Company provides updated full year 2022
outlook
Announces date for the release of its final
second quarter 2022 financial results
While the company is still conducting financial closing
procedures for the second quarter, Holley Inc. (NYSE: HLLY) today
announced preliminary results for the 13-week period ended July 3,
2022, and provided an updated outlook for fiscal year 2022.
Preliminary Second Quarter Highlights
vs. Prior Year Period
- Preliminary Net Sales of $179.4 million, down $13.6 million
(7.1%) from second quarter 2021
- Preliminary Gross Profit of $75.3 million, down $5.9 million
(7.3%) from second quarter 2021
- Preliminary Net Income of $40.6 million, up $17.5 million from
the $23.1 million recorded in the second quarter of 2021
- Preliminary Adjusted EBITDA1 of $37.2 million, down $16.9
million (31.3%) from 2021
1See “Use and Reconciliation of Non-GAAP Financial Measures”
below.
“Second quarter sales fell short of expectations, driven by
microchip shortages and other supply chain challenges that
prevented us from building and shipping many of our most popular
products,” said Tom Tomlinson, Holley’s Chief Executive Officer.
“Growth in DTC sales was more than offset by resellers that reduced
their purchases below their out-the-door sales levels, indicating
that some sell-down of reseller inventory also occurred in the
quarter. This is all against the backdrop of challenging economic
conditions and softening consumer demand.”
Full Year 2022 Outlook
Holley revised its outlook for the full year 2022 to the
following:
Revised Full Year 2022 Guidance
Range
Previous Full Year 2022 Guidance
Range
Net Sales
$700 - $725 million
$765 - $790 million
Adjusted EBITDA
$135 - $145 million
$186 - $194 million
Capital Expenditures
$14 - $16 million
$14 - $16 million
Depreciation and Amortization
$24 - 26 million
$24 - $26 million
Interest Expense
$33 - $35 million
$30 - $32 million
“Given our second quarter results and our latest view of supply
chain conditions, which worsened during the quarter, we are
revising our outlook for the full year 2022,” said Dominic Bardos,
Holley’s Chief Financial Officer. “Our most popular electronic
products have driven significant growth in previous quarters, and
we now expect the microchip shortages we experienced in the second
quarter to persist throughout 2022. Our revised guidance also
incorporates the reduction of certain expenses in the forecast
period to bring them more in line with the expected sales volume
levels.”
Second Quarter 2022 Financial Results
Conference Call
Holley will host a conference call and live webcast on Thursday,
August 11, 2022, at 8:30 a.m. (Eastern Daylight Time) to discuss
the Company’s second quarter 2022 final financial results. The
Company’s earnings release for the second quarter 2022 will be
issued before the market opens on Thursday, August 11, 2022, 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, Tom Tomlinson, Chief Financial Officer, Dominic
Bardos, and Executive Vice President of Corporate Development and
New Ventures, Vinod Nimmagadda.
Date:
Thursday, August 11, 2022
Time:
8:30 a.m. Eastern Daylight Time
Dial-In #:
United States: 1-877-407-4019 (Toll
Free)
United States: 1-201-689-8337 (Toll)
Access Code:
13731249
Alternatively, the conference call will be webcast at:
Event URL:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=BJ6XoDYf
For those unable to participate, a telephone replay recording
will be available until Thursday, August 18, 2022. To access the
replay, please call 877-660-6853 (Toll Free) or 201-612-7415 (Toll)
and enter confirmation code 13731249. A web-based archive of the
conference call will also be available at the Company’s
website.
About Holley Inc.
