EnviroStar(EVI) - 2025 Q4 - Annual Results

Executive Summary & Company Overview This section provides an overview of EVI Industries' record fiscal 2025 financial performance and its profile as a leading commercial laundry distribution and service provider Fiscal 2025 Highlights EVI Industries reported record financial results for fiscal year 2025, driven by strategic acquisitions, organic growth, and technological advancements. The company achieved significant increases in revenue, gross profit, operating income, net income, and Adjusted EBITDA, alongside a 7% compounded annual organic revenue growth rate over three years - Fiscal 2025 was a defining year, delivering record financial results, completing the largest acquisition, and making meaningful progress on the technology roadmap[3] Fiscal Year 2025 Key Financial Highlights (YoY Growth) | Metric | Value (FY25) | Growth (YoY) | | :---------------- | :----------- | :----------- | | Revenue | $390 million | 10% | | Gross Profit | $118 million | 12% | | Operating Income | $13.8 million | 18% | | Net Income | $7.5 million | 33% | | Adjusted EBITDA | $25.0 million | 11% | | Organic Revenue CAGR (3-year) | 7% | N/A | Company Profile EVI Industries, Inc. is a leading value-added distributor and provider of advisory and technical services in the North American commercial laundry distribution and service industry. The company offers planning, design, consulting, sales, leasing, and installation, maintenance, and repair services for commercial laundry equipment, parts, and accessories to a diverse customer base - EVI Industries is a value-added distributor and provider of advisory and technical services in the commercial laundry sector, offering equipment, parts, and comprehensive services[20] - The company serves retail, commercial, industrial, institutional, and government customers, providing solutions from individual parts to complex systems and services[20] Financial Performance This section details EVI Industries' financial results for fiscal year 2025 and the fourth quarter, including GAAP and non-GAAP measures Full Fiscal Year 2025 Results For the fiscal year ended June 30, 2025, EVI Industries achieved record revenues of $389.8 million, a 10% increase year-over-year. Gross profit rose 12% to $118.3 million, with the gross profit margin expanding to 30.4%. Net income saw a substantial 33% increase to $7.5 million, and diluted EPS grew from $0.37 to $0.49 Fiscal Year Ended June 30, 2025 vs. 2024 (in thousands, except per share data) | Metric | FY25 | FY24 | Change ($) | Change (%) | | :-------------------------- | :------- | :------- | :--------- | :--------- | | Revenues | $389,830 | $353,563 | $36,267 | 10.3% | | Cost of Sales | $271,482 | $248,310 | $23,172 | 9.3% | | Gross Profit | $118,348 | $105,253 | $13,095 | 12.4% | | SG&A | $104,580 | $93,625 | $10,955 | 11.7% | | Operating Income | $13,768 | $11,628 | $2,140 | 18.4% | | Interest Expense, net | $2,743 | $2,744 | $(1) | -0.0% | | Income before Income Taxes | $11,025 | $8,884 | $2,141 | 24.1% | | Provision for Income Taxes | $3,527 | $3,238 | $289 | 8.9% | | Net Income | $7,498 | $5,646 | $1,852 | 32.8% | | Net Earnings per Share - Basic | $0.50 | $0.39 | $0.11 | 28.2% | | Net Earnings per Share - Diluted | $0.49 | $0.37 | $0.12 | 32.4% | | Weighted Average Shares Outstanding - Basic | 12,734 | 12,650 | 84 | 0.7% | | Weighted Average Shares Outstanding - Diluted | 13,159 | 13,218 | (59) | -0.4% | Fourth Quarter 2025 Results In the fourth quarter of fiscal 2025, EVI Industries reported a 22% increase in revenue to $110.0 million. Gross profit grew 24% to $33.9 million, achieving a record gross margin of 30.8%. Operating income increased 13% to $4.1 million, and net income saw a modest 1% rise to $2.1 million, with diluted EPS remaining flat at $0.14 Fourth Quarter Ended June 30, 2025 vs. 2024 (in thousands, except per share data) | Metric | Q4 FY25 | Q4 FY24 | Change ($) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | | Revenues | $109,956 | $90,146 | $19,810 | 22.0% | | Cost of Sales | $76,040 | $62,777 | $13,263 | 21.1% | | Gross Profit | $33,916 | $27,369 | $6,547 | 23.9% | | SG&A | $29,802 | $23,717 | $6,085 | 25.6% | | Operating