What goes around, comes around...

[andrewb70]

Karma is a bitch.

http://www.portfolio.com/news-market...iles-for-ch-11



Andrew

[BonzoHansen]

Why do you say karma?

Snap, bondholders getting .10 on the dollar.

[Bill Howell]

As of Jan. 28, Holley's balance sheet showed assets of about $106 million and debts of $243 million.
How do you get that deep???

[andrewb70]

As of Jan. 28, Holley's balance sheet showed assets of about $106 million and debts of $243 million.
How do you get that deep???

Buy now, pay later at 12.5%

Andrew

[Damn True]

As of Jan. 28, Holley's balance sheet showed assets of about $106 million and debts of $243 million.
How do you get that deep???

Giving 90 day terms to retailers with no credit.
Putting huge booths at big $$ shows like SEMA and PRI.

Not letting certain members of this website continue to work for you in favor of knuckledragers with no brains who would do the above.

[JMarsa]

Beside the parent company brand, NOS, Weiand , Earl's, Hooker, & Flowtech isn't there a piston company in the mix too?

--JMarsa

[69TAPoser]

Wow, I had no clue that there was common angst against Holley. What is the deal? Who have they been treating unfairly?

It is really sad to see some big, long standing, brand names associated with american hot rodding in trouble. Is the acquisition spree that they have been on over the past several years driving some of their financial issues?

It just sux to see another US company in trouble. Especially one that is tied to your hobby.

Phil

[andrewb70]

Beside the parent company brand, NOS, Weiand , Earl's, Hooker, & Flowtech isn't there a piston company in the mix too?

--JMarsa

Jason,

I believe you are talking about Lunati. Lunati was sold a few months ago.

Andrew

[dharrod]

I agree with 69TAPoser ... we've all known someone with a stuborn carburator (name any brand) and we all know that executives are overpaid ... but there were/are a lot of American workers and fellow hobbist in the respective brands. I'm not happy they are in the situation - and for the most part I have had good experiences with the company/brands. Any more it isn't a case of what goes around .. comes around .... it simply goes to China. Karma ... hope not. If it is I hope they bounce back, strenghen the key brands, and focus on quality and service more than ever. I'm often amazed at "senior management" and hope the Karma/situation lands them (execs) on their rears ... and the hardworking portion of the business stays employed and the company gets back on their feet with new leadership.

[Cruiser]

It will be bought by some company based in China.......suddenly all those cheap parts that come from there will be brand named and cost more for the same cheap crap.

[69TAPoser]

It will be bought by some company based in China.......suddenly all those cheap parts that come from there will be brand named and cost more for the same cheap crap.

There are certainly enough examples of this in other industries. Let's hope it doesn't play out that way here.

Phil

[Samckitt]

It will be bought by some company based in China.......suddenly all those cheap parts that come from there will be brand named and cost more for the same cheap crap.

I hope not. How long does it have to go on before these companies that are having stuff made in China realize that the American employees that loose their jobs to cheap Chinese workers are not going to be loyal to their formal company? They are going to be just the opposite, they will buy anything BUT that make. Or when will politicians realize that outsourcing all of these jobs may look good on paper for profits, but before long there will not be the consumer base in the US to buy these products.

[hotrod392]

Hey guys, my name is Shane Weckerly and I am the Director of Product Management at Holley. I know the “bankruptcy” word sounds bad, 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: Holleyâ, Weiandâ, Hookerâ, FlowTechâ, Earl’sâ, and NOSâ.


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 (watch for the intro on the new Weiand Street Warrior LS intake!)

There are many enthusiasts within the Holley organization and we look forward to being around another 100+ years.

Thank you for your support of the Holley brands in the past and the future.
Shane

[wiedemab]

Sounds nice, but someone is getting hosed in the deal. If this deal is beneficial for Holley, someone is losing their ass. It looks like some of the bondholders - right?

Quote from http://www.portfolio.com/news-market...iles-for-ch-11

Bondholders that own Holley's $4.2 million 12.25 percent senior unsecured notes are slated to get either $100 in cash for each $1,000 worth of bonds, or warrants to purchase equity in the reorganized company.

[trapin]

Why not just make carberators and be happy with that? Why the need to buy other companies, play games, and try to be master of the universe?

If you make something and are successful at it....just do that, be successful and live happily ever after. This isn't rocket science.

The minute you let greed creep into your life......you're finished.

[69TAPoser]

Why not just make carberators and be happy with that? Why the need to buy other companies, play games, and try to be master of the universe?

If you make something and are successful at it....just do that, be successful and live happily ever after. This isn't rocket science.

The minute you let greed creep into your life......you're finished.

I don't think that is totally realistic in today's investor-driven business world. To an investor it is all about increasing market share and growth, which translates into bigger dollars for them (Hence their "investing" in the company... They are investing in a growing return on their investment). One common way to grow is through acquistion of companies that pull you into new markets. Investors DO want to master the universe.

In the end, it is not necessarily about Holley being greedy, it is about keeping investors happy. It may not be rocket science, but it is complicated.

This is one reason why many companies choose to remain private with little outside investment. Not to mention the loss of control.

Phil

[68Formula]

Why not just make carberators and be happy with that? Why the need to buy other companies, play games, and try to be master of the universe?

If you make something and are successful at it....just do that, be successful and live happily ever after. This isn't rocket science.

The minute you let greed creep into your life......you're finished.

Just like their main competitor (Edelbrock) did, they wanted to broaden their range and be able to offer packages instead of just intakes and carbs. Look at comp, the now offer cylinderheads.
Why did GM start a credit car company, buy Hughes Aircraft, Saab, Fiat, blah, blah, blah?

Holley is not the only company feeling the pain of the current economic situation. I don't think anyone can be sure that they would be in even better shape had they not expanded.

[YoungGun]

I don't think that is totally realistic in today's investor-driven business world. To an investor it is all bout increasing market share and growth, which translates into bigger dollars for them (Hence their "investing" in the company). They are investing in a growing return on their investment). One common way to grow is through acquistion of companies that pull you into new markets. Investors DO want to master the universe.

I agree its not realistic, but I don't think Holley is Public.

The assets vs. debt on the balance sheet is in part because they financed growth through debt and not equity. Equity would have been cheaper for the most part, besides giving up part ownership. I do not know what type of rating they have but 12.5% bonds is real high, so must not be the most sound company financially. Also those bonds were a small portion of the debt, they seem to have a revolving credit line they drew on and other debt financing somewhere in there.

May have hit the loan covenants and now need to refinance or secure some rescue financing, and get rid of some debt in the process.

This is just on quick glance though!

Oh, and the 2:1 on the D/E ratio....thats not bad. I have seen 10:1 EBITDA ratios and far worse on the D/E. It is about the cash flows!!

I think they will be fine though in all honesty.

Just my opinion.

Tim

[trapin]

......This is one reason why many companies choose to remain private with little outside investment. Not to mention the loss of control.

That's essentially what I'm saying. Why mess with a good thing by trying to be everything to everyone. Just make the damn carberators and quick worrying about being a conglomerate. Greed is what fuels a company to go public and acquire other companies. Which I understand is the essential goal of some businesses. But that's not how Holley started out. They had a good thing going for a very long time and somebody just had to act on a bright idea.

Idiots.

[EFI69Cam]

When was Holley spun off of Colt Industries? A 3310 I bought around 1992 said Colt Industries on the box.