Holley Inc.

Profitable, high-margin performance-auto aftermarket franchise with strong brands but elevated leverage and an earnings decline.

Strengths

• Top-decile gross margin (43%, 94th pct) and operating margin 13.4% (86th pct) with positive FCF
• Diversified portfolio of leading enthusiast brands (Holley, MSD, Flowmaster) in a fragmented market

Risks

• Net income fell ~183% (14th pct) and revenue growth only 1.9% (26th pct)
• Elevated leverage (D/E 1.15, 84th pct) with weak ROE (4.3%) and ROA (1.6%)
• Discretionary-spend sensitivity, EV headwinds, and tariff/cost pressure

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Chronic dilutionShare count +21%/yr over 3y (dilution, book value/share -38%)
• Pending merger” Business Combination On July 16, 2021, we consummated the Business Combination pursuant to the Merger Agreement, by and among Empower, Merger Sub I, Merger Sub II, and Holley Intermediate