HLLY

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:30 a.m. ET Investor Relations - Anthony Rozmus President and Chief Executive Officer - Matthew Stevenson Chief Financial Officer - Jesse Weaver Operator: 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. Anthony Rozmus: 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. 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? Jesse Weaver: 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: [Operator Instructions] Our first question comes from Philip Blee with William Blair. Olivia May Witte: 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? Matthew Stevenson: 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. Olivia May Witte: 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? Matthew Stevenson: 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. Operator: Our next question comes from Joe Altobello with Raymond James. Please go ahead. Mitchell Ingles: 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? Jesse Weaver: 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. Mitchell Ingles: 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? Jesse Weaver: 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. Operator: Our next question comes from Brian McNamara with Canaccord Genuity. Please go ahead. Brian McNamara: 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. Matthew Stevenson: 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. Brian McNamara: 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? Jesse Weaver: 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. Brian McNamara: 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? Matthew Stevenson: 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. Operator: Our next question comes from Michael Baker with D.A. Davidson. Please go ahead. Michael Baker: 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. Jesse Weaver: 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. Michael Baker: 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? Jesse Weaver: 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: [Operator Instructions] Our next question comes from Joe Feldman with Telsey Advisory Group. Joseph Feldman: 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. Matthew Stevenson: 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. Joseph Feldman: 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? Jesse Weaver: 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. Joseph Feldman: 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%. Jesse Weaver: 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. Operator: Our next question is from Michael Baker with D.A. Davidson. Michael Baker: 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? Jesse Weaver: 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. Operator: 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. Matthew Stevenson: 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. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Holley, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Holley wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Holley (HLLY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Investors might want to bet on Holley Inc. (HLLY), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook. Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Holley Inc., as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.07 per share for the current quarter represents a change of +133.3% from the number reported a year ago. Over the last 30 days, two estimates have moved higher for Holley compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 16.67%. For the full year, the earnings estimate of $0.39 per share represents a change of +116.7% from the year-ago number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Holley. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 28.69%. Thanks to promising estimate revisions, Holley currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. While strong estimate revisions for Holley have attracted decent investments and pushed the stock 24.5% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Holley Inc. (HLLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Holley Inc.? Here are five stocks we like better. Second-quarter sales improved: Net sales rose 3.2% year over year to $172 million, or 4.9% on a core-business basis, with three of four divisions posting double-digit core growth. Modern Truck & Off-Road, Euro & Import, and Safety & Racing led gains, while American Performance’s decline narrowed to 2.1%. Tariffs pressured reported profitability, with adjusted EBITDA falling to $33.8 million and margin declining to 19.6%; management said EBITDA was roughly flat excluding a prior-year tariff-related benefit. Free cash flow increased to $40.9 million, helped partly by a one-time $10 million-$11 million tariff refund. Holley continued simplifying its portfolio and reducing debt: It divested its Restoration brands, cut facilities, workforce and low-margin SKUs, generated $8.3 million in quarterly savings, and reduced leverage to 3.74 times. The company reaffirmed its 2026 outlook and made an additional $15 million voluntary debt repayment after quarter-end. Holley (NYSE:HLLY) reported second-quarter 2026 net sales growth as three of its four operating divisions posted double-digit core sales gains, while the company continued divesting non-core assets, reducing debt and investing in marketing and product launches. Net sales increased 3.2% year over year to $172 million. On a core-business basis, excluding portfolio rebalancing and divestiture effects, sales grew 4.9%. Chief Executive Officer Matthew Stevenson said the company’s first-quarter headwinds—including elevated distributor inventories and an unfavorable start to the spring season—eased during the second quarter. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling “Three of our four divisions delivered double-digit core sales growth year-over-year,” Stevenson said, adding that the result reflected the breadth of Holley’s portfolio and execution against its strategic priorities. Modern Truck & Off-Road was Holley’s fastest-growing operating division during the quarter, with net sales rising 15.7%, accelerating from 3.8% growth in the first quarter. The company attributed the performance to consumer demand and new-product introductions across retail and enthusiast channels. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Euro & Import sales increased 13.1%, compared with 1% growth in the first quarter. Holley said prior supply constraints had been resolved, enabling the division to better meet demand in the European enthusiast vehicle market. Safety & Racing sales rose 13.8%, building on 10.2% growth in the first quarter. Growth was supported by new products from the Stilo and Simpson brands, demand connected to the Snell SA2025 helmet certification cycle, and momentum in motorcycle safety products. → No Hangover: Revisiting Microsoft One Week After Earnings American Performance, the company’s largest business, reported a 2.1% sales decline. That was an improvement from a 9.7% decline in the first quarter. Stevenson said channel inventory levels have normalized, while the company also shifted certain product categories from its second-quarter marketing calendar to the second half of the year. Holley expects the division to improve through the balance of 2026, supported by retailer placements and expanded marketing activity. Gross profit was $70.5 million, compared with $69.6 million a year earlier, while gross margin fell 72 basis points to 41%. Adjusted EBITDA declined to $33.8 million from $36.4 million, and adjusted EBITDA margin fell to 19.6% from 21.9%. Chief Financial Officer Jesse Weaver said the year-over-year margin comparisons were affected by tariff-related costs and a one-time, non-cash benefit in the prior-year quarter from capitalizing tariff costs into inventory. During the question-and-answer session, Weaver said that benefit was approximately $3 million to $3.5 million. Adjusting for the prior-year item, he said adjusted EBITDA was roughly flat year over year. The company reported a GAAP net loss of $2.4 million, compared with net income of $10.9 million in the prior-year period. Holley said the loss reflected the divestiture of its non-core Restoration brands. Adjusted net income more than doubled to $24 million from $10.6 million. Quarterly free cash flow increased $5.2 million year over year to $40.9 million. The result included improved working-capital management, operational discipline and a one-time benefit from refunds related to IEEPA tariffs. Weaver said the refund totaled about $10 million to $11 million and was not an ongoing benefit, as other tariffs more than offset it. During the quarter, Holley completed the divestiture of its Restoration brands, including Brothers Trucks and Scott Drake. The company has one remaining business to divest among the five businesses identified under its portfolio rebalancing program, according to Stevenson. Year to date, Holley said it has divested four brands, eliminated two facilities, reduced warehouse space by approximately 95,000 square feet, reduced its workforce by about 5% through divestitures, and removed roughly 7,000 low-margin SKUs, or approximately 16% of its portfolio. The company also