and give our distributors ample notice in advance. When we look at the tariff landscape, of course, there's been a lot of puts and takes over time on there. So some of the IPAs were reduced, of course, but that really was the minority of our tariff costs on an annual basis. Those got reduced. Other tariffs came in, ended up being somewhat of a wash overall when you looked at our overall tariff exposure on an annual run rate.
Okay. Great. That's helpful. And then could you also talk about -- obviously, the first quarter was choppy across the board, broader retail environment with weather and whatnot. But curious how you view your performance versus the industry during the quarter. Do you think you maintained the level of share gains that you saw during the fourth quarter?
Yes. I mean, ultimately, the out-the-door is a true testament, our consumers preferring our brands and buying our products. And as Jesse commented there a few minutes ago, the out-the-doors, generally speaking, are pretty healthy when you take out the weather effect. So as we're -- we continue to maintain share in our key categories, we're seeing growth in other categories. So overall, we think that momentum we've built over the last 12 to 18 months is continuing. And just we had this temporary effect of the weather that, as you just commented, we're seeing in a lot of consumer businesses in the first quarter.
We take the next question from the line of Joseph Altobello from Raymond James.
This is Martin on for Joe. I just wanted to quickly touch on the weather impact. You've quantified around $3 million. I'm wondering if you view that as completely lost? Or could we see some recovery of it sort of in the second quarter?
I think ultimately, Martin, we got to see how the quarter continues to play out. As we sit here in early May, April was over 6% growth, right? So it was a nice recovery going in the month of April, and we're seeing those demand trends stay consistent into May. So ultimately, we got to see if that demand washed out of the quarter completely or it's recoverable here as we go through the remainder of the year.
And just really quickly touching on the guidance, you've taken down the sales guidance a bit. Is that entirely the product optimization? And just sort of have you seen any kind of retailer concern on consumer confidence because of the Iran war and the increased energy pricing?
Yes. This is Jesse. Good question. On the guide adjustment, that's purely the net impact of the portfolio optimization. So that includes both the businesses that we've identified that we need to find new homes for, offset by what we're getting -- picking up in HRX. And then on the question around retailers, can you restate that one?
Yes. Just have you had any concern from retailers about consumer confidence? I think you've said at least ordering patterns have normalized, but are you hearing anything about consumer confidence concerns?
Yes. I think our large customers and partners, they read the headlines and those like Michigan Consumer Confidence Index and such. But at the same time, they're reporting to us to sellout, generally speaking, are good. And the enthusiast customer base, this is a passion for them, right? This isn't something they do every 5 to 10 years or like some of these other consumer durables, like this is their thing. This is what they go and do in the evenings and the weekends. This is what they do with family and friends. They work on car modifications or they go race on the track or do they go road motorcycles, parts of our business. So we're cautiously optimistic. Of course, with the extended conflict in the Middle East, we've got to see how that plays out. But right now, our large partners aren't reporting outside of the weather impact, any negative impact so far.
We take the next question from the line of Joe Feldman from Telsey Advisory Group.
With regard to the portfolio rebalancing, did any of that happen already in the first quarter? Did that impact any sales in the first quarter? And how should it impact, I guess, each of the next few quarters? Is it ratable? Is it all at once in the second quarter? Or how should we think about it?
Joe, it's a great question. So for Q1, no impact really in Q1. I would say for Q2, Q3 and Q4 to kind of put to the $15 million on the top and bottom end of the guidance that was adjusted specifically for this activity. You probably see about $1 million in Q2 and about $7 million in Q3 and $7 million in Q4 the one caveat to that is, obviously, this is our current estimate of timing of when these transactions would take place. But right now, that's our current pacing. And we'll obviously update as we go forward throughout this year on an apples-to-apples comparison, which as you can see in our guide, that hasn't changed at this point. The range is still the 2% to 7% on the core business, which would exclude the impacts of those pieces.
Excellent. That's helpful. And then with regard to the bolt-on acquisitions that you guys are talking about, is that contemplated in the CapEx guidance that you gave? Or is that going to be incremental? Or I guess, how do we think of that portion of it?
Yes. The CapEx guidance would not account for any bolt-on acquisition activity as it currently is laid out. I would say to Matt's earlier comments, these are businesses that we feel like have sustained long-term double-digit growth trajectory, and they're in the relatively small range. I mean, we're talking $5 million to $10 million with huge upside and things that we feel very confident we could fund with free cash flow. So they're not in the guide at the moment. But as they come along, we will absolutely be funding those with free cash flow.
We take the next question from the line of Bret Jordan from Jefferies.
Contribution year-over-year in same SKU price?
Pricing was in the mid-single digits, Bret, from a price realization, similar to kind of how we were pacing more and more throughout the end of last year, so mid-single digits.
Okay. And then I guess the 12 brands that you saw growth, could you sort of give us just as perspective, how many brands in total you are running, I guess, post the SKU cull here?
The ones when we talk about the SKU rationalization, Bret, there are only about 5, relatively speaking, in that bucket. But when we talk about our lifestyle and power brands, it's roughly about 20 that we really concentrate across our 4 divisions and through our organization. And you saw nice growth in some of the brands. In my prepared comments, I commented Euro was a bit behind just for some product availability because Q4 demand was quite strong. So that limited some of the growth. You saw nice growth in safety and growth in Truck and Off-Road. And the decline there in American Performance was really just a concentration of inventory at some key partners that primarily focus on American Performance. So that's where you saw the differences across those 4 divisions.
Okay. And I guess a quick question on HRX. I guess, international distribution, are there other brands that you have in your portfolio that you can lever into the HRX distribution?
I'd say I'd look at it, Bret, in a broader context. International opportunity for our organization, we believe, is quite extensive. We're underpenetrated in Asia Pacific, Europe, South America, Mexico, a number of these areas that we're developing strategies for or executing on like we are in Mexico and Latin America. So we include HRX in our lifestyle and power brands, and they'll be part of this larger global expansion effort that we will coordinate.
We take the next question from the line of Mike Baker from D.A. Davidson.
Okay. Great. I guess just a follow-up on a previous question. Because it seems like your sales guidance is just in line with the portfolio rebalancing both the positive addition and subtraction. Doesn't mean that you expect the lost sales from the first quarter to come back. Am I misinterpreting that? I know that was already asked, but I just wanted a clarification on that.
Yes. No, it's a good clarification, Mike. I mean I think that is exactly what that would imply. I mean we're seeing pretty strong in April and what that would imply for the balance of the year is 6% to 7% on each of the subsequent quarters. It may not phase out exactly that way. But based on what we're seeing in April, we still feel like there's a lot of year left and reason to believe. I mean some of the things that we've spoken to in the past were pretty significant new product development that's rolling out in Q3 and Q4. I mean I think this -- we hadn't spoken as much until this quarter about the new Car Care line, but we've seen really positive feedback from consumers as we started to introduce that at LS Fest West. And that's just a really big TAM, something that we always knew could be big, but we feel really good about. In addition to that, you've got our CTS 4, which is one of our top products. We also have the continued growth in the Snell cycle, growth in safety and new products coming out within the EFI product line. So that is what's implied.
Okay. That's helpful. And maybe 2 quick related follow-ups. One, I guess with all the moving pieces of this -- the weather shift and the exits and acquisitions, et cetera, last quarter, you had said expect the year to be 51% in the first half, 49% in the second half, versus typically 52%, 48%. Can you help us sort of adjust that with all these moving parts? And then a related follow-up, the rebound in April and continuing into May, is that primarily on the American business? Has that improved from, I think, the minus 10% in the first quarter?
Yes. Mike, I'll take the back half of that question, and I'll defer to Jesse for the first half. No, we're seeing a nice recovery across the portfolio here as we get into April into May. Like I commented, a lot of that concentration of that inventory is in American Performance in Q1, and we're seeing that turn around as that inventory has normalized in the weather and continuing to see nice growth across the board in all 4 divisions.
Yes. And Mike, to answer your question, after all the changes with the portfolio rebalancing just on the first half, second half, it probably is going to be a bit more of the -- closer to 50% to 51% in the first half versus the 51% guide that we gave before. So a little bit less in the first half as a result of these.
Ladies and gentlemen, as there are no further questions, with that, we conclude the question-and-answer session. I would now hand the conference over to Matthew Stevenson for his closing comments.
