Holley Reports Third-Quarter Sales Growth, Hits 3.5x Leverage Target a Quarter Early
Net sales were $141.6 million in the third quarter, and the company cut debt $25 million to reach a four-year-low 3.50x leverage ratio.
Holley Performance Brands (HLLY), an automotive aftermarket performance-products company, reported net sales of $141.6 million, up 2.3%, for the third quarter ended September 27, 2026, and reduced debt by $25 million, inclusive of a previously announced $15 million repayment, and said the Credit Agreement Total Leverage Ratio fell to a four-year low of 3.50x, achieving its year-end 3.5x target a quarter early.
Cumulative debt reduction since September 2023 reached $125 million. The leverage ratio was 3.75x at December 31, 2025.
Net sales were $141.6 million, up 2.3% from $138.4 million a year earlier. Core business net sales, which exclude sales of divested businesses and the portfolio rebalancing initiative, grew 6.7%, versus 4.9% core growth in the second quarter.
Net income was $7.8 million, or $0.06 a share, compared with a net loss of $0.8 million, or $0.01 a share, a year earlier. Adjusted net income was $7.7 million.
Adjusted EBITDA was $29.4 million, up 8.6% from $27.1 million a year earlier. Adjusted EBITDA margin expanded to 20.8% from 19.6% a year earlier, after 19.6% in the second quarter.
President and Chief Executive Officer Matthew Stevenson said the results reflected continued strength in the core business, which has now grown in six of the last seven quarters, and progress against strategic priorities in a moderating macroeconomic environment. He said a new national retailer program shipped during the quarter, expanding shelf presence, and that exiting non-core businesses such as the Restoration brands has reduced complexity and contributed to the margin expansion.
Free cash flow was $8.8 million, a $3.3 million year-over-year improvement from $5.5 million. Net cash provided by operating activities was $14.1 million versus $7.4 million a year earlier.
Long-term strategic initiatives drove $18.6 million in revenue and $6.1 million in cost savings, versus $13.4 million in revenue and $8.3 million in cost savings in the second quarter. Twenty-seven brands delivered growth across DTC and B2B channels.
Chief Financial Officer Jesse Weaver said the quarter demonstrated progress across sales growth, profitability, cash generation and balance-sheet strength, and that strong cash generation enabled further deleveraging.
For the year ending December 31, 2026, current full-year net sales guidance is $610 million to $625 million, with core business growth of about 2% to about 5%. Current Adjusted EBITDA guidance is $127 million to $132 million. Current interest expense guidance excluding collar revaluation is $40 million to $44 million. Capital expenditures remain $15 million to $20 million and depreciation and amortization $24 million to $26 million. The company said those ranges were narrowed but remain within previously communicated ranges, while other guidance is unchanged.
Weaver said the company believes it is prudent to be conservative regarding its outlook given the current consumer environment and that it has tightened full-year revenue, Adjusted EBITDA and interest expense guidance ranges.
Cash and cash equivalents were $49.9 million at September 27, 2026. Long-term debt, net of the current portion, was $492.7 million, with $8.2 million in the current portion.
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