completed two manufacturing-site consolidations during the second quarter and reduced its employee and contractor base by more than 115 positions. Holley expects its portfolio rebalancing and cost-reduction work streams to provide 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, and improved inventory turns. Holley generated $8.3 million in quarterly savings, including $5 million from purchasing and tariff-related actions and $3.3 million from operational improvements. Through the first half, the company said operational initiatives delivered about $6 million in savings. Weaver said Holley expects to reach or exceed the high end of its previously stated $5 million to $7 million full-year cost-reduction target. Total leverage ended the quarter at 3.74 times, the company’s lowest level in four years. Holley had $69 million of cash on hand and had repaid the $10 million drawn under its revolving credit facility in the first quarter. After quarter-end, the company made an additional $15 million voluntary debt repayment, bringing voluntary debt reduction since September 2023 to $115 million. Management reaffirmed its full-year 2026 guidance, though specific guidance ranges were not discussed on the call. Holley cited normalized channel inventories, approximately $12 million in new national-retailer placements planned for the third quarter, a pipeline of product launches and ongoing contributions from HRX, which management said continues to exceed its original estimates. The company also completed a restructuring of its marketing organization, reducing reliance on outside agencies and hiring more than 20 marketing professionals to work within operating divisions. Management said the approach is intended to bring marketing teams closer to enthusiast communities and improve speed and relevance across social media, forums, events and direct-to-consumer channels. In the second quarter, Holley’s strategic initiatives contributed $13.4 million in revenue, including contributions from product innovation, national retail activity, international expansion and HRX. The company also repurchased approximately $2 million of common stock during the quarter. Stevenson said Holley remains focused on debt reduction while evaluating selective acquisitions and potential share repurchases. He reiterated the company’s long-term targets of at least 6% stable organic top-line growth, 40% gross margins and adjusted EBITDA margins above 20%. Holley Inc is a designer, manufacturer and marketer of high‐performance automotive products for the enthusiast market. Through its portfolio of well‐known brands, the company develops fuel delivery systems, intake manifolds, ignition components, nitrous oxide systems, digital controls and other engine‐dress accessories tailored to both street and competition applications. Holley's products are sold through a network of domestic and international distributors, retailers and directly to professional race teams and hobbyists. The company's product offerings span mechanical and electronic fuel injection, carburetion, engine management, add‐on power systems and calibration tools. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Holley Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Holley Inc (NYSE:HLLY) returned to net sales growth in Q2 2026, with a 3.2% increase to $172 million and a 4.9% rise in core business sales, driven by double-digit growth in three of its four divisions. The company generated strong free cash flow of $40.9 million in the quarter, a $5.2 million increase year-over-year, supported by operational discipline and working capital management. Holley Inc (NYSE:HLLY) reduced its leverage ratio to 3.74 times, its lowest level in four years, and made an additional $15 million voluntary debt repayment after quarter-end, bringing total voluntary reductions to $115 million since September 2023. The company completed the divestiture of its non-core restoration brands, simplifying its portfolio and focusing resources on higher-growth areas, while adjusted net income more than doubled to $24 million. Holley Inc (NYSE:HLLY) secured approximately $12 million in new national retailer placements for Q3, has a robust product launch pipeline, and its HRX acquisition continues to outperform expectations, contributing to growth and earnings. Holley Inc (NYSE:HLLY) reported a GAAP net loss of $2.4 million for Q2 2026, primarily due to one-time costs associated with the divestiture of its restoration brands. Gross margin declined by 72 basis points to 41%, and adjusted EBITDA margin fell by 223 basis points to 19.6%, impacted by higher tariff-related costs and fixed cost deleverage. The American Performance division, the company's largest, saw net sales decline 2.1% in Q2, reflecting elevated channel inventories and a shift in marketing calendar, though it improved sequentially. The company faces ongoing macroeconomic headwinds, including inflationary pressures, higher fuel and transportation costs, and an evolving tariff landscape, which could impact future performance. Holley Inc (NYSE:HLLY) incurred $4.4 million in SG&A expenses related to legal costs from a securities class action settlement and portfolio rebalancing, which weighed on profitability. Warning! GuruFocus has detected 4 Warning Signs with HLLY. Is HLLY fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the changes to your marketing strategy, the KPIs you're tracking, and any early signs of improvement in traffic, conversion, or sales productivity? A: CEO Matthew Stephenson explained that the company significantly reduced its reliance on outside agencies by hiring over 20 marketing professionals and embedding them directly within the operating divisions. This brings teams closer to enthusiasts, enables faster responses to market trends, and strengthens brand activation. They track performance through a complete marketing funnel, from awareness and consideration to activation and purchase. Early results are encouraging, with Modern Truck and Off-Road, which has had the complete marketing team the longest, showing strong growth. Q: How do you view the runway for further retail expansion, and what is driving the recent wins with national retail partners? A: CEO Matthew Stephenson stated that Holley's differentiation lies in being a one-stop shop for performance needs, offering a breadth and depth of product line that competitors can't match. The long lead sales cycles involve significant partnership and planogram development. The company is seeing growth across all national retailers and views this as a growth category both in the U.S. and internationally, with new placements secured for the third quarter. Q: How are you thinking about pricing for the balance of the year? A: CFO Jesse Weaver noted that the company recently announced a modest price increase to address freight headwinds, fuel surcharges, and memory chip challenges. They have strong partnerships with national retailers who understand these changes. Outside of this, no additional pricing is expected for the year. Q: Could you size the impact of last year's one-time tariff capitalization benefit on the year-over-year EBITDA comparison? A: CFO Jesse Weaver quantified the impact at approximately $3 million to $3.5 million. Adding that back would result in slightly better EBITDA dollars year-over-year and a margin rate much closer to par with the prior year. Q: On Slide 13, which of the five factors gives you the most optimism for H2, and can you provide color on the new national retailer partnership? A: CEO Matthew Stephenson said all five factors are impactful, but highlighted the simplification of operations from divestitures, the long-awaited national retailer partnerships, and a robust product innovation pipeline with two big launches planned for late Q4. He also noted that HRX continues to outperform original estimates, and the new marketing structure is enabling faster reactions to market trends. Q: Can you quantify the sales from last year that didn't repeat due to divestitures, and is it fair to run-rate HRX's Q2 performance for a full year? A: CFO Jesse Weaver acknowledged there is seasonality in HRX's performance. He declined to break out the specific prior-year divestiture impact on the call but reiterated that on a year-over-year basis, investors should pull out approximately $6 million to $7 million from last year to account for all divestitures and the HRX acquisition. Q: The market isn't giving the stock credit for the progress. Any thoughts on the disconnect? A: CEO Matthew Stephenson acknowledged the many positive initiatives underway and stated the company will continue to execute its capital allocation priorities, primarily paying down debt. They have a robust pipeline of M&A targets but remain selective, seeking founder-led, high-growth, cash-flow-positive businesses like HRX. They will remain opportunistic with share repurchases when the share price seems disconnected from results. Q: Why is the annualized net cash impact on Slide 12 now $12 million versus $15 million before, while the EBITDA benefit is up? A: CFO Jesse Weaver clarified that the original $15 million estimate was an initial projection. The $12 million reflects the actual results generated so far, excluding cash tax benefits. The increase in the EBITDA benefit range reflects additional work done since the last