Good afternoon, ladies and gentlemen and welcome to the Conference Call to discuss the Results from Holley’s Fourth Quarter 2022. [Operator Instructions] Please be advised the reproduction of this call in whole or in part is not permitted without written authorization of Holley. And as a reminder, this call is being recorded and will be made available for future playback. I would now like to introduce your host for today’s call Mr. Ross Collins, Managing Director of Alpha IR. Please go ahead.

Thank you and good morning, everyone. Thank you for taking the time to join us today. On the call with me today are Matt Rubel, Executive Chairman; Michelle Gloeckler, Interim President and Chief Executive Officer; Jesse Weaver, Chief Financial Officer; and Vinny Nimmagadda, Executive Vice President of Corporate Development and New Ventures. After their prepared remarks, we will open the call for questions. Now I will reference the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. This call may contain certain forward-looking statements that are subject to significant risks and uncertainties, including the future operating and financial performance of the company. In many cases, these risks and uncertainties are beyond the company’s control. Although the company believes the expectations reflected in its forward-looking statements are reasonable, they can give no assurance that such expectations or any of its forward-looking statements will prove to be correct and actual results may differ materially from expectations. Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in the company’s recent 10-Q, S4 and S1 filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed. Investors should not assume that statements will remain relevant and operative at a later time. Holley undertakes no obligation to update any information included in this call in the future. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP are included in today’s press release, which is also posted on our Investor Relations website. At this time, I would like to turn the call over to Michelle Gloeckler, Holley’s Interim President and Chief Executive Officer. Michelle?

Thanks, Ross. Good morning, everyone and thank you for joining us today. As we enter the next chapter for Holley, I know I can speak for myself and the Board when I say that we are excited about the organization’s focus supported by the incredible talent and depth of the organization and this leadership team. This is a business built for enthusiast by enthusiast. Many of our associates have decades of experience in the industry and not only believe in our company vision to inspire and enable enthusiast in their automotive adventures by bringing innovation, discovery and fun to motor life, but they also live our vision in their day-to-day lives outside of Holley. Our team’s experience and direct connection to the enthusiast consumer as enthusiast themselves is a strategic asset that underpins the foundation necessary for us to execute on our strategy and capitalize on continued growth in this category. That strategy is built on five pillars: one, prioritizing key categories and platforms; two, product innovation; three, mergers and acquisitions; four, our consumer focused channel strategy; and five, engaging and inspiring the enthusiast. Moving forward, we are confident that we have the right team and the right plan in place to drive shareholder value. Our markets remain fundamentally strong and although sector demand is experiencing a normalization to pre-COVID levels, we firmly believe our industry is capable of growing organically at 6% to 7% over the long run. Given our unmatched scale, market leading brands, new product innovation, direct-to-consumer powerhouse and proven M&A platform, Holley is poised to grow at or above the market. We continue to believe this business can return to 40% gross margins with EBITDA margins greater than 20% in the near future. While we did not meet these targets in 2022 due to a combination…

Thank you, Michelle and good morning everyone. Holley delivered net sales of $154.2 million in the fourth quarter, a decrease of $25.6 million or 14.3% compared to the fourth quarter of 2021. Non-comparable sales associated with acquisitions contributed $7.3 million or 4.1% of year-over-year growth. The remaining comparable sales decreased by $33 million or 18.3% compared to the prior year quarter offsetting the impact from acquisitions. Past due orders declined by $9.6 million in the quarter to $26.8 million driven primarily by improvements in our mechanical product availability. We are still seeing elevated past dues in our electrical products, which continue to be an opportunity and are expected to impact sales potential in 2023. Sales levels in the quarter were below our expectations driven both by weaker customer orders as well as supply chain impacts. Orders were down 10% from the prior year, with the weakest year-over-year performance in our exhaustion safety products. As Michelle mentioned, we are seeing a normalization of demand trends back to pre-COVID growth rates. Prior to any COVID impacts on demand, the team had reported that our addressable market grew at roughly a 6% to 7% compound annual growth rates between 2001 and 2019. To the extent, our comparable sales growth rate exceeded that level between 2020 and 2022 demand was likely positively impacted by consumer spending habits from stimulus related to COVID shutdowns. While we believe this approach is an appropriate guide to better understanding demand normalization, the approach would not factor in any potential upside from share gains or new market entrants. While we believe demand normalization maybe a headwind in the near-term, we still expect the market to grow 6% to 7% per year in the medium to long-term and for Holley organically to perform in line with the market with upside…

Absolutely, Jesse. [Operator Instructions] Operator, please open the line for questions from our participants.

