HLLYMEDIUM SIGNALRISK10-K

HLLY has transitioned away from emerging growth company status while adding new risk disclosures around inflation, fuel costs, and labor challenges alongside deteriorating cash position.

The company's removal of JOBS Act language indicates it has matured beyond emerging growth company thresholds, suggesting increased regulatory compliance requirements and investor scrutiny. The addition of specific risk factors around fuel costs impacting powered vehicle usage and labor retention challenges signals management is identifying new operational headwinds that could affect future performance.

Comparing 2026-03-16 vs 2025-03-14View on EDGAR →
FINANCIAL ANALYSIS

HLLY shows mixed financial health with gross profit growing modestly to $266.2M while operating expenses increased proportionally. However, the company's cash position declined notably to $37.2M from $56.1M, while current liabilities rose 21% and interest expense grew substantially to $60.7M. The combination of higher capital expenditures, increased debt servicing costs, and reduced cash reserves suggests tightening liquidity conditions that warrant monitoring.

FINANCIAL STATEMENT CHANGES
Capital Expenditure
Cash Flow
+81.1%
$6.8M$12.3M

Capital expenditure jumped 81.1% — major investment cycle underway; assess returns on deployment.

Interest Expense
P&L
+51%
$40.2M$60.7M

Interest expense surged 51% — significant debt increase or rising rates materially impacting earnings.

Cash & Equivalents
Balance Sheet
-33.6%
$56.1M$37.2M

Cash declined 33.6% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Current Liabilities
Balance Sheet
+21%
$95.2M$115.1M

Current liabilities rose 21% — increased short-term obligations, watch current ratio.

Gross Profit
P&L
+11.6%
$238.5M$266.2M

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

SG&A Expense
P&L
+10.6%
$132.1M$146.1M

SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.

LANGUAGE CHANGES
NEW — 2026-03-16
PRIOR — 2025-03-14
ADDED
There were 120,941,585 shares of Common Stock, including 1,093,750 re stricted earn-out shares, par value $0.0001 per share, issued and outstanding as of March 9, 2026 .
tax laws and regulations, including the impact on deferred tax assets; anticipate the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, and demographic trends; and respond to other risks and factors, listed under the caption Risk Factors included in this Annual Report on Form 10-K, and/or as disclosed in any subsequent filings with the SEC.
Inflation and tariffs could result in higher costs and decreased profitability and our revenue and results of operations may be materially affected.
Fuel shortages, or high fuel prices, could have a negative effect on the use of powered vehicles that use our products.
Our success depends on the continuing efforts of our employees and retention of skilled personnel, and our results of operations may be adversely affected by labor shortages, turnover and labor cost increases.
Our failure to both assess and maintain our effective internal control over financial reporting could harm us, and we may identify additional weaknesses in the future.
We attribute a major component of our success to our brands, including Holley, Holley EFI, MSD, Simpson, Flowmaster, EDGE, Cataclean, and Accel, among others.
Our principle is sales growth through our DTC channel and our loyal distribution partners.
Accelerating Profitable Growth : Our third strategic principle is to significantly increase revenue by expanding our market share while maintaining and improving profitability.
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.
REMOVED
See Note 2, "Business Combination, Acquisitions, and Divestiture" Includes professional fees for legal, accounting, consulting, administrative, and other professional services directly attributable to acquisitions.
Write-off of obsolete inventory, net of inventory adjustments.
There were 119,958,936 shares of Common Stock, including 1,093,750 restricted earn-out shares, par value $0.0001 per share, issued and outstanding as of March 11, 2025.
laws and regulations, including the impact on deferred tax assets; anticipate the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ); anticipate the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, and demographic trends; and other risks and factors, listed under the caption Risk Factors included in this Annual Report on Form 10-K, and/or as disclosed in any subsequent filings with the SEC.
Inflation and tariffs could result in higher costs and decreased profitability.
Our failure to maintain relationships with retail partners or increase sales through our direct-to-consumer ("DTC") channel could harm our business.
Our failure to maintain effective internal controls over financial reporting could harm us and we have identified a material weakness in our internal control over financial reporting and may identify additional weaknesses in the future.
Our management team does not have extensive experience managing a public company.
We may redeem unexpired Warrants to their exercise at a time that is disadvantageous to the Warrant holders, thereby making the Warrants worthless.
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.
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