Holley (HLLY) Piper Sandler 5th Annual Growth Frontiers Conference summary

Business overview and market position

• Operates in the enthusiast performance aftermarket, serving a $50 billion addressable market with over 70 million participants.

• Structured into four divisions: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing.

• Portfolio includes over 60 brands, with a focus on about 20 prioritized brands.

• Strategic plan emphasizes innovation, operational excellence, global expansion, and transformational M&A.

• Recent divestitures of non-core brands have streamlined the portfolio and improved alignment with core strategy.

Financial performance and operational improvements

• Achieved 3.2% reported growth and nearly 5% core growth in Q2, with three out of four business segments up double digits.

• Generated $41 million in free cash flow and realized $8.3 million in cost savings in the recent quarter.

• Paid down $115 million in debt since September 2023, reducing leverage from nearly 6x to 3.74x EBITDA, targeting under 3.5x by year-end and 3x by 2027.

• Guidance for 2026 projects $610–$640 million in revenue and $127–$137 million in adjusted EBITDA.

• Free cash flow is typically $40–$50 million annually, with a capital-light model and resilient consumer base.

Growth drivers and strategic initiatives

• Key growth drivers include product innovation, expanded national retailer relationships, and export market expansion.

• Over 90% of revenue is currently U.S.-based, with significant export opportunities identified in Australia, South America, and Europe.

• Direct-to-consumer business accounts for about 22% of sales, supported by omni-channel strategy and 16 websites.

• Marketing has been decentralized to divisions, improving connection with enthusiast communities and driving double-digit growth in segments like Modern Truck & Off-Road.

• Share repurchase program initiated, with $2 million repurchased in Q2 out of a $25 million authorization.