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What changed in Holley Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Holley Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+288 added−314 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-14)

Top changes in Holley Inc.'s 2025 10-K

288 paragraphs added · 314 removed · 235 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe principal factors on which industry participants compete include technical features, performance, product design, innovation, reliability and durability, brand, time to market, customer service, reliable order execution, and price. Our success in the marketplace depends on our ability to execute our Business Strategy discussed above. The performance automotive aftermarket parts industry in the United States is large and highly fragmented.
Biggest changeCompetition The performance automotive industry is highly competitive, and we face substantial competition in all the markets that we serve. The principal factors on which industry participants compete include technical features, performance, product design, innovation, reliability and durability, brand, time to market, customer service, reliable order execution, and price.
We believe these strategies will have a meaningfully positive impact across our brand portfolio. In recent years, we have shifted our marketing efforts towards digital advertising and have increased investments in consumer engagement directly via digital and social media platforms and campaigns. Additionally, since mid-2020 we increased resources focused on expanding our e-commerce and digital platforms.
We believe these strategies will have a meaningfully positive impact across our brand portfolio. In recent years, we have shifted our marketing efforts towards digital advertising and have increased investments in consumer engagement directly via digital and social media platforms and campaigns. Additionally, since mid-2020, we have increased resources focused on expanding our e-commerce and digital platforms.
By fostering an environment where our teammates’ automotive passions thrive, with shared goals, we will create a synergy that sparks creative solutions, fuels collaboration, and propels us to new heights. • Supercharging our Customers : As a leading enthusiast platform in the automotive performance aftermarket, our objective is to deliver exceptional value, innovation, and support to our customers, ultimately creating a loyal and satisfied base of consumer and distribution partners who continue to choose Holley Performance Brands for their automotive needs.
By fostering an environment where our teammates’ automotive passions thrive, with shared goals, we aim to create a synergy that sparks creative solutions, fuels collaboration, and propels us to new heights. • Supercharging our Customers : As a leading enthusiast platform in the automotive performance aftermarket, our objective is to deliver exceptional value, innovation, and support to our customers, ultimately creating a loyal and satisfied base of consumer and distribution partners who continue to choose Holley Performance Brands for their automotive needs.
We are one of the largest multi-product category brands in the performance automotive aftermarket based on gross sales. • Single-product category providers : established companies focused on one product category in the market primarily selling via distribution partners.
We are one of the largest multi-product category brands in the performance automotive aftermarket based on gross sales. • Single-product category providers : established companies focused on one product category primarily selling via distribution partners.
Today, as Holley Performance Brands, we are the leader in delivering high performance platform solutions, driven to accelerate the passion of auto enthusiasts around the globe.
Today, as Holley Performance Brands, we are a leader in delivering high performance platform solutions, driven to accelerate the passion of auto enthusiasts around the globe.
Product Development We offer our enthusiast consumers a comprehensive suite of performance automotive aftermarket products to meet a wide range of needs. We are continuously innovating and evolving our product offerings to meet ever-changing consumer needs. We invest heavily in developing new products, spending an average of $24.7 million per year on research and development since 2020 .
Product Development We offer our enthusiast consumers a comprehensive suite of performance automotive aftermarket products to meet a wide range of needs. We are continuously innovating and evolving our product offerings to meet ever-changing consumer needs. We invest heavily in developing new products, spending an average of $23.7 million per year on research and development since 2020.
We have a comprehensive marketing strategy tailored to the specific needs of the targeted consumer verticals. Our objective is sales growth through our DTC channel and our loyal distribution partners. We intend to balance the growth between these two channels based on the needs of the consumer verticals and our overall cost to serve the end customer through each channel.
We have a comprehensive marketing strategy tailored to the specific needs of the targeted consumer verticals. Our principle is sales growth through our DTC channel and our loyal distribution partners. We intend to balance the growth between these two channels based on the needs of the consumer verticals and our overall cost to serve the end customer through each channel.
From time to time, we become aware of potential infringement of our patent, trademark, or other proprietary rights, and we investigate instances of alleged infringement where we believe it is merited and take appropriate actions under applicable intellectual property laws in response to such infringements where we determine it is valuable to do so.
From time to time, we become aware of potential infringement of our patent, trademark, or other proprietary rights, and we investigate instances of alleged infringement when we believe it is merited and take appropriate actions under applicable intellectual property laws in response to such infringements when we determine it is valuable to do so.
On the Closing Date, Empower changed its name to Holley Inc. and its trading symbol on the NYSE from “EMPW” to “HLLY.” Business Strategy For over 100 years, we have pursued our mission of bringing innovation, discovery and fun to motor life.
On the Closing Date, Empower changed its name to Holley Inc. and its trading symbol on the NYSE from “EMPW” to “HLLY.” Business Strategy For over 120 years, we have pursued our mission of bringing innovation, discovery and fun to motor life.
Our core competitive set is comprised of four primary types of competitors with fragmentation across the majority of our major product categories: • Multi-product category providers : legacy brands with coverage across multiple performance aftermarket products with multiple brands often under one banner and built through acquisition.
Our core competitive set is comprised of four primary types of competitors with dispersion across the majority of our major product categories: • Multi-product category providers : legacy brands with coverage across multiple performance aftermarket products with multiple brands often under one banner and built through acquisition.
Single-product category providers generally offer either lower priced products or higher-quality products focused within one product category. • E-Tailer Private Labels : traditional online distribution partners sell other manufactured products and offer private label products, often at a lower price point.
Single-product category providers generally offer either lower priced products or higher-quality products focused within a single product category. • E-Tailer private labels : traditional online distribution partners who sell other manufactured products and offer private label products, often at a lower price point.
Ongoing supply chain disruptions, resulting in supply shortages and higher shipping charges, have and could continue to impact our ability to maintain supplies of products and the costs associated with obtaining raw materials and key components. 7 Table of Contents Marketing We reach and engage our consumers where they participate in the performance automotive aftermarket – online and in person.
Ongoing supply chain disruptions, resulting in supply shortages and higher shipping charges, have and could continue to impact our ability to maintain supplies of products and the costs associated with obtaining raw materials and key components. Marketing We reach and engage our consumers where they participate in the performance automotive aftermarket – online and in person.
We believe there are also opportunities to capitalize on growing our powertrain agnostic categories like Automotive and Motorcycle Safety. Suppliers We run a flexible sourcing model with a mix of global sourcing and in-house manufacturing. Our best value sourcing model decisions are based on a mix of cost, quality and service.
We believe 7 Table of Contents there are also opportunities to capitalize on growing our powertrain agnostic categories like Automotive and Motorcycle Safety. Suppliers We run a flexible sourcing model with a mix of global sourcing and in-house manufacturing. Our best value sourcing model decisions are based on a mix of cost, quality and service.
Such liability may be joint and several so that we may be liable for more than our share of any contamination, and any such liability may be determined without regard to causation or knowledge of contamination. We or our predecessors have been named potentially responsible parties at contaminated sites from time to time.
Such liability may be joint and several so that we may be liable for more than our share of any contamination, and any such liability may be determined without regard to causation or knowledge of contamination. We or our predecessors have been named 9 Table of Contents potentially responsible parties at contaminated sites from time to time.
Our first objective is to create a premier place to work that attracts, retains, and empowers talented individuals who share our passion for automotive performance.
Our first principle is to create a premier place to work that attracts, retains, and empowers talented individuals who share our passion for automotive performance.
In addition, we have established dedicated consumer verticals that are focusing on our go-to-market strategy for the following four vertical markets: Domestic Muscle, Modern Truck & Off-Road, Euro & Import, and Safety & Racing. Our current mix of spending is towards activities believed to generate the highest return on investment.
In addition, we have established dedicated consumer verticals that are focusing on our go-to-market strategy for the following four vertical markets: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing. Our current mix of spending is towards activities believed to generate the highest return on investment.
Approximately 46% of our full-time employees are based primarily in our Bowling Green, KY headquarters, distribution center and manufacturing plants. None of our employees are subject to collective bargaining agreements or represented by a labor union.
Approximately 39% of our full-time employees are based primarily in our Bowling Green, KY distribution center and manufacturing plants. None of our employees are subject to collective bargaining agreements or represented by a labor union.
Through our portfolio of leading brands – ranging from icons of the American Road, to emerging technologies – we serve a large, diverse community of expert partners and enthusiast consumers across four distinct consumer verticals, including Domestic Muscle, Modern Truck & Off-Road, Euro & Import, and Safety & Racing.
Through our portfolio of leading brands – ranging from icons of the American Road, to emerging technologies – we serve a large, diverse community of expert partners and enthusiast consumers across four distinct consumer verticals: American Performance, Modern Truck & Off-Road, Euro & Import, and Safety & Racing.
We believe events create the opportunity for us to remain closely connected to our enthusiast consumer, get feedback directly from enthusiasts on our offering, and broaden our understanding of the latest consumer trends. 5 Table of Contents • Accelerating Profitable Growth : Our third strategic objective is to significantly increase revenue by expanding our market share while maintaining and improving profitability.
We believe events create the opportunity for us to remain closely connected to our enthusiast consumer, get feedback directly from enthusiasts on our offering, and broaden our understanding of the latest consumer trends. • Accelerating Profitable Growth : Our third strategic principle is to significantly increase revenue by expanding our market share while maintaining and improving profitability.
DTC channel : Our DTC channel provides consumers full access to all of our brands, our unique branded content and our full product assortment. We have turned Holley.com into our primary hub for consumer communication and continue to add features and brands that make it an increasingly attractive digital destination for our consumers.
DTC channel : Our DTC channel provides consumers full access to all of our brands, our unique branded content and our full product assortment. Holley.com is our primary hub for consumer communication and we continue to add features and brands that make it an increasingly attractive digital destination for our consumers.
Our products are designed to enhance street, off-road, recreational and competitive vehicle performance through increased horsepower, torque and drivability. We have locations in the United States, Canada, Italy and China. 4 Table of Contents We attribute a major component of our success to our brands, including Holley EFI, Holley, MSD, Simpson, EDGE, Superchips, Diablosport, Accel and Flowmaster, among others.
Our products are designed to enhance street, off-road, recreational and competitive vehicle performance through increased horsepower, torque and drivability. We have locations in the United States, Canada, Italy and China. We attribute a major component of our success to our brands, including Holley, Holley EFI, MSD, Simpson, Flowmaster, EDGE, Cataclean, and Accel, among others.
Further, we introduced an internship program designed to provide students in the community with an opportunity to gain practical experience. We are committed to fostering an equitable work environment that seeks to ensure fair treatment, equality of opportunity, and fairness in access to information and resources. Social Responsibility . We are committed to social responsibility.
Further, we operate an internship program designed to provide students in the 10 Table of Contents community with an opportunity to gain practical experience. We are committed to fostering an equitable work environment that seeks to ensure fair treatment, equality of opportunity, and fairness in access to information and resources. Social Responsibility .
We consider our team members to be our most valuable asset and seek to attract and maintain the highest quality talent by offering competitive benefits and wellness services, opportunities to grow professionally, and regular evaluations, among other initiatives. On December 31, 2024, we employed 1,467 full-time employees and 53 temporary employees.
We consider our team members to be our most valuable asset and seek to attract and maintain the highest quality talent by offering competitive benefits and wellness services, opportunities to grow professionally, and regular evaluations, among other initiatives. On December 31, 2025, we employed 1,407 full-time employees and 76 temporary employees.
We attract and reward our employees by providing competitive benefits, including market-competitive compensation, medical, dental and vision insurance, short-term and long-term disability insurance, basic life and accidental death and dismemberment insurance, voluntary supplemental coverages, flexible spending accounts, paid time off, and our 401(k) program.
Compensation and Benefits . We strive to hire, develop and retain top talent. We attract and reward our employees by providing competitive benefits, including market-competitive compensation, medical, dental and vision insurance, short-term and long-term disability insurance, basic life and accidental death and dismemberment insurance, voluntary supplemental coverages, flexible spending accounts, paid time off, and our 401(k) program.
Our Internet address is www.holley.com. The information on our website is not, and should not be considered, part of this Form 10-K and is not incorporated by reference in this Form 10-K. The website is, and is only intended to be, for reference purposes only.
The information on our website is not, and should not be considered, part of this Form 10-K and is not incorporated by reference in this Form 10-K. The website is, and is only intended to be, for reference purposes only.
We own and have licensing arrangements for a number of U.S. and foreign patents, trademarks, and other proprietary rights related to our products and business. We also rely upon continuing technological innovation and licensing opportunities to develop and maintain our competitive position.
Intellectual Property Patents, trademarks, and other proprietary rights are important to the continued success of our business. We own and have licensing arrangements for a number of U.S. and foreign patents, trademarks, and other proprietary rights related to our products and business. We also rely upon continuing technological innovation and licensing opportunities to develop and maintain our competitive position.
Holley offers a variety of products across multiple categories but traces its roots back to carburetors which originally made the brand famous with automotive enthusiasts. • MSD : Currently our third leading brand and represented 10% of our sales for 2024 .
Holley offers a variety of products across multiple categories but traces its roots back to carburetors, which originally made the brand famous among automotive enthusiasts. • MSD : Currently our third largest brand, which represented 10% of our sales for 2025.
We believe the following factors distinguish Holley from its competitors: • Brand that resonates with enthusiasts: we actively engage enthusiasts at the platform level across multiple channels (e.g., events, digital media, online communities, etc.), creating reference networks for potential consumers. • Innovative product development: we invest heavily in product research, innovation and development, and introduce products that meet latest platform and use case-specific needs of our enthusiast consumers. • Operational ability that enables efficient order execution : we make significant investments in sourcing, manufacturing and distribution excellence, enabling management of multiple product lines while maintaining scale and attractive relative pricing. • Differentiated go-to-market strategy : we offer a mix of single product and platform-oriented solutions across DTC and distribution partner channels, delivering a strong overall consumer experience. 6 Table of Contents Brands We have a strong portfolio of brands covering various product categories.
Niche custom manufacturers are typically local or regionally focused, and some may distribute partners' customized products from other manufactured brands. 6 Table of Contents We believe the following factors distinguish Holley from its competitors: • Brand that resonates with enthusiasts : we actively engage enthusiasts at the platform level across multiple channels (e.g., events, digital media, online communities), creating reference networks for potential consumers. • Innovative product development : we invest heavily in product research, innovation and development, and introduce products that meet latest platform and use case-specific needs of our enthusiast consumers. • Operational ability that enables efficient order execution : we make significant investments in sourcing, manufacturing and distribution excellence, enabling management of multiple product lines while maintaining scale and attractive relative pricing. • Differentiated go-to-market strategy : we offer a mix of single product and platform-oriented solutions across DTC and distribution partner channels, delivering a strong overall consumer experience.
