Breaking Down EVI Industries, Inc. (EVI) Financial Health: Key Insights for Investors

You're looking at EVI Industries, Inc. (EVI) and trying to figure out if their aggressive buy-and-build strategy is truly paying off for the long haul, or just masking operational headwinds, and honestly, the 2025 fiscal year data gives us a clear, if complex, picture. The headline is strong: EVI delivered a record-setting year with revenue climbing 10% to a robust $390 million, and net income surging by a massive 33% to hit $7.5 million. Here's the quick math: that growth is fueled by strategic acquisitions-they deployed nearly $47 million on four new businesses, including their largest acquisition to date-which is a great sign for market consolidation. But still, you have to look deeper; while operating cash flow remained healthy at $21.3 million, that acquisition spree pushed net debt up to $44.1 million, an increase from $8.3 million just a year prior. So, the question isn't about growth, but about the quality of that growth and the cost of capital, especially as they invest heavily in new field service and enterprise resource planning (ERP) technology. You want to know if that debt load is manageable and if those new assets are truly integrated for margin expansion-that's what we're breaking down next.

Revenue Analysis

You're looking for a clear picture of EVI Industries, Inc. (EVI)'s growth engine, and the takeaway is simple: the company is expanding revenue aggressively, largely through a successful 'buy-and-build' strategy, but you need to watch the source of that growth. For the fiscal year ended June 30, 2025, EVI reported record annual revenue of approximately $390 million.

That result represents a significant year-over-year revenue growth rate of roughly 10% compared to the $353.5 million reported in fiscal year 2024. This double-digit growth is defintely a positive signal, but it's crucial to understand the two main drivers: acquisitions and price increases.

Primary Revenue Sources and Business Segments

EVI operates as a value-added distributor and service provider, meaning their revenue comes from a mix of equipment sales and ongoing technical services. They sell and/or lease commercial, industrial, and vended laundry and dry cleaning equipment, plus steam and hot water boilers. That's a wide customer base, spanning hospitals, hotels, correctional facilities, and laundromats.

The company reports its financial results through a single operating and reportable segment, so you won't see a neat split between 'equipment sales' and 'service revenue' in their main filings. Still, their core business is clearly defined:

• Selling/leasing commercial laundry and dry cleaning equipment.
• Providing installation, maintenance, and repair services.
• Distributing replacement parts and accessories.

The geographic footprint is concentrated in North America, with operations primarily in the United States, Canada, the Caribbean, and Latin America.

Growth Drivers and Revenue Trends

The significant change in EVI's revenue profile is the consistent execution of its 'buy-and-build' strategy. In fiscal 2025 alone, the company completed four acquisitions, including the largest in its history: Girbau North America (now Continental Laundry Solutions). This acquisition-fueled growth is expected to add around $50 million in annual revenue going forward.

Here's the quick math on their recent trajectory, showing the blend of organic and inorganic growth:

The fact that the three-year compounded annual growth rate (CAGR) in organic revenue-that's sales growth from existing businesses, not acquisitions-was a respectable 7% shows the underlying business is healthy, but the 10% total growth is definitely boosted by M&A activity. Your investment decision hinges on whether they can successfully integrate these new companies and maintain that organic growth rate. To dive deeper into the full financial picture, you can check out the rest of this series at Breaking Down EVI Industries, Inc. (EVI) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if EVI Industries, Inc. (EVI) is turning its strong revenue growth into real profit, and the answer is yes, but with a clear trade-off. For the fiscal year ended June 30, 2025, the company delivered record results, but its operating and net margins are still quite thin. This is the classic tension of a growth-by-acquisition strategy: you are building scale, but the costs to integrate and modernize eat into near-term profitability.

Here's the quick math on EVI's core profitability for the 2025 fiscal year:

• Gross Profit Margin: 30.4%
• Operating Profit Margin: $\approx$ 3.54%
• Net Profit Margin: $\approx$ 1.92%

EVI reported a record 2025 fiscal year revenue of $390 million, with a Gross Profit of $118 million and Net Income of $7.5 million. The jump from Gross Profit to Operating and Net Profit is where the story gets interesting for investors.

