EnviroStar(US:EVI)2026-02-09 21:03Financial Performance - Revenues for the six-month period ended December 31, 2025 increased by $37.2 million, or 20%, compared to the same period in the prior fiscal year[110]. - Gross profit for the six-month period ended December 31, 2025 increased by $13.0 million, or 23%, with gross margins rising from 30.3% to 31.1%[111]. - Operating expenses increased by $12.6 million, or 26%, for the six-month period ended December 31, 2025, primarily due to expenses from acquired businesses and increased selling costs[112]. - Interest expense for the six-month period ended December 31, 2025 was $2.0 million, up from $1.2 million in the same period of the prior year[113]. - The effective tax rate decreased to 27.4% for the six-month period ended December 31, 2025, down from 30.0% in the prior year[114]. - Net income for the six-month period ended December 31, 2025 was $4.2 million, compared to $4.4 million in the same period of the prior year[115]. Assets and Liabilities - Total assets increased from $307.0 million at June 30, 2025 to $315.6 million at December 31, 2025, driven by an increase in current assets[116]. - Total liabilities rose from $163.6 million at June 30, 2025 to $171.7 million at December 31, 2025, primarily due to increases in accounts payable and long-term debt[116]. - Working capital increased from $50.6 million at June 30, 2025, to $56.1 million at December 31, 2025, primarily due to increases in inventory and other current assets[118]. Cash Flow - Cash decreased by approximately $4.6 million for the six-month period ended December 31, 2025, compared to a decrease of $0.7 million for the same period in 2024[117]. - Operating activities provided cash of $5.1 million for the six months ended December 31, 2025, an increase of $2.9 million compared to $2.2 million in 2024[120]. - Investing activities used cash of $8.3 million for the six months ended December 31, 2025, a decrease of $4.3 million compared to $12.6 million in 2024[121]. - Financing activities used cash of $1.4 million for the six months ended December 31, 2025, compared to cash provided of $9.8 million in 2024, reflecting an $11.2 million increase in cash used[122]. Borrowings and Credit - As of December 31, 2025, the Company had approximately $58.0 million of outstanding borrowings under the Credit Agreement, with a weighted average interest rate of 5.14%[124]. - The Credit Agreement allows for borrowings up to $150 million, with an accordion feature to increase the revolving credit facility by up to $50 million[123]. - A hypothetical 1% increase in daily interest rates would increase the Company's annual interest expense by approximately $580,000[133]. Strategic Initiatives - The company acquired ASN Laundry Group on August 1, 2025, which is expected to complement its existing business and provide growth opportunities[106]. - The company’s growth strategy includes a "buy-and-build" approach, focusing on acquisitions and enhancing service operations to drive market share growth[106]. Economic Factors - Inflation did not have a significant effect on the Company's results during the reported periods, but risks related to inflation and price increases remain[128]. Internal Controls - There were no changes in the Company's internal control over financial reporting during the quarter ended December 31, 2025[139]. Future Outlook - The Company believes existing cash and anticipated cash from operations will be sufficient to fund operations and capital expenditures for at least the next twelve months[127].