These events focus on creating memorable experiences for enthusiasts, celebrate car culture, build community, and show enthusiasts how Holley products can help them get more performance and enjoyment from their vehicle s. Our events have grown in total annual attendance from 14,000 in 2015 to 114,000 in 2024 .
These events focus on creating memorable experiences for enthusiasts, celebrate car culture, build community, and show enthusiasts how Holley products can help them get more performance and enjoyment from their vehicles. Our events have grown in total annual attendance from 14,000 in 2015 to 110,000 i n 2025 .
These partners consist of E-tailers, warehouse distributors, traditional retailers, and jobber/installers with E-tailers and warehouse distributors accounting for 55% of our sales in 2024, and our top ten distribution partners accounting for 42% of our sales in 2024 with our largest making up 21% of our sales in 2024.
These partners consist of E-tailers, warehouse distributors, traditional retailers, and jobber/installers with E-tailers and warehouse distributors accounting for 54% of our sales in 2025, and our top ten distribution partners accounting for 42% of our sales in 2025 with our largest making up 22% of our sales in 2025.
E-tailer private labels generally occupy the value end of the market and have a greater presence in less engineered categories with less product-specific brand strength. • Niche custom manufacturers : while not our core competitors, smaller shops typically focus on fully customizing specific make or model vehicles.
E-tailer private labels generally occupy the value end of the market and have a greater presence in less engineered categories with less product-specific brand strength. • Niche custom manufacturers : smaller shops typically focus on fully customizing specific makes or models of vehicles.
Our marketing strategy is centered on strong brand equity, leading new product innovation capabilities and delivering consistently high-quality products. In 2024, we spent approximately $13.5 million (or approximately 2.1% of our 2024 annual gross sales) on marketing and advertising.
Our marketing strategy is centered on strong brand equity, leading new product innovation capabilities and delivering consistently high-quality products. In 2025, we spent approximately $14.7 million (or approximately 2.3% of our 2025 annual gross sales) on marketing and advertising.
See also “ Risk Factors — Risks Relating to Holley ’ s Business and Industry — If the Company is unable to successfully design, develop and market new products, the Company business may be harmed ” for a discussion of the risks related to the Company’s new product development.
See also “Risk Factors — Risks Relating to Holley’s Business and Industry — If the Company is unable to successfully design, develop and market new products, the Company business may be harmed” for a discussion of the risks related to the Company’s new product development.
We will do this by creating an environment that excites, empowers, and nurtures our teammates to their full potential by providing them with the resources, knowledge, encouragement, and motivation they need to excel in their roles.
We aim to achieve this by creating an environment that excites, empowers, and nurtures our teammates to their full 5 Table of Contents potential by providing them with the resources, knowledge, encouragement, and motivation they need to excel in their roles.
We hosted seven events in 2024: LS Fest East, LS Fest West, Ford Fest, MoParty, Weekend On The Edge, Haus Party, and LS Fest Texas. Sales and Distribution We have a diverse omni-channel distribution strategy focused on delivering the best customer experience to our enthusiast consumers and distribution partners.
We hoste d six events in 2025: LS Fest East, LS Fest West, Ford Fest, MoParty, Weekend On The Edge, and LS Fest Texas. Sales and Distribution We have a diverse omni-channel distribution strategy focused on delivering the best customer experience to our enthusiast consumers and distribution partners.
Our Holley EFI brand focuses on electronic fuel injection technology and showcases our new product development engine. • Holley : Currently our second largest brand and represented 15% of our sales for 2024 . The Holley brand resonates with consumers as the majority of automotive enthusiast consumers recognize the Holley brand.
Our Holley EFI brand focuses on electronic fuel injection technology and showcases our new product development engine. • Holley : Currently our second largest brand, which represented 11% of our sales for 2025. The majority of automotive enthusiast consumers recognize the Holley brand.
Accordingly, the Company’s historical results of operations may not be indicative of future performance. Regulations We are subject to a variety of federal, state, local and foreign laws and regulations, including those governing the discharge of pollutants into the air or water, the management and disposal of hazardous substances or wastes, and the cleanup of contaminated sites.
Regulations We are subject to a variety of evolving federal, state, local and foreign laws and regulations, including those governing the discharge of pollutants into the air or water, the management and disposal of hazardous substances or wastes, and the cleanup of contaminated sites.
We believe the popularity of our brands is the result of consistently delivering high quality, innovative products that resonate with our enthusiast consumers. Our brands have allowed us to build direct, trusted and long-lasting relationships with our consumers and distribution partners.
Simpson is focused on motorsport safety products including helmets, head and neck restraints, seat belts, and fire suits. We believe the popularity of our brands is the result of consistently delivering quality, innovative products that resonate with our enthusiast consumers. Our brands have allowed us to build direct, trusted and long-lasting relationships with our consumers and distribution partners.
On December 31, 2024, our Engineering function included approximately 103 employees, including many enthusiast-focused engineers who are passionate about cars. We continue to seek out top level talent that will help accomplish our mission and vision moving forward.
On December 31, 2025, our Engineering function included approximately 125 employees, including many enthusiast-focused engineers who are passionate about cars. We continue to seek out top level talent that will help accomplish our mission and vision moving forward. Our goal is to create an inclusive and safe environment for our employees that keeps them engaged in their work.
Our DTC channel enables us to directly interact with our customers, more effectively control our brand experience, better understand consumer behavior and preferences, and offer exclusive products, content, and customization capabilities. We believe our control over our DTC channel provides our customers with quality brand engagement and further builds customer loyalty, while generating attractive margins.
Our DTC channel enables us to directly interact with our customers, more effectively control our brand experience, better understand consumer behavior and preferences, and offer exclusive products, content, and customization capabilities.
This is demonstrated by both the Company’s and its team members’ participation in philanthropic causes such as local food drives and programs that provide holiday gifts to those in need. 10 Table of Contents Available Information Our principal executive offices are located at 2445 Nashville Rd., Suite B1, Bowling Green, KY 42101, and our telephone number is (270) 782-2900.
This is demonstrated by both the Company’s and its team members’ participation in philanthropic causes such as local food drives and programs that provide holiday gifts to those in need. Available Information Our principal executive offices are located at 1A Burton Hills Blvd Suite 240, Nashville, TN 37215, and our telephone number is (270) 782-2900. Our Internet address is www.holley.com.
In addition, we have seen consistent growth within the automotive aftermarket parts industry over the last two decades. Products in the performance automotive aftermarket parts industry range from functional products that enhance vehicle performance to products that improve safety, stability, handling and appearance.
Products in the performance automotive aftermarket parts industry range from functional products that enhance vehicle performance to products that improve safety, stability, handling and appearance.
Historically, our annual costs of achieving and maintaining compliance with environmental, health and safety requirements have not been material to our financial results.
We believe we are in substantial compliance with all applicable environmental laws and regulations applicable to our plants and operations. Historically, our annual costs of achieving and maintaining compliance with environmental, health and safety requirements have not been material to our financial results.
Holley gives its subsidiaries the ability to lead their own community engagement initiatives through contributions to charities and participation in fundraising events.
Through these programs, Holley and its employees are able to give back to the community through monetary donations and by providing community services. Holley gives its subsidiaries the ability to lead their own community engagement initiatives through contributions to charities and participation in fundraising events.
We follow local, state and federal regulations issued by the Occupational Safety and Health Administration and are prepared to implement any applicable workplace requirements in order to keep our employees safe. Inclusion . We know that diversity throughout our company creates stronger teams, leads to innovation, and results in an organization that provides the best service to our customers.
We follow local, state and federal regulations issued by the Occupational Safety and Health Administration and are prepared to implement any applicable workplace requirements in order to keep our employees safe. Inclusion .
For example, we added an HSA-eligible health plan in 2024. We are committed to providing an array of benefits that meet the needs of our workforce, as demonstrated by the addition of an HSA-eligible health plan in 2024. Health, Safety and Wellness .
During the 2025 fiscal year, Holley matched employee contributions to the 401(k) Plan up to 3.5% each pay period. We are committed to providing an array of benefits that meet the needs of our workforce, as demonstrated by the addition of an HSA-eligible health plan in 2025 . Health, Safety and Wellness .
We aim to achieve those objectives more quickly than in the past by focusing on our four go-to-market consumer verticals and launching innovative new products, entering new product categories, implementing sales and marketing strategies to boost revenue, and through strategic acquisitions.
We aim to achieve those principles by focusing on our four go-to-market consumer verticals and launching innovative new products, entering new product categories, implementing sales and marketing strategies to boost revenue, and through strategic acquisitions. We also intend to achieve sustainable and long-term profitability by lowering our cost to serve, improving operational efficiencies, and focusing on higher-margin products and services.
MSD has historically been focused on production of ignition products and recently has been more focused on developing electronics for the powertrain category. • Simpson : Currently our fourth leading brand and represented 10% of our sales for 2024 .
MSD has historically focused on production of ignition products but recently is focusing more on developing electronics for the powertrain category. • Flowmaster : Currently our fourth largest brand, which represented 6% of our sales in 2025. Flowmaster's main focus is developing exhaust products. • Simpson : Currently our fifth largest brand, which represented 5% of our sales for 2025.
Our portfolio consists of over 70 brands spanning across over 30 product categories. Our top five brands generated 55% of our sales in 2024 . • Holley EFI : Currently our largest brand and represented 14% of our sales for 2024 .
Brands We have a strong portfolio of brands cover ing various product categories. Our portfolio consists of over 65 brands spanning across over 35 product categories. Our top five brands generated 49% of our sales in 2025. • Holley EFI : Currently our largest brand, which represented 17% of our sales for 2025.
Some of our operations require environmental permits and controls to prevent and reduce air and water pollution. These permits are subject to modification, renewal and revocation by issuing authorities. We believe we are in substantial compliance with all material environmental laws and regulations applicable to our plants and operations.
If we fail to comply with such laws and regulations, we could be subject to significant fines, penalties, costs, liabilities or restrictions on operations, which could affect our financial condition. Some of our operations require environmental permits and controls to prevent and reduce air and water pollution. These permits are subject to modification, renewal and revocation by issuing authorities.
Based on the value that we offer to our distribution partners, we are able to operate with pricing discipline that supports the value of our products in the marketplace and buttresses our profit margins.
Based on the value we provide to our distribution partners, we maintain disciplined pricing that preserves the value of our products in the marketplace and supports our profit margins. We believe our approach to pricing allows us to better understand consumer demand and identify what our end consumers are buying.
Distribution Partners : We have historically sold the majority of our products through distribution partners who purchase our products and distribute them through various channels.
We believe our control over our DTC channel provides our customers with quality brand engagement and further builds customer loyalty, while generating attractive margins. 8 Table of Contents Distribution Partners : We have historically sold the majority of our products through distribution partners, who purchase our products and subsequently distribute them through various channels.
We have a recruitment strategy that encourages diversity across the company. We leverage our employee referral program to identify diverse talent during the recruitment process. We believe our employees should reflect the customers we serve. Notably, approximatel y 30% of Holley consumers are female.
We know that diversity of thought and experience throughout our company creates stronger teams, leads to innovation, and results in an organization that provides the best service to our customers. We have a recruitment strategy that encourages diversity across the company. We leverage our employee referral program to identify diverse talent during the recruitment process. Our Culture .
Our socially responsible initiatives include donations to community organizations, sponsorship of local sports teams and weekend family events. Through these programs, Holley and its employees are able to give back to the community through monetary donations and by providing community services.
We are committed to social responsibility as a way of attracting talent, enhancing the employee experience, and strengthening our relationships with the communities we serve. Our socially responsible initiatives include donations to community organizations, sponsorship of local sports teams and weekend family events.
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We also intend to achieve sustainable and long-term profitability by lowering our cost to serve, improving operational efficiencies, and focusing on higher-margin products and services. Competition The performance automotive industry is highly competitive, and we face substantial competition in all the markets that we serve.
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Our success in the marketplace depends on our ability to execute our Business Strategy, discussed above. The performance automotive aftermarket parts industry in the United States is large and highly fragmented. In addition, we have seen consistent growth within the automotive aftermarket parts industry over the last two decades.
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Niche custom manufacturers are typically local or regionally focused, and some also may distribution partners customized products from other manufactured brands.
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However, new requirements, more stringent application of existing requirements or the discovery of previously unknown environmental conditions could result in material environmental related expenditures in the future. See " Legal, Regulatory and Compliance Risks Related to Our Business.
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Simpson is focused on motorsport safety products including helmets, head and neck restraints, seat belts and fire suits. • Flowmaster : Currently our seventh largest brand and represented 6% of our sales in 2024 . Flowmaster's main focus is on developing exhaust products.
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" We are subject to environmental, health, safety, and other governmental laws and regulations, which could subject us to liabilities, increase our costs or restrict our operations in the future" within Item 1A. Risk Factors in this Annual Report on Form 10-K.
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We believe our approach to pricing allows us to better understand consumer demand and identify what our end consumers are buying. 8 Table of Contents Intellectual Property Patents, trademarks, and other proprietary rights are important to the continued success of our business.
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Increasing global efforts to control emissions of carbon dioxide, methane, ozone, nitrogen oxide and other greenhouse gases and pollutants, as well as the shifting focus of regulatory efforts towards total emissions output, have the potential to impact our facilities, costs, products and customers. The U.S.
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Environmental Protection Agency has taken action to control greenhouse gases from certain stationary and mobile sources. In addition, several states have taken steps, such as adoption of cap-and-trade programs or other regulatory systems, to address greenhouse gases. There have also been international efforts seeking legally binding reductions in emissions of greenhouse gases.
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These developments and further actions that may be taken in the U.S. and in other countries, states or provinces could affect our operations both positively and negatively (e.g., by affecting the demand for or suitability of some of our products).
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Our goal is to create an inclusive and safe environment for our employees that keeps them engaged in their work. 9 Table of Contents Compensation and Benefits . We strive to hire, develop and retain top talent.
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During the 2024 fiscal year, Holley matched employee contributions to the 401(k) Plan up to 3.5% each pay period, and made an additional discretionary match of up to 1.5% based on company performance to target. We suspended the 401(k) match effective July 2024, but we are committed to providing an array of benefits that meet the needs of our workforce.
