EVI Industries, Inc. (NYSE American: EVI) announced today record
results for the fiscal year and three-months ended June 30, 2019.
The record results for both the fiscal year and three-months ended
June 30, 2019, reflect the Company’s consistent execution of its
buy-and-build growth strategy.
Earnings Conference Call
The Company has provided a pre-recorded earnings conference call
and business update in the “Investors” section of the Company’s
website at www.evi-ind.com or by clicking here
https://ir.evi-ind.com/message-from-the-ceo.
Financial Performance
(compared to the same period of the prior fiscal year)
Fourth Quarter Results
- Revenue increased 47% to a record $65 million,
- Gross profit increased 43% to a record $16 million,
- Operating income increased 27% to a record $2.4 million,
- Net income increased 61% to $1.2 million, and
- Adjusted EBITDA increased 30% to a record $3.7 million.
Fiscal Year 2019 Results
- Revenue increased 52% to a record $228 million,
- Gross profit increased 44% to a record $53 million,
- Operating income was $7.0 million compared to $6.9
million,
- Net income was $3.7 million compared to 3.9 million, and
- Adjusted EBITDA increased 14% to a record $11.5 million.
Highlights to Financial Performance
EVI’s record results for the fourth quarter and fiscal year 2019
reflect the Company’s consistent execution of its buy-and-build
growth strategy. The record performance, however, only includes
twelve months of results of six of the Company’s thirteen
businesses. The Company continues to seek attractive investments
across its businesses in the pursuit of future growth and does not
believe that it has begun to reap the full benefits of its growing
size.
Acquisitions
During the fiscal year 2019, EVI completed a record six
acquisitions and continues to execute its long-term growth
strategy.
Revenue
For the fiscal year and three-months ended June 30, 2019,
revenues increased $78.3 million, or 52%, to a record $228 million
and increased $20.9 million, or 47%, to a record $65 million,
compared to the fiscal year and three months ended June 30, 2018,
respectively. The increase in revenue was primarily due to the
results of operations of acquired businesses that were not
consolidated into the Company’s financial statements for all or
part of the prior periods.
Gross Profit and Gross Margin
For the fiscal year and three-months ended June 30, 2019, gross
profit increased $16.2 million, or 44%, to a record $53 million and
increased $4.8 million, or 43%, to a record $16 million, compared
to the fiscal year and three months ended June 30, 2018,
respectively. For the fiscal year and three-months ended June 30,
2019, gross margin decreased from 24.3% to 23.1% and from 25.3% to
24.5%, compared to the fiscal year and three months ended June 30,
2018, respectively. The decrease in gross margin was primarily due
to EVI’s increased engagement in longer-term federal government
contracts. Excluding these longer-term federal government
contracts, gross margins for the fiscal year and three months ended
June 30, 2019 would have been 25.2% and 24.8%, respectively.
Operating Expenses
Operating expenses increased $16.1 million, or 55%, and $4.3
million, or 46%, for the fiscal year and three-months ended June
30, 2019, compared to the fiscal year and three months ended June
30, 2018, respectively. The increase in operating expenses was
largely attributable to expenses incurred by the Company in
connection with its growth strategy, including: (1) additional
operating expenses associated with acquired businesses not
reflected in prior fiscal year or period operating expenses, (2)
additional operating expenses at the acquired businesses in pursuit
of future growth and in support of the Company’s growing
operations, (3) increases in operating expenses in connection with
the Company’s growth, including greater accounting fees, legal
fees, and insurance costs, (4) the addition of sales, service, and
operations support professionals and related costs, as total
personnel at June 30, 2019 increased by 71% compared to total
personnel at June 30, 2018, with 76% of such increase attributable
to sales and service related personnel, (5) increased investments
in sales, service, and operations related technologies in support
of the Company’s buy-and-build growth strategy, and (6) an increase
in non-cash amortization expense related to the intangible assets
the Company acquired in connection with its acquisitions and an
increase in non-cash share-based compensation. EVI believes these
investments, initiatives and expenses will have a positive impact
on the Company’s ability to achieve its long-term growth goals.
Henry M. Nahmad, Chairman and CEO commented: “We are pleased
with the execution of our growth strategy. The records we continue
to set have created a reputation for our Company that we believe
will continue to encourage successful business owners, loyal
suppliers, and valued customers to invest in and do business with
EVI. We intend to continue to execute our growth strategy and build
upon our growth record by pursuing available opportunities for
growth in our and related industries.”
EVI to Attend Baird’s 2019 Industrials Conference on November
5-7, 2019
The Company will attend and host one-on-one meetings with
investors during the conference dates.
Use of Non-GAAP Financial Information
In this press release, EVI discloses the non-GAAP financial
measure of Adjusted EBITDA, which EVI defines as earnings before
interest, taxes, depreciation, amortization, and amortization of
share-based compensation. Adjusted EBITDA is determined by adding
interest expense, income taxes, depreciation, amortization, and
amortization of share-based compensation to net income as shown in
the attached Condensed Consolidated Earnings before Interest,
Taxes, Depreciation, Amortization, and Amortization of Share-based
Compensation. EVI considers Adjusted EBITDA to be an important
indicator of its operating performance. Adjusted EBITDA is also
used by companies, lenders, investors and others because it
excludes certain items that can vary widely across different
industries or among companies within the same industry. For
example, interest expense can be dependent on a company’s capital
structure, debt levels and credit ratings, and the tax positions of
companies can vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
jurisdictions in which they operate. Adjusted EBITDA should not be
considered as an alternative to net income or any other measure of
financial performance or liquidity, including cash flow, derived in
accordance with GAAP, or to any other method of analyzing EVI’s
results as reported under GAAP. In addition, EVI’s definition of
Adjusted EBITDA may not be comparable to definitions of Adjusted
EBITDA or other similarly titled measures used by other
companies.
