Earnings call transcript: EVI Industries Q1 2025 sees record revenues, strategic growth

EVI Industries reported record revenues of $94 million for the first quarter of 2025, reflecting strong operational performance and strategic acquisitions. The company’s stock price, however, saw a slight decline of 1.7% following the earnings release, closing at $17.67. With a market capitalization of $221.62 million and trailing twelve-month revenue of $370 million, EVI Industries continues to emphasize its growth strategy through acquisitions and technological advancements. According to InvestingPro analysis, the company currently trades at a premium to its Fair Value, with a P/E ratio of 34.26x.

Key Takeaways

• Record quarterly revenues of $94 million and gross profits of $28 million.
• Largest acquisition in company history with Gerbau North America.
• Stock price decreased by 1.7% post-earnings announcement.
• Continued focus on technology to enhance service and operational efficiency.

Company Performance

EVI Industries demonstrated robust performance in Q1 2025, achieving record revenues and gross profits. This growth is attributed to strategic acquisitions, including the significant acquisition of Gerbau North America, which has bolstered the company’s market presence. InvestingPro data shows the company maintains strong financial health with a "GOOD" overall score, supported by a healthy current ratio of 1.51 and moderate debt levels at 24% of equity. The integration of Gerbau’s operations is expected to further strengthen EVI’s competitive position. For deeper insights into EVI’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Revenue: $94 million (quarterly record).
• Gross profit: $28 million (quarterly record).
• Operating cash flow: $9 million for the quarter.
• Liquidity: Over $175 million following a credit facility amendment.

Outlook & Guidance

EVI Industries remains focused on expanding its customer base through both acquisitions and organic growth. The company is investing in digitalizing its operating platform to deliver exceptional service at scale. This strategy is expected to drive profitable growth while maintaining financial strength.

Executive Commentary

"We are focused on scaling with strength, growing our top and bottom line while remaining disciplined stewards of capital," said Henry Nahmad, Chairman and CEO. He emphasized the company’s aggressive pursuit of long-term growth balanced with conservative financial management, highlighting the value of EVI’s workforce as a key asset.

Risks and Challenges

• Integration of acquired businesses poses operational challenges.
• Macroeconomic pressures could impact customer demand.
• Continued investment in technology is necessary to maintain competitive advantage.
• Market saturation in certain regions may limit growth opportunities.
• Supply chain disruptions could affect service delivery and profitability.

EVI Industries’ Q1 2025 results underscore its commitment to growth and innovation, despite the slight dip in stock price. The company has demonstrated consistent growth with a 3.51% revenue increase over the last twelve months. The company’s strategic acquisitions and technological investments position it well for future success. InvestingPro subscribers can access additional insights through 7 exclusive ProTips and detailed valuation metrics to make more informed investment decisions.

Full transcript - EVI Industries Inc (EVI) Q3 2025:

Henry Nahmad, Chairman and CEO, EVI Industries: Hello, and welcome to EVI Industries Earnings Call for the Third Quarter of the Fiscal Year Ended 06/30/2025. I am Henry Nahmad, Chairman and CEO of EVI. Before we proceed, we would like to discuss our cautionary statement. This earnings call contains forward looking statements as defined by SEC rules and regulations. Forward looking statements are subject to a number of risks and uncertainties, including those set forth in our earnings press release issued today and in our SEC filings, including the Risk Factors section of our annual report on Form 10 ks for the fiscal year ended 06/30/2024.

Actual results may differ materially from those expressed in or implied by the forward looking statements. Before we get started, I want to share my appreciation to the nearly 900 valued employees that make up EVI today. Our people are the most valuable asset we have. And without their devotion to our company, our mission and the thousands of customers we serve, the consistent progress we have made towards achieving our long term growth goals would not be possible. Today, I’ll summarize our operating results for the third quarter of the fiscal year ended 06/30/2025, and provide greater context around the progress we’re making to scale our platform, enhance our capabilities and extend our leadership position in the market.

Let’s begin with a few performance highlights. We delivered record revenues of $280,000,000 and record gross profit of $84,000,000 for the fiscal year to date period and revenues of $94,000,000 and record gross profits of $28,000,000 for the third quarter, demonstrating continued strength in customer demand and operational execution. We generated $11,000,000 in operating cash flow for the fiscal year to date and $9,000,000 in operating cash flow for the third quarter, underscoring the quality of our earnings and the efficiency of our business model. While SG and A increased, this reflects intentional investments in strategic areas, particularly in digital infrastructure and integration of acquired businesses. Let me now spend some time on what we view as the most important strategic development of the third quarter, our acquisition of Gerbau North America, which closed on April 1.

The opportunity to acquire G and A emerged from years of mutual success and trust. Since 2018, we’ve had a productive distribution relationship with Gerbau through G and A. And over time, we developed a strong foundation of confidence and shared values that made this transaction possible. This is a transformational deal for EVI and marks the largest acquisition in our history. G and A is a best in class master distributor with a strong and loyal customer base across The United States, a highly experienced team, deep supply chain capabilities and a well established reputation for excellence and reliability.

More than just geographic expansion, this acquisition fundamentally enhances our operating scale, logistics infrastructure and customer reach. It significantly strengthens our presence in key growth markets and creates substantial cross sell opportunities within our existing base. We’ve already begun integrating G and A’s operations and I’m encouraged by how aligned the cultures, systems and customer centric values are. The early response from both customers and employees has been overwhelmingly positive. Longer term, we expect the acquisition to drive meaningful cost and revenue synergies, greater operational leverage as we expand our national platform and enhanced value for our customers through improved product availability, faster delivery and broader service capabilities.

G and A reflects the power and purpose of our buy and build strategy and our ability to execute large complex transactions with discipline and vision. Our acquisition strategy is reinforced by technology investments that are creating a durable competitive advantage. This quarter, we expanded adoption of our field service management platform, now supporting over four twenty five technicians in the field and continued building our next generation CRM and digital commerce capabilities. These investments are core to our long term strategy, even as they impact near term SG and A. They enable us to scale efficiently, serve customers more effectively and unify acquired businesses under a common data driven infrastructure.

One of the most important stories behind our performance this quarter is the strength of our operating cash flow, which exceeded $9,000,000 This is not just a reflection of our profitability, but a powerful strategic enabler. Strong and consistent cash flow generation allows us to fund accretive acquisitions like G and A without overreliance on equity or excess leverage, continue investing in systems, teams and infrastructure to support growth and preserve a healthy balance sheet, giving us the flexibility to navigate changing market conditions with confidence. In fact, following our March amendment to the credit facility, we now have over $175,000,000 in liquidity with extended maturity and improved capacity. That puts us in an excellent position to continue executing our buy and build strategy sustainably and responsibly. We are focused on scaling with strength, growing our top and bottom line while remaining disciplined stewards of capital.

Looking ahead, our long term strategy is clear: expand the customer base through acquisitions and organic growth digitize and modernize our operating platform, deliver exceptional service at scale and grow profitably while maintaining financial strength. With the addition of G and A, continued momentum in technology and of opportunities, we’re confident in our ability to accelerate growth and create lasting value for customers, employees and shareholders. In closing, I have 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 are able to execute on buy and build opportunities at any time. Today, EBI 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 third 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.

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