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Accordingly, we recognize the benefits of female representation in our workforce, and in 2024 39% of our workforce were women. We are committed to closing the gender gap and our recruitment and retention strategies support improving women’s representation in leadership roles. Our Culture .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBased on that evaluation, we have concluded that our disclosure controls and procedures were not effective as of December 31, 2024, due to a material weakness in internal control over financial reporting.
Biggest changeAs previously disclosed, in connection with our year-end assessment of internal control over financial reporting for fiscal year 2024, our management determined that, as of December 31, 2024, we had not maintained effective internal control over financial reporting due to a material weakness in internal control over financial reporting based on our conclusion that we did not have sufficient resources with the appropriate accounting expertise that resulted in a lack of adequate controls with respect to the preparation and precision of review of reconciliations, manual journal entries and third party reports supporting journal entries.
Disruptions of supply or shortages of raw materials or components used in our products could harm our business and profitability. We have experienced, and may continue to experience, disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of steel, non-ferrous metals and precious metals.
Disruptions of supply or shortages of raw materials or components used in our products could continue to harm our business and profitability. We have experienced, and may continue to experience, disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of steel, non-ferrous metals and precious metals.
Forecasting the demand for our products is very difficult given the manufacturing lead time and the amount of specification involved, especially given market volatility. Aside from supply chain disruptions and inflationary pressures, forecasting demand for specific automotive parts can also be challenging due to changing consumer preferences and competitive pressures and longer supply lead times.
Forecasting the demand for our products is very difficult given the manufacturing lead time and the amount of specification involved, especially given market volatility. Aside from supply chain disruptions and inflationary pressures, forecasting demand for specific automotive parts can also be challenging due to changing consumer preferences, competitive pressures, and longer supply lead times.
We are required to make quarterly payments of principal plus accrued interest. The Credit Agreement imposes various restrictions and contains customary affirmative and restrictive covenants, including, without limitation, certain reporting obligations, certain limitations on restricted payments, and limitations on liens, encumbrances and indebtedness.
We are required to make quarterly payments of principal plus accrued interest. The Credit Agreement imposes various restrictions and contains customary affirmative and restrictive covenants, including, without limitation, certain reporting obligations, certain limitations on restricted payments, and certain limitations on liens, encumbrances and indebtedness.
These risks may include, but are not limited to: • shortages of key component parts used in our products sourced from non-U.S. suppliers; • increased transportation costs; • significant delays in the delivery of cargo due to port security considerations; • imposition of duties, taxes, tariffs or other charges on imports; • potential recalls or cancellations of orders for any product that does not meet our quality standards; • disruption of imports by labor disputes or strikes and local business practices; • currency exchange rate fluctuations; • heightened terrorism security concerns, which could subject imported goods to additional, more frequent or more thorough inspections, leading to delays in deliveries or impoundment of goods for extended periods; • political tensions and military conflicts (including the conflict in Ukraine, the conflict in Israel and surrounding areas, and the possible expansion of such conflicts); • natural disasters, disease, epidemics and health related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; • inability of our non-U.S. suppliers to obtain adequate credit or access liquidity to finance their operations; and • our ability or inability to enforce any agreements with our foreign suppliers.
These risks may include, but are not limited to: • shortages of key component parts used in our products sourced from non-U.S. suppliers; • increased transportation costs; • significant delays in the delivery of cargo due to port security considerations; • imposition of duties, taxes, tariffs or other charges on imports; • potential recalls or cancellations of orders for any product that does not meet our quality standards; • disruption of imports by labor disputes or strikes and local business practices; • currency exchange rate fluctuations; • heightened terrorism security concerns, which could subject imported goods to additional, more frequent or more thorough inspections, leading to delays in deliveries or impoundment of goods for extended periods; • political tensions and military conflicts (including the conflict in Ukraine, the conflict in the Middle East and surrounding areas, and the possible expansion of such conflicts); • natural disasters, disease, epidemics and health related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; • inability of our non-U.S. suppliers to obtain adequate credit or access liquidity to finance their operations; and • our ability or inability to enforce any agreements with our foreign suppliers.
These events could also make any necessary debt or equity financing more difficult and/or costly. The future effect of these events on the financial services industry and broader economy are unknown and difficult to predict but could include failures of other financial institutions to which we or our customers, vendors, or other counterparties face direct or more significant exposure.
These events could also make any necessary debt or equity financing more difficult and/or costly. The future effect of these events on the financial services industry and broader economy are unknown and difficult to predict but could include failures of other financial institutions to which we or our customers, vendors, or other counterparties may face direct or more significant exposure.
The growth of our business will depend, in part, on our ability to continue to expand our retail partner and customer bases in the United States, as well as in international markets. In these markets, we may face challenges that are different from those we currently encounter, including competition, merchandising, distribution, hiring, and other difficulties.
The growth of our business will depend, in part, on our ability to continue to expand our distribution partner and customer bases in the United States, as well as in international markets. In these markets, we may face challenges that are different from those we currently encounter, including competition, merchandising, distribution, hiring, and other difficulties.
Only a portion of the intellectual property used in the manufacture and design of our products is patented, and we, therefore, rely significantly on trade secrets, trade and service marks, trade dress, and the strength of our brands. We regard our patents, trade dress, trademarks, copyrights, trade secrets, and similar proprietary rights as critical to our success.
Only a portion of the intellectual property used in the manufacture and design of our products is patented, and we rely significantly on trade secrets, trade and service marks, trade dress, and the strength of our brands. We regard our patents, trade dress, trademarks, copyrights, trade secrets, and similar proprietary rights as critical to our success.
Our reliance on foreign suppliers for some of the automotive parts we sell to our customers or include in our products presents risks to the business . A portion of automotive parts and components we use in our manufacturing processes are imported from suppliers located outside the U.S.
Our reliance on foreign suppliers for some of the automotive parts we sell or include in our products presents risks to the business. A portion of automotive parts and components we use in our manufacturing processes are imported from suppliers located outside the U.S.
On July 16, 2021, (th e “Closing” and such date, the “Closing Date”), the Company, the Sponsor, certain affiliates of the Sponsor, the Holley Stockholder and Sentinel Capital Partners V, L.P., Sentinel Capital Partners V-A, L.P. and Sentinel Capital Investors V, L.P., controlling affiliates of the Holley Stockholder entered into the Stockholders’ Agreement, pursuant to which the Holley Stockholder and the Sponsor have the right to designate nominees for election to our board of directors subject to certain beneficial ownership requirements.
On July 16, 2021, (the “Closing” and such date, the “Closing Date”), the Company, the Sponsor, certain affiliates of the Sponsor, the Holley Stockholder and Sentinel Capital Partners V, L.P., Sentinel Capital Partners V-A, L.P. and Sentinel Capital Investors V, L.P., controlling affiliates of the Holley Stockholder entered into the Stockholders’ Agreement, pursuant to which the Holley Stockholder and the Sponsor have the right to designate nominees for election to our board of directors subject to certain beneficial ownership requirements.
Any of the foregoing factors, or a combination of them, could increase the cost or reduce the supply of products available to us and materially and adversely impact our business, sales, financial condition and results of operations. 17 Table of Contents We depend on retail partners to display and present our products to customers, and our failure to maintain and further develop our relationships with retail partners could harm our business.
Any of the foregoing factors, or a combination of them, could increase the cost or reduce the supply of products available to us and materially and adversely impact our business, sales, financial condition and results of operations. 17 Table of Contents We depend on distribution partners to display and present our products to customers, and our failure to maintain and further develop our relationships with distribution partners could harm our business.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the certificate of incorporation to be inapplicable or unenforceable in such action. 32 Table of Contents Item 1B.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been 32 Table of Contents challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the certificate of incorporation to be inapplicable or unenforceable in such action.
Our success depends on the value and reputation of our brands, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our e-commerce platform and retail partner floor spaces, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service.
Our success depends on the value and reputation of our brands, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our e-commerce platform and distribution partner floor spaces, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service.
If our retail partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower gross margins, which would harm our business, financial condition and results of operations. If our plans to increase sales through our DTC channel are not successful, our business, sales, financial condition and results of operations could be harmed.
If our distribution partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower gross margins, which would harm our business, financial condition and results of operations. If our plans to increase sales through our DTC channel are not successful, our business, sales, financial condition and results of operations could be harmed.
These events have resulted in market disruption and volatility and future similar events could lead to greater instability in the credit and financial markets and a deterioration in confidence in economic conditions. Our operations may be adversely affected by any such economic downturn, liquidity shortages, volatile business environments, or unpredictable market conditions.
Recent events have resulted in market disruption and volatility and future similar events could lead to greater instability in the credit and financial markets and a deterioration in confidence in economic conditions. Our operations may be adversely affected by any such economic downturn, liquidity shortages, volatile business environments, or unpredictable market conditions.
Warrants are exercisable for Common Stock, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. On December 31, 2024, we had an aggregate of 14,633,311 Warrants issued and outstanding, representing the right to purchase an equivalent number of shares of Common Stock.
Warrants are exercisable for Common Stock, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. On December 31, 2025, we had an aggregate of 14,633,311 Warrants issued and outstanding, representing the right to purchase an equivalent number of shares of Common Stock.
Failure to detect, prevent, or fix defects could result in a variety of consequences, including a greater number of product returns than expected from customers and retail partners, litigation, product recalls, and credit claims, among others, which could harm our business, sales, financial condition and results of operations.
Failure to detect, prevent, or fix defects could result in a variety of consequences, including a greater number of product returns than expected from customers and distribution partners, litigation, product recalls, and credit claims, among others, which could harm our business, sales, financial condition and results of operations.
Our growth depends, in part, on expanding into additional consumer markets, and we may not be successful in doing so. We believe that our future growth depends not only on continuing to reach our current core demographic, but also continuing to broaden our retail partner and customer bases.
Our growth depends, in part, on expanding into additional consumer markets, and we may not be successful in doing so. We believe that our future growth depends not only on continuing to reach our current core demographic, but also continuing to broaden our distribution partner and customer bases.
If some investors find our Common Stock and Warrants less attractive as a result, there may be a less active trading market for our Common Stock and Warrants and more stock price volatility. 31 Table of Contents Delaware law and our certificate of incorporation and bylaws contain certain provisions, including anti- takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 31 Table of Contents Delaware law and our certificate of incorporation and bylaws contain certain provisions, including anti- takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
Our relationships with these retail partners are important to the authenticity of our brands and the marketing programs we continue to deploy. Our failure to maintain these relationships with our retail partners or financial difficulties experienced by these retail partners could harm our business. We have key relationships with national retail partners.
Our relationships with these distribution partners are important to the authenticity of our brands and the marketing programs we continue to deploy. Our failure to maintain these relationships with our distribution partners or financial difficulties experienced by these distribution partners could harm our business. We have key relationships with national distribution partners.
Because Holley is a premium brand, our sales depend, in part, on retail partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training their sales personnel to sell our products.
Because Holley is a premium brand, our sales depend, in part, on distribution partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training their sales personnel to sell our products.
A significant or prolonged decline in general economic conditions or uncertainties regarding future economic prospects that adversely affect consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which in turn would have an adverse impact on our business, sales, financial condition and results of operations.
A significant or prolonged decline in general economic conditions or 12 Table of Contents uncertainties regarding future economic prospects that adversely affect consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which in turn would have an adverse impact on our business, sales, financial condition and results of operations.
Item 1A. Risk Factors The following discussion of "Risk Factors" identifies factors that may adversely affect our business, operations, financial condition or future performance. This information should be read in conjunction with “Cautionary Note Regarding Forward-Looking Statements, ” "Management ’ s Discussion and Analysis of Financial Condition and Result of Operations" and the consolidated financial statements and related notes.
Item 1A. Risk Factors The following discussion of "Risk Factors" identifies factors that may adversely affect our business, operations, financial condition or future performance. This information should be read in conjunction with “Cautionary Note Regarding Forward-Looking Statements,” "Management’s Discussion and Analysis of Financial Condition and Result of Operations" and the consolidated financial statements and related notes.
Failure to maintain security of the data we hold could also result in violations of applicable privacy, data security and other laws, potentially subjecting us to lawsuits, fines and other forms of regulatory enforcement . While we have implemented security measures, our information technology systems remain susceptible to cyber-attacks, viruses and other disruptions and security compromises.
Failure to maintain security of the data we hold could also result in violations of applicable privacy, data security and other laws, potentially subjecting us to lawsuits, fines and other forms of regulatory enforcement. While we have 19 Table of Contents implemented security measures, our information technology systems remain susceptible to cyber-attacks, viruses and other disruptions and security compromises.
In particular, the U.S. government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and an addition of further limitations on the deductibility of business interest.
In particular, the U.S. government may enact 27 Table of Contents significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and an addition of further limitations on the deductibility of business interest.
None of the Private Warrants will be redeemable by us so long as they are held by the Sponsor, or its permitted transferees. The NYSE may delist our securities from trading on its exchange, which could limit stockholders ’ ability to make transactions in our securities and subject us to additional trading restrictions.
None of the Private Warrants will be redeemable by us so long as they are held by the Sponsor, or its permitted transferees. The NYSE may delist our securities from trading on its exchange, which could limit stockholders’ ability to make transactions in our securities and subject us to additional trading restrictions.
If we lose any of our key retail partners or any key retail partner reduces their purchases of our existing or new products or their number of stores or operations, or promotes products of our competitors over ours, our sales would be harmed.
If we lose any of our key distribution partners or any key distribution partner reduces their purchases of our existing or new products or their number of stores or operations, or promotes products of our competitors over ours, our sales would be harmed.
These impacts may include, but are not limited to: ▪ Significant reductions, shifts or fluctuations in demand for one or more of our products; ▪ Inability to meet our customers’ needs due to disruptions in our manufacturing and supply chain arrangements caused by the loss or disruption of essential manufacturing and supply chain elements.
These impacts may include, but are not limited to: • Significant reductions, shifts or fluctuations in demand for one or more of our products; 24 Table of Contents • Inability to meet our customers’ needs due to disruptions in our manufacturing and supply chain arrangements caused by the loss or disruption of essential manufacturing and supply chain elements.
Our failure to comply with such environmental, health and safety laws and regulations could result in substantial civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring remedial or corrective measures, installation of pollution control equipment or other actions.
Our failure to comply with such environmental, health and safety laws and regulations could result in substantial civil or criminal fines or penalties or enforcement actions, including 26 Table of Contents regulatory or judicial orders enjoining or curtailing operations or requiring remedial or corrective measures, installation of pollution control equipment or other actions.
We sell a significant amount of our products through knowledgeable national, regional, and independent retail partners. Our retail partners service customers by stocking and displaying our products, explaining the attributes of our products, and sharing the story of our brands.
