Holley Reports 37% Gross Profit Increase in Fourth Quarter

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Holley Inc., one of the largest and fastest growing platforms serving performance automotive enthusiasts, announced its financial results for its fourth quarter and fiscal year ended December 31, 2021.

Highlights of the fourth quarter compared to the prior year period

  • Net sales increased 29.9% to $179.8 million from $138.4 million in 2020
  • Gross profit increased 37.0% to $74.7 million from $54.6 million last year
  • Net loss of ($18.0) million, or $(0.16) per share, compared to net earnings of $2.0 million, or $0.03 per share, in the fourth quarter of 2020
  • Adjusted net earnings1 of $9.0 million, compared to adjusted net earnings of $2.0 million reported last year
  • Adjusted EBITDA1 increased to $36.1 million from $30.4 million in 2020
  • Highlights of the year 2021 compared to the period of the previous year
  • Net sales increased 37.4% to $692.8 million from $504.2 million in 2020
  • Gross profit increased 37.7% to $286.8 million from $208.2 million last year
  • Net loss of ($27.1) million, or $(0.30) per share, compared to net earnings of $32.9 million, or $0.49 per share, in 2020
  • Adjusted net earnings1 of $61.8 million, compared to adjusted net earnings of $32.9 million recorded last year
  • Adjusted EBITDA1 increased to $169.5 million from $126.2 million in 2020

“Holley delivered very strong fourth quarter results, capping off what has been a landmark year for the company,” said Tom Tomlinson, Holley’s president and chief executive officer. “Strong consumer demand for our products continues to drive growth across our various sales channels and we look forward to further driving consumer engagement as we head into 2022.”

Fourth quarter 2021 financial results

Net sales increased 29.9% to $179.8 million in the fourth quarter of 2021 from $138.4 million in the fourth quarter of 2020. Non-comparable sales associated with acquisitions contributed $24.0 million, or 17.3% of year-over-year net sales growth in the fourth quarter. Sales excluding the impact of acquisitions increased $17.4 million and contributed 12.6% of the year-over-year growth.

Selling, general and administrative expenses for the quarter increased by $15.6 million to $37.7 million, representing a 70.7% increase from $22.1 million in 2020 .

Additional selling, general and administrative expenses from recent acquisitions accounted for $4.1 million of the increase in the quarter. Additional cost drivers include increased non-cash compensation expense related to equity awards, increased costs associated with operating as a public company, increased outbound shipping costs related to increased sales and an increase in professional fees related to acquisitions.

Net income for the fourth quarter of 2021 was impacted by an increase in non-cash liabilities for warrants and earn-out shares, and a loss on early extinguishment of debt. The growth in operating profit was more than offset by these expenses. As a result, we recorded a net loss of ($18.0) million in the fourth quarter, compared to a net profit of $2.0 million in 2020.

Adjusted EBITDA reached $36.1 million in the fourth quarter, compared to $30.4 million in the fourth quarter last year.

EPS of ($0.16) for the fourth quarter of 2021 compared to $0.03 in 2020.

2021 annual financial results

Net sales increased 37.4% to $692.8 million in 2021 from $504.2 million in 2020. Non-comparable sales associated with acquisitions contributed $116.4 million, or 23 .1% of year-over-year growth. Sales excluding the impact of acquisitions increased by $72.3 million and contributed 14.3% to net sales growth in 2021.

Net income for the year was impacted by an increase in non-cash liabilities for warrants and earn-out shares, and a loss on early extinguishment of debt. As a result, we recorded a net loss of ($27.1) million in 2021, compared to a net profit of $32.9 million in 2020.

Adjusted EBITDA increased to $169.5 million in 2021 from $126.2 million last year.

Basic EPS of ($0.30) in 2021 compared to $0.49 in 2020.

Outlook for the year 2022

Holley provides the following outlook for the full year 2022:

  • Net sales in the range of $765-790 million
  • Adjusted EBITDA from $186 to $194 million
  • Capital expenditures in the range of $14-16 million
  • Depreciation expense of $24 to $26 million
  • Interest expense in the range of $30-32 million

“We are encouraged by our performance in 2021 with strong financial results in our first year as a public company,” said Dominic Bardos, chief financial officer of Holley. “As we look to 2022, we believe we are positioned to strike a good balance between organic and acquired growth while welcoming new enthusiasts to the Holley family.”

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