All right. Thank you. Let's turn to Slide 22. First quarter reinforced what we believe about this business. The fundamentals are durable. Despite temporary headwinds early in the quarter, we held adjusted EBITDA essentially flat year-over-year, a reflection of disciplined execution by our team and the resilience of our brand portfolio. With April showing mid-single-digit growth and channel inventory normalizing, we are entering Q2 with genuine momentum. We are managing the portfolio with intention, streamlining where it creates value, investing where we see competitive advantage. Adjusted for our planned portfolio optimization actions, our full year outlook for our core business is unchanged. We remain committed to the long-term financial targets we set out, at least 6% organic top line growth, 40% gross margins and greater than 20% adjusted EBITDA margin. That conviction hasn't wavered. The automotive enthusiast market is a near $40 billion space, driven by passion, loyal and a culture that extends generations. Holley's portfolio of storied brands sits at the center of it. We believe we are better positioned than anyone to serve that market and to grow in it through a combination of our brand heritage and the digital platform we are building. The path forward is clear: disciplined growth, margin expansion and sustainable free cash flow while continuing to invest in the innovation and experiences that keep our consumers at the heart of everything we do. In closing, I want to thank our team members for their dedication and hard work every single day, our consumers whose passion and performance drives everything we build, our distribution partners whose long-standing commitment has been essential to our success and all of you on this call for your continued interest in Holley. We look forward to updating you on our progress throughout the year. Thank you, and have a great rest of the day.
Thank you. Ladies and gentlemen, the conference of Holley has now concluded. Thank you for your participation. You may now disconnect your lines.
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Holley Inc - Ordinary Shares - Class A — Q1 2026 Earnings Call
Holley Inc - Ordinary Shares - Class A — Q4 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the conference call to discuss Holley's Fourth Quarter and Full Year 2025 Earnings Results. [Operator Instructions] Please be advised the reproduction of this call in whole or in part is not permitted without written authorization of Holley. And as a reminder, this call is being recorded and will be made available for future playback.
I would now like to turn the call over to your host, Anthony Rozmus, with Investor Relations. Anthony, please go ahead.
Good morning, and welcome to Holley's Fourth Quarter and Full Year 2025 Earnings Conference Call. On the call with me today are President and Chief Executive Officer, Matthew Stevenson; and Chief Financial Officer, Jesse Weaver. This webcast and the presentation materials, including non-GAAP reconciliations, are available on our Investor Relations website. Our discussion today includes forward-looking statements that are based on our best view of the world and of our businesses as we see them today and are subject to risks and uncertainties, including the ones described in our SEC filings. This morning, we will review our financial results for the fourth quarter and full year 2025 and discuss guidance for the full year 2026. At the conclusion of the prepared remarks, we will open the line up for questions.
With that, I'll turn the call over to our CEO, Matthew Stevenson.
Thank you, Anthony, and good morning to everyone joining us. As we reflect on 2025, I am pleased to report that our disciplined approach delivered strong fourth quarter results in a year of meaningful progress for Holley. This was a pivotal year and not because of one standout quarter, but because of sustained performance across all 4 quarters. For the first time since 2021, we delivered full year net sales growth while achieving adjusted EBITDA margins of 20%, highlighting the earnings capability of our business model.
Our core business generated net sales growth in every quarter of 2025 and culminating in double-digit growth in the fourth quarter, our strongest performance of the year and clear evidence of the accelerating momentum as we enter 2026. When we refer to core, we are excluding divested operations and strategically rationalized product lines. 4 straight quarters of core growth demonstrate that the underlying business is performing and that our strategy is producing measurable results. Throughout the year, we operated with focus and rigor, driving volume-led growth, sharpening pricing execution, strengthening operational capabilities and maintaining financial discipline.
Full year net sales growth was driven primarily by volume, complement by pricing, a balanced mix that reflects solid underlying demand for our leading brands. In the fourth quarter, we saw growth across B2B and direct-to-consumer channels. underscoring the resilience of our omnichannel platform and the strength of our relationships with distributors, e-tailers, marketplaces, installers and our own digital ecosystem. This strategy centered on serving enthusiasts wherever they choose to engage, drove growth across all 4 divisions and 22 key brands in 2025.
Just as importantly, we reinforced our financial foundation. We generated meaningful free cash flow and ended the year with net leverage below the target we set out at the beginning of 2025. And demonstrating balance sheet discipline and strong financial control. Consistent growth, expanding margins, strong cash generation and leverage reduction, all achieved simultaneously. That combination reflects disciplined focus performance.
Let's turn to Slide 5, which outlines how the sustained performance translated into measurable financial results for both the fourth quarter and full year 2025. As noted, for the first time since 2021, we delivered both full year net sales growth and adjusted EBITDA margins above 20%, a clear indication that our multiyear transformation is taking hold. Core net sales grew in every quarter of 2025, accelerating to 13.5% growth in Q4, reflecting solid demand and stronger commercial execution. For the full year, net sales totaled $613.5 million. Core net sales increased 6.6%, driven primarily by 3.8% volume growth with an additional 2.8% contribution from pricing, healthy mix that speaks to the quality of our growth.
For [indiscernible] broad-based, with growth across all divisions, 22 key brands and in both the B2B and direct-to-consumer channels, demonstrating the strength and diversification of our portfolio. Our strategic initiatives continue to drive tangible results. Revenue programs contributed meaningfully in 2025, while cost and efficiency actions delivered approximately $20 million in savings through purchasing discipline, tariff mitigation, operational improvements and productivity efforts. We generated $34.2 million free cash flow for the year, including $3.9 million in the fourth quarter an improvement year-over-year, even as we continue investing in the business.
We also prepaid an additional $10 million of debt in Q4, bringing total prepayments to $100 million since September of 2023. We ended the year below 3.8x leverage, achieving our stated target and enhancing our financial flexibility. The takeaway from this slide is alignment. Revenue growth, margin expansion, cost discipline, cash generation and leverage reduction all progressed together, reinforcing the durability of our operating model.
Turning to Slide 6. Let's take a closer look at the fourth quarter results. Net sales were $155.4 million, increasing 10.9% year-over-year with 13.5% core growth. our strongest core growth performance of 2025. Gross margin expanded to 46.8%, up 120 basis points versus the prior year driven by pricing discipline, favorable mix and continued operational improvements across sourcing and manufacturing. Adjusted EBITDA margin improved to 21.4%, up 56 basis points year-over-year with an adjusted EBITDA increasing to $33.2 million from $29.1 million last year. We delivered net income of $6.3 million in the fourth quarter, representing a meaningful year-over-year improvement.
Now innovation remains central to our strategy. During the quarter, we launched new products from all 4 divisions, including multiple Snell 2025 certified motor sports helmets, such as the popular Stelo ST6, new APR power packages for Volkswagen, Audi and Porch platforms and plug play edge model for late model GM trucks and SUVs, enabling consistent full-time VA performance. New product launches contributed to approximately $23 million in new product sales for the full year underscoring the ongoing vitality of our portfolio. Operationally, we maintained an average in-stock rate of approximately 91% across our top 2,500 SKUs supporting performance through disciplined inventory management and strong product availability.
In addition, we completed approximately $20 million in combined purchasing savings, tariff mitigation and operational improvements during 2025, structural actions that strengthen the business for the long term. The fourth quarter is also an important engagement period for our brands. We participated in both SEMA and PRI, two of the industry's most significant events, further deepening relationships with enthusiasts, installers and distribution partners. Taken together, our fourth quarter results reflect strong commercial performance, expanding margins, operational discipline and continued investment in innovation and brand engagement.
Turning to Slide 7. You can see how fourth quarter core growth translated across each division. American Performance increased 10% year-over-year, with several lifestyle and power brands delivering double-digit growth. Truck and off-road grew 5.4%, led by their brakes as new truck-focused offerings gain traction. Euro and import maintained strong momentum, finishing the quarter up 21.5% and in a solid year for the division. Safety and Racing faced earlier headwinds as we navigated the October transition to Snell 2025 motor sport helmet certification. Following the launch performance accelerated, driven by new helmet introduction and continued strength in motorcycle safety. The division closed up the quarter at 13.3%.
Importantly, every division contributed to fourth quarter growth, underscoring the breadth of our portfolio. We have structured the organization around focused divisional leadership with clear accountability, supported by shared capabilities across multiple centers of excellence. Fourth quarter results demonstrate the model is working as intended driving divisional performance while maintaining enterprise alignment.
Let's move next to Slide 8, where we revisit the strategic framework that continues to guide our execution and support long-term growth. At the foundation of our approach are 3 clear priorities: fueling our teammates, strengthening customer relationships and accelerating profitable growth. These are not abstract concepts they shape how we allocate capital, how we measure performance and how we prioritize initiatives across the organization. Throughout 2025, this framework provided clarity and consistency in decision-making and aligned our teams, sharpened our focus and ensure the progress you're seeing across revenue, margins, cash flow and leverage was intentional, not incidental. As we walk through the strategic initiative tracker, you'll see how these priorities translate into measurable actions intangible results.
Turning to Slide 9. The strategic initiative tracker quantifies the impact of our execution in the fourth quarter and across the full year 2025. Under Trailblazing Trusted PARTNER, we generated revenue of $14.7 million in Q4 and $43.9 million for the year, driven by improvements in product data quality and deeper collaboration with key customers. Under Premier CONSUMER journey, Q4 contributed $4.1 million, bringing the full year total to $12.5 million. Third-party marketplaces grew 24% in 2025 and led by strong Amazon performance. Under Product INNOVATION & Portfolio management, we delivered $10.8 million in Q4 and $40.3 million for the full year. Approximately $23 million came from our new product launches with an additional $16 million driven by focused portfolio management across our B2B network. Under Global Expansion & New Markets, we contributed $1.2 million in Q4 and $3.7 million for the year, reflecting continued progress in Mexico and expansion within powersports.
