The following is a summary of the Holley Inc. (HLLY) Q1 2024 Earnings Call Transcript:
Financial Performance:
Holley Inc. reported a decrease of 7.9% in Q1 2024 net sales due to elevated inventory levels and a weakening consumer environment.
The company maintained adjusted gross margins at 38.9%, a slight decrease of 40 basis points from the previous year.
Free cash flow has allowed the reduction of debt by an additional $15 million, summing up to $65 million since September.
Notable EBITDA contributions came from the cost-to-serve program.
The company's net sales were reported as 158.6 million, down from the 172.2 million in Q1 of the previous year.
The net leverage ratio was reduced to 4.16x, after prepaying an additional $15 million on debt.
Business Progress:
Holley is focusing on eliminating non-value-added costs and building a robust growth engine.
New members were added to the leadership team to drive the development of the organic growth engine.
Several new products were launched during Q1, focusing on growth areas, mainly in the modern truck and off-road segments.
The company is investing in developing consumer insights for innovation strategy and enhancing sales channels.
More than 3.7 million of the projected $5 million efficiency gains from cost-to-serve efforts were captured in Q1.
The SKU rationalization initiative continued, reducing approximately 12,000 finished goods SKUs.
Future targets include a net leverage ratio of between 3.5x to 4x, sales in the range of 165 million to 175 million, and adjusted EBITDA in the range of 34 million to 40 million.
More details: Holley IR
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