About EVI Industries
EVI Industries, Inc., through its wholly owned subsidiaries, is
a value-added distributor, and a provider of advisory and technical
services. Through the Company’s vast sales organization, it
provides its customers planning, designing, and consulting services
related to their commercial laundry operations. The Company sells
and/or leases its customers commercial laundry equipment
specializing in washing, drying, finishing, material handling,
water heating, power generation, and water reuse applications. In
support of the suite of products it offers, the Company sells
related parts and accessories. Additionally, through the Company’s
robust network of commercial laundry technicians, the Company
provides its customers installation, maintenance, and repair
services. The Company’s customers include retail, commercial,
industrial, institutional, and government customers. Purchases made
by customers range from parts and accessories, to single or
multiple units of equipment, to large complex systems, as well as
installation, maintenance and repair services.
Safe Harbor Statement
Except for the historical matters contained herein, statements
in this press release are forward-looking and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are subject to a
number of known and unknown risks and uncertainties that may cause
actual results, trends, performance or achievements of EVI, or
industry trends and results, to differ from the future results,
trends, performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include,
among others, the risks related to EVI’s business, results,
financial condition, prospects, and growth strategy and plans,
risks associated with EVI’s buy-and-build growth strategy,
including that EVI may not be successful in identifying or
consummating acquisitions or other strategic opportunities where or
when expected, or at all, that acquisition and other strategic
opportunities may not be available to EVI to the extent anticipated
or at all, that the potential benefits of transactions may not be
realized to the extent anticipated or at all, integration risks,
risks related to indebtedness incurred in connection with
transactions, dilution experienced by EVI’s stockholders as a
result of shares issued in connection with transactions, risks
related to the business, operations and prospects of acquired
businesses, their ability to achieve growth and EVI’s ability to
support growth efforts, risks related to EVI’s and its acquired
businesses’ relationships with principal suppliers and customers,
including EVI’s ability to expand or maintain such relationships,
and the impact that the loss of any principal supplier or customer
could have on EVI’s results and financial condition, risks related
to EVI’s ability to successfully build its existing operations,
risks relating to EVI’s ability to identify growth opportunities
in, successfully enter into, and compete effectively in, related
industries as well as trends related to those industries and the
timing of any such efforts, risks related to organic growth
initiatives, risks that investments, initiatives and expenses may
not result in the benefits anticipated, including long-term growth,
and other economic, competitive, governmental, technological and
other risks and factors, including those discussed in the Company’s
filings with the Securities and Exchange Commission, including,
without limitation, the Company’s Annual Report on Form 10-K for
the fiscal year ended June 30, 2019. Many of these risks and
factors are beyond EVI’s control. In addition, past performance of
EVI and its acquired businesses and perceived trends may not be
indicative of future results. EVI cautions that the foregoing
factors are not exclusive. The reader should not place undue
reliance on any forward-looking statement, which speaks only as of
the date made. EVI does not undertake to, and specifically
disclaims any obligation to, update or supplement any
forward-looking statement, whether as a result of changes in
circumstances, new information, subsequent events or otherwise,
except as may be required by law.
EVI Industries, Inc.
Condensed Consolidated Results of
Operations (in thousands, except per share data)
Unaudited
Unaudited
Fiscal Year Ended
Fiscal Year Ended
3-Months Ended
3-Months Ended
06/30/19
06/30/18
06/30/19
06/30/18
Revenues
$228,318
$150,007
$64,882
$44,012
Cost of Sales
175,620
113,501
49,005
32,897
Gross Profit
52,698
36,506
15,877
11,115
SG&A
45,693
29,572
13,513
9,259
Operating Income
7,005
6,934
2,364
1,856
Interest Expense, net
1,389
552
447
176
Income before Income Taxes
5,616
6,382
1,917
1,680
Provision for Income Taxes
1,873
2,416
701
923
Net Income
$3,743
$3,966
$1,216
$757
Net Income per Share
Basic
$0.30
$0.34
$0.10
$0.06
Diluted
$0.29
$0.33
$0.09
$0.06
Weighted Average Shares Outstanding
Basic
11,533
10,840
11,741
11,176
Diluted
12,022
11,277
12,209
11,672
The following table reconciles net income, the most comparable
GAAP financial measure, to Adjusted EBITDA.
EVI Industries, Inc.
Condensed Consolidated Earnings before
Interest, Taxes, Depreciation, Amortization, and Amortization of
Share-based Compensation (in thousands)
Unaudited
Unaudited
Fiscal Year Ended
Fiscal Year Ended
3-Months Ended
3-Months Ended
06/30/19
06/30/18
06/30/19
06/30/18
Net Income
$3,743
$3,966
$1,216
$757
Provision for Income Taxes
1,873
2,416
701
923
Interest Expense
1,389
552
447
176
Depreciation and Amortization
2,743
1,579
849
556
Amortization of Share-based
Compensation
1,740
1,575
453
411
Adjusted EBITDA
$11,488
$10,088
$3,666
$2,823
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version on businesswire.com: https://www.businesswire.com/news/home/20190913005221/en/
EVI Industries, Inc. Henry M. Nahmad (305) 402-9300 Chairman
& CEO Michael Steiner (305) 402-9300 Executive Vice President
EVI Industries (AMEX:EVI)
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