Strong organic growth and execution against strategic initiatives drive performance

Discloses quarterly 2020 historical results and confirms guidance

Holley Inc. (NYSE:HLLY), the largest and fastest growing platform serving performance automotive enthusiasts, today announced financial results for its second quarter ended June 27, 2021.

Second Quarter Highlights vs. Prior Year Period

Net Sales increased 54% to $193.0 million compared to $125.3 million in 2020
Gross Profit increased 48% to $81.2 million compared to $54.8 million last year
Operating Income increased 52% to $40.1 million compared to $26.3 million in 2020
Net Income increased 85% to $23.1 million from $12.5 million last year
Adjusted EBITDA¹ increased 49% to $54.1 million compared to $36.4 million in 2020
Acquired AEM Performance Electronics ("AEM") adding to Holley's electronics offering
Continued execution on direct-to-consumer channel growth strategy

2021 Outlook

Company reiterates fiscal 2021 Net Sales expected to range between $648-$663 million, Pro Forma Net Sales¹ between $655-$670 million, and Pro Forma Adjusted EBITDA¹ between $165-170 million

¹See "Use and Reconciliation of Non-GAAP Financial Measures" below.

Tom Tomlinson, Holley's President and Chief Executive Officer, said, "Consumer demand for our products was strong in the second quarter and we continued to see excellent growth in our direct-to-consumer channel. Our team performed well, captured significant additional demand in the quarter, and delivered great overall results."

Second Quarter 2021 Financial Results

Net sales increased 54% to $193.0 million in the second quarter of 2021, up from $125.3 million in the second quarter of 2020. Non-comparable sales associated with acquisitions, including the AEM acquisition completed in April and several completed in the fourth quarter of 2020, contributed $36.7 million of net sales growth in the quarter. Organic growth for comparable brands contributed the remaining $31.0 million of year-over-year net sales growth, representing slightly more than 25% growth over second quarter 2020 net sales. Consumer demand for electronic performance products drove the majority of the organic growth in the quarter.

Cost of goods sold increased $41.4 million, or 59%, to $111.8 million, as compared to $70.5 million for the second quarter of 2020 and is primarily attributable to the increase in product sales. Gross profit for the thirteen weeks ended June 27, 2021 increased $26.4 million, or 48.1%, to $81.2 million, as compared to $54.8 million for the second quarter of 2020. The increase in gross profit was driven by the increase in sales. Gross margin for the thirteen weeks ended June 27, 2021 was 42.1% compared to a gross margin of 43.8% for the thirteen weeks ended June 28, 2020.

Selling, general and administrative costs for the quarter increased $9.9 million to $26.2 million, representing an increase of 61% when compared to $16.3 million in 2020. Incremental SG&A from recent acquisitions were responsible for $5.3 million of the increase in the quarter. Additional cost drivers include a $1.6 million increase in shipping costs related to higher sales and global supply chain pressure, higher audit fees associated with the business combination with Empower, and increases in software licensing that support Holley's growth.

R&D and other operating expenses provided leverage in the second quarter, as those expenses increased 26% and 20%, respectively, against the net sales increase of 54%. Increases in these other operating expense areas are primarily due to acquisitions.

Net income for the second quarter 2021 reflects higher sales volume and the leverage achieved on certain fixed expenses. Net income improved to $23.1 million in the second quarter compared to $12.5 million in 2020, an increase of 85%.

Adjusted EBITDA grew from $36.4 million in the second quarter last year to $54.1 million in the second quarter of 2021, representing 49% year-over-year growth. Reconciliation to GAAP Net Income is included in the "Use and Reconciliation of Non-GAAP Financial Measures" table below.

Significant Event Subsequent to Quarter End

On July 16, 2021, Holley completed the business combination with Empower LTD and became a publicly traded company on the New York Stock Exchange (NYSE:HLLY). Since the transaction closed in Holley's third fiscal quarter, the 10-Q Holley will file with the Securities and Exchange Commission for the second quarter will reflect the pre-combination results of Empower LTD.

