Aftermarket parts maker Holley files for bankruptcy

[sunrunner_pei]

Filed under: Aftermarket (http://www.autoblog.com/category/aftermarket/), Earnings/Financials (http://www.autoblog.com/category/earnings-financials/)
http://www.blogsmithmedia.com/www.autoblog.com/media/2008/02/holley_opta.jpg (http://www.bloomberg.com/apps/news?pid=20601103&sid=aBsaKFQDcFqg&refer=news)Most of us on the Autoblog team never restored a classic with our dads in the family garage, thus our connection to aftermarket parts manufacturer Holley is somewhat limited. But we can appreciate the mark that this 100+ year old company and its many brands including Hooker Headers, Earl's, Weiand, NOS and Flowtech have left on the performance aftermarket scene. That's why we're sad to report that the company has recently filed for bankruptcy, citing its rapid expansion in the late '90s as the cause for its downfall.

Not all is lost, as bankruptcy for a company in the U.S. just means you get some time to reorganize and pay off your debts, hopefully reemerging as a stronger company in the end. As such, Holley wlll continue to operate as normal for the time being and none of its 390 employees spread across Kentucky, California and Mississippi will be affected. Paying off its debt will likely require the company to give nearly all its equity away to debtors, though those holding notes will only get half of what they're owed if a bankruptcy judge approves the reorganization plan. Thanks for the tip, Tobias!

[Source: Bloomberg]
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[OneFstGt]

That really stinks....:(

[1970rs]

Hi, My name is Jay McFarland and I am a Sr.Product Manager at Holley. I found this post and would like to shed a little light on the subject. The “bankruptcy” word sounds harsh, but Holley is fine. Please read the official press release below and then our further comments below that.


BOWLING GREEN, KENTUCKY, February 11, 2008 - Holley Performance Products Inc. (the “Company”) announced today that its Owner/Investors have overwhelmingly approved a plan to dramatically enhance the Company’s capital structure by converting a majority of the Company’s debt into equity.

Thomas W. Tomlinson, the Company’s Chief Financial Officer, said today that “This is a prudent financial move on the part of our Owner/Investors – it tremendously strengthens our Company’s financial position and provides substantial flexibility to invest in our future. This investment will allow the Company to realize its full growth potential and will maximize the value we can return to our investors. The actual conversion of debt into equity will be accomplished through a “Prepackaged” bankruptcy filing that will cancel-out the old capital structure and formally establish the new one. Customers, suppliers, and employees will not be affected.” Mr. Tomlinson emphasized that, “It will be “business-as-usual” at Holley throughout the restructuring process which we expect to be completed in as few as 45 days.”

James D. Wiggins, the Company’s Chief Executive Officer, went on to say that “We are very pleased with the transformation that has taken place here at Holley over the last several years. Today Holley is a lean and focused enterprise with strong customer relationships, significant technological capabilities, and diversified revenue sources. We have established a good track record of profitability and growth in enterprise value. This restructuring represents the culmination of tremendous effort on the part of the team at Holley and we are excited to share news of this successful program with you.”

Holley is a leader in the performance engine market, and is used throughout the world in racing, street, marine, and powersports. Holley’s family of companies includes the leading brands in the performance market including: Holley, Weiand, Hooker, FlowTech, Earl’s, and NOS.


So, what does this mean to you, the racer/enthusiast/consumer? It means that Holley will be a much healthier company and able to bring you better products, technology and support. This can now be done because we won’t be under the same financial constraints of the last few years.

Essentially, what has happened is that the original investment group will transfer ownership to the second tier of investors who were a minority owner. As a result, the debt we now owe is significantly less and puts us in a better position for the future.

This was intentionally structured this way so our vendors, employees and consumers wouldn’t be impaired in any way. It will be business as usual:
• Product will be available as always with no interruption in supply
• Race contingency and event sponsorship programs will continue as planned
• Technical service support via phone, e-mail and at track is unchanged
• All product warranty systems are continuing as normal
• New product development is ongoing and we expect to release several exciting new programs throughout the year and at SEMA/PRI.

I wanted to make sure everyone understood what this means and that it still means business as usual for Holley. Let me know if you have any questions.

Thanks and I am glad to be a part of the forum,
Jay