call, including closing more facilities and reducing headcount, which increases the overall operational cost savings impact. Q: Was the $12 million from the new retail deal in the previous guidance, and why hasn't the EBITDA guidance changed given higher savings? A: CFO Jesse Weaver confirmed the $12 million from the retail deal was part of the initial guidance. He explained the EBITDA change is de minimis and represents an annualized impact that won't all hit this year. He also clarified that the share buyback is not contemplated in these figures. Q: Can you share your thoughts on the industry growth rate and how you're thinking about it heading into next year? A: CEO Matthew Stephenson noted the industry is generally flat to low single-digits based on tracking at larger partners. Holley is outperforming with three divisions delivering double-digit growth. The American Performance division's decline was attributed to a hangover of channel inventory, which is now normalized, and a strategic shift of some major product lines from the Q2 marketing calendar to the back half of the year. Q: Are there any other puts and takes for gross margin in the second half, and should we expect it to tick up? A: CFO Jesse Weaver stated there are no other one-time items like the tariff capitalization benefit from last year. He expects gross margin to slightly tick up in the back half, consistent with historical patterns between the first and second halves, aided by the recent pricing actions taken to offset cost increases. Q: Can you discuss the tariff refunds received this quarter, and will you share any of those refunds with retail partners? A: CFO Jesse Weaver clarified the IEPA refund is a one-time event, as the tool was repealed and other tariffs more than offset it. The refund, which was around 10% to 11% as broken out in the 10-Q, was used to offset other costs. Without it, pricing would have increased even more, so in a way, the benefit was shared with partners through more moderate price increases. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Holley Inc. (HLLY) came out with quarterly earnings of $0.2 per share, beating the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +81.82%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.05, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Holley, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $172.01 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.72%. This compares to year-ago revenues of $166.66 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Holley shares have lost about 31.5% since the beginning of the year versus the S&P 500's gain of 13%. While Holley has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Holley was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.06 on $143.88 million in revenues for the coming quarter and $0.31 on $621.26 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Original Equipment is currently in the bottom 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, BRP Inc. (DOO), has yet to report results for the quarter ended July 2026. This company is expected to post quarterly loss of $0.46 per share in its upcoming report, which represents a year-over-year change of -168.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BRP Inc.'s revenues are expected to be $1.45 billion, up 6.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Holley Inc. (HLLY) : Free Stock Analysis Report BRP Inc. (DOO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

DOUBLE-DIGIT CORE GROWTH IN THREE OF FOUR DIVISIONS RETURN TO NET SALES GROWTH REFLECTS STRENGTH ACROSS THE BUSINESS LEVERAGE RATIO LOWEST LEVEL IN THE LAST FOUR YEARS Advancing Portfolio Rebalancing Initiative to Enhance Focus, Simplify Operations, and Support Second-Half 2026 Performance NASHVILLE, Tenn., Aug. 05, 2026 (GLOBE NEWSWIRE) -- Holley Performance Brands (NYSE: HLLY), a leader in automotive aftermarket performance solutions, today announced financial results for its second quarter ended June 28, 2026. Second Quarter Highlights vs. Prior Year Period Net Sales grew 3.2% to $172.0 million compared to $166.7 million last year Net Loss was $(2.4) million, or $(0.02) per diluted share, compared to Net Income of $10.9 million, or $0.09 per diluted share, last year Net Cash Provided by Operating Activities was $47.1 million compared to $40.5 million last year Adjusted Net Income2 was $24.0 million compared to $10.6 million last year Adjusted EBITDA2 was $33.8 million compared to $36.4 million last year Adjusted EBITDA margin2 was 19.6% compared to 21.9% last year Free Cash Flow2 was $40.9 million compared to $35.7 million last year 1 Core business net sales excludes sales of divested businesses and the portfolio rebalancing initiative.2 See “Use and Reconciliation of Non-GAAP Financial Measures” below. “Our second quarter results reflect positive core growth and continued execution against the strategic priorities we outlined earlier this year, with three of our four business segments delivering year-over-year core growth,” said Matthew Stevenson, President and Chief Executive Officer of Holley. Stevenson continued, “We believe we are entering the second half of the year with solid momentum, supported by new national retailer placements, a healthy cadence of product innovation, and several important launches slated for the coming months. At the same time, we have reinvigorated our marketing calendar with a greater focus on brand activation and enthusiast engagement, helping to strengthen awareness and demand across our portfolio. “During the quarter we completed the sale of our non-core Restoration brands, including Scott Drake and Brothers Trucks, a step that further reduces complexity and enables us to concentrate resources on our highest-priority growth opportunities. We remain focused on disciplined execution and believe the actions we have taken position Holley for continued progress in the periods ahead.” Jesse Weaver, Chief Financial Officer of Holley, added, “The second quarter showcased our continued focus on cash generation, balance sheet improvement, and disciplined capital allocation. Our underlying operating performance was stronger than the year-over-year Adjusted EBITDA comparison suggests: the prior-year quarter included a one-time, non-cash benefit from the capitalization of tariff costs that did not repeat this year, and adjusted for that item, we believe Adjusted EBITDA performance was approximately flat year-over-year. We generated strong free cash flow in the quarter and year-to-date, which enabled us to continue making progress on our capital priorities. "During the quarter, we repurchased approximately $2.0 million of our common stock, reflecting our confidence in the long-term value of the business. Following a $15.0 million voluntary debt prepayment made after quarter-end, we have now reduced debt by $115.0 million through voluntary prepayments since September 2023. Combined with our strong cash generation, these actions contributed to another quarter of leverage reduction helping us maintain progress towards finishing the year below our targeted leverage ratio of 3.5x. "Based on our first-half performance and the opportunities we see in the second half of the year, we are reiterating our full-year guidance and remain focused on delivering sustainable value for our shareholders." Strategic Business Highlights and Recent Events 27 brands delivered growth across DTC and B2B channels. Generated $40.9 million of free cash flow and remain on track for year-end leverage below 3.5x. Long Term Strategic initiatives drove $13.4 million in revenue and delivered $8.3 million in cost savings. Realigned marketing to strengthen consumer engagement and brand activation. Repurchased ~$2.0 million of shares, reinforcing confidence in our long-term value creation. Continued portfolio rebalancing through the divestiture of the non-core Restoration brands. Reduced debt by an additional $15.0 million, bringing total debt reduction to $115.0 million since September 2023. Well positioned for H2 2026 with new retail placements and a strong product launch pipeline. Outlook **For the year ending December 31, 2026, core business revenue guidance remains unchanged: 1 Core Business Growth Rate, excludes impact from Portfolio Rebalancing Initiative. * Holley is not providing reconciliations of forward-looking full year 2026 Adjusted EBITDA outlook because certain information necessary to calculate the most comparable GAAP measure, net income, is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, Holley is unable to provide these forward-looking reconciliations without unreasonable effort. Accordingly, Holley is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations. Holley notes that its outlook for the year-ending December 31, 2026 may vary due to changes in assumptions or market conditions and other factors described below under “Forward-Looking Statements.” Conference Call A conference call and audio webcast has been scheduled for 8:30 a.m. Eastern Time today to discuss these results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call available on the investor relations portion of the Company’s website at investor.holley.com. For those that cannot join the webcast, you can participate by dialing 877-407-4019 (Toll Free) or 201-689-8337 (Toll) using the access code of 13761658. For those unable to participate, a telephone replay recording will be available until Wednesday, August 12, 2026. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13761658. A web-based archive of the conference call will also be available on the Company’s website. Additional Financial Information The Investor Relations page of Holley’s website, investor.holley.com contains a significant amount of financial information about Holley, including our earnings presentation, which can be found under Events & Presentations. Holley encourages investors to visit this website regularly, as information is updated, and new information is posted. About Holley Performance Brands Holley Performance Brands (NYSE: HLLY) leads in the design, manufacturing and marketing of high-performance products for automotive enthusiasts. The company owns and manages a portfolio of iconic brands, catering to a diverse community of enthusiasts passionate about the customization and performance of their vehicles. Holley Performance Brands distinguishes itself through a strategic focus on four consumer vertical groupings, including American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing, ensuring a wide-ranging impact across the automotive aftermarket industry. Renowned for its innovative approach and strategic acquisitions, Holley Performance Brands is committed to enhancing the enthusiast experience and driving growth through innovation. For more information on Holley Performance Brands and its dedication to automotive excellence, visit https://www.holley.com. Forward-Looking Statements Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley’s future financial or operating performance. For example, projections of future revenue and adjusted EBITDA and other metrics, along with statements regarding the impact of portfolio rebalancing efforts and organizational changes, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “or” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Holley and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) Holley’s ability to execute our business strategy, including monetization of services provided and expansions in and into existing and new lines of business and successfully exiting non-core, low profit businesses; 2) Holley’s ability to compete effectively in our market; 3) Holley’s ability to successfully design, develop, and market new, effective, and safe products and platforms; 4) Holley’s ability to respond to changes in vehicle ownership and type; 5) Holley’s ability to maintain and strengthen demand for our products; 6) Holley’s ability to grow and effectively manage our growth; 7) Holley’s ability to attract new customers in a cost-effective manner and to expand into additional consumer markets; 8) Holley’s ability to successfully complete and integrate acquisitions or achieve the expected synergies from such acquisitions; 9) Holley’s ability to maintain relationships with customers and suppliers; 10) Holley’s ability to retain our management and key employees; 11) costs related to Holley being a public company; 12) disruptions to Holley’s operations, including as a result of cybersecurity incidents; 13) changes in applicable laws or regulations; 14) the outcome of any legal proceedings that have been or may be instituted against Holley; 15) general economic and political conditions, including the current macroeconomic environment, political tensions, and war (including the conflict in Ukraine, the conflict in the Middle East, and the possible expansion of such conflicts and potential geopolitical consequences); 16) the possibility that Holley may be adversely affected by other economic, business, and/or competitive factors, including recent events affecting the financial services industry (such as the closures of certain regional banks); 17) Holley’s estimates of its financial performance (e.g., the successful execution of cost saving initiatives); 18) Holley’s ability to anticipate and manage through disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of certain company products in distribution channels; 19) Holley’s ability to anticipate, manage, and mitigate the impact of changing trade policies, including tariffs; 20) disruptions and costs associated with doing business in certain countries; 21) Holley’s ability to adopt and react to risks posed by new technology; 22) inability to predict how products will ultimately be used; 23) Holley's ability to anticipate and manage through the impact of elevated interest rate levels, which cause the cost of capital to increase, as well as respond to inflationary pressures and trade restrictions, including tariffs; and 24) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 16, 2026, and disclosed in any subsequent filings with the SEC. Although Holley believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements or projections set forth herein will be achieved or that any of the contemplated results of such forward looking statements or projections will be achieved. There may be additional risks that Holley presently does not know or that Holley currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Holley undertakes no duty to update these forward-looking statements, except as otherwise required by law. Investor Relations Contacts: Anthony Rozmus / Jenna KozlowskiSolebury Strategic [email protected] Media Relations Contacts:Nathan Espinosa/Michael MurrayKahn [email protected] We present certain information with respect to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Credit Agreement Total Leverage Ratio (the "Leverage Ratio"), Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow as supplemental measures of our operating performance and believe that such non-GAAP financial measures are useful to investors in evaluating our financial performance and in comparing our financial results between periods because they exclude the impact of certain items that we do not consider indicative of our ongoing operating performance. We believe that the presentation of these non-GAAP financial measures enhances the usefulness of our financial information by presenting measures that management uses internally to establish forecasts, budgets, and operational goals to manage and monitor our business. We believe that these non-GAAP financial measures help to depict a more realistic representation of the performance of our underlying business, enabling us to evaluate and plan more effectively for the future. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, the Leverage Ratio, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow are not prepared in accordance with generally accepted accounting principles (“GAAP”) and may be different from non-GAAP and other financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing our financial performance. These metrics should not be considered as alternatives to net income, gross profit, net cash provided by operating activities, or any other performance measures, as applicable, derived in accordance with GAAP. We define EBITDA as earnings before depreciation, amortization of intangible assets, interest expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude, to the extent applicable, restructuring costs, which includes operational restructuring and integration activities, termination related benefits, facilities relocation, and executive transition costs; changes in the fair value of the warrant liability; changes in the fair value of the earn-out liability; equity-based compensation expense; gain or loss on the early extinguishment of debt; notable items that we do not believe are reflective of our underlying operating performance, including litigation settlements and certain costs incurred for advisory services related to identifying performance initiatives; and other expenses or gains, which includes gains or losses from disposal of fixed assets, franchise taxes, and gains or losses from foreign currency transactions. In addition, beginning with the quarter ended June 28, 2026, we have excluded from Adjusted EBITDA as a notable item any tariff refund income received in the quarter, as the refunds are non-recurring in nature for tariff costs incurred in the past and are not reflective of our ongoing performance. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. We define the Leverage Ratio as Net Debt divided by our Credit Agreement EBITDA for the trailing twelve-month ("TTM") period, as defined under our Credit Agreement entered into in November 2021, as amended, which is used in calculating covenant compliance. We define Adjusted Net Income as earnings excluding the effect of changes in the fair value of the warrant liability, changes in the fair value of the earn-out liability, loss on sale of assets, and gain or loss on the early extinguishment of debt. We define Adjusted Diluted EPS as Adjusted Net Income on a per share basis. Management uses these measures to focus on on-going operations and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present consolidated operating results. We believe that using this information, along with net income and net income per diluted share, provides for a more complete analysis of the results of operations. We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of fixed asset dispositions not related to brand divestitures. Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations.

