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) for the quarter, 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 for the quarter, compared to $3.3 million in the prior year.
• Adjusted EBITDA was $29.4 million for the quarter, an 8.6% increase from $27.1 million in the prior year.
• Adjusted EBITDA margin expanded to 20.8% for the quarter, up from 19.6% in the prior year.
• Free cash flow was $8.8 million for the quarter, an improvement of $3.3 million compared to $5.5 million in the prior year.
• Net cash provided by operating activities was $14.1 million for the quarter, compared to $7.4 million in the prior year.
• Total debt was reduced 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.

Guidance and Future Outlook

• Full-year 2026 Net Sales guidance range remains $610 million to $625 million.
• Full-year 2026 Core Business Growth Rate guidance remains ~2% to ~5%.
• Full-year 2026 Adjusted EBITDA guidance range was tightened to $127 million to $132 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.
• Full-year 2026 Interest Expense (excluding collar revaluation) guidance range was tightened to $40 million to $44 million.
• Management tightened full-year revenue, Adjusted EBITDA, and interest expense guidance ranges to be conservative given the current consumer environment.
• The company achieved its year-end leverage target of 3.5x a quarter ahead of schedule.

Business Segments and Product Lines

• 27 brands delivered growth across Direct-to-Consumer (DTC) and Business-to-Business (B2B) channels.
• Long-term strategic initiatives drove $18.6 million in revenue and delivered $6.1 million in cost savings.
• A new national retailer program shipped during the quarter, expanding shelf presence.
• The company exited non-core businesses, specifically Restoration brands, to simplify operations and reduce complexity.
• Marketing functions have been embedded within divisions to strengthen brand activation and enthusiast engagement.
• The company continues to invest in marketing to enhance consumer engagement and brand visibility.

Market and Competitive Landscape

• The company reported performance in a moderating macroeconomic environment.
• Holley serves enthusiasts across four consumer vertical groupings: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing.
• The company maintains a focused portfolio of iconic brands in the high-performance aftermarket.

Risks and Challenges

• Management cites the current consumer environment as a factor necessitating a conservative outlook.
• Forward-looking statements note risks including the ability to execute business strategy, compete effectively, and manage growth.
• Risks include changes in vehicle ownership, ability to attract new customers, and successful integration of acquisitions.
• Potential risks include disruptions from cybersecurity incidents, changes in laws or regulations, and geopolitical conflicts (e.g., Ukraine, Middle East).
• Risks include supply chain disruptions, manufacturing cost increases, and trade policy changes including tariffs.
• Risks include elevated interest rate levels, inflationary pressures, and the impact of regional bank closures on the financial services industry.

Management Commentary and Tone

• Matthew Stevenson, President and CEO, stated that results reflect the continued strength of the core business, which has grown in six of the last seven quarters.
• Stevenson noted that the performance was delivered in a moderating macroeconomic environment, highlighting disciplined execution.
• Stevenson emphasized that exiting non-core businesses and simplifying operations contributed to margin expansion.
• Jesse Weaver, CFO, highlighted progress across sales growth, profitability, cash generation, and balance sheet strength.
• Weaver noted that strong cash generation enabled further deleveraging and that the company remains focused on generating sustainable free cash flow.
• Management expressed confidence in positioning to close out 2026 and make further progress in periods ahead.

Other Key Points

• The company reduced debt by $25 million in the quarter, inclusive of a previously announced $15 million repayment.
• The company is not providing reconciliations of forward-looking full-year 2026 Adjusted EBITDA outlook due to the inability to predict the future financial statement 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.
• The company holds $49.9 million in cash and cash equivalents as of September 27, 2026.
• Treasury stock purchases totaled $2.0 million for the thirty-nine weeks ended September 27, 2026.
• Restructuring costs were $2.8 million for the quarter and $4.5 million for the thirty-nine weeks ended September 27, 2026.
• A loss on sale of assets of $335,000 was recorded for the quarter, and $28.6 million for the thirty-nine weeks.