We sell a significant amount of our products through knowledgeable national, regional, and independent distribution partners. Our distribution partners service customers by stocking and displaying our products, explaining the attributes of our products, and sharing the story of our brands.
If we are unable to develop or deploy new technologies as effectively or efficiently as our competitors, our business, financial condition, and results of operations could be materially and adversely impacted. 25 Table of Contents Legal, Regulatory and Compliance Risks Related to Our Business We may become involved in legal or regulatory proceedings and audits.
If we are unable to develop or deploy new technologies as effectively or efficiently as our competitors, our business, financial condition, and results of operations could be materially and adversely impacted. Legal, Regulatory and Compliance Risks Related to Our Business We may become involved in legal or regulatory proceedings and audits.
If we are unable to hire or retain skilled personnel, our results of operations would suffer. 18 Table of Contents Our operations and reputation may be negatively impacted if our information technology systems fail to perform adequately or if we experience an interruption in our operations due to security threats or disruptions.
If we are unable to hire or retain skilled personnel, our results of operations would suffer. Our operations and reputation may be negatively impacted if our information technology systems fail to perform adequately or if we experience an interruption in our operations due to security threats or disruptions.
The exercise price of the Warrants is $11.50 per share. To the extent such Warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to our stockholders and increase the number of shares eligible for resale in the public market.
The exercise price of the Warrants is 28 Table of Contents $11.50 per share. To the extent such Warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to our stockholders and increase the number of shares eligible for resale in the public market.
Our manufacturing facilities and distribution centers are highly automated, which means that our operations are complicated and may be subject to a number of risks related to computer viruses, the proper operation of software and hardware, electronic or power interruptions, and other system failures, including failures caused by factors outside of our control, such as political unrest, terrorist attacks, military conflicts (including the conflict in Ukraine, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), natural disasters or extreme weather (including events that may be caused or exacerbated by climate change).
Our manufacturing facilities and distribution centers are highly automated, which means that our operations are complicated and may be subject to a number of risks related to computer viruses, the proper operation of software and hardware, electronic or power interruptions, cybersecurity risks, data breaches, and other system failures, including failures caused by factors outside of our control, such as political unrest, terrorist attacks, military conflicts (including the conflict in Ukraine, the conflict in the Middle East and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), natural disasters or extreme weather (including events that may be caused or exacerbated by climate change).
In addition, public health crises, geopolitical instability (including the conflicts in Ukraine and Israel and surrounding areas, and the possible expansion of such conflicts and China-Taiwan relations), tariffs, as well as other global events have significantly increased global macroeconomic uncertainty and volatility.
In addition, public health crises, geopolitical instability (including the conflicts in Ukraine and the Middle East and surrounding areas, and the possible expansion of such conflicts and China-Taiwan relations), tariffs, as well as other global events have significantly increased global macroeconomic uncertainty and volatility.
This could materially harm our business, sales, financial condition and results of operations. If we fail to attract new customers, or fail to do so in a cost-effective manner, we may not be able to increase sales.
This could materially harm our business, sales, financial condition and results of operations. If we fail to keep our existing customers, attract new customers, or fail to do so in a cost-effective manner, we may not be able to maintain or increase sales.
As our business continues to expand, our competitors have imitated or attempted to imitate, and will likely continue to imitate or attempt to imitate, our product designs and branding, which could harm our business, sales, financial condition and results of operations.
Our competitors have imitated or attempted to imitate, and will likely continue to imitate or attempt to imitate, our product designs and branding, which could harm our business, sales, financial condition and results of operations.
This shift could force us to reduce prices for our products in order to compete. Conversely, rapid increases in demand due to improving economic conditions could lead to supply chain challenges. Global markets continued to face threats and uncertainty during fiscal year 2024.
This shift could force us to reduce prices for our products in order to compete. Conversely, rapid increases in demand due to improving economic conditions could lead to supply chain challenges. Global markets continued to face threats and uncertainty during 2025.
See Litigation in Note 18 “Commitments and Contingencies.” We could face additional securities litigation class action lawsuits in the future. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.
See Litigation in Note 18 29 Table of Contents “ Commitments and Contingencies .” We could face additional securities litigation class action lawsuits in the future. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.
All shares held by our affiliates are eligible for resal e in the public market, subject to applicable securities laws, including the Securities Act.
All shares held by our affiliates are eligible for resale in the public market, subject to applicable securities laws, including the Securities Act.
On November 18, 2021, we entered into a credit facility with a syndicate of lenders and Wells Fargo Bank, N.A., as administrative agent for the lenders, letter of credit issuer and swing line lender (as amended, the "Credit Agreement"). On December 31, 2024, $560.9 million in principal was outstanding under the credit facility.
On November 18, 2021, we entered into a credit facility with a syndicate of lenders and Wells Fargo Bank, N.A., as administrative agent for the lenders, letter of credit issuer and swing line lender (as amended, the "Credit Agreement"). On December 31, 2025, $529.4 million in principal was outstanding under the credit facility.
The standards by which ESG efforts and related matters are measured are developing and evolving, and we could be criticized for the scope of our initiatives and goals, or lack thereof.
The standards by which our efforts and operations are measured are developing and evolving, and we could be criticized for the scope of our initiatives and goals, or lack thereof.
We cannot predict if investors will find our Common Stock and Warrants less attractive because we will rely on these exemptions.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
On December 31, 2024, the Holley Stockholder and the Sponsor (together with its affiliates) beneficially own, in the aggregate, approximately 43% of our shares of Common Stock, excluding any warrants exercisable for Common Stock held by Sponsor or its affiliates (or 46% inclusive of shares of Common Stock underlying Warrants held by Sponsor and its affiliates).
On December 31, 2025, the Holley Stockholder and the Sponsor (together with its affiliates) beneficially own, in the aggregate, approximately 29% of our shares of Common Stock, excluding any warrants exercisable for Common Stock held by Sponsor or its affiliates (or 32% inclusive of shares of Common Stock underlying Warrants held by Sponsor and its affiliates).
On December 31, 2024, the Holley Stockholder and the Sponsor (together with its affiliates) beneficially own, in the aggregate, approximately 43% of shares of Common Stock, excluding any Warrants exercisable for Common Stock held by Sponsor or its affiliates (or 46% inclusive of shares of Common Stock underlying Warrants held by Sponsor and its affiliates).
On December 31, 2025, the Holley Stockholder and the Sponsor (together with its affiliates) beneficially own, in the aggregate, approximately 29% of shares of Common Stock, excluding any Warrants exercisable for Common Stock held by Sponsor or its affiliates (or 32% inclusive of shares of Common Stock underlying Warrants held by Sponsor and its affiliates).
In addition, we may incur higher costs for transportation, workforce and distribution capability in order to maintain the supply of product to our customers; ▪ Failure of third parties upon which we rely, including our suppliers, contract manufacturers, distributors, contractors and commercial banks, to meet their obligations to us in a timely manner; and ▪ Significant changes in the political and regulatory landscape in the markets in which we manufacture, sell or distribute our products, which may include, but are not limited to, restrictions on international trade, governmental or regulatory actions, closures or other restrictions that limit or suspend our or our third-party partners' or customers' operating and/or manufacturing capabilities, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results. 12 Table of Contents Unfavorable economic conditions could have an adverse impact on consumer discretionary spending and therefore adversely impact our business, sales, financial condition and results of operations.
In addition, we may incur higher costs for transportation, workforce and distribution capability in order to maintain the supply of product to our customers; • Failure of third parties upon which we rely, including our suppliers, contract manufacturers, distributors, contractors and commercial banks, to meet their obligations to us in a timely manner; and • Significant changes in the political and regulatory landscape in the markets in which we manufacture, sell or distribute our products, which may include, but are not limited to, restrictions on international trade, governmental or regulatory actions, closures or other restrictions that limit or suspend our or our third-party partners' or customers' operating and/or manufacturing capabilities, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results.
Although our ability to amend the terms of the Warrants with the consent of at least 50% of the then outstanding Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, shorten the exercise period or decrease the number of Common Stock purchasable upon exercise of a Warrant. 28 Table of Contents The market price and trading volume of Common Stock and Warrants may be volatile.
Although our ability to amend the terms of the Warrants with the consent of at least 50% of the then outstanding Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, shorten the exercise period or decrease the number of Common Stock purchasable upon exercise of a Warrant.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for Common Stock and Warrants could decrease, which might cause the market price and trading volume of our Common Stock and Warrants to decline significantly. 29 Table of Contents Future sales of our Common Stock and Warrants in the public market could cause our stock price to fall.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for Common Stock and Warrants could decrease, which might cause the market price and trading volume of our Common Stock and Warrants to decline significantly.
If we are unable to protect or preserve the value of our patents, trade dress, trademarks, copyrights, or other intellectual property rights for any reason, or if we fail to maintain the image of our brands due to actual or perceived product or service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, our brands and reputation could be damaged, and our business may be harmed. 16 Table of Contents Our profitability may decline as a result of increasing pressure on pricing.
If we are unable to protect or preserve the value of our patents, trade dress, trademarks, copyrights, or other intellectual property rights for any reason, or if we fail to maintain the image of our brands due to actual or perceived product or service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, our brands and reputation could be damaged, and our business may be harmed.
Despite the actions we have undertaken to minimize these impacts, there can be no assurance that unforeseen future events in the global supply chain and our ability to pass on inflationary costs to our customers could have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents A significant disruption in the operations of our manufacturing facilities or distribution centers could have a material adverse effect on our business, sales, financial condition and results of operations.
Despite the actions we have undertaken to minimize these impacts, there can be no assurance that unforeseen future events in the global supply chain and our ability to pass on inflationary costs to our customers could have a material adverse effect on our business, financial condition and results of operations.
Some of our competitors may have larger customer bases and significantly greater financial, technical and marketing resources than we do. These factors may allow our competitors to respond more quickly than we can to new or emerging technologies and changes in customer requirements by devoting greater resources than we can to the development, promotion and sale of automotive aftermarket products.
These factors may allow our competitors to respond more quickly than we can to new or emerging technologies and changes in customer requirements by devoting greater resources than we can to the development, promotion and sale of automotive aftermarket products.
The threat of our debt being accelerated in connection with a change of control could make it more difficult for us to attract potential buyers or to consummate a change of control transaction that would otherwise be beneficial to our stockholders. Our failure to maintain effective internal controls over financial reporting could harm us.
The threat of our debt being accelerated in connection with a change of control could make it more difficult for us to attract potential buyers or to consummate a change of control transaction that would otherwise be beneficial to our stockholders.
Stock markets, including the NYSE, have from time-to-time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for Common Stock and Warrants, the market price of Common Stock and Warrants may be volatile and could decline significantly, whether or not any price changes are related to matters specific to us.
Even if an active, liquid and orderly trading market develops and is sustained for Common Stock and Warrants, the market price of Common Stock and Warrants may be volatile and could decline significantly, whether or not any price changes are related to matters specific to us.
GAAP for each period. Our disclosure controls and procedures may not prevent or detect all acts of fraud.
Our disclosure controls and procedures may not prevent or detect all acts of fraud.
Our Common Stock and Warrants are currently listed on NYSE. We cannot assure that our securities will continue to be listed on the NYSE. In order to continue listing our securities on the NYSE, we are required to maintain certain financial, distribution and stock price levels. Generally, we are required to maintain a minimum amount of stockholders’ equity.
Our Common Stock and Warrants are currently listed on NYSE. We cannot assure that our securities will continue to be listed on the NYSE. In order to continue listing our securities on the NYSE, we are required to 30 Table of Contents maintain certain financial, distribution and stock price levels.
Increased competition could put additional pressure on us to reduce prices or take other actions, which may have an adverse effect on our business, sales, financial condition and results of operations. We may also lose significant customers or lines of business to competitors. If we are unable to successfully design, develop and market new products, our business may be harmed.
Increased competition could put additional pressure on us to reduce prices or take other actions, which may have an adverse effect on our business, sales, financial condition and results of operations. We may also lose significant customers or lines of business to competitors.
A significant disruption at any of our manufacturing facilities or distribution centers could materially and adversely affect our business, sales, financial condition and results of operations.
A significant disruption in the operations of our manufacturing facilities or distribution centers could have a material adverse effect on our business, sales, financial condition and results of operations. A significant disruption at any of our manufacturing facilities or distribution centers could materially and adversely affect our business, sales, financial condition and results of operations.
Our industry is subject to significant pricing pressure caused by many factors, including unfavorable economic conditions, intense competition, tariffs and other trade restrictions, consolidation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer demand.
Our profitability may decline as a result of increasing pressure on pricing. Our industry is subject to significant pricing pressure caused by many factors, including unfavorable economic conditions, intense competition, tariffs and other trade restrictions, consolidation in the retail industry, pressure 16 Table of Contents from retailers to reduce the costs of products, and changes in consumer demand.
If we fail to comply with the evolving customer or investor or employee expectations and standards, or if we are perceived to have failed to adequately respond to such expectations and standards (including opposition to various ESG practices), we may suffer from reputational damage, which could have an adverse impact on our business or financial condition. 24 Table of Contents We are exposed to political or country risk inherent in doing business in some countries, including China.
If we fail to comply with the evolving customer, investor, or employee expectations and standards, or if we are perceived to have failed to adequately respond to such expectations and standards (including opposition to various such practices), we may suffer from reputational damage, which could have an adverse impact on our business or financial condition.
If we fail to comply with the covenants or payments specified in the Credit Agreement, the lender could declare an event of default, which would give it the right to declare all borrowings outstanding, together with any accrued and unpaid interest and fees, to be immediately due and payable.
Failure to comply with the covenants, payments, and certain other provisions of the Credit Agreement, or the occurrence of a change of control, could result in an event of default, which would give the lender the right to declare all borrowings outstanding, together with any accrued and unpaid interest and fees, to be immediately due and payable.
Any failure to maintain internal control over financial reporting, or any failure to fully remediate the existing or any future material weaknesses that may be found to exist, could inhibit our ability to accurately and on a timely basis report our cash flows, results of operations or financial condition in compliance with applicable securities laws.
In doing so, we could identify material weaknesses in our internal controls or result in adverse opinion. 21 Table of Contents In addition, any failure to maintain internal control over financial reporting, or any failure to fully remediate the existing or any future material weaknesses, could inhibit our ability to accurately and on a timely basis report our cash flows, results of operations or financial condition in compliance with applicable securities laws.
If this were to occur, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future. 30 Table of Contents The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Common Stock and Warrants are listed on the NYSE, they are covered securities.
