PresentationHenry NahmadFounder, President, CEO & Chairman Hello, and welcome to EVI Industries Earnings Call for the Second Quarter of fiscal 2026. I am Henry Nahmad, Chairman and CEO of EVI Industries. Before we begin, I'd like to remind you that this presentation contains forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed. For additional information, ...

A core strength of EVI's growing enterprise is the depth of its customer relationships, supported by the largest sales and services organizations in the industry. To fully leverage this reach, the Company is making significant investments in people, processes, and technology aimed at building a more scalable, integrated, and efficient organization. These investments are expected to further enhance EVI's ability to deliver best-in-class laundry solutions, expand complementary product and service offerings, r ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Not Applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) ...

Core Insights - EVI Industries, Inc. (EVI) shares have declined 17.8% since the earnings report for the quarter ended September 30, 2025, underperforming the S&P 500 index, which gained 1.9% during the same period [1] - For Q1 fiscal 2026, EVI reported earnings per share of 11 cents, down from 21 cents year-over-year, while revenue increased by 16% to $108.3 million [2] - Gross profit reached a record $33.9 million, with a gross margin of 31.3%, attributed to the Continental acquisition [4] Financial Performance - Operating income fell to $3.6 million from $5 million a year ago, and net income dropped 43% to $1.8 million from $3.2 million [3] - Adjusted EBITDA decreased 11% to $6.8 million, indicating margin compression due to ongoing investments [3] - Selling, general and administrative (SG&A) expenses rose to $30.3 million from $23.9 million, impacting profitability metrics [6] Management Commentary - The CEO emphasized a long-term vision focused on acquisitions, technology upgrades, and process improvements to build a resilient business [7] - Management views current revenue gains and record gross margins as validation of its buy-and-build strategy, despite a dip in profitability [8] Business Metrics - EVI's gross margin improved to 31.3% from 30.8% year-over-year, primarily due to the Continental acquisition [4] - Adjusted EBITDA margin decreased to 6.2% from 8.1% in the comparable period, reflecting increased investments [5] Strategic Investments - The company made significant investments in consolidation and optimization, which pressured earnings, while participation in a major industry exposition elevated expenses [9] - Higher SG&A costs and increased interest expense (up to $0.9 million from $0.5 million) further squeezed profitability [10] Future Outlook - EVI reiterated confidence in sustaining gross margin improvements and pursuing additional acquisitions, supported by a robust balance sheet [11] - The company declared a special cash dividend of 33 cents per share, totaling $5 million, reflecting financial strength [12] Technological Advancements - EVI scaled its proprietary field service platform, handling approximately 9,000 service appointments in September 2025, up from 1,000 a year earlier [13] - Phase one of a new CRM system was rolled out at Continental, with plans for broader implementation to improve efficiency and sales effectiveness [13]

Financial Performance - Revenue increased 16% to a record $108 million compared to the first quarter of fiscal 2025[5] - Gross Profit increased 17% to a record $33.9 million, resulting in a gross margin of 31.3%[5] - Net Income for the quarter was $1.8 million, down from $3.2 million in the prior-year period, reflecting a net income margin of 1.7%[5] - Adjusted EBITDA was $6.8 million, or 6.2% of revenue, compared to 8.1% in the prior-year period[5] - Revenues for the three months ended September 30, 2025, increased to $108,269,000, up 15.6% from $93,625,000 for the same period in 2024[18] - Gross profit rose to $33,892,000, representing a 17.5% increase compared to $28,855,000 in the prior year[18] - Net income decreased to $1,847,000, down 42.8% from $3,231,000 year-over-year[18] - Adjusted EBITDA for the three months ended September 30, 2025, was $6,752,000, a decline of 11.2% from $7,606,000 in the same period last year[23] Acquisitions and Market Position - The Company completed four additional acquisitions, including the largest in its history, enhancing its market position[2] - The Company continues to explore qualified acquisition opportunities to capitalize on the fragmented commercial laundry market[8] Dividends and Financial Strength - The Company declared a $5.0 million special cash dividend, the largest in its history, reflecting confidence in its financial strength[6] Debt and Cash Flow - The Company’s net debt increased by $2.2 million to $46.3 million, primarily due to operating cash flow[9] - Cash at the end of the period was $4,658,000, down from $8,852,000 at the beginning of the period[20] - The company paid $1,041,000 in interest during the period, compared to $413,000 in the prior year[21] Assets and Liabilities - Total assets increased to $321,750,000 as of September 30, 2025, compared to $307,028,000 at June 30, 2025[19] - Current liabilities rose to $112,320,000, up 18.3% from $94,863,000 in the previous quarter[19] Capital Expenditures and Interest Expense - Capital expenditures for the three months ended September 30, 2025, were $1,913,000, compared to $1,253,000 in the prior year[20] - Interest expense increased to $916,000, up 90.1% from $482,000 in the same quarter last year[18] Service Capabilities - The field service platform supported approximately 9,000 appointments in September 2025, up from 1,000 a year ago, indicating significant growth in service capabilities[12]

