Holley reported higher third-quarter sales, a return to GAAP profitability and improved cash generation, while continuing to reduce debt. Growth in its continuing core business outpaced reported sales growth, which excludes the effect of businesses sold as part of a portfolio-rebalancing effort.
The automotive aftermarket supplier also said it shipped a new national retailer program during the quarter and that operational simplification helped expand margins. Holley said it issued full-year 2026 guidance, though the forecast figures are not included in the announcement text available here.
Financial and operating results
- Net sales rose 2.3% to $141.6 million, from $138.4 million a year earlier. Core business sales, excluding divested businesses, increased 6.7%.
- Holley earned $7.8 million, or 6 cents per diluted share, compared with a net loss of $800,000, or 1 cent per share, in the year-ago quarter.
- Adjusted net income was $7.7 million, up from $3.3 million.
- Adjusted EBITDA increased 8.6% to $29.4 million, from $27.1 million. Adjusted EBITDA margin expanded to 20.8% from 19.6%.
- Cash from operating activities rose to $14.1 million, compared with $7.4 million a year earlier. Free cash flow increased to $8.8 million from $5.5 million.
Debt and business changes
- Holley prepaid $25 million of debt during the quarter. It said leverage had reached its lowest level in four years and that it achieved its year-end leverage target of 3.5 times a quarter early.
- The company said its core business had grown in six of the past seven quarters, even as it faced a moderating consumer environment.
- A new national retailer program began shipping during the quarter, expanding the company’s shelf presence.
- Holley said exiting non-core businesses, including its Restoration brands, reduced operating complexity and contributed to margin expansion.
- The company has moved some marketing functions into its business divisions, which it said is strengthening brand activity and engagement with enthusiasts.
The quarter combined growth in core sales with higher margins, earnings and cash generation. The debt prepayment and earlier-than-planned achievement of the leverage target mark progress in reducing the company’s balance-sheet debt.