Under FUND the Growth, we generated $7 million in Q4 and approximately $20 million for the full year through purchasing savings, tariff mitigation and operating efficiencies. Under Great Place to Work, employee engagement improved by 4 points, while revenue per employee reached approximately $460,000, exceeding our 2025 objective and reinforcing our focus on culture and productivity. Collectively, these initiatives delivered meaningful revenue contribution and significant structural cost savings in 2025, clear evidence that our strategic framework is translating into measurable financial results.
Turning to Slide 10. Our strategic framework in 8 key focus areas continue to guide execution and long-term value creation. This slide outlines several of the priority initiatives that will drive performance in 2026. Under premier consumer journey, we are continuing to optimize our product launch process to accelerate adoption and improve speed to market. At the same time, we are enhancing digital merchandising and expanding our presence across key third-party marketplaces, ensuring we meet enthusiasts wherever they choose to shop. Within Trailblazing trusted PARTNER, we are deepening relationships with our largest B2B customers, while applying the same structured, data-driven approach to midsized accounts. We are also expanding the reach of our direct sales organization, advancing meaningful growth initiatives with national retailers to further strengthen our brick-and-mortar presence. Product innovation remains central to our strategy.
In 2026, we will expand our Performance Chemicals portfolio, including new vehicle care products while continuing to grow packaged solutions and modern truck through partnerships serving both OEM dealers and consumers. We are applying a similar approach in euro and import working closely with leading dealers alongside our direct-to-consumer efforts. International expansion continues to represent opportunity as we introduce more of our portfolio to enthusiast globally. Powersports also remains a growth priority supported by deeper collaboration with major distributors to increase awareness and adoption of our UTV and safety offerings. While remaining committed to our deleveraging objectives, we will selectively evaluate strategic M&A opportunities that strengthen priority growth categories and unlock operational synergies.
Supporting these growth initiatives are focused operational actions eliminating nonvalue-added costs, reducing tariff exposure -- strategic sourcing savings, improving facility efficiency and optimizing our manufacturing footprint. In 2026, we will also begin the early stages of implementing a new ERP and warehouse management system to support scalable long-term operational excellence. Collectively, these initiatives position us to deliver over 4% revenue growth and more than $15 million in cost synergies this year.
Now with that, I'll turn it over to Jesse to review our fourth quarter and full year 2025 financial results in more detail and provide additional perspective on our outlook for 2026. Jesse?
Thank you, Matt, and good morning, everyone. Before diving into the details, I want to reinforce Matt's earlier comments that we closed '25 having achieved several meaningful financial milestones. We delivered 4 consecutive quarters of core business growth and return to full year reported net sales growth for the first time since '21, driven by the focused execution of our strategy across both our D2C and B2B commercial engines. Importantly, the quality of this growth reflects the transformation of our company across virtually every apartment, creating a durable growth engine and a level of operational excellence that simply did not exist before. We also strengthened the balance sheet completing $25 million of debt prepayments in [indiscernible] and surpassing $100 million in total prepayment since September '23. And importantly, we achieved full year adjusted EBITDA margin of 20% for the first time since 2021.
Taken together, these milestones reflect tangible progress against the strategy. And with that context, I'd like to walk through our progress in more detail, starting with an update on progress against our '25 financial priorities on Slide 12. Our efforts in '25 remain centered on reinforcing the core strengths of our business. restoring historical profitability, improving working capital management and deleveraging the balance sheet. On profitability, the team delivered $10 million in operational savings during the year, beating the top end of our stated target. These results were driven by optimized staffing models and sustained efficiency gains across our manufacturing and distribution network. We also advanced facility consolidation and disciplined network-wide cost actions that further strengthen the structural profitability of the business and enhanced our operating foundation.
Turning to working capital. Excluding tariff impacts on product costs, we closed the year with a $9 million improvement, including $4.5 million realized in the fourth quarter alone. While inventory levels did not fully reach our rental reduction targets for the year, the outcome reflects deliberate operational decisions aimed at improving supply chain efficiency. These actions temporarily elevated inventory that represent important depth towards building a more resilient and consistent operating model. We also made meaning progress in strengthening the balance sheet. During the fourth quarter, we prepaid $10 million of debt, bringing total payments for the year up to $25 million and over $100 million since 2023.
As a result of our transformation, focused on restoring profitability, improving working capital discipline and executing targeted debt reduction, we reduced leverage from a peak of 5.67x in the first quarter and to 3.75x at year-end in '25, a significant improvement in the strength and flexibility of our capital structure. On Slide 13, I will review our key financial metrics for the fourth quarter. Net sales for the fourth quarter increased 10.9% to $155.4 million compared to $140.1 million in the prior year period. Growth was driven by a healthy balance of price and volume contributing approximately 5.6% and 5.4%, respectively. It's worth noting that the way the Christmas and New Year holidays fell this year provided an estimated 2 to 3 percentage points of benefit from incremental in all place from our major partners. Even adjusting for that timing impact, growth was solid and reflects continued underlying momentum in the business.
This marks our second consecutive quarter of reported net sales growth, which is the first sustained growth we've delivered since 2023. Excluding approximately $3 million of prior year sales related to divestitures and strategic product rationalization, core sales increased approximately 13.5% representing our fourth consecutive quarter of consistent growth in the business coming from a combination of price and volume, contributing approximately 5.7% and 7.8%, respectively, in the quarter. We are particularly encouraged that this growth was broad-based across both D2C and B2B channels and throughout all divisions, reflecting the continued impact of our commercial transformation initiative. Gross profit for the quarter was $72.8 million, an increase of 14% versus the prior year. Gross margin reached 46.8%, expanding 120 basis points year-over-year.
Margin improvement was supported by the flow-through of pricing actions as well as operational gains at our facilities, lower excess inventory write-downs and continued enhancements and product quality reflected in reduced warranty claims. SG&A inclusive of R&D, totaled $47.9 million compared to $39.4 million in the same period last year. The year-over-year change reflects the comparison against reduced payroll expense in the prior year due to furlough actions, lower incentive compensation accruals in '24 and increased '25 investment in SOX readiness cybersecurity and tariff mitigation initiatives. Net income for the quarter was $6.3 million representing an improvement of $44.1 million versus the prior year period, we had combined goodwill and trademark impairment of approximately $49 million.
Adjusted net income was $4.6 million compared to $12.6 million last year. Adjusted EBITDA for the fourth quarter was $33.2 million, up from $29.1 million in the prior year. Adjusted EBITDA margin reached 21.4%, expanding 56 basis points year-over-year.
On Slide 14, we highlight continued positive cash generation with fourth quarter free cash flow of $3.9 million compared to $1.8 million in the prior year period. For fiscal '25, free cash flow totaled $34.2 million, marking our third consecutive year of positive cash generation. And this performance reflects strong execution and disciplined financial management across the organization.
On Slide 15, we continue to reduce our covenant net leverage at the end of the fourth quarter to 3.75x versus 3.91x in Q3 and 4.17x a year ago. Our leverage continued to decline as a result of stronger operating performance and disciplined cash management. We achieved our goal of being below 1.0x by year-end, which reflects continued progress in strengthening our capital structure. We ended the quarter with $37 million of cash on hand and no outstanding balance on our revolver. Our liquidity position remains solid, and we remain committed to maintaining a conservative balance sheet posture as we continue to execute on our broader financial priorities.
Now turning to financial results for full year '25. Net sales for fiscal '25 were $613.5 million, representing 1.9% growth compared to fiscal '24, making the first full year of reported top line growth since '21 and a testament to the organizational-focused execution against the strategic initiatives targeted at driving the commercial engine of the business. Excluding approximately $26.8 million of divestiture-related and strategic product rationalization sales from the prior year period, underlying core growth was approximately 6.6%, coming through a combination of price and volume, contributing 2.8% and 3.8%, respectively.
Once again, core business momentum was broad-based across divisions and channels, reflecting continued traction from our commercial transformation in both B2B and B2C. Gross profit for the year was $266.2 million, an increase of $27.7 million versus the prior year. Gross margin reached 43.4%, and an expansion of 378 basis points year-over-year. Margin performance reflects a combination of pricing minutes and ongoing operational progress, specifically, facility level efficiencies and lower excess inventory adjustments and improved product quality, evidenced by reduced warranty claims. Year-over-year improvement also reflects the absence of the $8.2 million in strategic product rationalization charge recorded in 2024, which had negatively impacted gross margin and EBITDA in the prior year.
SG&A, inclusive of R&D, totaled $165 million for the year compared to $150.9 million last year. Year-over-year changes largely reflected the comparison against lower payroll expense and '24 related to furlough actions reduced '24 incentive compensation accruals, increased investment in external sales support and higher '25 investment in SOX compliance, cybersecurity and tariff mitigation.
