Holley (HLLY) investor relations material

Executive summary

• Q3 net sales rose 2.3% YoY to $141.6M; core sales grew 6.7% excluding divestitures and portfolio rebalancing.

• Gross margin expanded 73 bps to 44.0%, adjusted EBITDA margin rose 120 bps to 20.8%, and net income was $7.8M versus a $0.8M loss.

• Debt fell $25M in Q3 and leverage reached 3.50x, the year-end target, one quarter early.

Financial highlights

• Q3 gross profit was $62.3M, up 4.0%; operating income was $19.6M, up 23.3%.

• Adjusted net income was $7.7M vs. $3.3M; adjusted EBITDA was $29.4M vs. $27.1M, up 8.6%.

• Free cash flow was $8.8M vs. $5.5M; operating cash flow was $14.1M vs. $7.4M.

• 9M sales increased 0.6% to $460.9M; operating income fell 36.5% to $39.8M, largely reflecting $28.6M of divestiture losses.

• 9M operating cash flow was $58.3M vs. $40.1M; free cash flow was $43.4M vs. $30.3M.

Outlook and guidance

• FY2026 net sales guidance narrowed to $610M–$625M from $610M–$640M; core growth guidance is ~2%–~5%.

• FY2026 adjusted EBITDA guidance narrowed to $127M–$132M from $127M–$137M; capex is $15M–$20M and D&A $24M–$26M.

• FY2026 interest expense guidance is $40M–$44M, excluding collar revaluation; midpoint guidance implies ~21% adjusted EBITDA margin.

• FY operating savings target is $5M–$7M; inventory reduction target is $10M–$15M, with ~$10M achieved YTD through Q3.