Fiscal 2021 Full Year Outlook

We reiterate our full-year expectations of recognized net sales in the range of $648 to $663 million for fiscal 2021. We expect pro forma net sales in the range of $655 to $670 million, and pro forma adjusted EBITDA between $165 and $170 million. Additional information regarding pro forma adjustments is included in the "Use and Reconciliation of Non-GAAP Financial Measures" table below.

Dominic Bardos, Holley's Chief Financial Officer, added, "We continued to execute on our strategy in the second quarter, with both organic growth and recent acquisitions contributing to our strong revenue performance. We expect sales growth to moderate in the back half of 2021, largely due to lapping strong 2020 performance and the three acquisitions made during the fourth quarter last year. Our full-year guidance also contemplates the uncertainties surrounding global supply chain challenges and inflationary pressure on raw material costs. Our markets remain strong and our consumers continue to be highly engaged."

Conference Call

A conference call and audio webcast has been scheduled for 10:00 a.m. Eastern Time today to discuss these results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call available on the investor relations portion of the Company's website at investor.holley.com. For those that cannot join the webcast, you can participate by dialing 1-844-200-6205 (United States Toll Free), 1-646-904-5544 (United States Local), or + 44-208-0682-558 (All Other Locations) using the access code of 472207.

For those unable to participate, a telephone replay recording will be available until Wednesday, September 1, 2021. To access the replay, please call 1-929-458-6194 (U.S.), 0204-525-0658 (U.K.), or + 44-204-525-0658 (All Other Locations) and enter confirmation code 986200. A web-based archive of the conference call will also be available at the Company's website.

About Holley Inc.

Holley Inc. (NYSE:HLLY) is a leading designer, marketer, and manufacturer of high-performance products for car and truck enthusiasts. Holley offers the largest portfolio of iconic brands that deliver innovation and inspiration to a large and diverse community of millions of avid automotive enthusiasts who are passionate about the performance and personalization of their classic and modern cars. Holley has disrupted the performance category by putting the enthusiast consumer first, developing innovative new products, and building a robust M&A process that has added meaningful scale and diversity to its platform. For more information on Holley, visit https://www.holley.com.

Forward-Looking Statements

Certain statements in this press release may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley's future financial or operating performance. For example, projections of future revenue and adjusted EBITDA and other metrics are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," "or" or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Holley and its management are inherently uncertain factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the ability to recognize the anticipated benefits of the business combination with Empower LTD, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 2) costs related to the business combination and Holley becoming a public company; 3) changes in applicable laws or regulations; 4) the outcome of any legal proceedings that may be instituted against Holley; 5) the possibility that Holley may be adversely affected by other economic, business and/or competitive factors; 6) Holley's estimates of its financial performance; 7) the impact of the novel coronavirus disease pandemic and its effect on business and financial conditions; and 8) other risks and uncertainties set forth in the section entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Prospectus filed with the U.S. Securities and Exchange Commission ("SEC") filed on July 28, 2021. Although Holley believe the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements or projections set forth herein will be achieved or that any of the contemplated results of such forward looking statements or projections will be achieved. There may be additional risks that Holley presently does not know or that Holley currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Holley undertakes any duty to update these forward-looking statements, except as otherwise required by law.

[Financial Tables to Follow]

HOLLEY INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

	For the thirteen weeks ended							For the twenty-six weeks ended
	27-Jun		June 28,				%	27-Jun		June 28,				%
	2021		2020		Variance		Variance	2021		2020		Variance		Variance
Net Sales	$	193,041	$	125,296	$	67,745	54.1%	$	353,373	$	232,453	$	120,920	52.0%
Cost of Goods Sold		111,841		70,468		41,373	58.7%		206,494		134,292		72,202	53.8%
Gross Profit		81,200		54,828		26,372	48.1%		146,879		98,161		48,718	49.6%

Operating Expenses		41,138		28,479		12,659	44.5%		94,036		54,138		39,898	73.7%
Operating Income		40,062		26,349		13,713	52.0%		52,843		44,023		8,820	20.0%