Net income for the year was $19.2 million, representing an improvement of $42.4 million versus the year-end of 2024. Adjusted net income was $21.2 million compared to $24.8 million last year. Adjusted EBITDA for year-end '25 was $124 million, up $13.5 million from '24. Adjusted EBITDA margin was 20.2%, an increase of 191 basis points year-over-year and delivering on our commitment of achieving at least 20% EBITDA on an annual basis since the transformation began upon that's appointment in June of '23.
Turning to Slide 17, where we'll walk through guidance for '26. As we enter the year, the consumer backdrop remains uneven in this increasingly K-shaped economy. Middle and lower-income households continue to face pressure from elevated prices and tighter credit while higher income consumers remain willing to spend. While overall sentiment is still subdued, recent improvements and stable spending trends suggest conditions are gradually stabilizing as we move into the year. We are incorporating these dynamics into our '26 guidance and outlook, while also recognizing that significant winter weather events impacted consumer spending we began the year.
For '26 revenue, we are expecting a range of $625 million to $655 million, which implies approximately 4% to 4.5% growth at the midpoint of the range. Our adjusted EBITDA guidance is $127 million to $137 million, representing approximately 6.5% growth at the midpoint. As it relates to capital expenditures, we expect to invest between $15 million and $20 million this year, modestly above our historical range. This increase reflects targeted investments in facility consolidations to drive structural efficiencies and ERP implementation to enhance operational scalability and incremental product development to support our next-generation EFI platform. We view this as a temporarily elevated level of investment tied to high-return initiatives that strengthened the operating model and support long-term growth, not a structural shift in the capital intensity of the business.
In support of this outlook, the financial priorities that have underpinned our transformation remain firmly in place for '26. On Slide 18, you'll see the specific objectives aligned to each of these priorities. First, as it relates to profitability through operational efficiency, we are targeting an incremental $5 million to $7 million in savings through continued network optimization, facility consolidation and disciplined cost actions. Second, Improving working capital remains a key focus area through enhanced forecasting, tighter safety stock management, supplier negotiations on minimum order quantities and continued figment of our SIOP processes we are targeting $10 million to $15 million in inventory reduction by year-end.
And third, the combination of earnings growth, working capital improvement and disciplined capital allocation is expected to further strengthen the balance sheet positioning us to exit the year below 3.5x leverage and continue progressing toward our longer-term objective of approximately 3x in 2027. Taken together, these priorities reflect a continued commitment to profitable growth, stronger cash generation and more resilient capital structure.
As we conclude fiscal '25, we are encouraged by the progress we have made and the foundation we have built for the year ahead. Our focus remains centered on reinforcing our balance sheet, driving sustainable free cash flow and allocating capital with discipline all of which support our long-term growth trajectory heading into '26 and beyond. We are proud of the team for closing the year on a strong note and continuing progress in 2026.
This concludes our prepared remarks. We would now like to open the line up for questions.
[Operator Instructions] Our first question is coming from Brian McNamara from Canaccord Genuity.
2. Question Answer
Congrats on the strong year and the progress on your initiatives here. So market growth in 2025, can you guys quantify that and what your expectation is for 2026? I know I see a plus 4%, 3% at the midpoint for guidance versus your historical kind of mid-single-digit market growth number. Just trying to assess relative conservatism here relative to market growth.
Yes. I would say market growth last year, I mean, we obviously did pretty strong and core growth of 6.6%. I want to say, based on our intel from the market, it was out the door sales were probably in the 3% to 4% range. So we continue to take share throughout the year, and I think that partnership with distribution partners is really paying off there. I would say for next year, Brian, our plan would indicate that the share gains continue maybe not to the pace that we saw last year, but it is implicit in what we've guided to right now.
Great. And then secondly, on pricing, 2025 volumes were better than we would have thought. Can you remind us of the timing and frequency of pricing you take in a typical year? And how much pricing growth is contemplated in guidance? And is that 8.75% pricing you took last year and kind of still working through the P&L?
Yes, I'll take that. Typically, the pricing cadence is middle of the year. We did, obviously, in Q3 -- sorry, at the end of Q2, take some price 8.75% and in the Q3 call, we talked about how it wasn't all completely flowing through. We obviously picked up more of that flow through in Q4 and this year, we're recognizing the market probably doesn't have a stomach for the level of pricing that we took last year to kind of support the tariff impacts that we're all experiencing. We did take a modest price increase at the very beginning of the year. But I would suspect that that's going to be slightly offset with continued sort of partnership with distribution partners and selective channel margin enhancements to continue to drive growth. So not a lot anticipated there or a price increase middle of the year, at least at this point.
Your next question today is coming from Christian Carlino from JPMorgan.
Congrats on a strong year. Could you talk about how you're thinking about elasticity as you annualize the impact of tariffs into the second half? It's less apparent right now seeing that 8 to 9 points part because of B2B growing faster. But compared to your typical low single-digit price increases, is that normalizes over the year? Are you in -- that you're assuming an improvement in unit trends to offset this as maybe real wages theoretically pick up later in the year? And just any broader comments on maybe cadence of the year would be helpful.
Yes. I'd say, Christian, obviously, we talked about the strategy around the pricing increase to make sure we were able to maintain margin and free cash flow. And as you can see in our guide, like that is playing out. To your question around volume impacts, I mean we're continuing to see on the out-the-door sales continued growth. I would say there has been, in some select areas, some volume implications there. but the team is maniacally focused on taking surgical pricing actions to address those things as they come up. If you take a shot here and then you kind of refine along the way. I think as we talked about, just in the previous question, we do anticipate some volume increases here to achieve our guidance.
In terms of the actual cadence of the sales throughout the year, I think as we've talked about in the past, in a perfectly normal year, which no year as we all know, is perfectly normal. It would be about 50 to 48. I think that's what we hit last year. And then just depending on inventory levels and how the weather is doing in a particular period, that could shift a bit. And I think you probably heard in my remarks, Q1 with the January weather event and then a double whammy with the early February weather event in the Northeast, I would say this year is probably going to shape up more like a [indiscernible] with more of the sales kind of shifting to the back half, but not to be too far off from that.
Got it. That's really helpful. And I guess, could you -- to the extent you can quantify the impact from the weather so far this year? And then my question was going to be about are distributors ordering any more aggressively in anticipation of stronger demand during tax refund season? Or would you expect them to chase if they need to and I guess, what's your assessment of both channel inventory levels in terms of their need to basically chase and then your own inventory level in terms of your ability to fulfill that if they end up needing to chase inventory.
Yes. Christian, generally speaking, what we're seeing to Jesse's pointed is out the doors are pretty healthy. With that said, though, there were some weeks there in late January and early February that impacted all of us, including our distribution partners, quite significantly as people were bearing out from either ice or snow. And so if you take those out of the equation, like I said, the out the doors are pretty healthy. And then the month of March, just for the seasonality of the business, the month of March is a big month, and at the same time, we run a promotional event or a marketing calendar to capture that demand as the season starts to pick up. .
Now in terms of any out of the ordinary stock ups or anything for tax refund fees or anything, we're not seeing anything out of the ordinary there. And then generally speaking, inventory levels taking into consideration those weeks that were quite slow due to the weather conditions, they're a little heavier, but that would be the only real indication of impact on the inventory levels.
Your next question is coming from Bret Jordan from Jefferies.
You commented on seeing some recent consumer improvement. I guess when you think about the 4 segments of the business, are any of those more cyclical than others? Is your own import more of a luxury buyer who is sensitive. I guess when you look across the portfolio, are there areas that are brighter than others?
Yes, Bret. And I think in Jesse's prepared remarks, he talked about that key economy. We see it in our portfolio in the euro business, you saw the robust growth there that we had in 2025, significant double digits there on the core up over 20%. And so those buyers of euro cars tend to be more affluent. We're also seeing some of those patterns in our safety business around our Stelo brand, which is ultra premium, almost kind of luxury helmets in the motorsport segment and we're seeing phenomenal growth in that segment as well. But generally speaking, things are still generally healthy across the portfolio per numbers that we provided there for '25, but you're definitely seeing some spikes driven by more of that economy phenomenon with more from customer.
And then within chemicals, I guess it looks like a sort of an expansion year for that. Could you talk about the TAM and sort of maybe the margin profile of that category and is it become a fifth segment? Or is this sort of just overlaid across the existing business lines?
Yes. We've actually bucketed it in our American Performance vertical under our accessories group just because the kind of the legacy nature of some of our existing portfolio focus is there. But on chemicals, they are great margin products for us. And we just saw natural expansion opportunities based on our enthusiast consumer base. So we recently introduced the NOS octane booster, which is now getting placement in -- retailers, which is very exciting. And then as we get into here 2026 in the back half of the year, we'll introduce a new car care line, which is with the reach we have with millions of millions of enthusiasts just makes complete sense. So we're really excited about that. And eventually, we'll have a strategy. It takes a little longer to get into national retailers and such. But eventually, that is the goal to get that on shelves as well as third-party marketplaces in our own e-commerce platform.