Income | $4,114 | $3,652 | $462 | 12.6% | | Interest Expense, net | $1,026 | $476 | $550 | 115.5% | | Income before Income Taxes | $3,088 | $3,176 | $(88) | -2.8% | | Provision for Income Taxes | $991 | $1,109 | $(118) | -10.6% | | Net Income | $2,097 | $2,067 | $30 | 1.5% | | Net Earnings per Share - Basic | $0.14 | $0.14 | $0.00 | 0.0% | | Net Earnings per Share - Diluted | $0.14 | $0.14 | $0.00 | 0.0% | | Weighted Average Shares Outstanding - Basic | 12,758 | 12,681 | 77 | 0.6% | | Weighted Average Shares Outstanding - Diluted | 13,192 | 13,127 | 65 | 0.5% | Non-GAAP Financial Measures (Adjusted EBITDA) EVI Industries utilizes Adjusted EBITDA as a key non-GAAP financial measure to assess operating performance, defining it as earnings before interest, taxes, depreciation, amortization, and amortization of stock-based compensation. For fiscal year 2025, Adjusted EBITDA increased 11% to $25.0 million, and for the fourth quarter, it grew 17% to $7.2 million - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, and amortization of stock-based compensation, serving as an important indicator of operating performance[19] Adjusted EBITDA Reconciliation (in thousands) | Metric | FY25 | FY24 | Q4 FY25 | Q4 FY24 | | :----------------------------------- | :------- | :------- | :-------- | :-------- | | Net Income | $7,498 | $5,646 | $2,097 | $2,067 | | Provision for Income Taxes | $3,527 | $3,238 | $991 | $1,109 | | Interest Expense, Net | $2,743 | $2,744 | $1,026 | $476 | | Depreciation and Amortization | $6,692 | $5,983 | $1,958 | $1,491 | | Amortization of Stock-based Compensation | $4,558 | $4,974 | $1,130 | $1,018 | | Adjusted EBITDA | $25,018 | $22,585 | $7,202 | $6,161 | Adjusted EBITDA Growth: * FY25 YoY Growth: 10.8% ($25,018k vs $22,585k) * Q4 FY25 YoY Growth: 16.9% ($7,202k vs $6,161k) Strategic Growth Initiatives This section outlines EVI Industries' key strategies for growth, including acquisitions and technological advancements Buy-and-Build Strategy & Acquisitions EVI Industries continued its 'buy-and-build' growth strategy in fiscal 2025 by completing four acquisitions, including the largest in company history, Girbau North America (now Continental Laundry Solutions). This acquisition is expected to add approximately $50 million in annual revenue and establish a new strategic channel for growth by leveraging Continental as a master distributor and sourcing division - EVI completed four acquisitions in fiscal 2025, including the largest in company history, Girbau North America (now Continental Laundry Solutions)[6] - The Continental acquisition is expected to add approximately $50 million in annual revenue and will be leveraged as a master distributor and strategic sourcing division to enhance purchasing power and product availability[7] - EVI's acquisition success is built on valuing people, culture, and trust, earning a reputation as the acquirer of choice in the commercial laundry industry[8] Innovation and Technology Advancements EVI made significant technological strides in fiscal 2025, focusing on modernizing operations and enhancing customer experience through its field service platform, enterprise-wide business intelligence tools, and a planned e-commerce platform Field Service Platform - The field service platform equips technicians with tools to optimize scheduling, streamline dispatch, provide real-time updates, and generate valuable data for improved efficiency and customer experience[9] - Technicians identify preventative maintenance needs and equipment replacement opportunities, generating qualified leads for the sales team and driving revenue growth[9] - Platform adoption rapidly expanded from 2 business units completing ~1,000 appointments in July 2024 to 27 business units completing over 8,500 appointments in June 2025[10] Business Intelligence & ERP - By the end of fiscal 2025, 28 of 31 business units were operating on the Company's end-state ERP platform, combined with enterprise-wide business intelligence (BI) tools[11] - These initiatives provide real-time, data-driven insights for faster decision-making, aiming to optimize inventory, improve job costing, enhance service operations, and strengthen working capital