If this were to occur, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
Until our remediation plan is fully implemented, our management will continue to devote significant time and attention to these efforts. Any failure to implement our remediation plan or any difficulties we encounter with our remediation plan could result in additional material weaknesses or deficiencies in our internal control or future material misstatements in our annual or interim financial statements.
Any failure to implement our remediation plan or any difficulties we encounter with our remediation plan could result in additional material weaknesses or deficiencies in our internal control or future material misstatements in our annual or interim financial statements.
If such an event of default and acceleration of the Loan Parties’ obligations occurs, subject to intercreditor agreements agreed to by the lenders, the lenders under the Credit Agreement would have the right to proceed against the collateral the Loan Parties granted to them to secure such indebtedness.
If such an event of default and acceleration of obligations occurs, the lenders under the Credit Agreement would have the right to proceed against the collateral securing such indebtedness.
Our risk management, business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of catastrophic events or longer-term developments, such as the impacts of climate change. Failure to compete effectively could reduce our market share and significantly harm our business, sales, financial condition and results of operations.
Our risk management, business continuity and disaster 13 Table of Contents recovery plans may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of catastrophic events or longer-term developments, such as the impacts of climate change.
For 2024, we generated approximately $149.5 m illion in gross sales through our DTC channel. Part of our growth strategy involves increasing sales through our DTC channel.
For 2025, we generated approximately $144.9 million in gross sales through our DTC channel. Part of our growth strategy involves increasing sales through our DTC channel.
Any such developments could adversely impact our results of operation and financial position, and there may be other risks we have not yet identified. 20 Table of Contents Our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in our current credit agreements, our business, sales, financial condition and results of operations could be harmed.
Our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in our current credit agreements, our business, sales, financial condition and results of operations could be harmed.
While we have contingency plans and insurance coverage for potential liabilities of this nature, they may not be sufficient to cover all claims and liabilities and in some cases are subject to deductibles and layers of self-insured retention. 19 Table of Contents We are exposed to risks related to the failure to protect the integrity of individually identifiable information of our customers, vendors, suppliers and employees.
While we have contingency plans and insurance coverage for potential liabilities of this nature, they may not be sufficient to cover all claims and liabilities and in some cases are subject to deductibles and layers of self-insured retention.
Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require increased capital expenditures to improve our product portfolio to meet such new laws, regulations and standards.
Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require increased capital expenditures to improve our product portfolio to meet such new laws, regulations and standards. Evolving expectations with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
We cannot provide assurance that any acquisition, once integrated, will perform as planned, be accretive to earnings, or prove to be beneficial to our results of operations or cash flow.
It may not be possible to achieve the expected synergies or the actual cost of delivering such benefits may exceed the anticipated cost. We cannot provide assurance that any acquisition, once integrated, will perform as planned, be accretive to earnings, or prove to be beneficial to our results of operations or cash flow.
Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within our company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.
Because of the inherent limitations in all 22 Table of Contents control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within our company have been prevented or detected.
Even in the event that increased costs can be passed through to customers, our gross margin percentages may decline. Additionally, our suppliers are also subject to fluctuations in the prices of raw materials and may attempt to pass all or a portion of such increases on to us.
Additionally, our suppliers are also subject to fluctuations in the prices of raw materials and may attempt to pass all or a portion of such increases on to us. In the event they are successful in doing so, our margins would decline.
Our business operations are dependent on information technology systems, which manage crucial functions such as manufacturing, distribution, sales, accounting, and communications. Effective resource allocation and management are vital for building, sustaining, and safeguarding these systems. Failure to do so, including inadequate oversight of system upgrades or third-party service providers, could negatively impact our business and financial results.
Our business operations are dependent on information technology systems, which manage crucial functions such as manufacturing, distribution, sales, accounting, and communications. Effective resource allocation and management are vital for building, sustaining, and safeguarding these systems.
Our ability to enter into and complete acquisitions may be restricted by, or subject to, various approvals under U.S. or other applicable law or may not otherwise be possible, may result in a possible dilutive issuance of our securities, or may require us to seek additional financing. 22 Table of Contents In addition, following completion of an acquisition, our management and resources may be diverted from their core business activities due to the integration process, which diversion may harm the effective management of our business.
Our ability to enter into and complete acquisitions may be restricted by, or subject to, various approvals under U.S. or other applicable law or may not otherwise be possible, may result in a possible dilutive issuance of our securities, or may require us to seek additional financing.
We use raw materials directly in manufacturing and in components that we purchase from our suppliers. We generally purchase components with significant raw material content on the open market. Volatility in the prices of raw materials such as steel, aluminum and nickel could continue to increase the cost of manufacturing our products.
Our products contain various raw materials, including corrosion-resistant steel, non-ferrous metals such as aluminum and nickel, and precious metals such as platinum and palladium. We use raw materials directly in manufacturing and in components that we purchase from our suppliers. We generally purchase components with significant raw material content on the open market.
There can be no assurance that the outcomes from such examinations, or changes in tax law or regulation impacting our effective tax rates, will not have an adverse effect on our business, financial condition and results of operations. 27 Table of Contents Risks Related to Ownership of Our Securities Certain of our stockholders, including the Holley Stockholder and the Sponsor, may have conflicts of interest with other stockholders and may limit other stockholders' ability to influence corporate matters.
There can be no assurance that the outcomes from such examinations, or changes in tax law or regulation impacting our effective tax rates, will not have an adverse effect on our business, financial condition and results of operations.
The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2024, in conjunction with its budgeting and forecasting process for fiscal year 2025 and concluded that impairment existed for its reporting unit.
The Company completed its annual goodwill and intangible assets impairment analysis in the fourth quarter of fiscal 2025, in conjunction with its budgeting and forecasting process for fiscal year 2026 and concluded that no material impairment existed for its reporting unit or intangible assets. 23 Table of Contents Global climate change and related regulations could negatively affect our business.
Discretionary spending is also affected by many other factors, including general business conditions, inflation, interest rates, the availability of consumer credit, taxes, and consumer confidence in future economic conditions. Purchases of our products could decline during periods when disposable income is lower, or during periods of actual or perceived unfavorable economic conditions.
Consumers are generally more willing to make discretionary purchases of automotive products during favorable economic conditions and when consumers are feeling confident and prosperous. Discretionary spending is also affected by many other factors, including general business conditions, inflation, interest rates, the availability of consumer credit, taxes, and consumer confidence in future economic conditions.
We may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value. Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value.
Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value.
Events affecting the financial services industry could have an adverse impact on the Company's business operations, financial condition, and results of operations. The closures of certain regional banks have created bank-specific and broader financial institution liquidity risk and concerns.
Events affecting the financial services industry could have an adverse impact on the Company's business operations, financial condition, and results of operations. Periods of banking sector stress, reduced market liquidity, or tightening credit conditions may create bank specific and broader financial institution liquidity risks and concerns.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThird-Party Risk Management Our information technology team is responsible for identifying and managing any cybersecurity threats that occur with our vendors and suppliers. The team communicates with our suppliers and vendors and relies on them to apprise Holley of any cybersecurity issues.
Biggest changeWe have created an Incident Response Plan that provides our support team with a clear framework for effectively responding to significant incidents. 33 Table of Contents Third-Party Risk Management Our information technology team is responsible for identifying and managing any cybersecurity threats that occur with our vendors, service providers, and suppliers.
Management ’ s Role Holley’s information technology team, which is responsible for developing and implementing our cybersecurity program, currently operates under the oversight of our Chief Information Officer (“CIO”). The CIO is generally responsible for managing risks from cybersecurity threats, as well as overseeing the safeguarding and fortification of our networks and systems.
Management’s Role Holley’s information technology team, which is responsible for developing and implementing our cybersecurity program, currently operates under the oversight of our Chief Information Officer (“CIO”). The CIO is responsible for managing risks from cybersecurity threats, as well as overseeing the safeguarding and fortification of our networks and systems.
Our employees with network access participate annually in required training, including privacy and security training designed to enhance employee awareness of how to detect and respond to cybersecurity threats. We have created an Incident Response Plan that provides our support team with a clear framework for effectively responding to significant incidents.
Our employees with network access participate annually in required training, including privacy and security training designed to enhance employee awareness of how to detect and respond to cybersecurity threats.
W e have not identified risks from cybersecurity threats that have materially affected us, including our financial position, results of operations, cash flows, or reputation, although certain risks, if realized, are reasonably likely to materially affect us. For more information regarding the risks we face from cybersecurity threats and how those risks could affect us, please see Item 1A.
The team communicates with our suppliers, service providers, and vendors and relies on them to apprise Holley of any cybersecurity issues. We have not identified risks from cybersecurity threats that have materially affected us, including our financial position, results of operations, cash flows, or reputation, although certain risks, if realized, are reasonably likely to materially affect us.
Removed
The CIO reports directly to the Chief Financial Officer ("CFO"). Combined the two have a proven track record in developing and leading data science teams. The CFO's expertise in business, finance and technology enables him to guide the team in making strategic information technology investments that strike a balance between growth opportunities, risk mitigation and return on investment.
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The CIO reports directly to the Chief Executive Officer ("CEO"), reflecting the strategic importance of information security and enterprise technology in supporting the Company’s operations and long‑term objectives.
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For more information regarding the risks we face from cybersecurity threats and how those risks could affect us, please see Item 1A. “Risk Factors.”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located at 2445 Nashville Rd, Suite B1, Bowling Green, Kentuck y 42101. We lease the property and building where our headquarters is located. Our facility is approximately 74,000 square feet. We own property at 1801 Russellville Rd, Bowling Green, Kentucky 42101, and is approximately 200,000 square feet.
Biggest changeItem 2. Properties Our corporate headquarters is located at 1A Burton Hills Blvd, Suite 240, Nashville, TN 37215 . We own property at 1801 Russellville Rd, Bowling Green, Kentucky 42101, that is approximately 200,000 square feet.
We have a number of leased locations across the United States, Canada and Italy that serve multiple functions, including distribution, engineering, manufacturing, office space, R&D, and retail sales. We have 15 facilities that perform manufacturing of our products and 11 distribution locations. We also have 14 R&D/Engineering facilities designed to develop our new product innovations.
We have a number of leased locations across the United States, Canada, Italy, and China that serve multiple functions, including distribution, engineering, manufacturing, office space, R&D, and retail sales. We have 17 facilities that perform manufacturing of our products and 13 distribution locations. We also have 15 R&D/Engineering facilities designed to develop our new product innovations. Item 3.
Added
Legal Proceedings See Litigation in Note 18 " Commitments and Contingencies ." Item 4. Mine Safety Disclosures Not applicable 34 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Repurchase of Equity Securities None Unregistered Sales of Equity Securities Except as previously disclosed in a Current Report on Form 8-K, no unregistered sales of the Company’s equity securities were made during the year ended December 31, 2024.
Biggest changeIssuer Repurchase of Equity Securities None Unregistered Sales of Equity Securities Except as previously disclosed in a Current Report on Form 8-K, no unregistered sales of the Company’s equity securities were made during the year ended December 31, 2025. Item 6. [Reserved] 35 Table of Contents
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The principal market on which Holley's Common Stock and Warrants are listed for trading is the New York Stock Exchange. Holley's Common Stock and Warrants trade under the symbols “HLLY” and “HLLY WS,” respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The principal market on which Holley's Common Stock and Warrants are listed for trading is the New York Stock Exchange. Holley's Common Stock and Warrants trade under the symbols “HLLY” and “HLLY WS,” respectively.
Holders of Record A s of March 11, 2025, there w ere approximately 34 stockh olders o f record of Common Stock, although we believe that a larger number of beneficial owners hold our shares in street name by brokers and other nominees.
Holders of Record A s of March 9, 2026, t here were approximately 24 stockh olders of record of Common Stock, although we believe that a larger number of beneficial owners hold our shares in street name by brokers and other nominees.
Removed
Stock Performance Graph The following graph shows a comparison from July 16, 2021, (the date the Company’s common stock commenced trading on the NYSE) through December 31, 2024, of the cumulative total return for the Company's common stock, the Standard & Poor's 500 Stock Index (S&P 500 Index), and the Standard & Poor’s Consumer Discretionary (Sector) Index.
Removed
The graph assumes that $100 was invested in the Company’s common stock at the close of the market on July 16, 2021. In the case of the S&P 500 Index and the S&P Consumer Discretionary Index, the graph assumes that $100 was invested at the close of the market on July 16, 2021, and assumes reinvestments of dividends.
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The stock price performance of the following graph is not necessarily indicative of future stock price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInterest is based on the SOFR or prime rate, plus the applicable margin rate. 38 Table of Contents Results of Operations Year Ended December 31, 2024 Compared With Year Ended December 31, 2023 The table below presents our results of operations for the years ended December 31, 2024 and 2023 (dollars in thousands): For the years ended December 31, 2024 2023 Change ($) Change (%) Net sales $ 602,224 $ 659,704 $ (57,480 ) (8.7 )% Cost of goods sold 363,680 403,615 (39,935 ) (9.9 )% Gross profit 238,544 256,089 (17,545 ) (6.9 )% Selling, general, and administrative 132,149 120,244 11,905 9.9 % Research and development costs 18,710 23,844 (5,134 ) (21.5 )% Amortization of intangible assets 13,884 14,557 (673 ) (4.6 )% Impairment of indefinite-lived intangible assets 7,695 — 7,695 100.0 % Impairment of goodwill 40,906 — 40,906 100.0 % Loss on sale of assets 9,234 — 9,234 100.0 % Restructuring costs 1,566 2,641 (1,075 ) (40.7 )% Other expense (268 ) 765 (1,033 ) (135.0 )% Operating income 14,668 94,038 (79,370 ) (84.4 )% Change in fair value of warrant liability (7,570 ) 4,111 (11,681 ) nm Change in fair value of earn-out liability (2,333 ) 2,303 (4,636 ) (nm Loss (gain) on early extinguishment of debt 141 (701 ) 842 (120.1 )% Interest expense 50,690 60,746 (10,056 ) (16.6 )% Income (loss) before income taxes (26,260 ) 27,579 (53,839 ) (195.2 )% Income tax expense (benefit) (3,025 ) 8,399 (11,424 ) (136.0 )% Net income (loss) (23,235 ) 19,180 (42,415 ) (221.1 )% Foreign currency translation adjustment (452 ) 234 (686 ) (293.2 )% Total comprehensive income (loss) $ (23,687 ) $ 19,414 $ (43,101 ) (222.0 )% Net Sales Net sales for the year ended December 31, 2024 , decreased $57.5 million , or 8.7% , to $602.2 million as compared to $659.7 million for the year ended December 31, 2023 .