[Operator Instructions] Our next question is coming from Joe Feldman from Telsey Advisory Group.
Congrats on the quarter and the year. I wanted to ask, can you share a little more color on the ERP and the WMS system. Maybe just remind us plan for that this year, like how that gets implemented and because occasionally, that can be a little bumpy. And I know you guys said you have more work to do there. So just curious if you could share more thought on that.
Yes, Joe, I appreciate the question. Joe, for this year, it's mostly your just preparation alignment that also drives some capital expense in Jesse's outlook. Really for the implementation go live more in early '27. But right now, the team, of course, has a lot of work to be done prior to going live, and that investment, that will happen. But in terms of any potential business impact. Our job, of course, is to make sure that doesn't happen, but that wouldn't even be on the table here for '26 regardless.
Okay. That's helpful. And then with that, I know everybody asked about AI these days, so I figured I'll ask too. But are you incorporating or will the new systems allow you to incorporate AI to maybe your better design or better demand visibility, things like that? .
Yes. I mean the team is already using AI and various [indiscernible] so more modern ERP allow other API plug-in with AI to continue to involve our competencies around that. So that's many benefits that we see in the new ERP implementation.
Got it. And then maybe just one quick one, Jesse, well, I don't know if it's quick. But can you share a little more color? You talked about, I guess, some operating expense savings presumably, does that mean we'll see that line which is gross margin? Like maybe you can share a little color on the complexion for 2026, how those should shape up? .
You're asking Joe the $5 million to $7 million in operations come in and the timing of that?
Yes, effectively. And like should we see more gross margin strength in 2026? Or would it be more SG&A leverage? How we should look at that? .
Yes. I mean, obviously, we don't break those out in our guidance, but it would be pretty much like the operating savings line is also kind of helping with mitigating some of any pressure that would be residual from tariff mitigation actions as well. So you'll see most of that just flow through the gross margin line. And then on the SG&A side, it's just more the margin expansion there is just through leverage on the cost.
We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments. .
All right. Thank you, Kevin. Slide 20 underscores a compelling investment narrative for our highly performance brands. We operate in a nearly $40 billion passion-driven enthusiast market, where loyalty runs deep and performance matters. With a portfolio of iconic, innovation-led brands, Holley holds a clear leadership position. In addition, we have a proven track record of disciplined acquisitions and value creation through integration.
Looking ahead, we see meaningful opportunity to expand our digital ecosystem, enhancing how enthusiasts and distribution partners engage with our brands and further strengthening our competitive advantage. Our long-term commitments are clear through mid-single-digit organic top line growth, maintained 40% gross margins, maintain at least 20% adjusted EBITDA margins, generate sustainable free cash flow pursue disciplined value-creating acquisitions.
In closing, 2025 was defined by consistency and discipline. We delivered core growth every quarter, expanded margins, generated meaningful free cash flow and reduce leverage below our target, all while continuing to invest in innovation, customer relationships and operational excellence. We enter 2026 with a stronger foundation, greater financial flexibility and a clear focus on disciplined profitable growth.
Thank you to our team members, passion and enthusiast and our long-standing distribution partners for the commitment that drives our collective success. We thank you for your participation today, and have a wonderful day. Thank you.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.
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Holley Inc - Ordinary Shares - Class A — Q4 2025 Earnings Call
Holley Inc - Ordinary Shares - Class A — Q3 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the conference call to discuss Holley's third quarter 2025 earnings results. [Operator Instructions] Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Holley. And as a reminder, this call is being recorded and will be made available for future playback.
I would now like to introduce your host for today's call, Anthony Rozmus with Investor Relations. Please go ahead.
Good morning, and welcome to Holley's Third Quarter 2025 Earnings Conference Call. On the call with me today are President and Chief Executive Officer, Matthew Stevenson; and Chief Financial Officer, Jesse Weaver. This webcast and presentation materials, including non-GAAP reconciliations, are available on our Investor Relations website. Our discussion today includes forward-looking statements that are based on our best view of the world and of our businesses as we see them today and are subject to risks and uncertainties, including the ones described in our SEC filings. This morning, we will review our financial results for the third quarter and discuss guidance for the full year 2025. At the conclusion of the prepared remarks, we will open the call up for questions.
With that, I'll turn the call over to our CEO, Matthew Stevenson.
Thank you, Anthony, and good morning to everyone joining us live on the call today. As we look back on the third quarter of 2025, I'm pleased to share that the positive momentum we have been building for more than 2 years continues to gain strength. This quarter marks another clear step forward in our transformation journey, a reflection of disciplined execution, sharp focus and a resilient team that keeps delivering results in a constantly changing consumer and macroeconomic environment. For the third consecutive quarter, our core business delivered strong growth. Just as a quick reminder, when I say core business, I'm referring to our results, excluding the operations we divested and the product lines we phased out as part of last year's strategic rationalization.
This quarter, we made meaningful progress across the company with core growth in every division. It's especially encouraging to see continued momentum in both our direct-to-consumer and business-to-business channels, reinforcing the strength and balance of our omnichannel strategy. As we've said before, our omnichannel approach remains central to our core strategy as the leading consumer enthusiast platform in the automotive performance aftermarket. We're committed to serving customers wherever they choose to engage, whether that's through e-tailers, distributors, wholesalers, third-party marketplaces, installers, national retailers or our own e-commerce platform.
The foundation we've built through our strategic framework continues to deliver from product innovation and digital capability to operational excellence and commercial capabilities. With these fundamentals in place, our focus remains on sustaining momentum and executing against our 3-year plan. We're also staying proactive in managing external factors like tariffs and supply chain costs. While these remain dynamic, our diversified sourcing strategies and pricing discipline have positioned us well to manage impacts and protect margins. Overall, it was an excellent quarter, one that reflects the hard work, focus and determination driving our organization forward. I couldn't be prouder of our team and the meaningful progress we continue to make together.
Now let's turn to Slide 5. I'll walk you through a few of this quarter's standout highlights. We delivered strong results this quarter, achieving 6.4% growth in our core business. This performance reflects genuine volume-driven expansion, which continues to build momentum quarter-over-quarter. Year-to-date, our 5% core growth is composed of a 4% increase in volume and a modest 1% pricing tailwind. This performance showcases the strength of our business model designed to drive consistent growth and the deep commitment of our enthusiast consumer base for whom this is more than a hobby. It's a passion and it's a way of life.
Importantly, our growth was broad-based across all channels, divisions and within 70 brands. That breadth speaks to the success of our transformation initiatives across the company and the strong execution behind our go-to-market strategy. In our B2B channel, we saw a 7.3% growth as we deepen engagement with key partners. Through strong joint planning, continued data integration and expanded sales enablement tools, we've enhanced collaboration and delivered more value to our channel partners. It's a great example of how our customer-first approach is driving strong relationships and measurable performance gains across the business.
Our strategic initiatives also contributed meaningfully this quarter, generating about $26 million of revenue. Roughly $11.3 million came from new product innovation and portfolio management, including strategic pricing and channel margin optimization. These results underscore how well our commercial and operational teams are working together to drive sustainable, profitable growth. Even in what's typically our slowest quarter of the year, we generated $5.5 million of free cash flow, a $7.6 million improvement from last year. That improvement came from higher margin and disciplined capital management across the organization.
We ended the quarter with net debt-to-EBITDA leverage at 3.9x, ahead of our year-end target of 4x. Now this is the first time we've been below 4x leverage since 2022, a clear marker in our transformation and a reflection of our stronger financial position. And after the quarter ended, we prepaid another $10 million in debt, bringing total prepayments to $100 million since September 2023. That's an important milestone for us and reinforces our commitment to strengthening the balance sheet, positioning us for continued long-term value creation.
Let's move over to Slide 6 and take a look at some of the key quantitative highlights from the quarter. Net sales for Q3 was $138.4 million, which translated to core business growth of 6.4%. That marks our third consecutive quarter of year-over-year growth in the core business, and it underscores our outperformance in the market and the share gains we are seeing in key categories across the company. Gross margins came in at 43.2%, up more than 400 basis points from last year. That improvement reflects strong pricing discipline and operational improvements across the company while keeping our focus on quality and serving the customer.
Adjusted EBITDA margin rose to 19.6%, an increase of over 300 basis points year-over-year. This strong performance highlights the operating leverage within the business and the benefits of maintaining cost discipline and execution focus, resulting in a significant $7.6 million improvement in free cash flow compared to the same quarter last year. On the right-hand side of the slide, you can see a few additional business highlights. Product innovation continues to be central to our philosophy, and this past quarter delivered a range of successful launches across our divisions, including digital dashes from our Holley EFI product suite, Big Claw heavy-duty brake kits from Baer, at-home BMW performance tuning solutions from Dinan and [ Club Sport ] racing seats from Simpson. We'll see the impact of these and many other recent product introductions when we review our strategic initiatives tracker in the upcoming slides.
