HLLY - Holley posts lighter than expected loss highlights cost-saving efforts

2023-03-09 08:30:57 ET

Holley Inc. ( NYSE: HLLY ) shares rose sharply on Thursday after posting a lighter than expected loss ofr the fourth quarter.

The company posted a $0.13 loss for the quarter, one cent better than expected, while $154.2M was in-line with consensus estimates. Gross profit declined 36.8% from the prior year quarter to $47.3M.

“Despite ongoing supply-chain disruptions and demand normalization impacting financial results during the quarter, we remain encouraged by the underlying strength of our core enthusiast base and are confident that Holley remains a clear leader in the performance enthusiast automotive space,” CEO Michelle Gloeckler. “We are intently focused on strategically aligning our cost structure, delivering strong free cash flow, and returning the Company’s growth and margin performance to historical levels.”

Full-year guidance projects net sales in the range of $625M to $675M, slightly below the $679.13M consensus. Adjusted EBITDA for the year is expected to range from $108M to $122M.

“Heading into 2023, we believe we are well-equipped to execute our well-defined strategy. There is incredible depth in our leadership, and we have the needed financial flexibility to align our cost structure to current market demand,” CFO Jesse Weaver said. “Despite a normalization to pre-Covid trend growth levels, our end markets remain strong, and Holley is an unquestioned leader across key product categories. We’ve taken several steps to fully capture acquisition synergies, improve our freight strategy, and right size our operating structure.”

The company expects to deliver $30M in cost savings for 2023. Management also announced an agreement with its lending group to amend the net leverage covenant that calls for significant leverage ratio reduction in coming quarters.

Shares of Holley Inc. ( HLLY ) rose 2.6% in premarket trading on Thursday.

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