Holley (HLLY) Q2 2024 earnings summary

Executive summary

• Net income rose 31.8% year-over-year to $17.1 million, with diluted EPS up to $0.14 from $0.11, driven by lower tax expense and fair value gains.

• Achieved key milestones in organizational transformation, including finalizing a high-performing leadership team and driving direct-to-consumer growth.

• Despite a 3.3% sales decline to $169.5 million, margins improved and market share was gained through brand strength, digital initiatives, and product launches.

• Hosted major enthusiast events, directly engaging nearly 50,000 participants and generating 1.7 billion media impressions.

• S&P Global upgraded credit ratings and company exited covenant relief period after prepaying $10 million in debt.

Financial highlights

• Q2 2024 net sales were $169.5 million, down 3.3% year-over-year; adjusted gross margin rose 170 basis points to 41.0%.

• Adjusted EBITDA was $37.4 million, nearly flat year-over-year; adjusted EBITDA margin improved 50 basis points to 22.1%.

• Net income was $17.1 million, up from $13 million in Q2 2023.

• Free cash flow for Q2 2024 was $24.4 million, with $42.1 million year-to-date, a $10 million improvement over the prior year.

• Interest expense increased to $13.2 million from $9.9 million year-over-year.

Outlook and guidance

• Full-year 2024 net sales guidance lowered to $605–$645 million; adjusted EBITDA guidance set at $117–$132 million.

• Q3 2024 net sales expected between $133–$153 million; adjusted EBITDA between $20–$30 million.

• Capital expenditures for 2024 projected at $6–$8 million; year-end leverage expected between 3.75x and 4.25x.

• Guidance reflects macroeconomic uncertainty, consumer health, and distributor destocking.