NASHVILLE, Tenn., July 22, 2026 (GLOBE NEWSWIRE) -- Holley Performance Brands (NYSE: HLLY), a leader in automotive aftermarket performance solutions, today announced the date for the release of its second quarter 2026 financial results. Second Quarter 2026 Results        Holley will host a conference call and live webcast on Wednesday, August 5, 2026, at 8:30 am (Eastern Time) to discuss the Company’s second quarter 2026 financial results. The Company’s earnings release and presentation for the second quarter 2026 will be issued before the market opens on Wednesday, August 5, 2026, and will be available on the Investor Relations page of the Company’s website at investor.holley.com. Hosting the call will be Holley Inc. President and Chief Executive Officer, Matthew Stevenson, and Chief Financial Officer, Jesse Weaver. Date:                        Wednesday, August 5, 2026Time:                        8:30 a.m. Eastern Time        Dial-In #:                  United States: 1-877-407-4019 (Toll Free)                                United States: 1-201-689-8337 (Toll) Access Code: 13761658        Alternatively, the conference call will be webcast at: Event URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Oa22CztZ For those unable to participate, a telephone replay recording will be available until Wednesday, August 12, 2026. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13761658. A web-based archive of the conference call will also be available at the Company’s website. About Holley Performance BrandsHolley Performance Brands (NYSE: HLLY) is home to a portfolio of iconic brands that serve enthusiasts across the high-performance aftermarket. The company designs, engineers, manufactures and markets category-leading products and solutions for automotive enthusiasts through a focused portfolio spanning four consumer vertical groupings: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing. For more than a century, Holley has built its reputation through innovation, technical expertise and a deep understanding of enthusiast culture. For more information, visit https://www.holley.com. Contact:        Investor Relations: Anthony Rozmus / Jenna KozlowskiSolebury Strategic [email protected] Media Relations Contacts: Nathan Espinosa / Patrick CurtinKahn [email protected]

Interested in Holley Inc.? Here are five stocks we like better. Holley’s Q1 sales fell 3.7% to $147.3 million as elevated distributor inventories and severe winter weather delayed demand, but management said order trends improved late in the quarter and into Q2. April revenue was already growing in the mid-single-digit range, suggesting a recovery is underway. Profitability held up despite weaker sales, with net income rising to $7.3 million from $2.8 million and adjusted EBITDA essentially flat at $27.3 million. The company also delivered $6.5 million in cost savings, helping offset gross margin pressure from lower volume. Holley is reshaping its portfolio and acquisitions strategy by exiting five brands, consolidating facilities and completing the HRX acquisition in premium racing safety gear. The company kept adjusted EBITDA guidance unchanged, while trimming full-year sales guidance to reflect portfolio actions and expecting leverage to improve below 3.5x by year-end. Holley (NYSE:HLLY) reported lower first-quarter 2026 sales as elevated distributor inventories and severe winter weather weighed on early-quarter demand, but executives said order trends improved late in the period and into the second quarter. President and Chief Executive Officer Matthew Stevenson said the quarter began with “a couple of temporary headwinds,” including elevated distributor inventories after partners worked toward year-end rebate targets and stocked up ahead of a Jan. 1 price increase. He said the company expected inventories to normalize in January and February, but severe winter weather slowed retail activity and delayed the process. → Rocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance “Beginning in week eight, as weather conditions improved and channel dynamics normalized, we saw steady improvement in purchasing patterns,” Stevenson said. He added that Holley exited the quarter with momentum and that early second-quarter trends were encouraging, with healthier channel inventories and improving order activity. Holley reported first-quarter net sales of $147.3 million, down 3.7% from $153 million in the prior-year period. Chief Financial Officer Jesse Weaver said all reported sales in the quarter were core sales, as the company was not rolling over any acquisitions or divestitures in the period. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum Gross profit declined to $60.7 million from $64.1 million a year earlier, while gross margin decreased 65 basis points to 41.2%. Weaver attributed the gross margin compression to fixed-cost deleverage, partially offset by operational efficiency gains. SG&A, including research and development, declined to $39.4 million from $40.8 million, reflecting improved efficiency in legal and marketing spending and lower outbound freight tied to reduced sales volumes. → MarketBeat Week in Review – 05/04 - 05/08 Net income rose to $7.3 million from $2.8 million in the first quarter of 2025. Adjusted net income increased to $5.7 million from $2.6 million. Adjusted EBITDA was $27.3 million, essentially flat from the prior-year period, while adjusted EBITDA margin improved 71 basis points to 18.5%. Stevenson said the company delivered $6.5 million in cost savings during the quarter, including $3.8 million from purchasing discipline and tariff mitigation and $2.7 million from operational improvements. Three of Holley’s four divisions grew in the quarter, while American Performance declined due to weather and inventory-related factors. American Performance: Sales declined 9.7%, which Stevenson said reflected the greatest impact from weather and temporary inventory dynamics at a small number of key partners. Truck & Off-Road: Sales rose 3.8%, supported by momentum in the truck category and product introductions. Euro & Import: Sales increased 1%, with performance limited by product availability constraints earlier in the quarter that have since been addressed. Safety & Racing: Sales grew 10.2%, driven by the Snell 2025 helmet certification cycle, demand for the Stilo brand and strength in motorcycle safety. In response to an analyst question, Weaver said sell-out sales at distribution partners were “very strong” and were likely in the “plus 4% range.” He estimated weather accounted for about 3 percentage points of pressure, while elevated inventory contributed another roughly 4 percentage points to the gap between sell-in and sell-out trends. Holley is moving forward with a portfolio rebalancing initiative aimed at exiting brands that do not meet its growth, profitability or strategic criteria, simplifying operations and redeploying capital into higher-growth areas. Stevenson said the company is in the process of exiting five brands and consolidating five facilities and is approximately halfway through that work. The effort includes reducing warehouse space by about 100,000 square feet, streamlining the workforce by about 9% and rationalizing roughly 11,000 SKUs, representing about 25% of the portfolio by count. The company expects the portfolio rebalancing effort to generate more than $15 million in one-time net cash and to expand adjusted EBITDA margin by approximately 75 to 150 basis points, including at least $1 million in annualized benefits. Holley also expects a modest leverage improvement of around 0.15x and about a 5% improvement in inventory terms. Holley also closed the acquisition of HRX, an Italy-based maker of premium racing apparel and safety equipment, including suits, gloves, shoes and team wear. Stevenson said HRX is a strategic fit within the company’s safety division and adds FIA-homologated products, premium manufacturing capabilities and a stronger presence in Europe. The company said it is targeting five to 10 bolt-on acquisitions over the next 24 months. Stevenson said Holley is generally looking at founder-led businesses with $5 million to $10 million in revenue, established double-digit revenue growth, the ability to reach EBITDA margins of 20% or more after synergies, and positive free cash flow. Holley updated its full-year 2026 net sales guidance to a range of $610 million to $640 million, reflecting a net $15 million revenue reduction tied to portfolio optimization actions. Weaver said the company’s core business revenue range is unchanged. Adjusted EBITDA guidance remains unchanged at $127 million to $137 million. Weaver