Shares of EVI Industries, Inc. EVI have declined 10% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 0.7% growth over the same time frame. Over the past month, the stock has gained 7.2% against the S&P 500’s 3.8% decline.
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EVI Industries reported net earnings per share (EPS) of 7 cents for the second quarter of fiscal 2025, down from 9 cents in the prior-year quarter.
The company posted record revenues of $92.7 million for the second quarter of fiscal 2025, marking a 1% year-over-year increase.
Gross profit reached an all-time quarterly high of $27.5 million, up 4% from the prior year, with gross margin expanding to 29.7% from 28.9%.
Despite the top-line growth, operating income declined to $2.4 million from $3 million, while net income fell to $1.1 million compared to $1.3 million in the year-ago period. Adjusted EBITDA decreased to $5.1 million from $5.5 million.
EVI Industries, Inc. Price, Consensus and EPS Surprise
EVI Industries, Inc. price-consensus-eps-surprise-chart | EVI Industries, Inc. Quote
Key Business Metrics
EVI’s sales order backlog remains above $100 million, reflecting steady demand across its industrial, on-premise, and vended laundry segments. However, the company cited delays in completing certain large industrial sales contracts, affecting revenue growth.
The company continued expanding its workforce, increasing its sales team by 3% to over 190 professionals and its service team by 10% to more than 425 professionals. It also deployed new field service technologies to over 70% of its service organization.
EVI’s ongoing technology initiatives include its e-commerce platform and Enterprise Resource Planning system, aimed at driving future operational efficiency.
Management Commentary
Chairman and CEO Henry M. Nahmad reaffirmed the company’s long-term growth strategy, emphasizing continued investments in personnel, technology and operational efficiency. He highlighted EVI’s financial flexibility and commitment to scaling its business despite near-term cost pressures affecting operating margins.
Management acknowledged that while the timing of large industrial sales remains uneven, the company expects to benefit from order fulfillment in the coming quarters.
Factors Influencing Results
Revenue growth was constrained by the irregular cadence of industrial sales, with only one customer invoiced for over $1 million in the quarter compared to five in the prior-year period. A shift toward higher-margin parts and services contributed to gross margin expansion, partially offsetting lower sales volumes.
Operating profit was impacted by higher selling, general, and administrative (SG&A) expenses, which rose to $25.1 million from $23.5 million year over year, primarily due to workforce expansion and technology investments.
Cash flow from operations declined to $2.2 million in the first half of fiscal 2025, compared to $10.9 million a year earlier, driven by working capital changes and acquisition-related expenses.
Outlook
Looking ahead, management remains optimistic about sustained demand in the commercial laundry sector and the potential for long-term growth through acquisitions and organic expansion. While ongoing investments may continue to pressure near-term profitability, EVI’s backlog and strategic initiatives position it for continued market share gains.
Other Developments
During the first half of fiscal 2025, EVI completed two acquisitions in Florida and Indiana, adding to its sales and service capabilities in the Southeast region. In January 2025, the company also acquired a commercial laundry distributor in Illinois, marking its entry into the Midwest market.
Additionally, EVI paid a record $4.6 million dividend, reflecting confidence in its long-term growth outlook.
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