EnviroStar(EVI) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the second quarter increased by 24% year-over-year to $115 million, driven primarily by contributions from acquired businesses, with legacy operations also contributing [6] - Gross margin expanded to nearly 31%, reflecting favorable product mix, pricing discipline, and benefits from strategic acquisitions [6] - Net income increased by 110% to 2.1% of revenues, and Adjusted EBITDA increased by 49% to $7.7 million, or 6.6% of revenue, demonstrating strong underlying operating performance [6][7] Business Line Data and Key Metrics Changes - The company has achieved record results in revenue, gross profit, and operating profit, surpassing $425 million in trailing twelve months revenue for the period ended December 31, 2025 [2] - The six-month period saw revenue increase by 20% to more than $223 million, with gross margin remaining at 31% [7] Market Data and Key Metrics Changes - EVI has established itself as a leader in a highly fragmented industry, with compounded annual growth rates of approximately 30% in revenue, 16% in net income, and 27% in adjusted EBITDA since 2016 [3] Company Strategy and Development Direction - The company is focused on building the broadest and most flexible portfolio of products in the industry, sourced from leading OEMs, to address a full range of customer needs across all market segments [5] - Significant investments are being made in people, processes, and technology to transform the enterprise into a more scalable, integrated, and efficient organization [4][5] - The company is pursuing a balanced approach to growth, evaluating opportunities in and around the laundry ecosystem that can be supported by existing operations and relationships [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth strategy and the ongoing investments in modernization and optimization initiatives [2][11] - The company maintains strong liquidity, solid working capital, and access to low-cost capital, providing flexibility to continue investing and executing on growth strategies [11] Other Important Information - Operating margin expansion was impacted by higher operating expenses associated with investments in technology, modernization, and service capability expansion [8] - The company generated positive operating cash flow during both the 3- and 6-month periods under December 31, 2025, despite a planned inventory buildup of approximately $12 million [10] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.