efficiency[11][12] Planned E-Commerce Platform - EVI is developing an e-commerce platform, expected to launch in fiscal 2026, to deliver a seamless, data-driven, and service-integrated digital experience[12] - The platform will offer 24/7 ordering, real-time access to product information, inventory, pricing, and service capabilities, along with personalized recommendations and online service scheduling[12] - Supported by the industry's largest inventory and broadest product portfolio, this platform aims to enhance customer satisfaction, loyalty, and efficiency while lowering the cost to serve[13] Financial Health & Capital Allocation This section examines EVI Industries' cash flow, liquidity, and capital allocation decisions, including special dividends Cash Flow and Liquidity EVI Industries generated $21.3 million in operating cash flow in fiscal 2025, a decrease from the prior year primarily due to increased investment in working capital, specifically higher inventory and accounts receivable balances. Net debt increased to $44.1 million as of June 30, 2025, reflecting ongoing investments in acquisitions, technology, and working capital - EVI generated $21.3 million in operating cash flow in fiscal 2025, lower than the prior year due to increased investment in working capital[15] - Working capital investment included higher inventory ($66.1 million) and accounts receivable ($60.5 million) balances as of June 30, 2025[15] - Net debt increased from $8.3 million (June 30, 2024) to $44.1 million (June 30, 2025), reflecting $46.9 million deployed for strategic acquisitions and other growth initiatives[15] Special Cash Dividend EVI's Board of Directors declared a special cash dividend of $0.33 per share, payable on October 6, 2025, to shareholders of record as of September 25, 2025. This dividend, totaling approximately $4.9 million, reflects the company's strong fiscal 2025 results and disciplined capital structure, marking an increase from the previous year's $0.31 per share dividend - A special cash dividend of $0.33 per share was declared on September 11, 2025[16] - The dividend is payable on October 6, 2025, to shareholders of record as of September 25, 2025, with an aggregate amount of approximately $4.9 million[16] - This dividend reflects strong fiscal 2025 results and an increase from the prior year's special dividend of $0.31 per share[16] Operational Context & Outlook This section discusses external factors like tariff impacts and the company's future strategic direction Tariff Impacts EVI Industries continues to monitor tariff developments and has responded to higher costs by adjusting pricing, diversifying sourcing, and collaborating with suppliers on cost strategies. Despite trade policy uncertainty, the company's focus on essential equipment and replacement parts across diverse markets provides a strong foundation for sustained performance - EVI monitors tariff developments and has adjusted pricing, diversified sourcing, and collaborated with suppliers to mitigate higher costs[17] - The company's focus on essential equipment and replacement parts across diverse markets provides a strong foundation for sustained performance despite trade policy uncertainty[17] Future Outlook EVI Industries remains committed to executing its long-term strategy, focusing on growth, innovation, and achieving operating leverage. The company plans to build on its strong foundation and proven model to deliver sustained value for customers and shareholders - EVI will continue to execute its long-term strategy, focusing on growth, innovation, and achieving operating leverage[18] - The company is committed to disciplined execution, building on its strong foundation to deliver sustained value for customers and shareholders[18] Financial Statements This section presents the condensed consolidated financial statements, including results of operations, balance sheets, and cash flows Condensed Consolidated Results of Operations The condensed consolidated results of operations provide a detailed breakdown of EVI Industries' financial performance for the twelve and three months ended June 30, 2025, compared to the same periods in 2024, showing significant growth across key revenue and