Holley (HLLY) The 44th Annual William Blair Growth Stock Conference summary

Industry overview and market positioning

• Automotive aftermarket performance sector has a resilient 6%+ CAGR, driven by a passionate enthusiast base.

• Over 70 million U.S. enthusiasts, with average incomes above $75,000, consider performance upgrades a lifestyle priority.

• Company offers a broad product portfolio across Domestic Muscle, Euro & Import, Modern Truck & Off-Road, and Safety & Racing, holding top positions in most categories.

• Grassroots engagement includes over 100,000 consumers at events, with LS Fest East drawing 60,000 attendees.

• Channel strategy balances D2C, national retailers, warehouse distributors, e-tailers, and some OE and international business.

Strategic transformation and operational focus

• Recent transformation aligned sales, marketing, and product management around four verticals, using data-driven prioritization.

• Emphasis on servant leadership, operational efficiency, and integrating 16 acquisitions from 2020–2023.

• High-performing team built by recruiting leaders with both industry expertise and passion for automotive performance.

• SKU rationalization removed 35,000 low-revenue items, focusing on market-driven product innovation.

• Enhanced digital strategy, promotional planning, and value-based pricing to improve margin realization.

Financial performance and outlook

• Maintained nearly 20% EBITDA margin despite an 8% revenue decline in Q1, aided by $3.7 million in cost savings.

• Free cash flow remains strong, with $50 million generated and $65 million in debt prepaid since September last year.

• Inventory and SKU reductions improved working capital and supply chain forecast accuracy from 30% to 70–80%.

• Full-year revenue guidance is $640–$680 million, aiming for flat performance amid headwinds from excess inventory and past due fulfillment.

• Long-term leverage target is under 3x, with continued focus on cost savings, operational efficiency, and selective M&A.