BOWLING GREEN, Ky. - Holley Performance Brands (NYSE: HLLY), known for its automotive aftermarket performance solutions, has made a significant reduction in its debt by prepaying $65 million in principal since September 2023. The company announced it has recently paid down an additional $15 million against its first lien term loan facility, utilizing cash on hand for the transaction.
The latest prepayment is part of a series of debt reductions, including a $50 million paydown during 2023. These efforts have enabled Holley to potentially save an estimated $2.5 million annually in net interest. Jesse Weaver, Holley's Chief Financial Officer, emphasized the company's commitment to reducing leverage and strengthening the balance sheet, crediting their resilient business model and strong free cash flow generation for enabling these strategic prepayments.
Holley's focus on improving inventory turnover and maintaining a selection of high-performance products has been a key factor in its financial strategy. As the company progresses through its business transformation, further reducing the leverage ratio using near-term cash flow remains a priority.
The information in this article is based on a press release statement.
InvestingPro Insights
Holley Performance Brands (NYSE: HLLY) has shown a strong commitment to financial health through its aggressive debt reduction strategy. With a market capitalization of 503.68 million USD, the company is trading at a P/E ratio of 26.07, reflecting investor confidence in its earnings potential. Notably, Holley has been recognized for a high shareholder yield, a metric that combines dividend payments and share repurchases, indicating a return of value to shareholders—even though the company does not pay a dividend.
InvestingPro data highlights that Holley’s liquid assets exceed its short-term obligations, suggesting a solid financial footing for the company. The company's gross profit margin stands at an impressive 38.82% for the last twelve months as of Q4 2023, which underscores its ability to manage costs effectively and maintain profitability. Moreover, analysts predict that Holley will be profitable this year, which is consistent with its performance over the last twelve months.
Investors should note that Holley's stock price movements have been quite volatile, with a one-year price total return of 73.88%. This volatility may present opportunities for investors who are looking to capitalize on price movements. For those considering a deeper dive into Holley’s financials, InvestingPro offers additional insights and metrics that could be crucial for making informed decisions. There are 7 additional InvestingPro Tips available for Holley, which can be accessed by visiting https://www.investing.com/pro/HLLY. For those interested in a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to get an additional 10% off.
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