Operationally, we also continue to move the needle. In-stock rates for our top 2,500 products improved 2.2% year-over-year, giving customers better access to what they need. Efficiency was up more than $3 million and past due orders were down 20.7%. Those are strong signs of progress and a testament to the impactful additions we made to our operational leadership team across supply chain, manufacturing and quality. On the consumer side, we continue to see strong engagement from our enthusiast base. Direct-to-consumer sales were up 4.2% year-over-year, supported by a sharper promotional execution and stronger digital performance.
The third quarter also represents the peak of our event season. And this year, engagement across our enthusiast community was strong. Attendance at our events was on track to break records, but a rainy weekend during our flagship LS Fest East did impact that momentum, leaving overall attendance roughly flat for our event season this year. Even so, the impact of these events extends well beyond in-person attendance. A key part of our event strategy is leveraging these experiences to grow and engage our digital audience. With more than 8 million followers growing steadily this quarter at 2% year-over-year, our brands continue to reach and inspire enthusiasts across platforms, keeping our community energized during marquee weekends like LS Fest.
On Slide 7, we can see some standout examples of the core business growth driving our performance across divisions in Q3. Our Domestic Muscle division roared ahead with 6.2% year-over-year growth, powered by an unwavering enthusiast passion for our legendary brands. Multiple brands delivered standout high-single and double-digit gains across categories, reinforcing the vitality of this portfolio. The Modern Truck and Off-Road division accelerated with 5.2% growth, led by exceptional performance from Baer, Flowmaster and Range, each posting double-digit gains. DiabloSport also delivered robust high single-digit growth, further strengthening the division's overall performance. Meanwhile, our Euro & Import division continued its impressive trajectory, climbing 16.6%. Dinan and APR sustained remarkable growth throughout the year, driving strong segment performance.
We've also shifted AEM to our Domestic Muscle portfolio, better aligning its fuel delivery and monitoring focus with that vertical. Going forward, the Euro & Import division will include only Dinan and APR, sharpening focus and alignment. In our safety division, distributors began ramping up ahead of the Snell 2025 certification changeover, which officially began on October 1. Simpson Motorsport, Motorcycle and Stilo all posted solid gains, signaling renewed momentum across the category. This acceleration follows the typical precertification cycle slowdown earlier in the year, and it positions the division for continued strength through the balance of 2025 and beyond. Together, these results highlight broad-based growth across our divisions, setting the stage for continued progress.
Let's move next to our strategic initiative tracker to see how these efforts are fueling our long-term growth. But before that, just a quick reminder on Slide 8, where we revisit the 8 areas forming the foundation of our strategic framework centered around 3 core principles. First, fueling our teammates, making Holley great place to work, where team members are empowered, see clear paths for growth and thrive in an engaging and inclusive culture. Second, supercharging our customer relationships, delivering the premier consumer journey in our industry, strengthening B2B partnerships through shared growth and leading with innovation that defines performance excellence. And finally, accelerating profitable growth, expanding into new markets, pursuing transformational M&A and driving continuous operational improvement to enable reinvestment and long-term value creation. Together, these principles continue to guide our strategic initiatives and keep our teams aligned around Holley's long-term vision.
Now on Slide 9, I'm pleased to share our third quarter highlights as captured in the updated strategic initiative tracker. Under our Trailblazer and trusted partner pillar focused on B2B growth, we delivered another strong quarter. Enhanced product data adoption at key retailers drove $1.7 million in new sales, bringing year-to-date gains to $83 million. Our smaller account segment also remained strong, growing $2.4 million year-over-year in Q3. The largest driver of growth in the quarter was continued share gains with our largest e-tailer and wholesale partners. Altogether, B2B initiatives generated $13.5 million in revenue this quarter.
Turning to our premier consumer journey pillar. E-commerce and direct-to-consumer channels continue to perform well. Third-party marketplaces grew 28% year-to-date to $12.9 million, with our new Amazon program driving over 50% growth in the chemical product sales. Enthusiast events also fueled record merchandise sales and overall e-commerce sales were up 5% year-to-date. In total, this pillar contributed nearly $2 million year-over-year. New product launches across divisions, paired with continuous sales strength in tuning and exhaust for their new innovations delivered $2.5 million in year-over-year growth and set the stage for strong momentum heading into Q4.
Within portfolio management, strategic pricing actions and distributor margin enhancements contributed an additional $7.7 million in sales during the quarter. Combined, this pillar contributed approximately $11.3 million in revenue during Q3. Our global expansion in new markets pillar also continues to gain traction. Mexico shipments reached 240,000 in September, our second straight month above 200,000, tracking toward a $2.5 million annual run rate.
Powersports delivered record revenue of nearly $300,000 in September and $1.1 million year-to-date, keeping pace with a $1.8 million target. Together, these efforts generated $1.1 million in revenue for Q3. Under our Fund the Growth pillar, cost and efficiency initiatives yielded $6.2 million in total savings this quarter. In-stock rates for our top 2,500 products are near our 93% goal with significant reductions in past dues with decreased overall inventory levels. Finally, our Great Place to Work initiatives continue to build engagement and productivity. Employee engagement rose 4%, and we remain on track to achieve our revenue per employee goals by year-end.
Altogether, execution of our strategic framework delivered about $27.8 million in revenue from key initiatives and $6.2 million in cost savings this quarter, clear proof of focus, discipline and consistent execution. Holley's third quarter showcased strong broad-based growth, margin expansion and disciplined execution across our business. We've strengthened our financial position, bringing net debt-to-EBITDA leverage below 4x for the first time since 2022, a major milestone in our transformation journey. These results reflect the hard work and focus of our team and position us well for continued momentum.
With that, I'll turn it over to Jesse to walk through the financial highlights and refined guidance for the remainder of the year. After Jesse's remarks, we'll return for Q&A. Jesse?
Thank you, Matt, and good morning, everyone. I'd like to start by providing an update on our progress against our financial priorities, then discuss our third quarter '25 financial results before discussing our guidance updates.
Moving to Slide 11. Turning to our financial priorities. Our focus remains on strengthening the fundamentals of the business by restoring historical profitability and optimizing working capital. We built on our progress with operating efficiency by generating $3.2 million in incremental savings during the quarter, achieved through ongoing improvements in logistics and the recovery process. These efforts have already pushed total '25 savings to $5 million with additional initiatives still underway. As of the end of the quarter, we remain within our target range and expect further savings through year-end as the team continues to execute on previously outlined initiatives moving steadily toward the midpoint of our annual goal.
Turning to working capital. I'd like to take some time to discuss our inventory performance in the third quarter. Year-to-date, inventory reduction moderated from $9 million in Q2 to $5 million in Q3. This shift reflects operating decisions made during the quarter aimed at enhancing long-term visibility, control and operational efficiency, specifically around the consignment inventory and bonded warehouse.
While these actions temporarily increased inventory on hand, they are foundational to our improvements in operations and delivering on our commitments to our customers. While these operational changes mean we are not currently on pace to reach the low end of the $10 million reduction target for the full year of '25, they are setting the stage for sustainable improvements in working capital management. We remain focused on refining our SIOP process to improve planning and forecasting, optimizing safety stock levels, all of which are expected to drive further gains in '26 as these initiatives mature.
And on Slide 12, we'll walk through our key financial metrics for the third quarter. Net sales for the third quarter grew 3.2% to $138.4 million versus $134 million in the same period a year ago. It's important to note that this is the first time we achieved net sales growth on a GAAP reported basis in 2 years. On a core business basis, we achieved net sales growth of 6.4%, which is the third quarter in a row of core business growth. The increase was primarily related to a combination of improved pricing realization of $4.6 million and volume mix increase of 3.7. Core business growth once again came across all divisions as well as both channels and continues to be the result of our commercial transformation efforts with B2B and D2C.
Gross profit was $59.8 million in the quarter, a growth of 14.4% compared to $52.3 million in the same period last year. Gross margin for the quarter was 43.2%, an increase of 422 basis points versus 39% in the prior year. This improvement was through a combination of pricing flow-through as well as operational initiatives highlighted earlier in the presentation across facilities efficiencies, reduced excess inventory write-downs and improvements in quality through reduced warranty claims.
SG&A, including R&D expense for the third quarter was $38.2 million versus $34.7 million in the same period for the prior year. Primary drivers in SG&A are related to lapping reduced payroll expense in '24 from the furlough activity, reduced '24 incentive comp accrual and increased investments in '25 related stocks and tariff mitigation support.
Net loss for the third quarter was negative $800,000, a $5.5 million improvement versus a net loss of $6.3 million in the third quarter of '24. Adjusted net income in the third quarter was $3.3 million, a $3.8 million improvement versus an adjusted net loss of $500,000 in the same period of last year. Adjusted EBITDA for the third quarter was $27.1 million versus $22.1 million in the prior year and driven by a combination of higher sales and improved gross margin. Adjusted EBITDA margin was 19.6%, a 309 basis point improvement versus 16.5% in the third quarter of 2024.
On Slide 13, the third quarter was another strong quarter of free cash flow generation of $5.5 million compared to negative $2.1 million in free cash flow for the same quarter a year ago. This performance was driven by improved EBITDA, slightly offset by working capital investments, as previously noted in the presentation. And year-to-date, we have generated $30.3 million in free cash flow.
