HLLY - Holley crashes after supply-chain hits revenue annual guidance cut far below consensus

• Holley ( NYSE: HLLY ) shares are down big-time 23% in premarket trading on Friday after second quarter's preliminary results disappointed the market, making it worst on sharp cut in the full-year guidance.
• The auto-parts manufacturer reported 7.1% year-over-year decline in sales to $179.4M, far below the analysts' estimate of a $205.48M revenue in Q2 2022.
• Gross profit fell 7.3% to $75.3M.
• CEO Tom Tomlinson blamed supply chain hick-ups to lower-than-expected revenue. He said: "Second quarter sales fell short of expectations, driven by microchip shortages and other supply chain challenges that prevented us from building and shipping many of our most popular products."
• "Growth in DTC sales was more than offset by resellers that reduced their purchases below their out-the-door sales levels, indicating that some sell-down of reseller inventory also occurred in the quarter. This is all against the backdrop of challenging economic conditions and softening consumer demand," Tomlinson added.
• Adjusted EBITDA was down $16.9M to $37.2M
• Net Income for the quarter is estimated at $40.6M, up $17.5M on yea-ago comparison.
• Cuts FY 2022 Outlook: Net Sales is now expected between $700-$725M, vs. prior guidance of $765-$790M, vs. consensus of $753.38M
• On adjusted basis, EBITDA expected at $135 - $145M, vs. prior outlook range of $186 - $194M; Capex unchanged at $14 - $16M; and Interest Expenses to increase to $33 - $35M, vs. prior estimate of $30 - $32M.
• “Given our second quarter results and our latest view of supply chain conditions, which worsened during the quarter, we are revising our outlook for the full year 2022,” said CFO Dominic Bardos. "We now expect the microchip shortages we experienced in the second quarter to persist throughout 2022."
• HLLY are trading at $9.70 in premarket vs. 52-week range of $8.32 to $14.68.
• Earlier: Holley Non-GAAP EPS of $0.19 beats by $0.04, revenue of $200.1M beats by $7.4M

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