Interest Expense		11,174		11,013		161	1.5%		21,245		22,518		(1,273)	-5.7%

Income Before Income Taxes		28,888		15,336		13,552	88.4%		31,598		21,505		10,093	46.9%

Income Tax Expense (Benefit)		5,790		2,827		2,963	104.8%		10,556		4,144		6,412	154.7%

Net Income (Loss)		23,098		12,509		10,589	84.7%		21,042		17,361		3,681	21.2%

Comprehensive Income:
Foreign Currency Translation Adj.		35		-		35	-		19		-		19	-
Total Comprehensive Net Income:		23,133		12,509		10,624	84.9%		21,061		17,361		3,700	21.3%

HOLLEY INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

	For the thirteen weeks ended
	March 29,		June 28,		Sept. 27,		Dec. 31,		March 28,		27-Jun
	2020		2020		2020		2020		2021		2021
Net Sales	$	107,157	$	125,296	$	133,307	$	138,419	$	160,332	$	193,041
Cost of Goods Sold		63,824		70,468		77,778		83,865		94,653		111,841
Gross Profit		43,333		54,828		55,529		54,554		65,679		81,200

Operating Expenses		25,659		28,479		27,149		41,502		52,898		41,138
Operating Income		17,674		26,349		28,380		13,052		12,781		40,062

Interest Expense		11,505		11,013		9,325		11,929		10,071		11,174

Income Before Income Taxes		6,169		15,336		19,055		1,123		2,710		28,888

Income Tax Expense (Benefit)		1,317		2,827		5,512		(830)		4,766		5,790

Net Income (Loss)		4,852		12,509		13,543		1,953		(2,056)		23,098

Comprehensive Income:
Foreign Currency Translation Adj.		-		-		-		16		(16)		35
Total Comprehensive Net Income:		4,852		12,509		13,543		1,969		(2,072)		23,133

HOLLEY INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)

	As of		As of		As of		As of		As of		As of
	March 29,		June 28,		Sept. 27,		Dec. 31,		March 28,		27-Jun
	2020		2020		2020		2020		2021		2021
Assets
Total Current Assets	$	200,825	$	221,873	$	190,361	$	257,980	$	275,832	$	261,207
Net Property, Plant & Equipment		32,752		32,929		34,131		43,729		44,581		49,692
Goodwill		297,607		297,607		297,607		359,099		359,099		377,368
Other Net Intangibles		330,807		328,157		325,459		404,522		401,186		425,423
Total Assets		861,991		880,566		847,558		1,065,330		1,080,698		1,113,690

Liabilities and Stockholder's Equity
Total Current Liabilities		46,980		53,046		54,463		82,009		98,175		107,428
Long-term Debt Net of Current Portion		531,078		530,857		482,636		649,458		650,123		649,874
Deferred Taxes		51,656		51,863		51,995		71,336		71,814		72,538
Other Noncurrent Liabilities		21,890		21,890		21,890		22,146		22,146		22,146
Total Liabilities		651,604		657,656		610,984		824,949		842,258		851,986

Common Stock		-		-		-		-		-		-
Additional Paid-In Capital		236,624		236,638		236,759		238,890		239,021		239,152
Accumulated Loss		(397)		(397)		(397)		(674)		(690)		(655)
Retained Earnings		(25,840)		(13,331)		212		2,165		109		23,207
Total Stockholder's Equity		210,387		222,910		236,574		240,381		238,440		261,704

Total Liabilities and Stockholder's Equity		861,991		880,566		847,558		1,065,330		1,080,698		1,113,690

HOLLEY INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	For the thirteen weeks ended
	March 29,		June 28,		Sept. 27,		Dec. 31,		March 28,		27-Jun
	2020		2020		2020		2020		2021		2021
Operating Activities
Net Income	$	4,852	$	12,509	$	13,543	$	1,953	$	(2,056)	$	23,098
Adjustments to Reconcile to Net Cash		5,964		5,811		6,102		13,960		7,142		24,855
Changes in Operating Assets & Liabilities		6,764		7,549		12,510		(3,104)		13,870		(20,512)
Net Cash from Operating Activities		17,580		25,869		32,155		12,809		18,956		27,441