Trends in Profitability and Operational Efficiency

The good news is that EVI Industries, Inc. is showing strong positive trends, which is what you want to see from a company executing a 'buy-and-build' strategy. The growth in profit outpaced the growth in revenue, which signals operating leverage (a company's ability to increase net income faster than revenue).

• Revenue increased 10% year-over-year.
• Gross Profit increased 12% year-over-year.
• Operating Income increased 18% year-over-year to $13.8 million.
• Net Income surged by 33% year-over-year.

The gross margin improved slightly to 30.4% for FY 2025, compared to 29.6% in the prior year period, which shows solid cost management on the product and service side, or a favorable sales mix. But still, the operating margin of $\approx$ 3.54% tells you they are spending heavily on growth. The company's focus on integrating recent acquisitions, like Girbau North America (now Continental Laundry Solutions), and its investments in technology are driving up Selling, General and Administrative (SG&A) expenses. [cite: 7, 15 in step 1, 5 in step 1] This is a defintely necessary cost for long-term scalability, but it keeps the near-term bottom line tight.

Industry Comparison and Investor Takeaway

To be fair, comparing EVI Industries, Inc. to the end-customer business-the laundromats they sell to-shows why their margins look low. A typical U.S. laundromat operator, a service-based business, can see Gross Profit Margins in the 35% to 50% range and Net Profit Margins between 20% and 40%. EVI is a distributor and service provider, which means they have lower gross margins (30.4%) because they are selling equipment and parts, not just high-margin wash cycles.

What this comparison hides is the difference in business models. EVI's low operating margin is a strategic choice, not a sign of poor performance. They are prioritizing market consolidation and platform modernization over immediate high profitability. Your investment decision boils down to whether you believe their long-term strategy of building a national, technology-enabled distribution platform will eventually lead to significant operating leverage-where that 3.54% operating margin starts climbing toward double digits as acquisition and technology costs moderate. Check out their strategic goals here: Mission Statement, Vision, & Core Values of EVI Industries, Inc. (EVI).

Here is a summary of EVI Industries, Inc.'s Fiscal Year 2025 profitability:

Debt vs. Equity Structure

You want to know how EVI Industries, Inc. (EVI) is funding its growth, and the answer is clear: they are leaning more on debt to fuel their aggressive acquisition strategy. This isn't a red flag yet, but it's a trend you need to watch closely. The company's Debt-to-Equity (D/E) ratio for fiscal year 2025 is significantly higher than the industry average, reflecting a conscious trade-off to drive expansion.

As of June 30, 2025, EVI Industries, Inc. reported total shareholders' equity of approximately $143.477 million, which serves as the core capital base for the business. Their primary debt component is classified as long-term, netting out to $53.0 million. The total liabilities, including accounts payable and other accrued expenses, stood at $163.551 million. Honestly, that's a lot of paper for a company of this size, but it is all tied to a clear strategy.

Debt-to-Equity: Comparing EVI to the Industrials Sector

The key metric here is the Debt-to-Equity ratio, which tells us how much debt the company uses to finance its assets relative to shareholder funding. For the fiscal year ended June 30, 2025, EVI Industries, Inc.'s D/E ratio was approximately 45.1%. [cite: 1 in first search, 6 in first search] This is a notable increase from the prior year and reflects the capital deployed for strategic acquisitions. To be fair, a higher D/E ratio isn't inherently bad if the company is generating strong returns on the acquired assets.

However, when you compare this to the broader Industrials sector, where the average Net Debt-to-Equity is closer to 29.7%, EVI Industries, Inc. is running with a more leveraged capital structure. [cite: 2 in first search] This higher leverage means a greater reliance on borrowed money, which increases your risk profile, especially in a rising interest rate environment. One clean one-liner: Acquisitions cost cash, and EVI is paying with debt.

Here's the quick math on the key balance sheet components (in thousands of USD):

What this estimate hides is the nature of the debt. The long-term debt is primarily a Revolving Line of Credit, which gives them flexibility. As of September 30, 2025, the outstanding borrowings under this Credit Agreement were about $51.0 million.

Financing Growth: Debt vs. Equity Balance

EVI Industries, Inc. has been very open about its buy-and-build growth strategy, and debt is the engine. The increase in net debt to $44.1 million as of June 30, 2025, is directly attributed to deploying approximately $46.9 million across strategic acquisitions during fiscal 2025, including the largest in company history, Continental Laundry Solutions. They are using debt to scale rapidly.

