Holley (HLLY) investor relations material

Business overview and market positioning

• Focuses on automotive enthusiasts, serving a passionate customer base of around 70 million, with a 120-year history and a portfolio of 70 brands.

• Organized into four verticals: domestic muscle, trucking/off-road, Euro/import, and safety/racing, each with significant addressable markets.

• Domestic muscle remains a core segment, but growth is also driven by trucking/off-road and Euro/import, with safety/racing offering global reach.

• Not a replacement parts company; mission centers on performance, safety, and fun for enthusiasts.

• Transformation over the last two years has led to back-to-back growth quarters, outperforming a flat or declining market.

Operational transformation and growth strategy

• Professionalized operations by implementing processes, division structure, and growth engine focused on D2C and B2B channels.

• Investments in growth funded by cost reductions and operational efficiencies, maintaining margins and EBITDA even in a down market.

• Enhanced product development with stage gate processes and category leadership.

• Growth in all segments, with trucking/off-road and Euro/import showing strong potential; domestic muscle has a long runway due to shifting consumer preferences.

• EV penetration is minimal in core segments, and product stickiness remains high, especially for legacy products like carburetors.

Financial performance and capital management

• Targeting net leverage below 3x, expecting to reach 3.25x by end of next year and below 3x the following year through free cash flow and operational efficiency.

• Strong cash generation due to high gross margins and a capital-light business model, with CapEx at roughly 2% of sales.

• M&A remains a focus, with a robust pipeline of smaller deals; larger transactions would be carefully evaluated to avoid jeopardizing leverage targets.

• Capital raise could be considered if share price rises significantly, but not at current levels.