Reports preliminary Q4 adjusted EBITDA $13M-$15M vs. $36M y/y. CFO Jesse Weaver says: "Holley’s results for the fourth quarter and full year 2022 were below our expectations. Ongoing supply chain challenges and normalization of consumer demand to pre-covid levels reduced sales in the second half of 2022. Adjusted EBITDA results were disappointing, as continued deleveraging of fixed cost, inflation, and manufacturing challenges from the unpredictable supply chain significantly impacted our profitability. While we reduced our past-due orders by over 25% in the fourth quarter, the improvement came in product categories outside of electronics, which has been a key growth area for the Company in recent years. As Holley executed its acquisition growth strategy in recent years, the Company underwent a significant transformation. In the last three years, we’ve closed 16 acquisitions, integrated 13 ERP systems and consolidated more than 160,000 square feet across 10 locations. To fully maximize the value of these transactions and position the Company for the next wave of growth, our focus in 2023 will be accelerating deal synergy capture and improving free cash flow across the Company through a combination of realigning teams to key strategic focus areas, streamlining operations, and working with vendors to bring cost back in line. Furthermore, targeted cost and inventory management efforts aim to improve profitability and support debt reduction, while a recently implemented interest rate collar should help to minimize the effects of rising interest rates on the Company. We are actively engaged in discussions with our lenders to ensure maximum flexibility as we execute these plans."
Published first on TheFly
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