Holley Inc. (NYSE: HLLY) is a leading designer, marketer, and
manufacturer of high-performance products for car and truck
enthusiasts. Holley offers the largest portfolio of iconic brands
that deliver innovation and inspiration to a large and diverse
community of millions of avid automotive enthusiasts who are
passionate about the performance and personalization of their
classic and modern cars. Holley has disrupted the performance
category by putting the enthusiast consumer first, developing
innovative new products, and building a robust M&A process that
has added meaningful scale and diversity to its platform. For more
information on Holley, 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 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) the
ability to recognize the anticipated benefits of the business
combination with Empower LTD, which may be affected by, among other
things, competition, the ability of the combined company to grow
and manage growth profitably, maintain relationships with customers
and suppliers and retain its management and key employees; 2) costs
related to the business combination and Holley becoming a public
company; 3) disruptions to Holley's operations, including as a
result of cybersecurity incidents; 4) changes in applicable laws or
regulations; 5) the outcome of any legal proceedings that may be
instituted against Holley; 6) general economic and political
conditions, including political tensions and war (such as the
ongoing conflict in Ukraine); 7) the possibility that Holley may be
adversely affected by other economic, business and/or competitive
factors; 8) Holley’s estimates of its financial performance; 9) the
impact of the novel coronavirus disease pandemic and its effect on
business and financial conditions; and 10) 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, 2021
filed with the U.S. Securities and Exchange Commission (“SEC”) on
March 15, 2022, and that are otherwise described or updated from
time to time in Holley’s 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 any duty to
update these forward-looking statements, except as otherwise
required by law.
Holley believes EBITDA and Adjusted EBITDA are useful to
investors in evaluating the Company’s financial performance. In
addition, Holley uses these measures internally to establish
forecasts, budgets and operational goals to manage and monitor its
business. Holley believes that these non-GAAP financial measures
help to depict a more realistic representation of the performance
of the underlying business, enabling the Company to evaluate and
plan more effectively for the future.
HOLLEY INC.
USE AND RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
(In thousands)
(Unaudited)
For the thirteen weeks
ended
July 3,
June 27,
2022
2021
Net Income
$
40,563
$
23,098
Adjustments:
Interest Expense
8,961
11,174
Income Taxes
3,023
5,790
Depreciation
2,523
2,201
Amortization
3,662
3,502
EBITDA
58,732
45,765
Acquisition and Restructuring Costs
1,691
2,676
Change in Fair Value of Warrant
Liability
(23,168
)
—
Change in Fair Value of Earn-Out
Liability
(4,234
)
—
Equity-Based Compensation Expense
3,483
131
Related Party Acquisition and Management
Fee Costs
—
1,658
Notable Items
378
3,862
Other Expense
325
47
Adjusted EBITDA
$
37,207
$
54,139
Holley defines EBITDA as earnings before (a) interest expense,
(b) income taxes and (c) depreciation and amortization. Holley
defines Adjusted EBITDA as EBITDA plus (i) acquisition integration
and restructuring costs, (ii) an adjustment in 2021 due to a change
in the fair value of the Simpson acquisition contingent
consideration payable, (iii) changes in the fair value of the
warrant liability, (iv) changes in the fair value of the earn-out
liability, (v) compensation expense related to equity awards, (vi)
related party acquisition and management fee costs, (vii) notable
items that in 2022 consist primarily of non-cash adjustments
related to the adoption of ASC 842, "Leases," and in 2021 consist
primarily of the amortization of the fair market value increase in
inventory due to acquisitions, and (viii) other expenses, which
includes losses from disposal of fixed assets and foreign currency
transactions. We have included within the definition of Adjusted
EBITDA the changes in the fair value of the warrant liability,
changes in the fair value of the earn-out liability and losses from
the early extinguishment of debt, as management believes such
matters, when they occur, do not directly reflect the performance
of the underlying business.
EBITDA and Adjusted EBITDA are not prepared in accordance with
accounting principles generally accepted in the United States
(“GAAP”) and may be different from non-GAAP 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 Holley’s financial
performance. These metrics should not be considered as alternatives
to net income or any other performance measures derived in
accordance with GAAP.
A forecast for full year 2022 Adjusted EBITDA is provided on a
non-GAAP basis only because certain information necessary to
calculate the most comparable GAAP measure 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 a reconciliation of these
measures without unreasonable effort.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728006071/en/
Investor Relations: Ross Collins / Stephen Poe Alpha IR
Group 312-445-2870 HLLY@alpha-ir.com
Holley (NYSE:HLLY)
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