said the portfolio optimization is expected to be slightly accretive to adjusted EBITDA on a net basis while generating incremental cash and reducing operational complexity. The company’s guidance for capital expenditures, depreciation and amortization, and interest expense was unchanged. Weaver said second-quarter trends were starting positively, with April revenue growing in the mid-single-digit range. Later in the call, Stevenson said April growth was “over 6%” and that demand trends were continuing into May. Weaver said the unchanged core business outlook implies recovery of the first-quarter sales shortfall over the balance of the year, supported by April trends and planned product introductions. Free cash flow was negative $6.3 million in the first quarter, improving by about $4.5 million from the prior-year period. Weaver said the first quarter is expected to be the low point for free cash flow this year, similar to last year, and that free cash flow should improve meaningfully in the second quarter as inventory levels come back in line. Inventory was up modestly in the first quarter, reflecting sales performance. Weaver said actions taken starting in January around forecasting, safety stock and a more just-in-time approach on high-velocity SKUs are beginning to pay off. Holley continues to target $10 million to $15 million in inventory reduction for the year. Covenant net leverage ended the quarter at 3.84x, down from 4.32x a year earlier but modestly higher than year-end due to seasonal working capital needs and the HRX acquisition. Holley expects to end 2026 below 3.5x net leverage. The company ended the quarter with $33.1 million of cash and $10 million drawn on its revolving credit facility. Weaver said the revolver draw was used proactively to fund the final Cataclean payment and the HRX acquisition, and the company planned to repay it in the coming weeks with cash on hand. Stevenson closed the call by saying Holley remains committed to its long-term targets of at least 6% organic top-line growth, 40% gross margins and adjusted EBITDA margins above 20%. Holley Inc is a designer, manufacturer and marketer of high‐performance automotive products for the enthusiast market. Through its portfolio of well‐known brands, the company develops fuel delivery systems, intake manifolds, ignition components, nitrous oxide systems, digital controls and other engine‐dress accessories tailored to both street and competition applications. Holley's products are sold through a network of domestic and international distributors, retailers and directly to professional race teams and hobbyists. The company's product offerings span mechanical and electronic fuel injection, carburetion, engine management, add‐on power systems and calibration tools. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Holley Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Performance in Q1 was impacted by a combination of elevated distributor inventory following year-end rebate targets and severe winter weather that delayed seasonal retail activity. Management attributes the flat year-over-year adjusted EBITDA to disciplined cost control and operational improvements, which offset a 3.7% decline in net sales. The 'American Performance' division saw the sharpest decline at 9.7% due to its high sensitivity to weather and specific inventory dynamics at key partner accounts, though the company expects it to return to growth as conditions normalize. Strategic positioning is shifting toward a more streamlined model, focusing resources on high-growth 'lifestyle and power brands' while exiting lower-margin, non-scalable legacy brands. The acquisition of HRX marks a return to disciplined M&A, specifically targeting founder-led businesses with high margins and established international growth potential. Operational efficiency gains of $6.5 million were driven by purchasing discipline, tariff mitigation, and manufacturing productivity improvements. Management expects the spring selling season to build momentum, citing mid-single-digit growth in April as a signal that channel inventories have normalized. The portfolio rebalancing initiative is projected to generate over $15 million in one-time net cash and improve adjusted EBITDA margins by 75 to 150 basis points. The company plans to implement a moderate price increase in mid-June to offset rising transportation and resin costs driven by oil price increases. The company is targeting 5 to 10 bolt-on acquisitions over the next 24 months, focusing on businesses with $5 million to $10 million in revenue and 20% or greater EBITDA margins. Inventory reduction targets of $10 million to $15 million for the full year are supported by improved forecasting, right-sized safety stock, and a shift toward just-in-time replenishment for high-velocity SKUs. The company is rationalizing approximately 11,000 SKUs, representing 25% of its total portfolio, to reduce operational complexity and improve inventory turns. A workforce reduction of approximately 9% and the consolidation of 5 facilities are underway as part of the site and brand optimization program. Net leverage ended the quarter at 3.84x, with management maintaining a target to reach below 3.5x by year-end 2026 through free cash flow generation. The divestiture of Arizona Desert Shocks was driven by the brand's lack of scalability in the high-end racing segment compared to broader market opportunities. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management noted that while sell-in was down 3.7%, out-the-door sales at distribution partners remained healthy, estimated in the plus 4% range. The gap was attributed to approximately 3% weather impact and 4% from distributors working through excess inventory carried over from Q4. The $15 million revenue reduction from portfolio optimization is expected to be weighted toward the second half of the year. Estimated impacts are $1 million in Q2, followed by approximately $7 million each in Q3 and Q4, though timing remains subject to transaction closures. Management confirmed seeing increases in freight and raw material costs (resins) linked to oil prices. Recent tariff changes were described as a 'wash,' with some reductions offset by new implementations, leading to the planned June price increase. HRX was acquired to fill a gap in European-style FIA-homologated racing apparel, which complements the more 'Americana' focus of the Simpson brand. Management emphasized that future acquisitions will not be 'turnaround situations' but rather solid fundamental businesses that can be scaled via Holley's distribution network. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Image source: The Motley Fool. Wednesday, May 6, 2026 at 8:30 a.m. ET Chief Executive Officer — Matthew Stevenson Chief Financial Officer — Jesse Weaver 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? Jesse Weaver: 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: [Operator Instructions] We take the first question from the line of Brian McNamara from Canaccord Genuity. Brian McNamara: 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? Jesse Weaver: 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. Brian McNamara: 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? Matthew Stevenson: 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. Brian McNamara: 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. Matthew Stevenson: 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. Operator: We take the next question from the line of Christian Carlino from JPMorgan Chase & Company. Christian Carlino: 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. Matthew Stevenson: 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. Christian Carlino: 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? Matthew Stevenson: 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. Operator: We take the next question from the line of Phillip Blee from William Blair. Olivia May Witte: 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? Matthew Stevenson: 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. Olivia May Witte: 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? Matthew Stevenson: 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. Operator: We take the next question from the line of Joseph Altobello from Raymond James. Martin Mitela: 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? Matthew Stevenson: 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. Martin Mitela: 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? Jesse Weaver: 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? Martin Mitela: 