Biggest changeThese amounts include the write‑off of unamortized deferred financing costs, prepayment penalties, and the impact of any negotiated settlement amounts differing from the carrying value of the extinguished debt. 38 Table of Contents Results of Operations Year Ended December 31, 2025 Compared With Year Ended December 31, 2024 The table below presents our results of operations for the years ended December 31, 2025 and 2024 (dollars in thousands): For the years ended December 31, 2025 2024 Change ($) Change (%) Net sales $ 613,514 $ 602,224 $ 11,290 1.9 % Cost of goods sold 347,279 363,680 (16,401) (4.5) % Gross profit 266,235 238,544 27,691 11.6 % Selling, general, and administrative 146,132 132,149 13,983 10.6 % Research and development costs 18,831 18,710 121 0.6 % Amortization of intangible assets 13,778 13,884 (106) (0.8) % Impairment of indefinite-lived intangible assets — 7,695 (7,695) (100.0) % Impairment of goodwill — 40,906 (40,906) (100.0) % Loss on sale of assets — 9,234 (9,234) (100.0) % Restructuring costs 2,903 1,566 1,337 85.4 % Other expense (income) 2,110 (268) 2,378 (887.3) % Operating income 82,481 14,668 67,813 462.3 % Change in fair value of warrant liability 1,211 (7,570) 8,781 (116.0) % Change in fair value of earn-out liability 897 (2,333) 3,230 (138.4) % Loss (gain) on early extinguishment of debt (93) 141 (234) (166.0) % Interest expense 51,833 50,690 1,143 2.3 % Income (loss) before income taxes 28,633 (26,260) 54,893 (209.0) % Income tax expense (benefit) 9,458 (3,025) 12,483 (412.7) % Net income (loss) 19,175 (23,235) 42,410 (182.5) % Foreign currency translation adjustment 1,282 (452) 1,734 (383.6) % Total comprehensive income (loss) $ 20,457 $ (23,687) $ 44,144 (186.4) % Net Sales Net sales for the year ended December 31, 2025 , increased $11.3 million , or 1.9% , to $613.5 million as compared to $602.2 million for the year ended December 31, 2024.
Loss on Sale of Assets Loss on sale of assets for the year ended December 31, 2024 was $9.2 million, which relates to the sale of Detroit Speed Engineering.
Loss on sale of assets for the year ended December 31, 2024 was $9.2 million, which relates to the sale of Detroit Speed Engineering.
Factors that could cause such differences are discussed herein and under the caption, “ Cautionary Note Regarding Forward-Looking Statements. ” Overview We are a designer, marketer, and manufacturer of high-performance automotive aftermarket products serving car and truck enthusiasts, with sales, processing, and distribution facilities reaching most major markets in the United States, Canada, Europe and China.
Factors that could cause such differences are discussed herein and under the caption, “Cautionary Note Regarding Forward-Looking Statements.” Overview We are a designer, marketer, and manufacturer of high-performance automotive aftermarket products serving car and truck enthusiasts, with sales, processing, and distribution facilities reaching most major markets in the United States, Canada, Europe and China.
These metrics should not be considered as alternatives to net income, gross profit, net cash provided by operating activities, or any other performance measures, as applicable, derived in accordance with GAAP. Adjusted EBITDA We define EBITDA as earnings before depreciation, amortization of intangible assets, interest expense, and income tax expense.
These metrics should not be considered as alternatives to net income, gross profit, net cash provided by operating activities, or any other performance measures, as applicable, derived in accordance with U.S. GAAP. Adjusted EBITDA We define EBITDA as earnings before depreciation, amortization of intangible assets, interest expense, and income tax expense.
EBITDA and Adjusted EBITDA are not prepared in accordance with 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.
EBITDA and Adjusted EBITDA are not prepared in accordance with U.S. 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 U.S. GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing Holley’s financial performance.
Acquired intangible assets, excluding goodwill, are valued using various methodologies including discounted cash flows, relief from royalty, and multiperiod excess earnings depending on the type of intangible asset purchased. These methodologies incorporate various estimates and assumptions, such as projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.
Acquired intangible assets, excluding goodwill, are valued using various methodologies including discounted cash flows, relief from royalty, and multi-period excess earnings depending on the type of intangible asset purchased. These methodologies incorporate various estimates and assumptions, such as projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.
Critical Accounting Estimates The discussion and analysis of Holley's financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Estimates The discussion and analysis of Holley's financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Upon closing of the Business Combination, Empower changed its name to Holley Inc. and its trading symbol on the NYSE from “EMPW” to “HLLY.” The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Holley Intermediate was deemed the accounting acquirer with Holley Inc. as the successor registrant.
Upon closing of the Business Combination, Empower changed its name to Holley Inc. and its trading symbol on the NYSE from “EMPW” to “HLLY.” The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). Holley Intermediate was deemed the accounting acquirer with Holley Inc. as the successor registrant.
Sales are displayed net of rebates and sales returns allowances. Sales returns are recorded as a charge against gross sales in the period in which the related sales are recognized. Cost of Goods Sold Cost of goods sold consists primarily of the cost of purchased parts and manufactured products, including materials and direct labor costs.
Sales returns are recorded as a charge against gross sales in the period in which the related sales are recognized. Cost of Goods Sold Cost of goods sold consists primarily of the cost of purchased parts and manufactured products, including materials and direct labor costs.
The loss in the year ended December 31, 2024 was recognized on the repurchase of $25.0 million of our first lien term loan at a discount to par, net of the write-off of unamortized debt issuance costs.
The gain in the year ended December 31, 2025 was recognized on the repurchase of $25.0 million of our first lien term loan at a discount to par, net of the write-off of unamortized debt issuance costs.
Loss (Gain) on Early Extinguishment of Debt For the year ended December 31, 2024 , we recognized a loss of $0.1 million on the early extinguishment of debt as compared to a gain of $0.7 million for the year ended December 31, 2023 .
Loss (Gain) on Early Extinguishment of Debt For the year ended December 31, 2025, we recognized a gain of $0.1 million on the early extinguishment of debt as compared to a loss of $0.1 million for the year ended December 31, 2024.
A reporting unit represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test.
Goodwill is tested for impairment at the reporting unit level. A reporting unit represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test.
We believe that our most critical accounting estimates are related to accounting for inventory reserves, the fair value of assets and liabilities acquired in the Business Combination and acquisitions, and accounting for goodwill and intangible assets.
We believe that our most critical accounting estimates are related to accounting for inventory reserves, the fair value of assets and liabilities acquired in the Business Combination and acquisitions, and accounting for goodwill and intangible assets. These critical accounting policies are addressed below.
Our capital expenditures for the year ended December 31, 2024 of $6.8 million are primarily related to ongoing maintenance and improvements, including investments related to upgrading and maintaining our information technology systems, tooling for new products, vehicles for product development, and machinery and equipment for operations. We expect capital expenditures of up to $16 million in fiscal year 2025 .
Our capital expenditures for the year ended December 31, 2025 of $12.3 million are primarily related to ongoing maintenance and improvements, including investments related to upgrading and maintaining our information technology systems, tooling for new products, vehicles for product development, and machinery and equipment for operations. We expect capital expenditures of up to $20.0 million in fiscal year 2026.
The table below presents our net sales for the year ended December 31, 2024 and 2023, as well as sales related to divestitures and sales part of our strategic product rationalization project. The divestitures sales relate to divested businesses prior to the divestiture date. The divestitures include Detroit Speed Engineering, Gear FX and Proforged.
The table below presents our net sales for the years ended December 31, 2025 and 2024, as well as sales related to divestitures and sales associated with our strategic product rationalization project. The divestitures sales relate to divested businesses prior to the divestiture date. The divestitures include Detroit Speed Engineering, Gear FX, and Proforged.
When expressed as a percentage of sales, selling, general and administrative costs increased to 21.9% of sales for the year ended December 31, 2024 , compared to 18.2% of sales in 2023.
When expressed as a percentage of sales, selling, general and administrative costs increased to 23.8% of sales for the year ended December 31, 2025 , compared to 21.9% of sales in 2024.
Impairment of Indefinite-lived Assets Impairment of indefinite-lived assets for the year ended December 31, 2024 was $7.7 million, which related to our tradenames. Refer to Note 5, “Goodwill and Other Intangible Assets” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our recognition of impairment charges.
Impairment of indefinite-lived assets for the year ended December 31, 2024 was $7.7 million, which related to our trade names. Refer to Note 5, “ Goodwill and Othe r Intangible Assets ” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our recognition of impairment charges.
Income Tax Expense (Benefit) We recognized income tax benefit of $3.0 million for the year ended December 31, 2024 , as compared to income tax expense of $8.4 million for the year ended December 31, 2023 . The effective tax rate was 11.5% and 30.5% for the years ended December 31, 2024 and 2023 , respectively.
Income Tax Expense (Benefit) We recognized income tax expense of $9.5 million for the year ended December 31, 2025 , as compared to income tax benefit of $3.0 million for the year ended December 31, 2024 . The effective tax rate was 33.0% and 11.5% for the years ended December 31, 2025 and 2024, respectively.
These critical accounting policies are addressed below. 46 Table of Contents Inventory Reserve Our inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence or impaired balances.
Inventory Reserve Our inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence or impaired balances.
The gain in the year ended December 31, 2023 was recognized on the repurchase of $38.8 million of our first lien term loan at a discount to par, net of the write-off of unamortized debt issuance costs (refer to Note 7, “Debt” for further discussion).
The loss in the year ended December 31, 2024 was recognized on the repurchase of $25.0 million of our first lien term loan at a discount to par, net of the write-off of unamortized debt issuance costs. (Refer to Note 7, “ Debt ” for further discussion).
On December 31, 2024, based on the then current weighted average interest rate of 8.4%, expected interest payments associated with outstanding debt totaled approximately $47.3 million for fiscal year 2025.
On December 31, 2025, based on the then current weighted average interest rate of 7.8%, expected interest payments associated with outstanding debt totaled approximately $41.2 million for fiscal year 2026.
Cash provided by operating activities for the year ended December 31, 2024 , was $46.9 million compared to cash provided by operating activities of $88.1 million for the year ended December 31, 2023 .
Net cash provided by operating activities for the year ended December 31, 2025 , was $46.2 million compared to net cash provided by operating activities of $46.9 million for the year ended December 31, 2024 .
The strategic product rationalization sales relate to discontinued SKUs.
The strategic product rationalization sales relate to discontinued stock keeping units ("SKUs").
Comprehensive income (loss) includes the effect of foreign currency translation and pension liability adjustments. 43 Table of Contents Non-GAAP Financial Measures We present EBITDA and Adjusted EBITDA as supplemental measures of our operating performance and believe that such non-GAAP financial measures provide useful information to investors, because they exclude the impact of certain items that we do not consider indicative of our ongoing operating performance and we believe are useful in comparing our results of operations between periods.
Non-GAAP Financial Measures We present EBITDA and Adjusted EBITDA as supplemental measures of our operating performance and believe that such non-GAAP financial measures provide useful information to investors, because they exclude the impact of certain items that we do not consider indicative of our ongoing operating performance and we believe are useful in comparing our results of operations between periods.
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 our financial performance.
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 U.S. GAAP, and the items excluded from or included in these metrics are significant components in understanding and assessing our financial performance.
Cash provided by investing activities for the year ended December 31, 2024 , was $2.0 million, primarily relating to the sales of Detroit Speed Engineering, which was partially offset by capital expenditures of $6.8 million . Cash used in investing activities for the year ended December 31, 2023, was $4.5 million, primarily relating to capital expenditures of $5.9 million.
Cash provided by investing activities for the year ended December 31, 2024 , was $2.0 million, primarily relating to the sales of Detroit Speed Engineering, which was partially offset by cap ital expenditures of $6.8 million . Financing Activities .
Impairment of Goodwill Impairment of goodwill for the year ended December 31, 2024 was $40.9 million. Refer Note 5, “Goodwill and Other Intangible Assets” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our recognition of impairment charges.
Refer Note 5, “ Goodwill and Other Intangible Assets ” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our recognition of impairment charges. Loss on Sale of Assets There was no loss on sale of assets for the year ended December 31, 2025.
Income before Income Taxes As a result of factors described above, we recognized $27.6 million of income before income taxes for the year ended December 31, 2023, as compared to net income before income taxes of $78.3 million for the year ended December 31, 2022.
Income (Loss) before Income Taxes As a result of factors described above, we recognized $28.6 million of net income before income taxes for the year ended December 31, 2025, as compared to a loss before income taxes of $26.3 million for the year ended December 31, 2024.
The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2024, in conjunction with its budgeting and forecasting process for fiscal year 2024 and concluded that impairment existed for its reporting unit.
The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2025, in conjunction with its budgeting and forecasting process for fiscal year 2026. Based on this analysis, the Company concluded that no goodwill impairment existed for its reporting unit for the year ended December 31, 2025.
Change in Fair Value of Warrant Liability For the year ended December 31, 2024 , we recognized a gain of $7.6 million due to the change in fair value of the warrant liability. This compares to a loss of $4.1 million for the year ended December 31, 2023 , a period during which Holley's stock price increased.
Change in Fair Value of Warrant Liability For the year ended December 31, 2025 , we recognized a loss of $1.2 million due to the change in fair value of the warrant liability. This compares to a gain of $7.6 million for the year ended December 31, 2024.
We define Adjusted EBITDA as EBITDA adjusted to exclude, to the extent applicable, restructuring costs, which includes transaction fees and expenses, termination related benefits, facilities relocation, and executive transition costs; changes in the fair value of the warrant liability; changes in the fair value of the earn-out liability; equity-based compensation expense; impairment of goodwill and indefinite-lived intangible assets; loss on assets sold; loss or (gain) on the early extinguishment of debt; related party acquisition and management fee costs; notable items that we do not believe are reflective of operating performance, which for the year ended December 31, 2024, includes; $2.0 million legal settlement accrual, costs incurred for advisory services related to identifying performance initiatives, for the year ended December 31, 2023, includes certain costs incurred for advisory services related to identifying performance initiatives, and for the year ended December 31, 2022, included a non-cash adjustment related to the adoption of ASC Topic 842, “ Leases ,” and legal fees and costs related to a settlement; and other expenses or gains, which for the year ended December 31, 2022, includes a $1.0 million loss on the sale of a business and for all periods includes net gains or losses from disposal of fixed assets, franchise taxes, and gains or losses from foreign currency transactions.
