Holley Completes Restoration Brand Sales
Net sales rose 3.2% to $172.0 million as the company booked a $28.3 million loss on the sale of non-core assets.
Holley Performance Brands (HLLY) completed the sale of its non-core Restoration brands, including Scott Drake and Brothers Trucks, in the second quarter ended June 28, 2026, and recorded a $28.3 million loss on the sale of those assets.
The automotive aftermarket performance-products company said the divestiture is a step in its portfolio rebalancing initiative to reduce complexity and concentrate resources on higher-priority growth.
Net sales grew 3.2% to $172.0 million from $166.7 million a year earlier, a return to year-over-year growth after first-quarter 2026 sales of $147.3 million versus $153.0 million a year earlier. Core business net sales, which exclude divested businesses and the rebalancing initiative, grew 4.9%. President and Chief Executive Officer Matthew Stevenson said three of the four business segments delivered year-over-year core growth.
GAAP results swung to a net loss of $(2.4) million, or $(0.02) a share, from net income of $10.9 million, or $0.09 a share, a year earlier. Adjusted net income was $24.0 million, and adjusted diluted earnings were $0.20 a share.
Adjusted EBITDA was $33.8 million, and the adjusted EBITDA margin was 19.6%. Chief Financial Officer Jesse Weaver said the prior-year quarter included a one-time, non-cash benefit from the capitalization of tariff costs that did not repeat, and that adjusted for that item Adjusted EBITDA was approximately flat year-over-year. Sequentially, adjusted EBITDA rose from $27.3 million in the first quarter, and the margin expanded from 18.5%.
Cash generation improved. Free cash flow was $40.9 million, after net cash provided by operating activities of $47.1 million. In the first quarter, free cash flow was $(6.3) million and operations used $2.9 million. Cash and cash equivalents were $69.0 million at June 28.
Long-term strategic initiatives drove $13.4 million in revenue and $8.3 million in cost savings, and 27 brands delivered growth across DTC and B2B channels, the company said. Stevenson said the company is entering the second half with new national retailer placements, product innovation, and launches slated for the coming months, and that it has reinvigorated its marketing calendar with a greater focus on brand activation and enthusiast engagement.
Holley repurchased approximately $2.0 million of common stock in the quarter. After a $15.0 million voluntary debt prepayment made after quarter-end, the company said it had reduced debt by $115.0 million through voluntary prepayments since September 2023. The Credit Agreement total leverage ratio was 3.74x at June 28, 2026, versus 3.75x at December 31, 2025, which the company described as the lowest level in the last four years. Weaver said those actions contributed to another quarter of leverage reduction and that the company remains on track to finish the year below its targeted leverage ratio of 3.5x.
Full-year 2026 core business guidance was reiterated unchanged: net sales of $610 million to $640 million with core business growth of about 2% to about 7%, and adjusted EBITDA of $127 million to $137 million. Capital expenditures are guided at $15 million to $20 million.
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