The company balances this by maintaining a strong focus on cash flow and liquidity. They use debt for the big, strategic moves, but also generated $21.3 million in operating cash flow in fiscal 2025. Plus, they are not shy about rewarding shareholders, declaring a special cash dividend of $0.33 per share in September 2025. This shows a confidence in their financial strength and long-term outlook, even with the higher leverage. If you want to understand the strategic rationale behind this approach, you should review their Mission Statement, Vision, & Core Values of EVI Industries, Inc. (EVI).

The risk is that if the acquired businesses don't integrate well or fail to generate the expected cash flow, the debt service could become a drag. But for now, EVI is defintely prioritizing growth via acquisition over a pristine balance sheet.

Next step: Analyst team should model a sensitivity analysis on the cost of debt increasing by 100 basis points against the expected cash flow from the FY2025 acquisitions by the end of next week.

Liquidity and Solvency

You need to know if EVI Industries, Inc. (EVI) can cover its short-term bills, especially as they pursue an aggressive buy-and-build strategy. The quick answer is yes, their liquidity position is solid, but it's heavily reliant on inventory and their revolving credit facility. You need to look past the healthy Current Ratio to the underlying working capital trends.

For the fiscal year ended June 30, 2025, the company's liquidity ratios show a reasonable ability to meet obligations. The Current Ratio sits at 1.53, meaning EVI has $1.53 in current assets for every dollar of current liabilities. That's a good buffer. But the Quick Ratio (or acid-test ratio), which excludes inventory, drops to 0.76.

Here's the quick math on what that gap tells us:

• Current Ratio of 1.53 suggests strong short-term coverage.
• Quick Ratio of 0.76 signals that without selling inventory, EVI can only cover about 76 cents of every dollar of current debt.
• The difference highlights the importance of inventory-valued at $66.1 million as of June 30, 2025 [cite: 1 from previous search], a significant component of their current assets.

This inventory reliance isn't defintely a red flag for a distributor like EVI, but it means a sharp downturn in demand could slow the conversion of that inventory to cash. Still, the company maintains over $175 million in available liquidity, bolstered by an amended revolving credit facility, which provides a substantial safety net against any short-term cash crunch.

Working Capital and Cash Flow Trends

EVI's working capital trends in FY 2025 directly reflect their growth strategy. They deliberately increased their investment in working capital to support organic and acquired growth [cite: 1 from previous search]. This is a strategic choice, but it consumes cash.

The cash flow statement for FY 2025 paints a clear picture of a company in an active acquisition phase:

Operating cash flow of $21.3 million [cite: 1 from previous search] demonstrates the core business is profitable and generates cash, but it was not enough to cover the $51.786 million [cite: 1 from previous search] deployed for acquisitions and capital expenditures. Consequently, the company relied on financing activities, specifically new debt, to bridge the gap and fund its expansion. This is why net debt increased to $44.1 million as of June 30, 2025 [cite: 1 from previous search]. This is the cost of growth.

The key takeaway is that liquidity is strong, thanks to external capacity, but internal cash generation is currently being recycled into growth assets (inventory, receivables, and acquisitions), not stockpiled. The current strategy is a disciplined use of debt to fund accretive acquisitions, which is a risk you need to monitor. To see who is betting on this strategy, you should be Exploring EVI Industries, Inc. (EVI) Investor Profile: Who's Buying and Why?

Valuation Analysis

Is EVI Industries, Inc. (EVI) overvalued or undervalued? The short answer is that its valuation multiples suggest the market is pricing in significant future growth, making it look expensive on a trailing basis, but analysts still see a strong upside. You're essentially paying a premium for a proven 'buy-and-build' strategy that has delivered.

For the fiscal year ended June 30, 2025 (FY 2025), EVI Industries, Inc.'s valuation ratios are definitely elevated compared to the broader Industrials sector average. This isn't a cheap stock, but that's often the case for companies executing a successful acquisition-driven growth strategy.

Here's the quick math on the key FY 2025 metrics:

The P/E ratio of 43.35 is the main flag. It tells you investors are willing to pay over 43 times the company's annual earnings per share. This premium reflects the market's confidence in EVI Industries, Inc.'s ability to integrate acquisitions and grow its Adjusted EBITDA, which hit a record $25.0 million in FY 2025.