We define Adjusted EBITDA as EBITDA adjusted to exclude, to the extent applicable, restructuring costs, which includes transaction fees and expenses, termination related benefits, facilities relocation, and executive transition costs; changes in the fair value of the warrant liability; changes in the fair value of the earn-out liability; equity-based compensation expense; impairment of goodwill and indefinite-lived intangible assets; loss on assets sold; loss or (gain) on the early extinguishment of debt; related party acquisition and management fee costs; notable items that we do not believe are reflective of operating performance, which for the year ended December 31, 2025, includes, $1.8 million non-recurring account remediation, $1.5 million consulting fees and talent acquisition fees; for the year ended December 31, 2024 includes, $2.0 million legal settlement accrual, costs incurred for advisory services related to identifying performance initiatives.
Gross margin for the year ended December 31, 2024 , was 39.6% as compared to a gross margin of 38.8% for the year ended December 31, 2023 . The decrease in gross profit was primarily due to lower sales volume and a $8.2 million related to the strategic product rationalization charge.
Gross margin for the year ended December 31, 2025 , was 43.4% as compared to a gross margin of 39.6% for the year ended December 31, 2024 . The increase in gross profit was primarily due to higher sales volume, reduced warranty claims, and the absence of $8.2 million related to the strategic product rationalization charge in prior year.
Indefinite life intangible assets are not amortized but are tested for impairment at least annually or more often if circumstances indicate that the carrying amounts may not be recoverable. During the fourth quarter of 2024, a quantitative assessment of indefinite life intangible assets identified certain tradenames for which the carrying amounts might not be recoverable.
Indefinite life intangible assets are not amortized but are tested for impairment at least annually or more often if circumstances indicate that the carrying amounts may not be recoverable. During the fourth quarter of 2025, the Company completed qualitative and quantitative assessments on indefinite life intangible assets.
The following unaudited tables present the reconciliation of net income and net income per diluted share, the most directly comparable GAAP measures, to Adjusted Net Income and Adjusted Diluted EPS for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands): For the years ended December 31, 2024 2023 2022 Net income (loss) $ (23,235 ) $ 19,180 $ 73,774 Special items: Adjust for: Change in fair value of warrant liability (7,570 ) 4,111 (57,021 ) Adjust for: Change in fair value of earn-out liability (2,333 ) 2,303 (10,731 ) Adjust for: Impairment of indefinite-lived intangible assets 7,695 - 2,395 Adjust for: Impairment of goodwill 40,906 - - Adjust for: Loss on sale of assets 9,234 - - Adjust for: Loss (gain) on early extinguishment of debt 141 (701 ) - Adjusted Net Income $ 24,838 $ 24,893 $ 8,417 For the years ended December 31, 2024 2023 2022 Net income (loss) per diluted share $ (0.20 ) 0.16 $ 0.63 Special items: Adjust for: Change in fair value of warrant liability (0.06 ) 0.03 (0.48 ) Adjust for: Change in fair value of earn-out liability (0.03 ) 0.02 (0.09 ) Adjust for: Impairment of indefinite-lived intangible assets 0.06 - 0.02 Adjust for: Impairment of goodwill 0.35 - - Adjust for: Loss on sale of assets 0.08 - - Adjust for: Loss (gain) on early extinguishment of debt - - - Adjusted Diluted EPS $ 0.20 $ 0.21 $ 0.08 We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of dispositions.
GAAP measures, to Adjusted Net Income and Adjusted Diluted EPS for the years ended December 31, 2025 and 2024 (dollars in thousands): For the years ended December 31, 2025 2024 Net income (loss) $ 19,175 $ (23,235) Special items: Adjust for: Change in fair value of warrant liability 1,211 (7,570) Adjust for: Change in fair value of earn-out liability 897 (2,333) Adjust for: Impairment of indefinite-lived intangible assets — 7,695 Adjust for: Impairment of goodwill — 40,906 Adjust for: Loss on sale of assets — 9,234 Adjust for: Loss (gain) on early extinguishment of debt (93) 141 Adjusted Net Income $ 21,190 $ 24,838 For the years ended December 31, 2025 2024 Net income (loss) per diluted share $ 0.16 $ (0.20) Adjustments: Change in fair value of warrant liability 0.01 (0.06) Change in fair value of earn-out liability 0.01 (0.03) Impairment of indefinite-lived intangible assets - 0.06 Impairment of goodwill - 0.35 Loss on sale of assets - 0.08 Loss (gain) on early extinguishment of debt - - Adjusted Diluted EPS $ 0.18 $ 0.20 We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of dispositions.
The warrant liability reflects the fair value of the Warrants issued in connection with the Business Combination. Change in Fair Value of Earn-Out Liability For the year ended December 31, 2024 , we recognized a gain of $2.3 million due to the change in fair value of the earn-out liability, which reflects a decrease in Holley's stock price during 2024.
The warrant liability reflects the fair value of the Warrants issued in connection with the Business Combination. Change in Fair Value of Earn-Out Liability For the year ended December 31, 2025 , we recognized a loss of $0.9 million due to the change in fair value of the earn-out liability.
Operating Income As a result of factors described above, operating income for the year ended December 31, 2024, decreased $79.3 million, or 84.4%, to $14.7 million as compared to $94.0 million for the year ended December 31, 2023, which is primarily attributable to the $48.6 million impairment charges.
Operating Income As a result of factors described above, operating income for the year ended December 31, 2025, increased $67.8 million, or 462.3%, to $82.5 million as compared to $14.7 million for the year ended December 31, 2024, which is primarily attributable to the $48.6 million impairment charges in the prior year.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations Unless the context requires otherwise, references to “ Holley, ” “ we, ” “ us, ” “ our ” and “ the Company ” in this section are to the business and operations of Holley Inc.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless the context requires otherwise, references to “Holley,” “we,” “us,” “our”, and “the Company” in this section are to the business and operations of Holley Inc.
We believe that using this information, along with net income and net income per diluted share, provides for a more complete analysis of the results of operations.
We believe that using this information, along with net income and net income per diluted share, provides for a more complete analysis of the results of operations. 43 Table of Contents The following unaudited tables present the reconciliation of net income and net income per diluted share, the most directly comparable U.S.
For the year ended December 31, 2024 2023 Net Sales $ 602,224 $ 659,704 Divestitures 12,821 13,437 Strategic Product Rationalization 13,953 7,298 Cost of Goods Sold Cost of goods sold for year ended December 31, 2024 , decreased $39.9 million , or 9.9% , to $363.7 million as compared to $403.6 million for the year ended December 31, 2023 .
For the year ended December 31, 2025 2024 Net Sales $ 613,514 $ 602,224 Divestitures — 12,821 Strategic Product Rationalization — 13,953 Cost of Goods Sold Cost of goods sold for year ended December 31, 2025 , decreased $16.4 million , or 4.5% , to $347.3 million as compared to $363.7 million for the year ended December 31, 2024 .
Cash Flows The following table provides a summary of cash flows from operating, investing, and financing activities for the periods presented (dollars in thousands): For the years ended December 31, 2024 2023 2022 Cash flows provided by operating activities $ 46,899 $ 88,092 $ 12,312 Cash flows (used in) provided by investing activities 2,021 (4,453 ) (25,037 ) Cash flows (used in) provided by financing activities (34,605 ) (69,008 ) 2,850 Effect of foreign currency rate fluctuations on cash 691 300 (300 ) Net (decrease) increase in cash and cash equivalents $ 15,006 $ 14,931 $ (10,175 ) 45 Table of Contents Operating Activities .
Cash Flows The following table provides a summary of cash flows from operating, investing, and financing activities for the periods presented (dollars in thousands): For the years ended December 31, 2025 2024 Cash flows provided by operating activities $ 46,220 $ 46,899 Cash flows (used in) provided by investing activities (32,229) 2,021 Cash flows used in financing activities (32,612) (34,605) Effect of foreign currency rate fluctuations on cash (235) 691 Net (decrease) increase in cash and cash equivalents $ (18,856) $ 15,006 Operating Activities .
Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations.
Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations. The following unaudited table presents the reconciliation of net cash provided by operating activities, the most directly comparable U.S.
Net Income and Total Comprehensive Income As a result of factors described above, we recognized net income of $19.2 million for the year ended December 31, 2023, as compared to net income of $73.8 million for the year ended December 31, 2022.
Net Income (Loss) and Total Comprehensive Income (Loss) As a result of factors described above, we recognized net income of $19.2 million for the year ended December 31, 2025, as compared to net loss of $23.2 million for the year ended December 31, 2024. 41 Table of Contents Additionally, we recognized total comprehensive income of $20.5 million for the year ended December 31, 2025, as compared to total comprehensive loss of $23.7 million for the year ended December 31, 2024.
For 2024, Adjusted EBITDA includes $1.7 million benefit also related to the strategic product rationalization, netting to $6.5 million non-cash charge. 44 Table of Contents Adjusted Net Income and Adjusted Diluted EPS We define Adjusted Net Income as earnings excluding the after-tax effect of changes in the fair value of the warrant liability, changes in the fair value of the earn-out liability, impairment of goodwill and indefinite-lived intangible assets, loss on sale of assets, and gain or loss on the early extinguishment of debt.
Adjusted Net Income and Adjusted Diluted EPS We define Adjusted Net Income as earnings excluding the after-tax effect of changes in the fair value of the warrant liability, changes in the fair value of the earn-out liability, impairment of goodwill and indefinite-lived intangible assets, loss on sale of assets, and gain or loss on the early extinguishment of debt.
As a result of this evaluation, a pre-tax impairment of $7.7 million was recognized on certain indefinite-lived tradenames. 47 Table of Contents Recent Accounting Pronouncements For a discussion of Holley’s new or recently adopted accounting pronouncements, see Note 1, “ Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies ,” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. 48 Table of Contents
Based on the qualitative and quantitative assessments, the Company concluded that no material impairment existed for any of its indefinite‑lived tradenames for the year ended December 31, 2025. 47 Table of Contents Recent Accounting Pronouncements For a discussion of Holley’s new or recently adopted accounting pronouncements, see Note 1, “ Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies ,” in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
On December 31, 2024 , working capital was $202.2 million compared to $203.6 million on December 31, 2023 . For the year ended December 31, 2024 , prepaids and other current assets decreased by $3.1 million and accrued liabilities decreased by $1.1 million . Offsetting this decrease in working capital was an increase in cash of $15.0 million .
On December 31, 2025 , working capital was $201.0 million compared to $202.2 million on December 31, 2024 . For the year ended December 31, 2025 , accrued liabilities increased by $5.1 million and cash decreased by $18.9 million . Offsetting this decrease in working capital was an increase in accounts receivable of $21.4 million .
The following unaudited table presents the reconciliation of net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands): For the years ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 46,899 $ 88,092 $ 12,312 Capital expenditures (6,804 ) (5,934 ) (13,590 ) Proceeds from the disposal of fixed assets 1,726 1,481 888 Cash paid for acquisitions, net — — (14,301 ) Free Cash Flow $ 41,821 $ 83,639 $ (14,691 ) Liquidity and Capital Resources Our primary cash needs are to support working capital, capital expenditures, acquisitions, and debt repayments.
GAAP measure, to Free Cash Flow for the years ended December 31, 2025 and 2024 (dollars in thousands): For the years ended December 31, 2025 2024 Net cash provided by operating activities $ 46,220 $ 46,899 Capital expenditures (12,321) (6,804) Proceeds from the disposal of fixed assets 322 1,726 Free Cash Flow $ 34,221 $ 41,821 Liquidity and Capital Resources Our primary cash needs are to support working capital, capital expenditures, acquisitions, and debt repayments.
We believe that these non-GAAP financial measures help to depict a more realistic representation of the performance of our underlying business, enabling us to evaluate and plan more effectively for the future.
We believe that these non-GAAP financial measures help to depict a more realistic representation of the performance of our underlying business, enabling us to evaluate and plan more effectively for the future. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow are not prepared in accordance with U.S.
These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.
These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with U.S. GAAP. 42 Table of Contents The following unaudited table presents the reconciliation of net income (loss), the most directly comparable U.S.
The following unaudited table presents the reconciliation of net income (loss), the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands): For the years ended December 31, 2024 2023 2022 Net income (loss) $ (23,235 ) $ 19,180 $ 73,774 Adjustments: Depreciation 10,551 10,308 10,107 Amortization of intangible assets 13,884 14,557 14,683 Interest expense, net 50,690 60,746 40,227 Income tax expense (benefit) (3,025 ) 8,399 4,493 EBITDA 48,865 113,190 143,284 Restructuring costs 1,372 2,641 4,513 Change in fair value of warrant liability (7,570 ) 4,111 (57,021 ) Change in fair value of earn-out liability (2,333 ) 2,303 (10,731 ) Equity-based compensation expense 5,170 7,291 24,395 Impairment of indefinite-lived intangible assets 7,695 — 2,395 Impairment of goodwill 40,906 — — Loss on assets sold 9,234 — — (Gain) loss on early extinguishment of debt 141 (701 ) — Notable items 7,100 1,285 1,838 Other expense (86 ) 765 477 Adjusted EBITDA $ 110,494 $ 130,885 $ 109,150 Adjusted EBITDA for 2024 and 2023 includes the impact of an $8.2 million and $(0.8) million, respectively, non-cash charge related to a previously announced strategic product rationalization.
GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the years ended December 31, 2025 and 2024 (dollars in thousands): For the years ended December 31, 2025 2024 Net income (loss) $ 19,175 $ (23,235) Adjustments: Depreciation 9,704 10,551 Amortization of intangible assets 13,778 13,884 Interest expense, net 51,833 50,690 Income tax expense (benefit) 9,458 (3,025) EBITDA 103,948 48,865 Restructuring costs 2,903 1,372 Change in fair value of warrant liability 1,211 (7,570) Change in fair value of earn-out liability 897 (2,333) Equity-based compensation expense 8,163 5,170 Impairment of indefinite-lived intangible assets — 7,695 Impairment of goodwill — 40,906 Loss on assets sold — 9,234 (Gain) loss on early extinguishment of debt (93) 141 Notable items 4,882 7,100 Other expense (income) 2,110 (86) Adjusted EBITDA $ 124,021 $ 110,494 For 2024, Adjusted EBITDA includes the impact of an $8.2 million non-cash charge and $1.7 million benefit related a strategic product rationalization, netting to $6.5 million non-cash charge.
Amortization and Impairment of Intangible Assets Amortization of intangible assets for the year ended December 31, 2024 , decreased $0.7 million , or 4.6% , to $13.9 million as compared to $14.6 million for the year ended December 31, 2023 .
