Holley Performance Brands — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales grew 2.3% year-over-year to $141.6 million for the quarter ended September 27, 2026, compared to $138.4 million in the prior year period.
• Core business net sales grew 6.7% year-over-year, excluding sales from divested businesses and the portfolio rebalancing initiative.
• Net income was $7.8 million ($0.06 per diluted share) compared to a net loss of $0.8 million ($(0.01) per diluted share) in the prior year.
• Adjusted net income was $7.7 million compared to $3.3 million in the prior year.
• Adjusted EBITDA was $29.4 million, an 8.6% increase from $27.1 million in the prior year.
• Adjusted EBITDA margin expanded to 20.8% from 19.6% in the prior year.
• Free cash flow was $8.8 million, an improvement of $3.3 million year-over-year from $5.5 million.
• Net cash provided by operating activities was $14.1 million compared to $7.4 million in the prior year.
• Total debt decreased by $25 million during the quarter, bringing cumulative debt reduction to $125 million since September 2023.
• The Credit Agreement Total Leverage Ratio declined to 3.50x as of September 27, 2026, down from 3.75x as of December 31, 2025.
• Cash and cash equivalents were $49.9 million as of September 27, 2026, compared to $37.2 million as of December 31, 2025.
• Inventory decreased to $181.6 million from $205.7 million as of December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 Net Sales guidance remains $610 million to $625 million.
• Full-year 2026 Core Business Growth Rate guidance remains ~2% to ~5%.
• Full-year 2026 Adjusted EBITDA guidance was narrowed to $127 million to $132 million.
• Full-year 2026 Interest Expense guidance (excluding collar revaluation) was narrowed to $40 million to $44 million.
• Full-year 2026 Capital Expenditures guidance remains $15 million to $20 million.
• Full-year 2026 Depreciation and Amortization Expense guidance remains $24 million to $26 million.
• Management tightened revenue, Adjusted EBITDA, and interest expense guidance ranges due to the current consumer environment but remains focused on generating sustainable free cash flow.

Business Segments and Product Lines:

• 27 brands delivered growth across DTC and B2B channels.
• A new national retailer program shipped during the quarter, expanding shelf presence.
• Strategic portfolio rebalancing included exiting non-core businesses, specifically Restoration brands, to reduce complexity.
• Long-term strategic initiatives drove $18.6 million in revenue and delivered $6.1 million in cost savings.
• Critical areas of marketing were embedded within divisions to strengthen brand activation and enthusiast engagement.
• Continued investment in marketing was made to enhance consumer engagement and brand visibility.

Market and Competitive Landscape:

• The company executed in a moderating macroeconomic environment.
• Holley serves enthusiasts across four consumer vertical groupings: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing.

Risks and Challenges:

• Management cited the current consumer environment as a reason for tightening guidance.
• Forward-looking statements note risks including general economic and political conditions, geopolitical tensions, and trade policies including tariffs.
• Risks include disruptions to operations, cybersecurity incidents, supply chain costs, and elevated interest rates.
• The company notes uncertainty regarding the future financial statement impact of certain items, preventing reconciliation of forward-looking Adjusted EBITDA to GAAP net income.

Management Commentary and Tone:

• Matthew Stevenson, President and CEO, stated results reflect the continued strength of the core business, which has grown in six of the last seven quarters.
• Stevenson highlighted that disciplined execution and operational simplification contributed to margin expansion.
• Jesse Weaver, CFO, noted that strong cash generation enabled further deleveraging and achieving the year-end leverage target of 3.5x a quarter ahead of schedule.
• Management expressed confidence in the strategic priorities while maintaining a prudent and conservative outlook regarding the full-year guidance.

Other Key Points:

• The company achieved its year-end leverage target of 3.5x a quarter ahead of schedule.
• The company is not providing reconciliations of forward-looking full-year 2026 Adjusted EBITDA outlook due to the inability to predict the occurrence and impact of certain items without unreasonable effort.
• A conference call and audio webcast were scheduled for November 5, 2026, at 8:30 a.m. Eastern Time.
• Treasury stock purchase of $2.0 million occurred during the first nine months of 2026.
• Restructuring costs were $2.8 million for the quarter and $4.5 million for the first nine months of 2026.
• Loss on sale of assets was $335,000 for the quarter and $28.6 million for the first nine months of 2026.