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? Matthew Stevenson: 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. Operator: We take the next question from the line of Joe Feldman from Telsey Advisory Group. Joseph Feldman: 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? Matthew Stevenson: 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. Joseph Feldman: 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? Matthew Stevenson: 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. Operator: We take the next question from the line of Bret Jordan from Jefferies. Bret Jordan: Contribution year-over-year in same SKU price? Matthew Stevenson: 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. Bret Jordan: 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? Matthew Stevenson: 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. Bret Jordan: 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? Matthew Stevenson: 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. Operator: We take the next question from the line of Mike Baker from D.A. Davidson. Michael Baker: 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. Matthew Stevenson: 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. Michael Baker: 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? Matthew Stevenson: 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. Jesse Weaver: 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. Operator: 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. Matthew Stevenson: 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. Operator: Thank you. Ladies and gentlemen, the conference of Holley has now concluded. Thank you for your participation. You may now disconnect your lines. Before you buy stock in Holley, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Holley wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $476,034!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,274,109!* Now, it’s worth noting Stock Advisor’s total average return is 975% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Holley (HLLY) Q1 2026 Earnings Transcript was originally published by The Motley Fool

GROWTH IN THREE OF FOUR DIVISIONS & IMPROVEMENTS IN MULTIPLE KEY FINANCIAL METRICS FIRST QUARTER NET INCOME OF $7.3 MILLION, UP $4.4 MILLION YEAR-OVER-YEAR FIRST QUARTER ADJUSTED EBITDA MARGIN EXPANSION TO 18.5%, UP 71 BPS YEAR-OVER-YEAR Disciplined Cost Control Supports Resilient First Quarter Profitability Portfolio Optimization Initiative Expected to Improve Margin by Exiting Non-Value Added Businesses NASHVILLE, Tenn., May 06, 2026 (GLOBE NEWSWIRE) -- Holley Performance Brands (NYSE: HLLY), a leader in automotive aftermarket performance solutions, today announced financial results for its first quarter ended March 29, 2026. First Quarter Highlights vs. Prior Year Period Net Sales was $147.3 million compared to $153.0 million last year Net Income was $7.3 million, or $0.06 per diluted share, compared to $2.8 million, or $0.02 per diluted share, last year Net Cash Used in Operating Activities was $2.9 million compared to $7.8 million last year Adjusted Net Income1 was $5.7 million compared to $2.6 million last year Adjusted EBITDA1 was $27.3 million compared to $27.3 million last year Adjusted EBITDA margin1 was 18.5% compared to 17.8% last year Free Cash Flow1 was $(6.3) million compared to $(10.8) million last year 1 See “Use and Reconciliation of Non-GAAP Financial Measures” below. “We delivered first quarter net sales of $147.3 million and Adjusted EBITDA of $27.3 million, reflecting resilient profitability and disciplined execution,” said Matthew Stevenson, President and Chief Executive Officer of Holley. “As noted on our prior earnings call, the first quarter began with several temporary headwinds. Distributor inventory levels were elevated entering the period, and while normalization was expected through improved sell-through, severe winter weather in late January and early February 2026 disrupted retail activity. That said, from week eight onward, we saw steady improvement in purchasing patterns and exited the quarter on improved footing. Margins remained strong in the first quarter of 2026, reflecting proactive tariff management and operating efficiency. We are maintaining that focus, prioritizing cost control and advancing our portfolio optimization initiative, which we expect to support performance over time, while continuing to invest in innovation, deepen our connection with enthusiasts, and compete to gain share. Strategically, we continued to execute against the framework established in 2025, centered on simplifying the portfolio, strengthening core franchises, and enhancing operating discipline. The acquisition of HRX, a targeted bolt-on that expands our racewear capabilities and deepens our European motorsports presence, marks the reengagement of our M&A strategy, and we remain focused on pursuing additional opportunities that meet our criteria. We believe that the actions we have taken over the past year position us to improve execution and strengthen the business over time.” Jesse Weaver, Chief Financial Officer of Holley, added, “Early trends in the second quarter indicate healthier inventory levels at our distribution partners and improving order activity, which we believe position us better for the balance of the year. Through our portfolio optimization initiative, we are exiting non-core, low- to no-profit businesses while reinvesting in targeted M&A, as reflected in our acquisition of HRX. Although these portfolio adjustments reduce our full-year revenue outlook by $15 million, our outlook for the core business remains intact, and we expect the net impact on Adjusted EBITDA from the portfolio optimization to be slightly positive. At the same time, our portfolio adjustments are expected to reduce SKUs by more than 11,000, lower operating complexity, improve working capital efficiency, and generate more than $15 million in incremental cash. Taken together, these actions are expected to improve the quality of our portfolio and support our decision to maintain our full-year Adjusted EBITDA outlook." Strategic Business Highlights Exited Q1 with momentum from week 8 as weather improved and inventory normalized. Growth in three of four divisions and across 12 brands across DTC and B2B channels. Delivered $6.5 million in Q1 cost savings from purchasing, tariffs, and operations. Advanced cost and complexity reduction, including site consolidation and closures. Expecting portfolio rebalancing to generate >$15 million to reinvest in growth HRX acquisition strengthens Safety and Racing and expands European presence. Free Cash Flow improvement of $4.5 million compared to same period last year. Outlook **For the year ended December 31, 2026, core business revenue guidance remains unchanged while we are updating full-year guidance to reflect an anticipated $15 million adjustment to net sales as a result of our planned portfolio optimization efforts: 1) Core Business Growth Rate, introduced this quarter, excludes impact from Portfolio Optimization Adjusted anticipated for 2026. * Holley is not providing reconciliations of forward-looking full year 2026 Adjusted EBITDA outlook because certain information necessary to calculate the most comparable GAAP measure, net income, is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, Holley is unable to provide these forward-looking reconciliations without unreasonable effort. Accordingly, Holley is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations. Holley notes that its outlook for the year-ended December 31, 2026 may vary due to changes in assumptions or market conditions and other factors described below under “Forward-Looking Statements.” Conference Call A conference call and audio webcast has been scheduled for 8:30 a.m. Eastern Time today to discuss these results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call available on the investor relations portion of the Company’s website at investor.holley.com. For those that cannot join the webcast, you can participate by dialing 877-407-4019 (Toll Free) or 201-689-8337 (Toll) using the access code of 13759753. For those unable to participate, a telephone replay recording will be available until Wednesday, May 13, 2026. To access the replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll) and enter confirmation code 13759753. A web-based archive of the conference call will also be available on the Company’s website. Additional Financial Information The Investor Relations page of Holley’s website, investor.holley.com contains a significant amount of financial information about Holley, including our