Amortization of Intangible Assets Amortization of intangible assets for the year ended December 31, 2025 , decreased $0.1 million , or 0.8% , to $13.8 million as compared to $13.9 million for the year ended December 31, 2024 . Impairment of Indefinite-lived Assets There was no impairment of indefinite-lived assets for the year ended December 31, 2025.
For the year ended December 31, 2022, cash used in investing activities was $25.0 million, primarily relating to acquisitions of $14.3 million and capital expenditures of $13.6 million. Financing Activities. Cash used in financing activities for the year ended December 31, 2024 , was $34.6 million , which primarily reflected principal payments on long-term debt.
Net cash used in financing activities for the year ended December 31, 2025 , was $32.6 million , which primarily reflected principal payments on long-term debt. Cash used in financing activities for the year ended December 31, 2024 , was $34.6 million , which primarily reflected principal payments on long-term debt. 45 Table of Contents Working Capital .
Offsetting these increases were decreases in cash used by accrued interest, accounts receivable, and accounts payable of $8.2 million, $6.1 million, and $0.9 million, respectively. The changes in accounts receivable, accounts payable, and inventory are impacted by fluctuations in sales and accrued interest, accounts receivable and accounts payable are impacted by the timing of receipts and payments. Investing Activities .
The changes in accounts receivable, accounts payable, and inventory are impacted by fluctuations in sales and accrued interest, accounts receivable and accounts payable are impacted by the timing of receipts and payments. Investing Activities .
Should the ongoing macroeconomic conditions not improve, or worsen, or if our attempts to mitigate the impact on our supply chain, operations and costs is not successful, our business, results of operations and financial condition may be adversely affected. 37 Table of Contents Key Components of Results of Operations Net Sales The principal activity from which we generate our sales is the designing, marketing, manufacturing and distribution of performance aftermarket automotive parts for our end consumers.
Should the ongoing macroeconomic conditions not improve, or worsen, or if our attempts to mitigate the impact on our supply chain, operations and costs is not successful, our business, results of operations and financial condition may be adversely affected.
Goodwill and Intangible Assets Goodwill and intangible assets deemed to have indefinite lives are not amortized but rather are tested at least annually for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level.
See Note 10, " Fair Value Measurements " in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our assets and liabilities measured at fair value. 46 Table of Contents Goodwill and Intangible Assets Goodwill and intangible assets deemed to have indefinite lives are not amortized but rather are tested at least annually for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable.
The difference between the effective tax rate and the federal statutory rate in 2023 was primarily due to permanent differences resulting from state income taxes, foreign rate differentials, compensation limits with respect to covered employees, and the change in fair value of warrant and earn-out liabilities.
The difference between the effective tax rate and the federal statutory rate in 2025 was primarily due to permanent differences related to changes in fair value of the warrant and earn-out liabilities recognized during the period, state taxes, the impact of foreign taxes in higher tax rate jurisdictions, and excess tax deficiencies from share-based compensation recognized during the period.
This compares to a gain of $10.7 million for the year ended December 31, 2022, a period during which Holley's stock price declined. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Combination.
This compares to a gain of $2.3 million for the year end ed December 31, 2024. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Co mbination.
Lower sales volume resulted in a decrease of approximately $67.7 million offset partially by improved price realization of approximately $10.2 million compared to the prior year period.
Higher price realization, based upon core business sales data, resulted in an increase of approximately $16.0 million, offset partially by decrease in sales volume of approximately $4.7 million compared to the prior year period.
Restructuring Costs Restructuring costs for the year ended December 31, 2024 , decreased $1.1 million to $1.6 million , as compared to $2.6 million for the year ended December 31, 2023 , reflecting a reduction in restructuring and integration activities associated with acquisitions.
Restructuring Costs Restructuring costs for the year ended December 31, 2025 , increased $1.3 million to $2.9 million , as compared to $1.6 million for the year ended December 31, 2024 , reflecting restructuring and integration activities 40 Table of Contents associated with our implementation of resource allocation efforts in support of portfolio development optimization.
The following discussion and analysis should be read in conjunction with Holley ’ s consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K.
The following discussion and analysis should be read in conjunction with Holley’s consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause Holley’s actual results to differ materially from management’s expectations.
We have generally financed our historical needs with operating cash flows, capital contributions and borrowings under our credit facilities. These sources of liquidity may be impacted by various factors, including demand for our products, investments made in acquired businesses, plant and equipment and other capital expenditures, and expenditures on general infrast ructure and information technology.
These sources of liquidity may be impacted by various factors, including demand for our products, investments made in acquired businesses, plant and equipment and other capital expenditures, and expenditures on general infrast ructure and information technology. 44 Table of Contents On December 31, 2025 , we had cash of $37.2 million and availability o f $97.5 million und er our $100.0 million senior secured revolving credit facility.
We are obligated under various operating leases for facilities, equipment, and automobiles with estimated lease payments of approximately $6.4 million, including short-term leases, due in fiscal year 2025. See Note 15, " Lease Commitments" in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our lease obligations.
See Note 15, " Lease Commitments " in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our lease obligations.
Amortization and Impairment of Intangible Assets Amortization of intangible assets for the year ended December 31, 2023, decreased $0.1 million, or 0.9%, to $14.6 million as compared to $14.7 million for the year ended December 31, 2022.
Research and Development Costs Research and development costs for the year ended December 31, 2025 , increased $0.1 million , or 0.6% , to $18.8 million as compared to $18.7 million for the year ended December 31, 2024 .
Restructuring Costs Restructuring costs consist of professional fees for legal, accounting, consulting, administrative, and other professional services directly attributable to restructuring. Impairment of Indefinite-lived Assets Impairment of indefinite-lived assets relates to indefinite-live trade name impairment charges. Impairment of Goodwill Impairment of goodwill relates to goodwill impairment charges.
Loss on Sale of Assets Loss on sale of assets relates to the loss incurred related to the sale of Detroit Speed Engineering in the year ended December 31, 2024 . Restructuring Costs Restructuring costs consist of professional fees for legal, accounting, consulting, administrative, and other professional services directly attributable to restructuring.
These estimates and assumptions could vary significantly, which could result in material differences in the fair values assigned to the assets and liabilities. See Note 10, " Fair Value Measurements " in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to our assets and liabilities measured at fair value.
These estimates and assumptions could vary significantly, which could result in material differences in the fair values assigned to the assets and liabilities.
Cost of Goods Sold Cost of goods sold for year ended December 31, 2023, decreased $31.1 million, or 7.2%, to $403.6 million as compared to $434.8 million for the year ended December 31, 2022.
Interest Expense Interest expense for the year ended December 31, 2025 , increased $1.1 million , or 2.3% , to $51.8 million as compared to $50.7 million for the ye ar ended December 31, 2024.
Selling, General and Administrative Selling, general and administrative costs for the year ended December 31, 2023, decreased $30.5 million, or 20.2%, to $120.2 million as compared to $150.7 million for the year ended December 31, 2022.
Selling, General and Administrative Selling, general and administrative ("SG&A") costs for the year ended December 31, 2025 , increased $14.0 million , or 10.6% , to $146.1 million as compared to $132.1 million for the year ended December 31, 2024 .
Loss on Sale of Assets Loss on sale of assets relates to the loss incurred related to the sale of Detroit Speed Engineering. Interest Expense Interest expense consists of interest due on the indebtedness under our credit facilities. On December 31, 2024, $560.9 million was outstanding under the Credit Agreement.
Interest Expense Interest expense consists of interest due on the indebtedness under our credit facilities. On December 31, 2025, $529.4 million was outstanding under the Credit Agreement. Interest is based on the secured overnight financing rate ("SOFR") or prime rate, plus the applicable margin rate.
Gross Profit and Gross Margin Gross profit for the year ended December 31, 2024 , decreased $17.5 million , or 6.9% , to $238.5 million as compared to $256.1 million for the year ended December 31, 2023 .
These operational improvements along with prior year's $8.2 million of product rationalization initiative more than offset cost pressures despite a 1.9% increase in product sales Gross Profit and Gross Margin Gross profit for the year ended December 31, 2025 , increased $27.7 million , or 11.6% , to $266.2 million as compared to $238.5 million for the year ended December 31, 2024 .
Income Tax Expense We recognized income tax expense of $8.4 million for the year ended December 31, 2023, as compared to $4.5 million for the year ended December 31, 2022. The effective tax rate was 30.5% and 5.7% for the years ended December 31, 2023 and 2022, respectively.
The increase was primarily attributable to the unfavorable impact of the interest rate collar, which resulted in recognized interest expense of $3.4 million and interest income of $1.1 million related to the interest rate collar for the year ended December 31, 2025 and 2024, respectively.
Offsetting this decrease were increases in cash provided by accrued interest, accounts receivable, and accounts payable of $5.1 million , $13.0 million , and $2.9 million , respectively. The changes in accounts receivable, accounts payable, and inventory are impacted by fluctuations in sales and accrued interest, accounts receivable and accounts payable are impacted by the timing of receipts and payments.
Cash used in operating activities included decreases in accounts receivable, inventories, and prepaids and other current assets of $21.4 million, $17.1 million, and $6.2 million, respectively. Partially offsetting the decrease were positive fluctuations from accounts payable, accrued interest, and accrued and other liabilities of $12.9 million, $0.1 million, $0.1 million, respectively.
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In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause Holley ’ s actual results to differ materially from management ’ s expectations.
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Key Components of Results of Operations Net Sales The principal activity from which we generate our sales is the designing, marketing, manufacturing and distribution of performance aftermarket automotive parts for our end consumers. Sales are displayed net of rebates and sales returns allowances.
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Major categories driving the comparable year-over- year results include a decreas e in electronic systems sales of $33.4 million ( 11.6% category decline), a decrease in mechanical systems sales of $11.5 million ( 7.3% category decline), a decrease in accessories sales of $10.6 million ( 10.7% category decline) and a decrease in exhaust system sales of $6.3 million ( 10.5% category decline.) This was partially offset by an increase in safety products sales of $4.2 million ( 7.5% category incline).
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Amortization of Intangible Assets Amortization of intangible assets represents the non‑cash expense related to the systematic write down of our definite‑lived intangible assets. 37 Table of Contents Impairment of Indefinite-lived Assets Impairment of indefinite-lived assets relates to indefinite-live trade name impairment charges. Impairment of Goodwill Impairment of goodwill relates to goodwill impairment charges.
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The decrease in cost of goods sold during the year ended December 31, 2024 , resulted from a 8.7% decrease in product sales and lower freight costs, partially offset by $8.2 million of strategic product rationalization charge that is part of a portfolio transformation aimed at eliminating unprofitable or slow-moving stock keeping units ("SKUs"), which was completed in the first quarter of 2024.
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Change in Fair Value of Warrant Liability Change in fair value of warrant liability represents remeasurement gains or losses on outstanding warrant liabilities, driven primarily by changes in our stock price and related valuation inputs.
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The improvement in gross margin was largely driven by cost to serve efforts related to lower freight costs and improved warranty performance, as well as reduced write-downs for excess and obsolete inventory, partially offset by the million related to the strategic product rationalization charge. 39 Table of Contents Selling, General and Administrative Selling, general and administrative costs for the year ended December 31, 2024 , increased $11.9 million , or 9.9% , to $132.2 million as compared to $120.2 million for the year ended December 31, 2023 .
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Change in Fair Value of Earn-out Liability Change in fair value of earn‑out liability reflects adjustments to contingent consideration based on revised expectations of earn‑out performance and updated valuation assumptions. Loss (Gain) on Early Extinguishment of Debt Extinguishment of debt consists of gains or losses recognized in connection with the termination, refinancing, or repayment of existing debt arrangements.
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The net increase in selling, general and administrative costs was predominately driven by a $2.0 million reserve related to litigation settlements, an increase in marketing and advertising to support growth, and incremental spend related to advisory services supporting transformation initiatives.
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The decrease in cost of goods sold during 39 Table of Contents the year ended December 31, 2025 , was primarily due to higher manufacturing efficiency, stronger inventory discipline reducing obsolete product charges, and improved product quality that lowered warranty costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOn December 31, 2024 the Company had $560.9 million of floating-rate debt outstanding under the Credit Agreement with a weighted average borrowing rate of 8.4%.
Biggest changeOn December 31, 2025 the Company had $529.4 million of floating-rate debt outstanding under the Credit Agreement with a weighted average borrowing rate of 7.8%.
Holley is exposed to credit risk associated with cash and cash equivalents and trade receivables. On December 31, 2024, the majority of the Company’s cash and cash equivalents consisted of cash balances in non-interest-bearing checking accounts which exceed the insurance coverage provided on such deposits. Substantially all trade receivable balances of the business are unsecured.
Holley is exposed to credit risk associated with cash and cash equivalents and trade receivables. On December 31, 2025, the majority of the Company’s cash and cash equivalents consisted of cash balances in non-interest-bearing checking accounts which exceed the insurance coverage provided on such deposits. Substantially all trade receivable balances of the business are unsecured.
To manage exposure to such risks, Holley performs ongoing credit evaluations of the Company’s customers and maintains an allowance for potential credit losses. Exchange Rate Sensitivity . On December 31, 2024, the Company was exposed to changes in foreign currency exchange rates.
To manage exposure to such risks, Holley performs ongoing credit evaluations of the Company’s customers and maintains an allowance for potential credit losses. Exchange Rate Sensitivity . On December 31, 2025, the Company was exposed to changes in foreign currency exchange rates.
A hypothetical 100 basis point increase in interest rates would result in an approximately $0.6 million increase in annual interest expense, while a hypothetical 100 basis point decrease in interest rates would result in an approximately $5.6 million decrease to Holley’s annual interest expense. Credit and other Risks .
A hypothetical 100 basis point increase in interest rates would result in an approximately $0.3 million increase in annual interest expense, while a hypothetical 100 basis point decrease in interest rates would result in an approximately $5.3 million decrease to Holley’s annual interest expense. Credit and other Risks .
Currently, the Company does not hedge foreign currency exposure; however, the Company may consider strategies to mitigate foreign currency exposure in the future if deemed necessary.
Currently, the Company does not hedge foreign currency exposure; however, the Company may consider strategies to mitigate foreign currency exposure in the future if deemed necessary. Item 8.
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Financial Statements and Supplementary Data The consolidated financial statements and accompanying notes listed in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K are included immediately following Part IV hereof and incorporated by reference herein. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None

Other HLLY 10-K year-over-year comparisons