Investing Activities
Capital Expenditures, Net of Dispositions		(1,283)		(2,152)		(3,218)		(2,082)		(3,104)		(3,752)
Acquisitions		-		(50)		-		(156,833)		-		(54,011)
Net Cash from Investing Activities		(1,283)		(2,202)		(3,218)		(158,915)		(3,104)		(57,763)

Financing Activities
Net Change and Principal Payments in Debt		27,500		(1,050)		(48,950)		163,044		(64)		(1,475)

Net Change in Cash & Cash Equivalents		43,797		22,617		(20,013)		16,938		15,788		(31,797)

Cash and Cash Equivalents
Beginning of Period		8,335		52,132		74,749		54,736		71,674		87,462
End of Period		52,132		74,749		54,736		71,674		87,462		55,665

	HOLLEY INTERMEDIATE HOLDINGS, INC. and SUBSIDIARIES
USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
(Unaudited)
		For the thirteen weeks ended
		June 27,		June 28,
Description		2021		2020

Net Income (Loss)		$	23,098	$	12,509

Adjustments:
	Interest Expense		11,174		11,013
	Income Taxes		5,790		2,827
	Depreciation		2,201		1,988
	Amortization		3,502		2,701
EBITDA			45,765		31,038

	Acquisition Integration & Restructuring		2,676		3,118
	Unusual or Nonrecurring Expenses		3,993		1,435
	Related Party Acquisition and Management Fee Expenses		1,658		880
	Other Expense		47		(109)
Adjusted EBITDA			54,139		36,362

				13 Weeks Ended
Description				June 27, 2021
Net Sales					193,041
Adjustments:
	Sales from Acquisitions within 365 Days of Purchase (Non-Comparable to Prior Year)				(36,700)
Organic Sales (Comparable to Prior Year Period Net Sales)					156,341

		2021 Forecast		2021 Forecast
Description		Low Range		High Range
Net Sales		$	647,600	$	662,600
	Pre-Acquisition Net Sales (AEM Performance Electronics)		7,400		7,400
Pro Forma Net Sales			655,000		670,000

Adjusted EBITDA		$	163,400	$	168,400
	Pre-Acquisition Adjusted EBITDA (AEM Performance Electronics)		1,600		1,600
Pro Forma Adjusted EBITDA			165,000		170,000

Holley believes EBITDA and Adjusted EBITDA are useful to investors in evaluating the Company's financial performance. In addition, Holley uses these measures internally to establish forecasts, budgets and operational goals to manage and monitor its business. Holley believes that these non-GAAP financial measures help to depict a more realistic representation of the performance of the underlying business, enabling the Company to evaluate and plan more effectively for the future.

Holley defines EBITDA as earnings before (a) interest expense, (b) income taxes and (c) depreciation and amortization. Holley defines Adjusted EBITDA as EBITDA plus (i) unusual or nonrecurring expenses that consist primarily of the addback of the amortization of the fair market value increase in inventory in 2019 and 2018 (for 2020, the addbacks consist of the amortization of the fair market value increase in inventory and legal settlement), (ii) acquisition and restructuring costs, (iii) related party acquisition and management fee costs, and (iv) other expenses, which includes losses from disposal of fixed assets and foreign currency transactions.

Organic sales excludes the impact from sales from acquisitions within 365 days of the consummation of such acquisition. Holley believes organic sales provides investors with useful supplemental information regarding Holley's underlying sales trends.

EBITDA, Adjusted EBITDA and organic sales are not prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and may be different from non-GAAP financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing Holley's financial performance. These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

A forecast for 2021 Adjusted EBITDA and Pro Forma Adjusted EBITDA is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, Holley is unable to provide a reconciliation of these measures without unreasonable effort.

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Holley Reports Second Quarter 2021 Results