On Slide 14, we reduced our covenant net leverage at the end of the third quarter to 3.9x versus 4.2x a quarter ago. In the third quarter, we prepaid an additional $15 million of debt, which helped drive our leverage down under 4x target we set for the end of '25. This marks the first time we are under 4x leverage in 12 quarters. In addition, at the end of October, we prepaid another $10 million of debt. And since September of '23, we have prepaid $100 million of debt, exercising our commitment to strengthening our balance sheet and enhancing our financial flexibility. And just as a reminder, our leverage remains well under the 5x covenant that is only in place when the revolver is drawn at the end of the quarter. There is no outstanding balance on our revolver, and we concluded the quarter with $51 million in cash with no expectation of drawing on the revolver in the near-term.
As we look ahead to guidance on Slide 15, we've been closely monitoring the broader economic environment throughout the year. Conditions remain fluid as tariff developments continue to evolve and consumer trends adjust. While factors such as higher unemployment, persistent inflation and tariff uncertainty have influenced sentiment as reflected in the University of Michigan Consumer Index, U.S. households continue to navigate these challenges with measured caution. But even within this complex backdrop, Holley continues to deliver strong results.
Our disciplined execution, focus on operational excellence and commitment to strategic priorities have driven growth that exceeded expectations through the first 9 months of '25. This performance highlights the resilience of our business model and our ability to perform in a dynamic environment. Given our results year-to-date and momentum we've built across our core operations, we are raising our full year guidance for revenue at the bottom end of our range on adjusted EBITDA. This update reflects both our confidence in the team's ability to execute and our disciplined approach to navigating an evolving macro environment.
For '25 revenue, we now expect a range of $590 million to $605 million, which implies 3.8% growth at the midpoint over the core business base of roughly $575 million in '24. Additionally, for adjusted EBITDA, we now expect a range of $120 million to $127 million as we raised the bottom end of our guidance from $116 million. We look forward to closing the year on a strong note and roll this momentum into 2026. We remain focused on strengthening our balance sheet, enhancing free cash flow generation and maintaining disciplined capital allocation to position ourselves for long-term growth for years to come.
This concludes our prepared remarks. We would now like to open the line for questions.
[Operator Instructions] Our first question comes from the line of Christian Carlino with JPMorgan.
2. Question Answer
You had talked about taking high single-digit pricing, but price realization was only around 3% in the quarter. So could you talk about why that delta exists? What was same SKU inflation? And then is it simply a function of channel mix and more B2B sales versus D2C or is there some trade down or favoring smaller projects over larger ones?
Yes. Good question, Christian. I think it's -- from what we can tell, it's a combination of those things. Obviously, continued strong growth on B2B as it relates to the ASP, you're going to have a bit of a lower price realization on a comparable basis as well as we've got several of our customers who, from a contractual perspective, the pricing doesn't flow through immediately. It comes in later periods. And then there's just -- as it relates to some of the contractual prices on some of the other items that we do for our existing distribution partners that are not playing in there but it really is a combination of them. As it relates to some of the trade down piece, Christian, we're not necessarily seeing that as much. It's just the other items.
Got it. That's helpful. And you're not tracking to above your gross margin and EBITDA margin targets for the year. So how should we think about the structural margin profile of the business? I guess, 2 parts there. One, is there anything unsustainable in the base right now? And then the flip side is that you've achieved this despite a subdued sales environment. So as sales growth returns to more normalized levels, is there room to expand margins further or will you generally look to reinvest upside back into the business?
On the first question, no structural change. I think, obviously, the pricing is certainly helping here and particularly at the lower volumes. But to your second question, yes, I mean, I think Matt and I continue to hold to -- while we're 2 years into the transformation, there's still things to be looked at as it relates to driving growth, particularly operations. And so we don't want to overcommit here in terms of just all of the growth flowing through. But obviously, we do keep an eye towards just driving continued margin acceleration, and our commitment is above 20%, but I wouldn't expect it to all flow through until we get to a much cleaner glide path, particularly on operations.
Our next question comes from the line of Phillip Blee with William Blair.
The question. The midpoint of your guidance implies a fairly big step down in organic sales growth in the fourth quarter it seems. So is that more just a function of conservatism in the current environment or is that driven by something more specific that you've seen quarter-to-date that warrants a bit more caution here?
Good question, Phillip. And it's a combination of the conservatism, like the current environment is a bit murky, and I think we're all reading the news every day. And so, Matt and I are really big on making sure that we don't overpromise on this. Plus, this time last year, we're lapping a marketing calendar event that we decided not to reengage in this year just from a margin profile perspective. So that's impacting the top line a bit. So those 2 things combined really account for the majority of it.
Okay, great. And then given what you know about who your average customer is, how do you think about the potential benefits from the One Big Beautiful Bill between no tax on tips and overtime and the potential for a bigger tax refund season next year? Do you think that, that could have maybe a more meaningful impact on your business and underlying demand?
Phillip, it's Matt. What I think the current environment shows our consumers are resilient, right? This is not just a hobby for them, it's a lifestyle. And as we've seen in the past, when there's times they get more discretionary income or tax refunds, that does generate increases in demand. So we'll see how that plays out over the next 6 months or so.
Our next question comes from the line of Joe Altobello with Raymond James.
I guess, Matt, first question for you. You've talked about a lot of the changes at Holley over the last 2-plus years here, certainly making a lot of progress. As we start to think about 2026, where are your priorities for next year?
Joe, I think if you reflect back on our strategic initiatives that we showcase each quarter on the progress there, that is part of our 3-year plan, and that's what we had the teams focused on. So there's a number of key growth areas there. Also, we still think it's pretty early relative to the operational roadmap we have for continued improvements there. So between those strategic initiatives around growth as well as operational improvements, that's where the team is focused. And again, still early innings in a number of areas that we continue to see opportunity.
Okay. Maybe a follow-up for Jesse. You mentioned inventories were a little heavier at least than I was looking for. Can you sort of explain a little bit better what drove that?
Yes, Joe. So in the quarter, there are a couple of things. One, operationally, we felt like there was a much stronger case for us to actually service our customers better by taking some product that we've been selling on consignment and bringing it into our system. It brings a lot more visibility into where the product is, how much of it we have on hand so we can make products and deliver on time to our customers. So that was about a $2 million to $3 million headwind in and of itself. And then in addition, we also decided to get out of the bonded warehouse, which was a strategy that was used to help mitigate tariffs in the beginning. It worked for that purpose. But as tariffs came down, it also was causing operational challenges. So as we started to bring in those products out of the bonded warehouse or directly from port and the port in particular, became less congested, you see a lot of inventory that came in, in Q3 that more than likely would have shown up in Q2. So it felt like a big change in Q3, but it's just more of some of the things that should have come in, in Q2 as well.
Our next question comes from the line of Brian McNamara with Canaccord Genuity.
Congrats on the strong results, I might add. So I'm curious, you guys did a 3.3% in Q1, 3.9% in Q2, a 6.4% in Q3, markedly getting better each quarter. Matt, I think like about a year ago, you kind of called your shot and you said we're going to return to growth in Q1. So kudos on that. I'm just curious how this year has played out relative to your expectations internally?
Brian, thanks for the question. I think, Brian, when we look at -- when we set out at the end of last year, our plan for '25, I'd say the team is doing a great job executing. We have -- as we just talked about with Joe, our strategic initiative tracker. That's what the team is locked in on every day and continue to deliver on the critical few initiatives that are underneath that to either drive growth or operational improvement. So I would generally say it's as planned.
And then with all the work you guys have done behind the scenes, do you think you have all the building blocks in place for this growth to be what I would, dare I call, sustainable from here on out, obviously, acknowledging that from quarter-to-quarter, there'll be unique challenges.
Yes. I mean we spent a lot of time on foundational elements, whether it was on our direct-to-consumer business, continue to enhance relationships with our distributors. And these are the foundational building blocks for the long term. Brian, as you know, we just -- currently, SEMA is going on right now, and I had the opportunity to meet with a number of our great distribution partners and the journey we've been on within the last 2 years and the enhanced collaboration and the ways we're finding to grow together. And so again, all foundational elements that are there for the long term.
And just last quick one, on SEMA, actually. It feels like you guys have refined your strategy with that event each year since you've been there, Matt. I'm curious how does SEMA today compare to maybe your first go at it in 2023 and obviously, acknowledging there was a high energy there last year given the election results.
Yes. I'd say the energy this year, Brian, was -- it felt even greater. I mean our booth was just absolutely packed. Customer meetings were tremendous. And to your point, like how we've progressed, this is my third SEMA with the company. I would say we continue to execute a plan at the event. From last year, really focusing on our key 4 verticals and somewhat eye-opening to the market the amount of fantastic brands and products we have in our portfolio and showcasing them within our 4 verticals and then just continue to expand that execution, that strategy, engaging with major customers, having set meetings and times to connect and winning product awards and really showcasing the great innovations we have. The team does a great job really refining our strategy and taking that time to engage with customers to drive business.