Stock Price Movement and Investor Sentiment

Over the last 12 months, the stock has shown volatility but ended the period up, increasing by about 6.05% as of November 2025. The stock price traded in a wide range, from a 52-week low of $14.99 to a high of $34.82. This range shows a significant swing in sentiment, but the current price around $22.03 (as of mid-November 2025) sits closer to the low end, which could be an opportunity if you believe in the long-term strategy.

Still, the recent price action shows a sharp decline from the high, so you need to understand the market's current skepticism. For a deeper look at who is buying and selling, you should check out Exploring EVI Industries, Inc. (EVI) Investor Profile: Who's Buying and Why?

Dividend Profile: Special Payouts

EVI Industries, Inc. is not your typical high-yield dividend stock. The company paid an annual dividend of $0.33 per share in 2025. This translates to a modest dividend yield of about 1.60%. The key here is that EVI often pays a special dividend, not a regular, growing one, as it prioritizes capital for its acquisition strategy.

• Annual Dividend: $0.33 per share.
• Dividend Yield: 1.60%.
• Payout Ratio: 84.31% of earnings. This high ratio suggests little room for regular increases unless earnings grow significantly.

Honestly, the high payout ratio of 84.31% on earnings is a sign that the dividend is not defintely sustainable without a major earnings jump, especially since the company is focused on reinvesting in its growth.

Analyst Consensus and Price Targets

The Wall Street consensus on EVI Industries, Inc. is overwhelmingly positive. The average brokerage recommendation is 2.0, which translates to an 'Outperform' rating. The consensus rating is a straight Buy.

The average 12-month price target is a range between $35.00 and $40.00. The most recent target change was a slight reduction from $40.00 to $35.00 in November 2025, but even the lower target implies a substantial upside from the current price. This suggests that while the stock trades at a premium, analysts believe the company's growth trajectory justifies a much higher price.

Risk Factors

You're looking at EVI Industries, Inc. (EVI) and seeing a strong growth story-record revenues and a disciplined acquisition strategy. That's true, but as a seasoned analyst, I have to map out the near-term risks that could slow that momentum. The biggest challenges for EVI are tied directly to their 'buy-and-build' strategy (acquiring and integrating businesses) and the financial demands it creates.

The core risk isn't about the commercial laundry market itself, which has resilient demand in healthcare and hospitality. It's about execution and capital structure. Here's the quick math: the company's net debt jumped to $44.1 million as of June 30, 2025, up sharply from $8.3 million a year prior, because they deployed $46.9 million on strategic acquisitions during fiscal 2025. That's a huge capital outlay for growth, and it means the successful integration of those new companies is absolutely critical.

Operational and Strategic Execution Risks

The 'buy-and-build' model is powerful, but it's also a high-wire act. The risk isn't just buying the right company; it's integrating it without breaking the core business. We saw the pressure this puts on margins in the first quarter of fiscal 2026 (ending September 30, 2025), where net income dropped to $1.8 million from $3.2 million year-over-year, despite record revenue. This decline is largely attributed to higher selling, general, and administrative expenses related to integration and technology investments. You have to watch that integration expense line closely.

• Acquisition Integration: Failure to successfully merge operations, especially with the largest acquisition in company history, Girbau North America (now Continental Laundry Solutions).
• Supplier Concentration: A significant operational risk is the reliance on a small group of manufacturers. Purchases from just four manufacturers accounted for approximately 72% of EVI's product purchases for fiscal 2025. Any disruption with one of those four hits the business hard.
• Technology Investment Lag: While EVI is investing in a proprietary field service platform, which supported approximately 9,000 appointments in September 2025, they must keep that pace up. If a competitor leapfrogs them on service tech, their competitive advantage erodes.

External and Financial Headwinds

External risks are the usual suspects, but they matter more when you're carrying more debt. Macroeconomic pressures-like a slowdown in hotel or healthcare construction-could impact customer demand for new equipment. Plus, the commercial laundry sector is competitive, so EVI must maintain its service edge.

On the financial side, while cash flow from operations was still strong at $21.3 million in fiscal 2025, that was an $11.4 million decrease from the prior year, mostly due to a larger investment in working capital (higher accounts receivable and inventory). That means more capital is tied up in the business to support growth, which is a drag on free cash flow.

