EVI Industries, Inc. Price & Performance (EVI)

Today, I will summarize our operating results for the second quarter of the fiscal year ended 06/30/2025, and I'll share our progress in connection with our long term goals. As I have shared time and again, EVI invests and manages with a long term perspective. In 2016, we commenced the execution of a long term growth strategy to build the undisputed leader in and around the commercial laundry industry and in doing so produced attractive returns for its shareholders over the long term. Since 2016, we have established EBI as a leader in the highly fragmented North American commercial laundry distribution and service industry. The company has grown from one business operating from a single location in the state of Florida with 31 employees, including 10 sales personnel and four service personnel to 30 businesses employing over 800 people, including over 190 sales focused personnel and over four twenty five service focused personnel each contributing to the company's long term goals. Since 2016, the thoughtful execution of our long term growth strategy has resulted in a compounded annual growth rate in revenue, net income and adjusted EBITDA of 31, 19 percent and 20 eight percent respectively. The second quarter of fiscal twenty twenty five is highlighted by three month records for revenue of $93,000,000 and gross profit of $28,000,000 and six month records for revenues of $186,000,000 gross profit of $56,000,000 gross margin of 30% and adjusted EBITDA of $12,700,000 During the six month period ended 12/31/2024, we also completed two acquisitions adding sales and service expertise to the company's Southeast region.

We continued the implementation of new field service technologies across certain regional operations, which is now deployed to over 70% of the company. We surpassed important milestones in development of the company's e commerce platform. We had new confirmed customer sales order contracts in excess of the value of those fulfilled during the period. And we paid a special cash dividend of $4,600,000 the largest dividend in EVI's history. It is also worth highlighting that the third acquisition was consummated shortly following the completion of the second fiscal quarter and that acquisition represents EVI's first in the Midwest Region Of The United States. All of this was achieved all while we continue to make investments and in certain cases increased investments across our business in the pursuit of our long term growth goals. And now my commentary on operating results for the three and six month periods ended 12/31/2024. ABI's revenue for the three month period increased 1% to a record $93,000,000 and revenue for the six month period increased 4% to a record $186,000,000 in each case versus the same period of the prior year. The modest increases in revenue during the three and six month periods is primarily attributed to the irregular cadence of industrial revenue and delays in the completion of certain large industrial sales order contracts.

While the company generates a recurring base of industrial business, the timing of revenue related to industrial projects is subject to longer sales cycles and complex installations that from time to time are uneven as compared to revenue derived from other commercial laundry categories. Record revenues for the quarter were achieved notwithstanding the fact that during the second quarter only one customer was invoiced for an amount in excess of $1,000,000 as compared to five in the same period of the prior year. Ultimately, these results demonstrate the incremental positive impact derived from our investment in additional sales professionals and service technicians, which are core to our long term market share strategy. Looking forward, we expect to benefit from the completion of confirmed customer sales order contracts across the industrial, on premise and vented laundry categories, which together contribute to our over $100,000,000 equipment sales backlog. During the three and six month periods ended December 31, the company set records for gross profit at $28,000,000 and $56,000,000 respectively and set a gross margin record for the six month period at 30%. These gains reflect in part a slight shift in mix to higher margin parts and services as well as the benefits derived from solution selling, which as an example has resulted in new sales of machinery aimed to lower the operating cost of commercial laundry by automating historically labor intensive tasks and new sales in consumables.

The variability and the timing of sales across certain laundry categories will from time to time impact the amount of operating leverage achieved on a quarter by quarter basis. But this does not discourage our continued investment in the execution of our long term buy and build growth strategy. Our investments in scalable technologies and investments in additional businesses remain central to the execution of this growth strategy. Specifically, the build component principally focuses on encouraging growth at our acquired businesses by adding product lines, growing our sales teams, expanding installation and service operations, investing in scalable technologies and promoting the exchange of ideas and business concepts between the management teams of our businesses. On technology investments, in 2020, we commenced a comprehensive technology initiative to transform EVI into a modern data driven company. Since that time, our technology group has grown significantly and various third party technology professionals have been retained. This growing team is leading efforts to consolidate business units into end state enterprise resource planning systems, enriching numerous datasets, building master databases and configuring and implementing multiple softwares, including our field service technologies and future e commerce platform. These technology initiatives were undertaken with a goal to accelerate sales and profit growth, increase the speed, convenience and efficiency in serving customers, extending our reach into new geographies and sales channels and create scalable operating processes.

While the aggregate cost and expense associated with these and other modernization initiatives adversely impacts our financial performance in the near term, we believe these technological capabilities will be a catalyst to achieving our long term growth and profitability goals. From a financial strength and liquidity perspective, during the six month period ended December 31, operating activities provided cash of $2,200,000 compared to $10,900,000 of cash provided by operating activities during the six months ended December thirty one of twenty twenty three. This $8,700,000 decrease in cash provided by operating activities was primarily attributable to changes in working capital, partially offset by an increase in net income. Given our growth in profitability prospects, solid cash flows and strong balance sheet with over $100,000,000 of available liquidity, on September eleven of twenty twenty four, the Board of Directors declared a special cash dividend on the company's common stock of $0.31 per share, a 10% increase over the special cash dividend declared on October of twenty twenty three. The special cash dividend was paid to stockholders on October seven of 'twenty four. As a result of these investments in working capital, the cash paid in connection with business acquisitions consummated during the six month period and payment of the special cash dividend, the company's net debt increased from $8,300,000 on '30 '20 '20 '4 million dollars to $24,000,000 at December 31.

On acquisitions, during the six month period ended December 31, the company completed the acquisition of two commercial laundry distributors and service providers, Lakeland, Florida based, Laundry Pro of Florida and Jeffersonville, Indiana based Odell Equipment and Supply. Shortly after the period end, company executed a third purchase agreement to acquire Huntley, Illinois based Hages Machinery, the company's first acquisition in the Midwest region of The United States. With each acquisition, we added similar distribution and service businesses comprised of experienced sales and service professionals with a loyal customer base in geographic areas where the company believes there are market share gain opportunities. A cornerstone of our long term growth strategy is the acquisition of long standing often family owned businesses. Since 2016, we have acquired 28 businesses. Our strategy includes the preservation of the people, unique culture and legacies of the acquired businesses with a goal of forming the single largest, most cohesive and entrepreneurial organization in the North American commercial laundry distribution service industry. Given our success, we believe that our entrepreneurial culture, growing technology advantage, strong financial position and other unique factors provide an attractive home for great businesses and we are actively pursuing opportunities that meet our financial, strategic and cultural criteria.

It is important to remember that our acquisitions have been internally sourced, negotiated, diligence, executed and integrated by our team and has been working together in Miami, Florida for over seven years. Our team has a profound appreciation for the sensitive process a family undertakes when contemplating the divestiture of a family owned business. We exercise flexibility and consideration throughout the buying process and have a tremendous reputation in our industry given our record of successful acquisitions. Considering our growth record and reputation, we continue to actively pursue many acquisitions and strategic transactions and opportunities in the commercial laundry industry and related industries. In summary, I've said time and again that we will be aggressive in the pursuit of long term growth, yet conservative in the way we finance our growth so that we're able to execute on buy and build opportunities at any time. Today, EVI is a fundamentally solid business that under our continuous leadership has demonstrated consistent growth over many years. We believe that we are well positioned for continued growth and intend to continue executing on our long term growth strategy. This concludes my comments related to the second quarter of the fiscal year ended June thirty of twenty twenty five.

As always, I want to thank our valued employees, our loyal suppliers and customers and our shareholders for your support and participation in EVI. Until next time.