[Operator Instructions] Our next question comes from the line of Bret Jordan with Jefferies.
Could you talk about the B2B and sort of what the white space you see there? I mean I think you talked about sort of doing more with some of the big parts retailers, traditional mechanical guys, but sort of good growth there, how do you see the run rate?
Yes, Bret, on a strategic initiative tracker, we call out a number of things there. We think there's still a lot of runway in our existing relationships, of course, with whether it's e-tailers, wholesale distributors, but some of the areas you referenced, national retailers is something we're continuing to engage in strongly. We feel that, that channel is accretive in our omnichannel strategy that in-store impulse purchase being able to provide enthusiast products that they want, being able to just go in and pick up something from one of our brands. We also see continued opportunity in export markets, and you see some of the expansion that we're doing in Mexico and other areas. And we continue to work with OEMs on programs for their aftermarket, not OE production, but their aftermarket performance teams and providing them solutions for enthusiasts. So there are a number of ways we're continuing to drive the B2B growth for the long term.
And I guess, you called out -- I think in the past, you've talked about the events generally being self-funding but you mentioned that LS Fest East was probably lower traffic. Were the events in the third quarter generally neutral to earnings or was there a headwind in the period?
No, no, Bret. They're positive. I think just -- we get a lot of questions always on attendance and how they're trending, right? And as I mentioned on the prepared remarks, the engagement was great this year but of course, there's always weather, at our largest event, that can impact things. And when you have 40,000-plus people when you get a rainy Friday afternoon and a rainy Friday or Saturday morning, it affects things but no, the profitability was in line as expected.
Our next question comes from the line of Joe Feldman with Telsey Advisory Group.
I wanted to ask, go back to the guidance, I think somebody had asked this as well, but something similar. What would happen for you guys or have to happen to get to the high-end of the guide versus the low-end? Like is there a subtle difference or is it you would really need a couple of things to really go right to get to the high-end versus the low-end?
Yes. I mean, I think, Joe, to get to the high end, we're coming up on our holidays event and just having a really strong merchandising calendar and participation by our B2B partners with great sellout would really allow us to get to the high-end. I think on the other end, it's obviously that not hitting in conjunction with distribution partners potentially getting even more conservative on what their forecast is for the coming year because that does impact their in stocks that they hold. So there could be some destocking there in that low-end scenario.
Got it. Okay. That's helpful. And then I wanted to follow up. I think you guys -- you mentioned working with the B2B and having better sharing of data, and I think data product adoption is how you framed it in the prepared remarks. Can you just share any more color there as what's going on with that, how that's been accepted and what -- how the B2B partners are actually using that data? And it seems like it's working to help, but I'm just curious just to get a little more understanding of it.
Yes, Joe, it's Matt. Happy to answer that. This has been a company-wide initiative for well over a year now. And when we say data, it's product data. So of course, in today's e-commerce world, whether it's going direct to consumer or one of our wholesale partners is selling it to an installer, what have you, it's about the product information they're able to display on -- through their merchandising efforts online. And so that is a very robust set of information that is required. It's photos, it's videos. Of course, it's dimensions in and out of the box, it's features advantage benefits, it's comparisons, compatible with this replaces that kind of thing.
And it was something that previously, there wasn't an approach in place to be really proactive on offering the best-in-class product data. And I'd say that our teams have done a tremendous job increasing the quality of our data. We grade the data of every category, of every brand, and we continuously improve that weekly as the product teams continue to enhance the information. So ultimately, it makes the job of our B2B customers easier to merchandise the products to their customers.
Our next question comes from the line of Mike Baker with D.A. Davidson.
Can I ask about just the overall spending environment in the consumer? It sounds like there's great energy at SEMA. So you took share clearly. Any idea or any metrics on the overall market? Is your growth just share gains or have you started to see any kind of recovery in spending in the consumer and all that kind of stuff?
It's a great question, Michael. I think as it relates to just the general industry, we -- it's a very difficult industry to get real-time information on. But in our discussions with distribution partners, I feel like out-the-door sales have been pretty strong throughout the year, obviously, on our products, but just consistently across their broader portfolio, they've seen a much better result for this year than they had expected coming into the year but obviously, we've continued to take share. And I think right now, in our guidance, we're assuming these trends continue.
So to that point, and that's my follow-up. When you say the trends continue, are you referring to your share gains or industry trends? And I guess what I'm getting at is for a lot of consumer type of names, we saw really strong sales results through July and August and then something seems to have changed in terms of spending September, October and even into November, for a lot of different macro government reasons. So I'm wondering if you can comment on that and any trend that you're seeing throughout the quarter and early into this year or this quarter?
Yes, Mike, it's Matt. Generally speaking, how our industry has played out this year, the first quarter was pretty soft. And then the overall industry started to pick up through the balance of the year. And I think to Jesse's point, through that whole period, we've been taking share. Now I just sat down with no less than a dozen of our key partners over 2 days. And generally speaking, they're seeing the out-the-door trends be very consistent in demand. And so there are no indications coming from our key partners or, of course, from ourselves that anything has really changed at this point and to which it does in the future, who knows.
Our final question this morning comes from the line of Mike Albanese with The Benchmark Company.
Nice quarter. When I look at, I guess, what you've taken for price, where your volumes are and your ability to expand margins, it really seems like you've done a nice job at mitigating tariffs and managing supply chain. And I'm just wondering if you could provide some color on what you're seeing across the competitive landscape. And I know it's tough -- Jesse, you mentioned it's tough to get kind of incremental data. And we're talking about a lot of different brands and SKUs here, but I'm wondering essentially how much of the share gain is a result of the kind of current macro dynamics from, I guess, a cost standpoint and whether or not really your competitive positioning has improved as a result of that?
Yes, Mike, I think you're meaning competitive position relative to pricing?
Correct.
Yes. Really, it's a category by category. There's no broad-based statement that covers it. Our job is to ensure we remain competitive, not only in our value proposition for the consumer, but to also make sure our distributors have healthy margins to be able to market and merchandise our products. But generally speaking, our share gains are -- whether you say outhustling, outperforming, increasing our capabilities, all the above throughout the year on both our D2C and B2B. And as I mentioned, some of the things, whether it's our product data or enhancing our relationships and the way we work with our key partners, those all have been big contributors to our share gains.
Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Stevenson for any final comments.
Okay. Thank you, Melissa. Slide 17 underscores the compelling investment story behind Holley Performance brands. This market, fueled by automotive enthusiasts goes far beyond a past time. It's a passion and it's a lifestyle for our customers. With an addressable market in the U.S. approaching $40 billion, Holley stands at the forefront, backed by a portfolio of iconic brands with a rich legacy of innovation. As we wrap up on today's discussion, I'd like to reflect on what this quarter signifies for Holley. The third quarter showcased broad-based strength across our operations with solid growth in every division and sustained momentum in both B2B and direct-to-consumer channels.
Our disciplined execution, operational enhancements and commitment to innovation continue to deliver tangible results from margin expansion and efficiency gains to deeper engagement with our enthusiast community. We also achieved a key financial milestone this quarter, reducing net leverage below 4x for the first time since 2022 and generating positive free cash flow during what is typically a slower seasonal period. These achievements highlight the impact of our transformation and the dedication of our teams to building a stronger and more resilient Holley. Through our strategic framework, we remain focused on initiatives that matter most, advancing digital capabilities, driving product innovation, strengthening partnerships and laying the foundation for sustainable, profitable growth.
Looking ahead, our outlook remains consistent. We are committed to delivering steady organic top line growth, maintaining gross margins above 40% and achieving adjusted EBITDA margins of 20%. Our goal is to generate sustainable free cash flow and continue creating value through strategic acquisitions that complement our portfolio. The combination of a vibrant automotive enthusiast marketplace and Holley's legendary brand family positions us as a unique investment opportunity in a passionate segment.
In closing, I want to express my gratitude to our team members for their dedication and execution, to our consumers for their unwavering passion for performance and to our distribution partners, many of whom have stood with us for decades. Together, we're building a stronger, more innovative Holley for the future. I want to thank you for your attendance on our call today and wish you all a great morning. Thank you.
Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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Holley Inc - Ordinary Shares - Class A — Q3 2025 Earnings Call
Finanzdaten von Holley Inc - Ordinary Shares - Class A
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|
|
| EBITDA | 102 102 |
5 %
5 %
17 %
|
|
| - Abschreibungen | 14 14 |
1 %
1 %
2 %
|
|
| EBIT (Operatives Ergebnis) EBIT | 88 88 |
6 %
6 %
14 %
|
|
| Nettogewinn | 10 10 |
134 %
134 %
2 %
|
|
Angaben in Millionen USD.
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Firmenprofil
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| Hauptsitz | USA |
| CEO | Mr. Stevenson |
| Mitarbeiter | 1.407 |
| Gegründet | 1903 |
| Webseite | www.empowermidocean.com |


