Tom Tomlinson retires as president and CEO.
Holley Inc., a platform serving performance automotive enthusiasts, has announced that Tom Tomlinson will retire as president and CEO and resign from the board. The board has appointed current director, Michelle Gloeckler, as interim president and CEO while it conducts a comprehensive search process to identify a permanent CEO. The search will be conducted with the assistance of Heidrick & Struggles, which was retained by the board in September 2022 for a comprehensive review of succession planning. Gloeckler has been a member of the board since July 2021 and has more than 30 years of experience in consumer-packaged goods, merchandising, sourcing, manufacturing and strategy.
In addition, Matthew Rubel, the company’s current chairman of the board, was designated and appointed executive chairman of the board, and expects to serve in such role until a permanent CEO has been selected. Further, Graham Clempson, an observer on the board since the company’s business combination with Empower Ltd. in July 2021, was appointed to serve as a member of the board, effective immediately. Clempson will serve as the chair and member of the Compensation and Talent Committee and as a member of the Audit Committee. Anita Sehgal, who joined the board in May of 2022, will become the chair of the Nominating and Governance Committee.
“The board thanks Tom for his many contributions and leadership during his 12 years as CEO and nearly 20 years at Holley,” said Rubel. “Tom’s commitment to the business and passion for automotive enthusiasts have helped grow Holley into a recognized leader in the growing enthusiast market with a solid foundation for future growth. We wish Tom well in his future endeavors.”
Rubel continued, “Holley has an industry-leading position in high-performance aftermarket products for car and truck enthusiasts, and we are well-positioned to execute on our vision of enabling them in their automotive journeys. We are fortunate to have Michelle lead Holley while the board conducts the search for a permanent CEO. She has a demonstrated ability to connect with customers, drive growth and build teams in consumer portfolio businesses that will serve Holley well.”
Gloeckler said, “I have tremendous respect for the Holley team and their commitment to our customers. I look forward to working closely with the board and Holley’s Executive Leadership team to lead the company and execute on the strategic vision.”
“It has been an honor to lead Holley since 2009 and I would like to thank all of our employees for their commitment and service to the Company,” said Tomlinson. “We have accomplished a great deal together, and I believe this team will continue to drive strong long-term growth well into the future.”
Preliminary Fourth Quarter and Full Year 2022 Results
While the company is still conducting its financial closing procedures for the quarter and year ended on Dec. 31, 2022, and the audit by the independent auditor is still underway, the company today announced preliminary results for the 13-week period and full year ended Dec. 31, 2022.
Fourth Quarter Highlights vs. Prior Year Period
- Preliminary Net Sales of $153-$155 million compared to $180 million in the fourth quarter 2021
- Preliminary Gross Profit of $46-$48 million compared to $75 million in the fourth quarter of 2021
- Preliminary Net Loss of $19-$17 million compared to a Net Loss of $18 million in the fourth quarter of 2021
- Preliminary Adjusted EBITDA1 of $13 to $15 million, compared to $36 million in the fourth quarter of 2021
Full Year 2022 Highlights vs. Prior Year Period
- Preliminary Net Sales of $687-$689 million, compared to $693 million in 2021
- Preliminary Gross Profit of $253-$255 million, compared to $287 million in 2021
- Preliminary Net Income of $70-$72 million, compared to a Net Loss of $27 million in 2021
- Preliminary Adjusted EBITDA range of $113-$115 million, compared to $169 million in 2021
“We are making the necessary changes to return Holley to profitable growth, including adding a highly experienced Interim Chief Operating Officer in December 2022, Brian Appelgate, who is leading our cost-reduction initiatives,” said Interim President and CEO Michelle Gloeckler. “The entire Holley team is committed to delivering on the Holley Strategic Vision – to inspire and enable enthusiasts in their automotive adventures while bringing innovation, discovery, and fun to motor life.”
“Holley’s results for the fourth quarter and full year 2022 were below our expectations,” said CFO Jesse Weaver. “Ongoing supply chain challenges and normalization of consumer demand to pre-covid levels reduced sales in the second half of 2022. Adjusted EBITDA results were disappointing, as continued deleveraging of fixed cost, inflation, and manufacturing challenges from the unpredictable supply chain significantly impacted our profitability. While we reduced our past-due orders by over 25% in the fourth quarter, the improvement came in product categories outside of electronics, which has been a key growth area for the company in recent years.”
Weaver continued, “As Holley executed its acquisition growth strategy in recent years, the Company underwent a significant transformation. In the last three years, we’ve closed 16 acquisitions, integrated 13 ERP systems and consolidated more than 160,000 square feet across 10 locations. To fully maximize the value of these transactions and position the company for the next wave of growth, our focus in 2023 will be accelerating deal synergy capture and improving free cash flow across the company through a combination of realigning teams to key strategic focus areas, streamlining operations, and working with vendors to bring cost back in line. Furthermore, targeted cost and inventory management efforts aim to improve profitability and support debt reduction, while a recently implemented interest rate collar should help to minimize the effects of rising interest rates on the company. We are actively engaged in discussions with our lenders to ensure maximum flexibility as we execute these plans.”
Mr. Weaver continued, “We intend to provide our initial 2023 financial guidance on our upcoming fourth quarter 2022 earnings call in early March, and we will include more detail around these efforts and their expected impact during the call.”