Here's a snapshot of the financial risk pressure points:

The good news is that management is aware of these risks and focuses on mitigation. They cite their strong supplier relations and their ongoing technology investments as key competitive advantages. Still, the next few quarters will defintely show if the revenue growth from acquisitions can outpace the integration costs. For a deeper dive into the valuation, check out our full post: Breaking Down EVI Industries, Inc. (EVI) Financial Health: Key Insights for Investors.

Next Action: Finance should model a sensitivity analysis on the cost of capital, assuming a 10% increase in interest rates, to quantify the impact on the $44.1 million net debt load.

Growth Opportunities

You're looking for a clear path forward on EVI Industries, Inc. (EVI), and the takeaway is that their growth is not speculative; it's a disciplined, repeatable process of acquisitions and operational modernization. The company's long-term strategy is built on its 'buy-and-build' model, which delivered a 10% revenue increase to a record $390 million for the fiscal year ended June 30, 2025.

The core growth drivers are two-fold: strategic acquisitions that expand their footprint and a significant push into technology that drives efficiency and organic growth. Honestly, they've established themselves as the industry leader in a fragmented market, which is a powerful position.

Key Growth Drivers and Strategic Initiatives

The most immediate and quantifiable driver is their acquisition strategy. In fiscal 2025 alone, EVI Industries completed four acquisitions, including the largest in company history: Girbau North America, now Continental Laundry Solutions, acquired for $43 million in March 2025. This single deal is expected to add approximately $50 million in annual revenue, after intercompany eliminations, providing a clear boost to the top line for fiscal 2026 and beyond. Plus, the acquisition of ASN Laundry Group in August 2025 further strengthened their market share in the critical New York area.

Beyond M&A, the company is making smart, foundational investments in digital infrastructure. They've expanded their Field Service Management platform to 27 business units by the end of fiscal 2025, which handled over 8,500 service appointments that June. This isn't just about efficiency; every service call is a sales opportunity that strengthens customer relationships.

• Acquisitions: Completed four deals in FY2025, deploying $46.9 million in capital.
• Organic Growth: Delivered a 7% compounded annual organic revenue growth rate over the last three years.
• Product Innovation: Leveraging Continental to become a strategic sourcing division, improving purchasing power.
• Technology Roadmap: Developing an e-commerce platform for a fiscal 2026 launch to provide 24/7 product access.

Revenue Projections and Earnings Estimates

While EVI Industries does not provide explicit forward-looking earnings per share (EPS) guidance, their recent performance and acquisition run-rate offer a strong indication of future growth. Fiscal 2025 saw Net Income jump 33% to $7.5 million, with Diluted EPS at $0.49. The key is that the acquisition of Continental alone is expected to add $50 million in annual revenue, which will be fully reflected in fiscal 2026 results. This is a significant inorganic tailwind on top of the established 7% organic growth rate.

Here's the quick math: if you take the fiscal 2025 revenue of $390 million and layer in the $50 million from Continental, you get a new baseline of $440 million before factoring in any organic growth or other acquisitions. The first quarter of fiscal 2026 already showed a 16% revenue increase to a record $108 million, reflecting this momentum. To be fair, this aggressive growth requires capital, which is why net debt increased to $44.1 million as of June 30, 2025, reflecting the investment in acquisitions and working capital.

Durable Competitive Advantages

EVI Industries' competitive edge isn't just about being the biggest; it's about being the most comprehensive and defintely having the best reputation. They operate the largest service organization in the North American commercial laundry industry, supported by more than 425 service professionals. This scale, combined with the industry's broadest product portfolio, is a powerful barrier to entry for competitors.

Their 'acquirer of choice' reputation is also a massive advantage. By honoring the legacies of acquired businesses and retaining local teams, they keep the entrepreneurial spirit alive while integrating the businesses onto a common, modernized platform. This approach is what allows them to consistently execute their strategy and maintain a strong pipeline of acquisition targets. If you want to dive deeper into who is investing and why, you should check out Exploring EVI Industries, Inc. (EVI) Investor Profile: Who's Buying and Why?

Next Step: Finance should model the impact of the $50 million Continental revenue contribution on the FY2026 gross margin by the end of next week.