Mr. Altobello, please go ahead with your question.

Great, thanks. Hey, good morning, guys. I appreciate the question. I guess first on the guide, I want to understand better what you’re assuming in terms of demand and supply chain sounds like you’re not expecting anything dramatic to change on that front. So maybe help us understand how we think about those two dynamics throughout ‘23?

Hey, this is Jesse. Good question. And the way that we’re thinking about the guide, you’ve got, we’ve tried to do a good job in the supplemental materials of illustrating sort of our assessment of how much the normalization of demand is kind of coming in to 2023. And when you look at sort of the midpoint of that you’re in the 5% range of headwinds year-over-year. And we’re assessing probably 4% of that is related to 4% to 4.5% related to normalization of demand. And the balance of it largely being just a continuation of the more recent trends we’ve seen as it relates to chip availability. So it doesn’t assume any improvement in some of the more recent months. But that would be upside if the environment changes.

Okay, that’s very helpful. Maybe second question, in terms of DTC growth, obviously, it’s outperforming the rest of the company. Is there any issue in terms of channel conflict between yourselves and some of your distributors and resellers for example, given the growth of that channel?

Yes, this is Michelle, thank you for the question. And you’re correct, with 27% DTC growth being 20% of our overall at almost $150 million. We’re happy with that because it does link us directly with the enthusiast. But to your question on does it create channel conflict. We have great relationships with our distributors, wholesalers, small shops, especially those that add service to the mix. So they’re a vital part of our business mix in the way we reach our customers and enthusiasts. So the way I like to think about it is we want to reach our enthusiast, however they want to shop whenever they want to shop. And if they need services, our distributors and wholesalers and independent shops, are – their value add to that. So we’re really trying to let this be an enthusiast led demand piece.

Okay, great. Thank you.

Thank you. Our next question comes from the line of John Lawrence, Benchmark Company. Please proceed with your questions.

Great, thanks for the chance to ask questions. Michelle, can you talk a little bit about the fact that a lot of initiatives a lot of strategic changes, I guess it’s – we get sort of a debt concerns out of the way liquidity a lot of these strategic initiatives, can you – by any chance, put them in buckets as far as what has to happen first, and most importantly on the innovation piece? I mean, I’ve always viewed that innovation piece is what sets you apart from the rest of the industry, and how has the cost cuts etcetera, expected that sort of innovation piece? And when you talk about reengineering, some things on the chip side. Can you walk through a little deeper dive there, please?

It would be my pleasure. And thank you for the question. And also, thank you for your understanding on the reengineering of the chips. That’s a very important point. I’m going to try to put things in some sequential buckets for you. Because I do think there is an order when you talk about the cost savings, both operational excellence, which is tied to SKU rationalization. So we mentioned that we were able to rationalize 20,000 SKUs across 18 brands that will bring efficiencies not only in operations, but in our distribution centers. And also consumer facing, that’s less things to scroll through on the website. So to me that is fundamental to get those consumer facing operations facing distribution center facing things in order. And we did the SKU rationalization with an eye toward what items were duplicate, what has substitutability? And what things are just costing us more to hold an inventory than as needed? So there was a good diligence done there. Under the operations thing, I think that, one of the things that our Chief Operating Officer is doing is going site-to-site not only here in Bowling Green, where we manufacture but we have several manufacturing sites. And we’re getting feedback from the team they’re what things are readily available for improvement. And what we’re finding is continuous refinement, continuous improvement, will build our efficiencies there, as well as cost reductions. You mentioned mergers and acquisitions. And yes, we have had a lot of them over the past several years. And we’re still working through those to find and realize synergies. Most of them are on our ERP systems, most of them are in our distribution centers. And most of them have centralized back office, things like payroll, but there are other unique things to each business, that we are focused on listening to the folks that are running those brands and businesses and making sure that we’re optimizing them both from a marketing standpoint, and a manufacturing. So that brings me to innovation, which you gave us credit for being one of the things that sets us apart. And when we look at our product, vitality charts. That’s absolutely true. We have improved our innovation process, and gave some real clarity to the team that works on that both the engineering team, as well as the financial team that up, that judges the size of market, the whitespace. And where we can make and manufacture things that our enthusiast will enjoy. So really, long answer there, but I covered a lot of areas and how we’re thinking about prioritizing, and it’s kind of like cleaning up the shop, and then just cranking out the product innovation. And it’s there is a sequence to it. So thank you.

Great, thank you. Just one quick follow-up there, that’s okay and when you look at capital requirements, obviously, to pay down the debt, does the debt agreements have any covenants or any restrictions on being able to go find a M&A opportunity, if you so choose to?

Yes, thank you for the question. And we do have during the covenant relief period, some limitations on our ability to go make acquisitions. And the focus that we’ve tried to articulate in our prepared remarks is this year is the year that we tighten the screws and we exit the year at a much, much stronger financial position and operational position. And so, our intent is to deliver the balance sheet get this business back to what we believe is the long-term potential here, which is over 20% EBITDA margins and to generate strong free cash flow. We know, this is what this business is capable of. And nothing has fundamentally changed in the market of enthusiast or our position to prevent us from being able to hit that 40% gross margin and greater than 20% EBITDA. And so that is the focus this year.

Great. Thanks, Jesse.

Thank you. Our next question is from the line of Anna Glaessgen with Jefferies. Please proceed with your questions.

Hey, good morning. Thanks for taking my questions. Just first I wanted to dig into the puts and takes gross margin in 2023. You talked about reengineering some products to widen the chip supply. Can you talk about when that could potentially be flowing into the model, the expected timeline to get there and the potential benefit to the gross margin line?

Yes, Anna, it’s Michelle, thanks for the question. And when we talk about reengineering the chips, so we mentioned that this was both a product lifecycle and an engineering opportunity, the engineering opportunity to reengineer these products for chips that are more readily available is time consuming. And we wouldn’t expect any of those new products before the end of this year. That said, we are continuing to buy and to put demand out there to try to procure through our distributors as well as on the open market on the existing chips, which are just purely an older model and not as readily available. So I’m glad that you understood there are two efforts going on there in order to meet the demand for those EFI items.

Great. Thanks.

So just to answer your question, as it relates to, whenever you’re looking at the economics of our business where the headwind from this is coming from, and I think that the biggest obviously margin is a piece of it, because we do have to purchase the chips that we can’t find on the spot market, which come at a premium. But I would say that the bigger opportunity here long-term that drives the greatest number of bottom line dollars is just getting the sales reengaged. And so that’s, that is where we are doing everything we can obviously to be financially smart about what we pay on the spot market, but really just getting access to the chips is the number one priority with an eye towards the profitability. So that we can make sure that our customers that are hungry for our product, actually get the product and are able to stay loyal to the brand.

Thanks. And then building on that, can you give any perspective on how much unfinished inventory is Holley EFI product that’s basically waiting for a chip?

Yes, we haven’t shared kind of our past dues, I will tell you that. We shared overall numbers around our past dues. And we’ve made progress on our mechanical product lines. But we still have a – an amount of past dues in the electronic fuel injection that we’re working through. We haven’t given a specific number.

Well, and I think I can point you to get you in the ballpark here. We do have in the supplemental materials. Now a breakdown of those past two buckets between the various categories, electronics, mechanical, exhaust, and so on. As you’ll see there on the electronics bucket, which is the bottom bar of the vast majority of what you see, which is roughly about $10 million in Q4 is related to these products, which I think to put in perspective and we were talking overall in a normal market, mid single digits in total sales value.

Okay, great. Thank you.

Thank you. [Operator Instructions] And our next question is from the line of Mike Swartz with Truist. Please proceed with you question.

Hi, good morning, everyone. I just wanted to ask a question just on this kind of normalization of demand commentary. And kind of putting that to the growth, double digit growth you saw in the direct-to-consumer business throughout the year. Are we just supposed to expect to read that the normalization demand is really around the reorder – the ordering patterns from distributors and retailers? Because it seems as if the end consumers still strong still buying, so are we – am I reading that correctly? And then has anything changed in the first quarter that’s I guess, changed your view on that?

That’s a good question. And I think that – I will answer a couple of different ways as it relates to the first quarter. I mean, I think at this moment, we’re not going to be giving any quarterly guidance. But as it relates to your commentary around, I think this question just generally is how is DTC continuing to grow, but you’re seeing normalization of demand. And I think is this has become a bigger and bigger part of our business. Certainly, all of the underpinning business case fundamentals around the DTC getting closer to the consumer, we 100% believe in. And it’s something that we are continuing to invest in, and certainly see higher gross margin opportunity there. But the harder thing for us to kind of dig into and understand is really how much of that is incremental versus really channel shifting from either an online retailer, or just another channel that customers may have been getting their products from. What I can say is, one of the things that helped us and I know that we spoke to this in our Q3 call was just around channel destocking. So, as you can imagine, when it comes to inventory availability, a lot of cases as our resellers might have become a bit more bearish. And recognizing all the trends that we saw, when it came to consumer shift from goods to services in the back half of the year, we still had product available. And so as they allow their inventories to decline, it’s likely that we picked up some of that benefit as we have products available for them to purchase. So, there is that sort of nuance there. And we firmly believe DTC long-term is a great additional sort of channel for us. But the incrementality piece of it is really the portion that we are having to dig into.

Okay, great. And just as it pertains to the ‘23 guidance, it looks like you are flying EBITDA margin somewhere in the 17% to 18% range. And I think if we look at, kind of the normalization idea, we go back to the ‘18, ‘19, you are running in the EBITDA range of 20%, 22%. I guess help us understand just the disconnect there, the difference are they incremental investments, is that fixed costs deleveraging, just anyway to think about that delta?

Yes. And you are keying in on, I think part of the reason we provided that additional detail is just to demonstrate this is a business that can be at greater than 20% on the EBITDA line. I think there is a few different things to kind of keep in mind between what the world looked like in 2019, for Holley versus where it is today, that would apply additional pressure on the business. I would say not the least of which as we have gone public, and there are certainly some incremental costs associated with being public, that wouldn’t have been in the 2019 numbers. In addition, while I think we are seeing some really good right-sizing efforts from the work that we have done on the SG&A side, to help offset some of those. We are also and we are seeing good work as it relates to the freight costs. A lot of the commodity cost increases that have occurred since then are still sort of a burden a bit on the business. And we have initiatives in place, as you would expect, all of our vendors that are commodity driven, were very quick to come and raise prices, but none of them have given us a call back and said, hey, you can actually lower the prices, commodities have come down. So, that’s effort that’s going to take some time. And then I would say the last thing is just a bit of an accounting nuance here. The way our business works when it comes to the inventory valuation and seeing the cost savings that flows through the income statement. A lot of those things actually kind of go on the balance sheet, and you don’t get all the benefits immediately, and then they come off the balance sheet. And so you will see some of that flow through towards the back half of the year.

Okay. That’s perfect. Thanks for your help, Jesse.

Sure.

Thank you. Our next question comes from the line of Christian Carlino with JPMorgan. Please proceed with your questions.

Hi. Good morning. Thanks for taking my question. As you think about sales for next year, how should we think about the contribution from price versus units and given inflation remains persistent are you still planning on doing multiple mid-single digit price increases this year, or are you reevaluating that?

Yes. Thank you for the question. And pricing has been an important lever for us. And it’s important for us to be strategic and to understand the industry and remain competitive. So, we will be correct. We will be looking strategically across our portfolio for pricing. And as Jesse said in the previous comment, we are continuing to work with our suppliers where commodity costs and other things have come down to make sure that we are buying at the best price, so we don’t have to take pricing. But it is always something that we are looking at reflecting yet remaining competitive.

Got it. And then just double clicking on Jesse’s previous answer, is the right way to think about gross margin this year that once you get through 1Q and maybe into 2Q, you will turn through all of the 2022 inventory with the higher capitalized costs. And then you also will benefit from the new freight agreements. So, as you get into the back half, you have this upward inflection for at least those discrete components of the margin?

Yes. I think what I can do, because again, we won’t be giving quarterly guidance, but maybe kind of help you think about the shape of the year a little bit. And we will just kind of start on the top line, because I think that it’s important to understand some of the anomalies that we experienced last year, as it relates to the seasonality. And in a lot of this is, a bit reading the tea leaves as to kind of what was happening in the economy with the stimulus and whatnot. The Q1 of last year, I think was an extremely strong year. And if you look at historical quarters, this business typically is about 50% to 52%, front end loaded, so Q1, Q2, from a top line perspective, with the balance being in Q3, Q4. And Q2 is generally our strongest quarter in the year. So, I think that’s important to keep in mind. And then as you think about the profitability piece, you definitely see from a year over year perspective, what that implies around sales deleverage in the first half. And then I think coupled with your comments around the cost flowing through, I would say that the team has done a really good job of acting swiftly where possible to go ahead and reap the benefits of the costs identified in the early part of this year. But certainly Q1 is going to be a bit of a partial win there, with the back half starting to reap a bit more of those benefits. So, hopefully that helps you as you kind of get in the ballpark of what we are anticipating for the year.

Yes. That’s really helpful. Best of luck guys.

Thank you.

Thank you. Our next question is from the line of Alex Perry with Bank of America. Please proceed with your questions.

Hi. Thanks for taking my questions. Just a few, would you say that sort of like there being a demand for Holley EFI is sort of the highest right now out of your entire product portfolio? And those are the products that are dealing with the chip shortages? And I guess can you just help us with the impact that’s going to have in 2023, and if there is any line of sight of this improving? I guess is the right way to think about it at the bottom end of the range of the sales guidance imply sort of a 9% decline, 4.5 points of sort of COVID demand normalization and 4.5 points a chip headwinds, and then the high end of the range is like 2%, with still that 4.5% of COVID demand normalization and then the highest – it implies the chip availability sort of improves.

Yes. I will take the first part of that. And just thank you for kind of reiterating the guidance, and I want to talk through the demand across our portfolio. We have a really wide portfolio of products across a lot more than just electronic fuel injection. So, when you think about safety, when you think about the mechanical, which we mentioned, is we are in much better conditions supplying that demand. But in exhaust, in brakes, there is –it’s a broad portfolio. And I could go on and on with all my favorite brands. But I will share that EFI while constrained, we are shipping a portion of our EFI portfolio called Sniper, those chips are readily available. It’s a little bit less expensive. The margin isn’t as high. There are other items that we have in the EFI portfolio that are strictly for high performance vehicles. Think about race cars, and they are more expensive, those chips are constrained. Those are the ones we are retooling. But overall I don’t want you to think this is just a huge portion of our portfolio because we have so many other brands and categories.

And then I will take sort of your question as it relates to what’s implied around the range on the top line guidance. I mean I would say the two key levers there that get you to the top end, and the bottom end, or bottom end are the ones that you identified, which would be the demand normalization. I mean I think we have done the work to kind of get us in a range as to what that could be worth. And I think as you pointed out, the top end of the range would assume probably some combination of less headwinds from that normalization, combined with some improvement in the supply availability that we have been experiencing for the past six months or so. And then the bottom end would be the reverse of that. So, I think as it relates to what the economic outlook looks like, you talk to five economists, you will get five different answers right now in the back half. But I do think that that is a bit of what’s the unknown here, as it relates to demand normalization. And then certainly, as it relates to supply, we don’t have any indications at this moment that it’s going to get any worse. But I think in the realm of possibility, I don’t think that we would have estimated that it would have gotten as bad as it did, either. And so we have baked that into the top line guide at this moment.

Perfect. And then just my follow-up is just to clarify what you said on sort of the phasing of the guidance. It sounded like sort of the first half would be sort of steeper, more pronounced declines. And then we should assume maybe a moderation in the back half, is the expectation that 2H sales could actually increase year-over-year? And then I wanted to ask about sort of DTC and the margin profile there. Is it both higher for you guys on an EBIT margin and gross margins selling through your DTC channel versus wholesale? Thanks?

Yes. I will take the DTC piece. We have not shared our margin structure there for the direct to consumer channel as a comparison to wholesale or other. And the other questions that you had as just to reiterate what Jesse said earlier, Q1 of last year was our strongest quarter of the year. So, as you are thinking about the flow of the year, I think he answered that, in a typical year, were a 48%, 52%. And the first quarter last year was our highest growth quarter. So, you should expect to see Q1 with strong overlaps.

Yes. I think you are – where you imputed and sort of what you had said there is pretty spot on and I will just kind of reiterate it. The 50% to 52% first half is more typical seasonality that we see and Q2 being the strongest, I think that would kind of get you in the range of Q1 would generally be tough from a sales lab, particularly when you combine that with how strong it was last year.

Perfect. That’s really helpful. Best of luck going forward.

Thank you.

Our next question is in the line of Joe Feldman with Telsey Advisory Group. Please proceed with your questions.

Yes. Hey guys. Thanks for taking the question. I wanted to clarify something. Just maybe I just misheard it. But I thought at the beginning, you had said that, with regard to the guidance at the midpoint, the sales would be a headwind around 5%. And then you said around 4% to 4.5% of that may be headwind due to the normalization of the industry. But then later, when someone was asking about the microchip headwind, you guys said that was a mid-single digit headwind, which doesn’t quite match that if let’s say, we are at the 5%. So, can you kind of square those two comments?

I don’t recall quantifying, and I apologize if it was read that way for the callers. I don’t recall qualifying the mid-single digit headwind related to the supply chain piece. But I think there was – what we are trying to do is get you guys sort of what we would call the meat of what the guide is, and the big drivers, and those are the two big ones. I mean we have also got in there if you wanted to kind of dig deeper into. We have got pricing that’s a tailwind. We have certainly got a bit of tailwind from some acquired businesses that would be helping us out. But then the other headwind there is, last year, if you just look at our order demand, it certainly wasn’t as strong as what the net sales would have implied because we had a good sort of tailwind from burning down the backlog throughout the year. So, and those things all kind of wash out, but I think the big items that I would recommend the investment community focus on here, or what’s happening with the normalization of demand, and our ability to secure these chips to help improve what we see is the midpoint of the guide. Hopefully, that helps to clarify for your, Joe.

That does.

Yes. Just one other thing, this is Matt Rubel. I think it was one of the callers who put that number out, it was not something what Jesse or Michelle put out. They framed it in how they asked the questions. So, that’s what you might have heard.

Okay. Thank you for clarifying guys. I really appreciate that. And then I guess I know, you just, you have said this a couple of times now reading the tea leaves, but and when does the industry maybe if not even you guys, but like, according to SEMA, like, are they assuming we get back to a normal level of demand, like in 2024 or is it 2025? Like, what is their forecast to maybe benchmarking…?

On the macro, this is Matt again. One of the things that we have seen with the general trend is that we believe and SEMA has validated this, that there will be that 6%-plus growth in the industry. I think one of the things that we have to go backward to go forward here is that there was still a ton of stimulus that was put into the first quarter of last year. And so the first quarter of last year, both for the industry, and for us, was distorted. And so I think that’s one of the things Jesse has done a good job, Jesse and Michelle have done a good job trying to contextualize here. And so you will – then you went through some channel adjustments of inventory and some other things that happened after that demand mitigated. And so I think an evening of the demand is what we are kind of trying to get back to on historical levels. So, you should start to see, by the time you get to second half, some of that curve moving more to the norm. And then by the time you hit 2024, you should have anniversaried all the noise and be back in a normal state. That’s our perspective.

Got it. That’s very, very helpful. I appreciate that. Thanks guys. And I have more, but I will ask them later. Good luck this quarter. Thank you.

Thank you, Joe.

Thank you.

Thank you. Our final question is from the line of Glenn Pravin [ph] with GHC Capital. Please proceed with your question.

Yes. Good morning. I had two questions. The first is you had brought in, I think a former executive to assess some of the integration, prior acquisitions. Just at a high level, what are you seeing? I know you did a pretty good job with some cost-outs here and that $30 million you called out. But beyond that, what are you seeing is the opportunity there? And then secondly, how these always been known for its innovation and product, and I am just curious if there is anything in this coming year that you are excited about or want to talk about?

Glenn, thank you for the questions. I will tackle the first one. Yes, you are correct. From our previous conversations, Brian Applegate joined us in Q4 last year as our Interim COO. As you recall, he was the former CEO of Driven and also a former President of SEMA. So, he knows the industry. He knows the brands and he is an operational wizard. And it’s, we are fortunate to have him. And he has been focused on cost savings, acquisition synergies. And as I mentioned earlier, a lot of our acquisitions are already on our ERP system and the distribution center on the website and have the back office things. But we are also looking at what things do they do unique, that are more efficiently done in their system with their way and their expertise. So, we continued to work through that and have, while we realized and we did share how much we realized with acquisitions during 2022, we have more to go, I think we put a $3 million to $3.5 million range out there for our future synergies in 2023. When you talk about our innovation and product, we have an innovation pipeline. We have an innovation process team engineering, it’s really cross functional, marketing looking at demand and whitespace. But today, I don’t have anything to share with you. But in the coming quarters we will have details on new product launches to share.

Great. Thanks. And there seems like there is a tremendous amount of progress that was made since the last call, so well done. Thank you.

Thank you Glenn. We appreciate your support.

Thank you. At this time, we have reached the end of the question-and-answer session. And I will turn it over to management for closing remarks.

We appreciate everyone dialing in today and following along on this journey with Holley and we look forward to sharing in future calls and are available for meetings following for our Q&A. Thanks to those who have already scheduled. Have a great day.

Thank you. This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.