Financial Performance - Revenues for the three-month period ended September 30, 2025 increased by $14.6 million, or 16%, compared to the same period of the prior fiscal year, primarily due to revenues from acquired businesses[107] - Gross profit for the same period increased by $5.0 million, or 17%, with gross margins rising from 30.8% to 31.3%[108] - Operating expenses increased by $6.5 million, or 27%, driven by expenses from acquired businesses and increased selling costs[109] - Net income for the three-month period was $1.8 million, down from $3.2 million, primarily due to increased operating expenses[112] Assets and Liabilities - Total assets increased from $307.0 million to $321.8 million, attributed to higher current assets and operating lease assets[113] - Total liabilities rose from $163.6 million to $181.0 million, largely due to increased accounts payable and customer deposits[113] - Working capital decreased from $50.6 million to $45.8 million, reflecting increases in accounts receivable and inventory[115] Cash Flow and Financing - For the three months ended September 30, 2025, operating activities provided cash of $1.0 million, an increase of $0.8 million compared to $0.2 million in the same period of 2024[117] - Investing activities used cash of $2.4 million for the three months ended September 30, 2025, a decrease of $4.7 million from $7.1 million used in the same period of 2024, primarily due to reduced cash paid for business acquisitions[118] - Financing activities used cash of $2.8 million for the three months ended September 30, 2025, compared to $6.7 million provided in the same period of 2024, reflecting a $9.5 million increase in cash used due to decreased net borrowings[119] - As of September 30, 2025, the Company had approximately $51.0 million of outstanding borrowings under its Credit Agreement, with a weighted average interest rate of 5.54%[121] - The Credit Agreement allows for borrowings up to $150 million, with an accordion feature to increase the facility by an additional $50 million, totaling $200 million[120] - The Company believes its existing cash, anticipated cash from operations, and funds available under the Credit Agreement will be sufficient to fund operations and capital expenditures for at least the next twelve months[124] - The Company is in compliance with its covenants under the Credit Agreement, with $48.0 million available to borrow under the revolving credit facility as of September 30, 2025[122] Special Events and Acquisitions - The company declared a special cash dividend of $0.33 per share, totaling $5.0 million, paid on October 6, 2025[113] - The company acquired ASN Laundry Group on August 1, 2025, which is expected to complement its existing business and provide growth opportunities[102] Economic Factors - Inflation did not significantly affect the Company's results during the reported periods, but risks related to inflation and price increases remain[125] - A hypothetical 1% increase in daily interest rates would increase the Company's annual interest expense by approximately $510,000 based on outstanding borrowings[130] Related Party Transactions - Payments under related party leases totaled approximately $63,000 and $57,000 for the three months ended September 30, 2025 and 2024, respectively[126]

Core Viewpoint - EVI Industries, Inc. will be presenting at the Baird Global Industrial Conference on November 12, 2025, with Chairman and CEO Henry M. Nahmad leading the presentation and hosting one-on-one meetings with registered investors [1] Company Information - EVI Industries, Inc. is actively engaging with investors through presentations and meetings at industry conferences, indicating a focus on investor relations and market presence [1]

Core Insights - Conestoga Capital Advisors reported that equity markets reached new all-time highs in Q3 2025, but their Smid Cap Composite underperformed the Russell 2500 Growth Index, returning -1.1% net-of-fees compared to the index's +10.7% [1] Company Overview - EVI Industries, Inc. is a distributor and consolidator of commercial laundry and dry-cleaning equipment, parts, and related services across the United States [3] - The company has seen solid demand for its commercial laundry equipment and services, and it anticipates a meaningful improvement in margins following the acquisition of Girbau North America [3] Stock Performance - EVI Industries, Inc. experienced a one-month return of -20.21% but gained 42.64% over the last 52 weeks, with a closing stock price of $27.52 and a market capitalization of $346.233 million as of October 17, 2025 [2] Investor Sentiment - EVI Industries, Inc. is not among the 30 most popular stocks among hedge funds, with only 2 hedge fund portfolios holding the stock at the end of Q2 2025, down from 3 in the previous quarter [4] - Despite acknowledging EVI's potential, the company believes that certain AI stocks offer greater upside potential and less downside risk [4]

Core Insights - EVI Industries is the only publicly traded company in the U.S. that specializes exclusively in commercial laundry equipment and services, indicating a unique market position that may soon face competition from Alliance Laundry Holdings [1] Company Overview - EVI Industries focuses on the commercial laundry sector, which is a niche market that may be overlooked by many investors, particularly in the small- to mid-cap range [1] Market Position - The unique positioning of EVI Industries in the commercial laundry equipment and services market may not last long due to potential competition from larger entities like Alliance Laundry Holdings [1]

Core Insights - EVI Industries, Inc. reported a 22% year-over-year revenue increase to a record $110 million for the quarter ended June 30, 2025, with a gross profit rise of 24% to $33.9 million, resulting in a gross margin of 30.8% [2][3] - The company achieved a fiscal 2025 revenue growth of 10% to $390 million, with net income increasing by 33% to $7.5 million and EPS rising to 49 cents, a 32% increase from the previous fiscal year [3][6] - EVI's operational strategy focused on long-term growth through acquisitions and organic growth, with a compounded annual growth rate of 7% in organic revenue over three years [4][9] Financial Performance - The company reported net income of $2.1 million for the quarter, a 1% increase year-over-year, despite a decline in operating cash flow to $21.3 million due to increased working capital investments [2][6] - EVI's gross profit margin expanded to 30.4% for fiscal 2025, with operating income advancing 18% to $13.8 million [3][4] Operational Highlights - EVI's ERP platform usage increased significantly, with 27 out of 31 business units utilizing it by June 2025, enhancing operational efficiency [4][5] - The company optimized field service operations, enabling over 8,500 service appointments in June 2025, which also served as sales touchpoints [5] Strategic Initiatives - EVI's acquisition of Girbau North America, rebranded as Continental Laundry Solutions, is expected to contribute approximately $50 million in annual revenues and enhance sourcing capabilities [14] - The company declared a special cash dividend of 33 cents per share, reflecting confidence in its financial health and ability to return value to shareholders [15] Market Positioning - EVI's strategic focus on essential commercial laundry services across sectors like healthcare and hospitality positions it favorably in a fragmented market [8][9] - The company is optimistic about future growth, supported by a solid backlog of customer orders and a robust acquisition pipeline [12][13]