profit metrics Condensed Consolidated Results of Operations | | | | For the twelve months ended | | | Unaudited | | Unaudited | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 12-Months | | 12-Months | | 3-Months | | 3-Months | | | | Ended | | Ended | | Ended | | Ended | | | | 6/30/25 | | 6/30/24 | | 6/30/25 | | 6/30/24 | | Revenues | $ | 389,830 | $ | 353,563 | $ | 109,956 | $ | 90,146 | | Cost of Sales | | 271,482 | | 248,310 | | 76,040 | | 62,777 | | Gross Profit | | 118,348 | | 105,253 | | 33,916 | | 27,369 | | SG&A | | 104,580 | | 93,625 | | 29,802 | | 23,717 | | Operating Income | | 13,768 | | 11,628 | | 4,114 | | 3,652 | | Interest Expense, net | | 2,743 | | 2,744 | | 1,026 | | 476 | | Income before Income Taxes | | 11,025 | | 8,884 | | 3,088 | | 3,176 | | Provision for Income Taxes | | 3,527 | | 3,238 | | 991 | | 1,109 | | Net Income | $ | 7,498 | $ | 5,646 | $ | 2,097 | $ | 2,067 | | Net Earnings per Share | | | | | | | | | | Basic | $ | 0.50 | $ | 0.39 | $ | 0.14 | $ | 0.14 | | Diluted | $ | 0.49 | $ | 0.37 | $ | 0.14 | $ | 0.14 | | Weighted Average Shares Outstanding | | | | | | | | | | Basic | | 12,734 | | 12,650 | | 12,758 | | 12,681 | | Diluted | | 13,159 | | 13,218 | | 13,192 | | 13,127 | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets as of June 30, 2025, and 2024, show an increase in total assets to $307.0 million, primarily driven by growth in current assets like accounts receivable and inventories, as well as increases in intangible assets and goodwill due to acquisitions. Total liabilities also increased significantly, mainly due to long-term debt Condensed Consolidated Balance Sheets | | | 6/30/25 | | 6/30/24 | | --- | --- | --- | --- | --- | | Assets | | | | | | Current assets | | | | | | Cash | $ | 8,852 | $ | 4,558 | | Accounts receivable, net | | 60,494 | | 40,932 | | Inventories, net | | 66,059 | | 47,901 | | Vendor deposits | | 1,396 | | 1,657 | | Contract assets | | 289 | | 1,222 | | Other current assets | | 8,346 | | 5,671 | | Total current assets | | 145,436 | | 101,941 | | Equipment and improvements, net | | 17,772 | | 13,950 | | Operating lease assets | | 10,751 | | 8,078 | | Intangible assets, net | | 30,875 | | 22,022 | | Goodwill | | 91,667 | | 75,102 | | Other assets | | 10,527 | | 9,566 | | Total assets | $ | 307,028 | $ | 230,659 | | Liabilities and Shareholders' Equity | | | | | | Current liabilities | | | | | | Accounts payable and accrued expenses | $ | 50,963 | $ | 30,904 | | Accrued employee expenses | | 15,398 | | 11,370 | | Customer deposits | | 24,316 | | 24,419 | | Contract liabilities | | 408 | | — | | Current portion of operating lease liabilities | | 3,778 | | 3,110 | | Total current liabilities | | 94,863 | | 69,803 | | Deferred income taxes, net | | 7,691 | | 5,498 | | Long-term operating lease liabilities | | 7,997 | | 5,849 | | Long-term debt, net | | 53,000 | | 12,903 | | Total liabilities | | 163,551 | | 94,053 | | Shareholders' equity | | | | | | Preferred stock, $1.00 par value | | — | | — | | Common stock, $.025 par value | | 325 | | 322 | | Additional paid-in capital | | 111,219 | | 106,540 | | Treasury stock | | (5,155) | | (4,439) | | Retained earnings | | 37,088 | | 34,183 | | Total shareholders' equity | | 143,477 | | 136,606 | | Total liabilities and shareholders' equity | $ | 307,028 | $ | 230,659 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows highlight EVI Industries' cash movements for the twelve months ended June 30, 2025. Net cash provided by operating activities decreased to $21.3 million, while net cash used by investing activities significantly increased to $51.8 million, primarily due to cash paid for acquisitions. Financing activities provided $34.8 million, leading to a net increase in cash of $4.3 million Condensed Consolidated Statements of Cash Flows | | | | For the twelve months ended | | | --- | --- | --- | --- | --- | | | | 6/30/25 | | 6/30/24 | | Operating activities: | | | | | | Net income | $ | 7,498 | $ | 5,646 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | Depreciation and amortization | | 6,692 | | 5,983 | | Amortization of debt discount | | 54 | | 34 | | Provision for expected credit losses | | 1,052 | | 688 | | Non-cash lease expense | | 143 | | 14 | | Stock compensation | | 4,558 | | 4,974 | | Inventory reserve | | 182 | | 54 | | (Benefit) provision for deferred income taxes | | (821) | | 475 | | Other | | (87) | | 25 | | (Increase) decrease in operating assets: | | | | | | Accounts receivable | | (11,058) | | 7,028 | | Inventories | | 211 | | 11,901 | | Vendor deposits | | 261 | | 634 | | Contract assets | | 1,157 | | (41) | | Other assets | | (735) | | 2,476 | | (Decrease) increase in operating liabilities: | | | | | | Accounts payable and accrued expenses | | 10,272 | | (8,234) | | Accrued employee expenses | | 2,220 | | 646 | | Customer deposits | | (742) | | 1,017 | | Contract liabilities | | 408 | | (668) | | Net cash provided by operating activities | | 21,265 | | 32,652 | | Investing activities: | | | | | | Capital expenditures | | (4,861) | | (4,867) | | Cash paid for acquisitions, net of cash acquired | | (46,925) | | (1,949) | | Net cash used by investing activities | | (51,786) | | (6,816) | | Financing activities: | | | | | | Dividends paid | | (4,593) | | (4,071) | | Proceeds from borrowings | | 106,000 | | 62,500 | | Debt repayments | | (66,000) | | (84,500) | | Repurchases of common stock in satisfaction of employee tax withholding obligations | | (716) | | (1,244) | | Issuances of common stock under employee stock purchase plan | | 124 | | 116 | | Net cash provided (used) by financing activities | | 34,815 | | (27,199) | | Net increase (decrease) in cash | | 4,294 | | (1,363) | | Cash at beginning of period | | 4,558 | | 5,921 | | Cash at end of period | $ | 8,852 | $ | 4,558 | Supplemental Disclosures of Cash Flow Information (in thousands) | Metric | FY25 | FY24 | | :------------------------------------ | :------- | :------- | | Cash paid during the period for interest | $2,500 | $2,783 | | Cash paid during the period for income taxes | $2,976 | $4,575 | Supplemental Disclosures of Non-Cash Financing Activities (in thousands) | Metric | FY25 | FY24 | | :------------------------------------ | :------- | :------- | | Issuances of common stock for acquisitions | $— | $229 | Supplemental Disclosures of Non-Cash Investing Activities (in thousands) | Metric | FY25 | FY24 | | :------------------------------------ | :------- | :------- | | Amounts owed to sellers in connection with acquisitions | $4,181 | $— | Adjusted EBITDA Reconciliation This section provides a reconciliation of net income, the most comparable GAAP financial measure, to Adjusted EBITDA for the twelve and three months ended June 30, 2025, and 2024, illustrating the calculation of this non-GAAP metric Adjusted EBITDA Reconciliation | | | | | | | Unaudited | | Unaudited | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 12-Months | | 12-Months | | 3-Months | | 3-Months | | | | Ended | | Ended | | Ended | | Ended | | | | 6/30/25 | | 6/30/24 | | 6/30/25 | | 6/30/24 | | Net Income | $ | 7,498 | $ | 5,646 | $ | 2,097 | $ | 2,067 | | Provision for Income Taxes | | 3,527 | | 3,238 | | 991 | | 1,109 | | Interest Expense, Net | | 2,743 | | 2,744 | | 1,026 | | 476 | | Depreciation and Amortization | | 6,692 | | 5,983 | | 1,958 | | 1,491 | | Amortization of Stock-based Compensation | | 4,558 | | 4,974 | | 1,130 | | 1,018 | | Adjusted EBITDA | $ | 25,018 | $ | 22,585 | $ | 7,202 | $ | 6,161 | Legal & Disclosures This section provides important legal disclosures, including the safe harbor statement regarding forward-looking information Safe Harbor Statement The Safe Harbor Statement outlines that the press release contains forward-looking statements subject to various known and unknown risks and uncertainties. These risks, detailed in the company's SEC filings, could cause actual results to differ materially from projections, and the company disclaims any obligation to update these statements - Statements in the press release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[21] - Forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including economic conditions, tariffs, supply chain issues, inflation, interest rates, and acquisition integration risks[21] - The company cautions against undue reliance on forward-looking statements and disclaims any obligation to update them, except as required by law[21]