earnings presentation, which can be found under Events & Presentations. Holley encourages investors to visit this website regularly, as information is updated, and new information is posted. About Holley Performance Brands Holley Performance Brands (NYSE: HLLY) leads in the design, manufacturing and marketing of high-performance products for automotive enthusiasts. The company owns and manages a portfolio of iconic brands, catering to a diverse community of enthusiasts passionate about the customization and performance of their vehicles. Holley Performance Brands distinguishes itself through a strategic focus on four consumer vertical groupings, including American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing, ensuring a wide-ranging impact across the automotive aftermarket industry. Renowned for its innovative approach and strategic acquisitions, Holley Performance Brands is committed to enhancing the enthusiast experience and driving growth through innovation. For more information on Holley Performance Brands and its dedication to automotive excellence, visit https://www.holley.com. Forward-Looking Statements Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley’s future financial or operating performance. For example, projections of future revenue and adjusted EBITDA and other metrics, along with statements regarding the impact of portfolio optimization efforts and organizational changes, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “or” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Holley and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) Holley’s ability to execute our business strategy, including monetization of services provided and expansions in and into existing and new lines of business; 2) Holley’s ability to compete effectively in our market; 3) Holley’s ability to successfully design, develop, and market new, effective, and safe products and platforms; 4) Holley’s ability to respond to changes in vehicle ownership and type; 5) Holley’s ability to maintain and strengthen demand for our products; 6) Holley’s ability to grow and effectively manage our growth; 7) Holley’s ability to attract new customers in a cost-effective manner and to expand into additional consumer markets; 8) Holley’s ability to successfully integrate acquisitions or achieve the expected synergies from such acquisitions; 9) Holley’s ability to maintain relationships with customers and suppliers; 10) Holley’s ability to retain our management and key employees; 11) costs related to Holley being a public company; 12) disruptions to Holley’s operations, including as a result of cybersecurity incidents; 13) changes in applicable laws or regulations; 14) the outcome of any legal proceedings that have been or may be instituted against Holley; 15) general economic and political conditions, including the current macroeconomic environment, political tensions, and war (including the conflict in Ukraine, the conflict in the Middle East, and the possible expansion of such conflicts and potential geopolitical consequences); 16) the possibility that Holley may be adversely affected by other economic, business, and/or competitive factors, including recent events affecting the financial services industry (such as the closures of certain regional banks); 17) Holley’s estimates of its financial performance (e.g., the successful execution of cost saving initiatives); 18) Holley’s ability to anticipate and manage through disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of certain company products in distribution channels; 19) Holley’s ability to anticipate, manage, and mitigate the impact of changing trade policies, including tariffs; 20) disruptions and costs associated with doing business in certain countries; 21) Holley’s ability to adopt and react to risks posed by new technology; 22) inability to predict how products will ultimately be used; 23) Holley's ability to anticipate and manage through the impact of elevated interest rate levels, which cause the cost of capital to increase, as well as respond to inflationary pressures and trade restrictions, including tariffs; and 24) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 16, 2026, and disclosed in any subsequent filings with the SEC. Although Holley believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements or projections set forth herein will be achieved or that any of the contemplated results of such forward looking statements or projections will be achieved. There may be additional risks that Holley presently does not know or that Holley currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Holley undertakes no duty to update these forward-looking statements, except as otherwise required by law. Investor Relations Contacts: Anthony Rozmus / Jenna Kozlowski Solebury Strategic Communications 203-428-3324 [email protected] Media Relations Contacts: Jordan Moore, [email protected]/ Sydney Goggans, [email protected] Tiny Mighty Communications 615-454-2913 [Financial Tables to Follow] We present certain information with respect to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Bank-adjusted EBITDA Leverage Ratio, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow as supplemental measures of our operating performance and believe that such non-GAAP financial measures are useful to investors in evaluating our financial performance and in comparing our financial results between periods because they exclude the impact of certain items that we do not consider indicative of our ongoing operating performance. We believe that the presentation of these non-GAAP financial measures enhances the usefulness of our financial information by presenting measures that management uses internally to establish forecasts, budgets, and operational goals to manage and monitor our business. We believe that these non-GAAP financial measures help to depict a more realistic representation of the performance of our underlying business, enabling us to evaluate and plan more effectively for the future. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Bank-adjusted EBITDA Leverage Ratio, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow are not prepared in accordance with generally accepted accounting principles (“GAAP”) and may be different from non-GAAP and other financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing our financial performance. These metrics should not be considered as alternatives to net income, gross profit, net cash provided by operating activities, or any other performance measures, as applicable, derived in accordance with GAAP. We define EBITDA as earnings before depreciation, amortization of intangible assets, interest expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude, to the extent applicable, restructuring costs, which includes operational restructuring and integration activities, termination related benefits, facilities relocation, and executive transition costs; changes in the fair value of the warrant liability; changes in the fair value of the earn-out liability; equity-based compensation expense; gain or loss on the early extinguishment of debt; notable items that we do not believe are reflective of our underlying operating performance, including litigation settlements and certain costs incurred for advisory services related to identifying performance initiatives; and other expenses or gains, which includes gains or losses from disposal of fixed assets, franchise taxes, and gains or losses from foreign currency transactions. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. We define the Bank-adjusted EBITDA Leverage Ratio as Net Debt divided by our Bank-adjusted EBITDA for the trailing twelve-month ("TTM") period, as defined under our Credit Agreement entered into in November 2021, as amended, which is used in calculating covenant compliance. We define Adjusted Net Income as earnings excluding the after-tax effect of changes in the fair value of the warrant liability, changes in the fair value of the earn-out liability, write-downs of assets held-for-sale, and gain or loss on the early extinguishment of debt. We define Adjusted Diluted EPS as Adjusted Net Income on a per share basis. Management uses these measures to focus on on-going operations and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present consolidated operating results. We believe that using this information, along with net income and net income per diluted share, provides for a more complete analysis of the results of operations. We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of dispositions. Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations.