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What changed in EVI INDUSTRIES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EVI INDUSTRIES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+172 added−164 removedSource: 10-K (2025-09-11) vs 10-K (2024-09-12)

Top changes in EVI INDUSTRIES, INC.'s 2025 10-K

172 paragraphs added · 164 removed · 138 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

38 edited+7 added−4 removed23 unchanged
Biggest changeProduct purchases made by customers range from parts and accessories, to single or multiple units of equipment, to large complex systems. The Company also provides its customers with the services described above.
Biggest changeAdditionally, through the Company’s robust network of commercial laundry technicians, the Company provides its customers with installation, maintenance, and repair services. The Company’s customers include government, institutional, industrial, commercial and retail customers. Product purchases made by customers range from parts and accessories, to single or multiple units of equipment, to large complex systems.
Stock-based plans include a voluntary employee stock purchase plan and an equity compensation plan under which restricted stock and other equity awards may be granted.
Stock-based plans include a voluntary employee stock purchase plan and an equity compensation plan under which restricted stock and other equity awards may be granted.
The Company’s equity compensation plan is designed to promote long-term performance, as well as to create long-term employee retention and continuity of leadership, and align the interests of management and employees with the long-term success of the Company.
The Company’s equity compensation plan is designed to promote long-term performance, as well as to create long-term employee retention and continuity of leadership, and align the interests of management and employees with the long-term success of the Company.
The Company seeks to establish customer satisfaction by offering: ● an experienced sales and service organization; ● comprehensive product offerings; ● competitive pricing; ● maintenance of comprehensive and well-stocked inventories of equipment, replacement parts and accessories, often with same day or overnight availability; 7 ● design and layout services; ● installation, maintenance and repair services; ● on-site training performed by factory trained technicians; and ● toll-free support lines and technical websites to address customer service problems.
The Company seeks to establish customer satisfaction by offering: ● an experienced sales and service organization; ● comprehensive product offerings; ● competitive pricing; ● maintenance of comprehensive and well-stocked inventories of equipment, replacement parts and accessories, often with same day or overnight availability; ● design and layout services; ● installation, maintenance and repair services; ● on-site training performed by factory trained technicians; and ● toll-free support lines and technical websites to address customer service problems.
The Company seeks to compete in these areas by employing experienced and successful professionals, by offering a comprehensive product line, by employing a robust network of qualified installation and service technicians, by maintaining optimized inventories of equipment, parts, and accessories at well-located facilities and on service vehicles, by investing in advanced technologies designed to improve the customer experience, and by expansion of its suite of value-added services.
The Company seeks to compete in these areas by employing experienced and successful professionals, by offering a comprehensive product line, 9 by employing a robust network of qualified installation and service technicians, by maintaining optimized inventories of equipment, parts, and accessories at well-located facilities and on service vehicles, by investing in advanced technologies designed to improve the customer experience, and by expansion of its suite of value-added services.
These reports and statements, as well as beneficial ownership reports filed by the Company’s officers and directors and beneficial owners of 10% or more of the Company’s common stock, may be accessed free of charge on the SEC’s website at http://www.sec.gov and, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC, on the Company’s website at http://www.evi-ind.com .
These reports and statements, as well as beneficial ownership reports 5 filed by the Company’s officers and directors and beneficial owners of 10% or more of the Company’s common stock, may be accessed free of charge on the SEC’s website at http://www.sec.gov and, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC, on the Company’s website at http://www.evi-ind.com .
The “build” component of the strategy involves implementing a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
The “build” component of the 6 strategy involves implementing a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
The Company seeks to attract highly qualified and diverse talent and to provide its employees with growth opportunities, competitive compensation and benefits, and a variety of training and development programs. As described above, the Company seeks to maintain a culture designed to reward performance through a variety of performance-based pay, commission programs, cash incentives, and stock-based equity programs.
The Company seeks to attract highly qualified and diverse talent and to provide its employees with growth opportunities, competitive compensation and benefits, and a variety of training and development programs. As described above, the Company seeks to maintain a culture designed to reward performance through a variety of performance-based pay, commission programs, cash incentives, and stock-based equity 10 programs.
However, there is no assurance that the Company or any of its acquired businesses will maintain its relationships with any of its suppliers, and the 8 loss of certain of these relationships, including the loss of a relationship with a principal supplier and any inability to successfully mitigate the effect of the loss of such supplier, could adversely affect the Company’s business and results.
However, there is no assurance that the Company or any of its acquired businesses will maintain its relationships with any of its suppliers, and the loss of certain of these relationships, including the loss of a relationship with a principal supplier and any inability to successfully mitigate the effect of the loss of such supplier, could adversely affect the Company’s business and results.
The Company intends to use and protect its service marks, tradenames and other intellectual property, as necessary. 9 Compliance with Environmental and Other Government Laws and Regulations Over the past several decades, federal, state, local and foreign governments have enacted environmental protection laws in response to public concerns about the environment.
The Company intends to use and protect its service marks, tradenames and other intellectual property, as necessary. Compliance with Environmental and Other Government Laws and Regulations Over the past several decades, federal, state, local and foreign governments have enacted environmental protection laws in response to public concerns about the environment.
The sellers as 6 well as other key individuals at the acquired businesses may also be provided with the opportunity to own shares of the Company’s common stock through equity-based plans of the Company.
The sellers as well as other key individuals at the acquired businesses may also be provided with the opportunity to own shares of the Company’s common stock through equity-based plans of the Company.
Beginning in 2015, the Company implemented a “buy-and-build” growth strategy which includes (i) the consideration and pursuit of acquisitions and other strategic transactions which management believes may complement the Company’s existing business or otherwise offer growth opportunities for, or benefit, the Company and (ii) the implementation of a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain additional initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
The Company’s “buy-and-build” growth strategy includes (i) the consideration and pursuit of acquisitions and other strategic transactions which management believes may complement the Company’s existing business or otherwise offer growth opportunities for, or benefit, the Company and (ii) the implementation of a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain additional initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
Customers and Markets The Company’s customer base consists of approximately 55,000 customers located primarily in the United States, Canada, the Caribbean, and Latin America. No single customer accounted for more than 10% of the Company’s revenues for fiscal 2024 or fiscal 2023.
Customers and Markets The Company’s customer base consists of approximately 55,000 customers located primarily in the United States, Canada, the Caribbean, and Latin America. No single customer accounted for more than 10% of the Company’s revenues for fiscal 2025 or fiscal 2024.
The Company’s commercial and industrial laundry equipment and boilers are sold or leased to a wide range of customers, including, but not limited to, vended laundry facilities, industrial laundry facilities, government institutions, correctional facilities, hospitals, hospital combines, nursing homes, veterinary clinics, professional sports franchises, educational institutions, hotels, motels, food and beverage establishments, cruise lines, and specialized users.
The Company’s commercial and industrial laundry equipment and related products are sold or leased to a wide range of customers, including, but not limited to, vended laundry facilities, industrial laundry facilities, government institutions, correctional facilities, hospitals, hospital combines, nursing homes, veterinary clinics, professional sports franchises, educational institutions, hotels, motels, food and beverage establishments, cruise lines, and specialized users.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included as Part II, Item 7 of this Report and Note 3 to the Consolidated Financial Statements included in Item 8 of this Report for additional information about the acquisitions consummated by the Company during fiscal 2023 and fiscal 2024, as well as the acquisition consummated by the Company subsequent to the fiscal 2024 year-end.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included as Part II, Item 7 of this Report and Note 3 to the Consolidated Financial Statements included in Item 8 of this Report for additional information about the acquisitions consummated by the Company during fiscal 2024 and fiscal 2025, as well as an acquisition consummated by the Company subsequent to the fiscal 2025 year-end.
The Company supports its sales and leasing activities through its websites and by advertising in trade publications, participating in trade shows and engaging in regional promotions and incentive programs.
The Company supports its sales and leasing 7 activities through its websites and by advertising online and in trade publications, participating in trade shows and engaging in regional promotions and incentive programs.
Purchases from four manufacturers accounted for a total of approximately 73% and 70% of the Company’s product purchases for fiscal 2024 and fiscal 2023, respectively. No other manufacturers accounted for more than 10% of product purchases during fiscal 2024 or fiscal 2023. The Company believes that it has good working relationships with its current manufacturers and suppliers.
Purchases from four manufacturers accounted for a total of approximately 72% and 73% of the Company’s product purchases for fiscal 2025 and 2024, respectively. No other manufacturers accounted for more than 10% of product purchases during fiscal 2025 or fiscal 2024. The Company believes that it has good working relationships with its current manufacturers and suppliers.
In addition to its distribution of products, the Company also provides installation, maintenance and repair services to its customers. The Company believes its services are competitively priced. Buy-and-Build Growth Strategy As described above, in addition to its pursuit of organic growth initiatives, the Company implemented a “buy-and-build” growth strategy in 2015.
In addition to its distribution of products, the Company also provides installation, maintenance and repair services to its customers. The Company believes its services are competitively priced. Buy-and-Build Growth Strategy As described above, in addition to its pursuit of organic growth initiatives, the Company’s growth strategy includes a “buy-and-build” growth strategy.
However, from time to time, including in fiscal 2024 and fiscal 2023, the Company purchased inventory in advance to take advantage of favorable pricing at the time or for other purposes, including to support the Company’s sales growth initiatives in new distribution territories and in support of growth initiatives related to the establishment of new manufacturer and supplier distribution relationships, and more recently to acquire inventory in light of supply chain constraints.
However, from time to time, including in fiscal 2025 and fiscal 2024, the Company purchased inventory in advance to take advantage of favorable pricing at the time or for other purposes, including to support the Company’s sales growth initiatives in new distribution territories and in support of growth initiatives related to the establishment of new manufacturer and supplier distribution relationships.
The major manufacturers of the products sold by the Company are American Dryer Corporation, Chicago Dryer Company, Cleaver Brooks Inc., Continental Girbau, Inc., Dexter Laundry, Inc., FMB Group, Fulton Thermal Corp., Kannegiesser ETECH, Maytag Corporation, Pellerin Milnor Corporation, Unipress Corporation and Whirlpool Corporation.
The major manufacturers of the products sold by the Company are American Dryer Corporation, Chicago Dryer Company, Cleaver Brooks Inc., Girbau S.A., Dexter Laundry, Inc., Fulton Thermal Corp., Kannegiesser ETECH, Maytag Corporation, Pellerin Milnor Corporation, Unipress Corporation, Softrol Systems, Inc., Fagor Commercial, Inc., and Whirlpool Corporation.
Material handling equipment distributed by the Company includes conveyor and rail systems. Mechanical equipment distributed by the Company includes boilers, hot water/steam systems, power generation products, water purification, reuse and recycling systems and air compressors.
Finishing equipment distributed by the Company includes sheet feeders, flatwork ironers, automatic sheet folders, and stackers. Material handling equipment distributed by the Company includes conveyor and rail systems. Mechanical equipment distributed by the Company includes boilers, hot water/steam systems, power generation products, water purification, reuse and recycling systems and air compressors.
In addition, most states and a number of local jurisdictions have environmental protections which are at least as stringent as the federal laws. The Company is also subject to rules and regulations with respect to its contracts and dealings with government facilities.
In addition, most states and a number of local jurisdictions have environmental protections which are at least as stringent as the federal laws. The Company is also subject to rules and regulations with respect to its contracts and dealings with government facilities. Human Capital Resources As of August 1, 2025, the Company had 850 full and part-time employees.
As a result, the businesses distributed other brands from one or more of the Company’s other suppliers. The Company does not believe that any such brand switches have had a material adverse impact on the Company as a whole.
In connection with certain business acquisitions, the business relationship between the acquired business and its principal supplier ceased. As a result, the businesses distributed other brands from one or more of the Company’s other suppliers. The Company does not believe that any such brand switches have had a material adverse impact on the Company as a whole.
The information contained on or connected to the Company’s website is not incorporated by reference into, or otherwise a part of, this Report.
The information contained on or connected to the Company’s website is not incorporated by reference into, or otherwise a part of, this Report. Further, references to the website URL of the Company in this Report are intended to be inactive textual references only.
Acquisitions are generally effected by the Company through a separate wholly-owned subsidiary formed for the purpose of effecting the transaction, whether by an asset purchase or merger, and operating the acquired business following the transaction. The Company, indirectly through its applicable wholly-owned subsidiary, also assumes certain of the liabilities of the acquired business.
Acquisitions are generally effected by the Company through an existing or newly-formed subsidiary which acquires (whether by an asset purchase, stock purchase or merger) and operates the acquired business following the transaction. The Company, indirectly through its subsidiary, also assumes certain of the liabilities of the acquired business.
Human Capital Resources As of August 1, 2024, the Company had 750 full and part-time employees. All of the Company’s employees are based in the United States. None of the Company’s employees are subject to a collective bargaining agreement. The Company believes that its relations with its employees are satisfactory.
All of the Company’s employees are based in the United States. None of the Company’s employees are subject to a collective bargaining agreement. The Company believes that its relations with its employees are satisfactory.
The Company has contracts with several of the manufacturers and suppliers of the products which the Company sells and has established, long-standing relationships with most of its manufacturers and suppliers. The Company believes that such relationships provide the Company with certain competitive advantages, including exclusivity for certain products in certain areas and, in certain cases, favorable pricing and other terms.
The Company believes that such relationships provide the Company with certain competitive advantages, including exclusivity for certain products in certain areas and, in certain cases, favorable pricing and other terms.
In addition, the Company’s technical staff has prepared training manuals, written in English and Spanish, relating to specific training procedures. The Company’s technical personnel are retrained as the Company believes to be necessary, including in connection with the development of new technology. 11
The Company’s technical personnel are retrained as the Company believes to be necessary, including in connection with the development of new technology. 11
The Company believes that its restricted stock program promotes this culture and long-term performance because restricted stock grants generally provide for long-term vesting, including in certain cases entirely at the end of the recipient’s career (age 62 or later). 10 In addition, as previously described, the Company uses in-person classroom training, instructional videos and vendor sponsored seminars to educate and train its sales personnel about product information.
The Company believes that its restricted stock program promotes this culture and long-term performance because restricted stock grants generally provide for long-term vesting, including in certain cases entirely at the end of the recipient’s career (age 62 or later).
The commercial and industrial laundry equipment distributed by the Company includes washroom, finishing, material handling, and mechanical equipment such as washers and dryers, tunnel systems and vended machines, many of which are designed to reduce utility and water consumption. Finishing equipment distributed by the Company includes sheet feeders, flatwork ironers, automatic sheet folders, and stackers.
Additionally, through the Company’s robust network of commercial laundry technicians, the Company provides its customers with installation, maintenance, and repair services. The commercial and industrial laundry equipment distributed by the Company includes washroom, finishing, material handling, and mechanical equipment such as washers and dryers, tunnel systems and vended machines, many of which are designed to reduce utility and water consumption.
Item 1. Business. General The Company was incorporated under the laws of the State of Delaware on June 13, 1963. On December 21, 2018, the Company changed its name from EnviroStar, Inc. to EVI Industries, Inc. 4 The Company, through its wholly-owned subsidiaries, is a value-added distributor, and provides advisory and technical services.
Item 1. Business. General The Company was incorporated under the laws of the State of Delaware on June 13, 1963. The Company, through its wholly-owned subsidiaries, is a value-added distributor, and provides advisory and technical services. Through its vast sales organization, the Company provides its customers with planning, designing, and consulting services related to their commercial laundry operations.
Through its vast sales organization, the Company provides its customers with 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.
Products and Services 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.
Sources of Supply The Company purchases commercial and industrial laundry products, dry cleaning machines, boilers and other products for distribution from a number of manufacturers and suppliers.
Risk Factors,” foreign sales may also be impacted by governmental measures, including trade policies, barriers and tariffs. Sources of Supply The Company purchases commercial and industrial laundry products, dry cleaning machines, boilers and other products for distribution from a number of domestic and foreign manufacturers and suppliers.
Further, references to the website URL of the Company in this Report are intended to be inactive textual references only. 5 Products and Services 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.
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.
The Company generally seeks to structure acquisitions to include both cash and stock consideration. The Company believes the issuance of stock consideration aligns the interests of the sellers of the acquired businesses, who the Company generally seeks to maintain to continue to operate the acquired businesses, with the interests of the Company’s other stockholders.
The Company believes the issuance of stock consideration in transactions aligns the interests of the sellers of the acquired businesses with the interests of the Company’s other stockholders.
All of the Company’s foreign sales require the customer to make payment in United States dollars.
The Company’s revenues from foreign sales relate principally to sales of commercial and industrial laundry and dry cleaning equipment and boilers to Canada, the Caribbean, and Latin America. All of the Company’s foreign sales require the customer to make payment in United States dollars.
Foreign sales may be affected by the strength of the United States dollar relative to the currencies of the countries in which the Company’s customers are located, as well as the strength of the economies of the countries in which the Company’s customers are located.
The Company’s purchases from foreign suppliers may be affected by the strength of the United States dollar relative to the currencies of the countries where its suppliers are located. Particularly, a weaker U.S. dollar would result in increased costs, which in turn would negatively affect the Company’s operating results.
The Company’s technical personnel are retrained as the Company believes to be necessary, including in connection with the development of new technology. Foreign Sales Substantially all of the Company’s revenues from foreign activities relate to the sale of commercial and industrial laundry and dry cleaning equipment and boilers to customers in Canada, the Caribbean, and Latin America.
The Company’s technical personnel are retrained as the Company believes to be necessary, including in connection with the development of new technology. Foreign Sales Foreign sales do not represent a significant portion of the Company’s business.
Removed
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 with installation, maintenance, and repair services. The Company’s customers include government, institutional, industrial, commercial and retail customers.
Added
The Company also provides its customers with the services described above. The Company’s growth strategy includes the pursuit of organic growth initiatives and a “buy-and-build” growth strategy.
Removed
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 with installation, maintenance, and repair services.
Added
Depending on the size of the acquisition and other factors, including market conditions at the time, the Company purchases the acquired businesses using cash and/or stock consideration consisting of shares of the Company’s common stock.
Removed
While the Company has generally not experienced difficulty in purchasing products it distributes, supply chain constraints in recent years have resulted in extended inventory lead times and resulting delays in fulfilling certain orders, as well as increases in product costs. In connection with certain business acquisitions, the business relationship between the acquired business and its principal supplier ceased.
Added
The Company’s sales to foreign buyers may be affected by the strength of the United States economy relative to the countries where its customers are located. The Company had no foreign exchange contracts outstanding at June 30, 2025 or 2024. As discussed elsewhere in this Report, including in “Item 1A.
Removed
While there is no assurance that this will be the case, including due to the fact that regulatory requirements or the interpretation or enforcement thereof are subject to change, the Company does not believe that compliance with federal, state, local and foreign environmental and other laws and regulations which have been adopted have had, or will have, a material effect on its capital expenditures, earnings or competitive position.
Added
The Company has contracts with several of the manufacturers and suppliers of the products which the Company sells and has established, long-standing relationships with most of its 8 manufacturers and suppliers.
Added
While the Company has generally not experienced difficulty in purchasing products it distributes, the effects of, and uncertainties surrounding, international tariffs could result in disruption in fulfilling orders and increases in product costs. The Company purchases products from a number of foreign suppliers.
Added
The Company has, at times in the past, paid certain suppliers in Euros. The Company had no foreign exchange contracts outstanding at June 30, 2025 or 2024. As discussed elsewhere in this Report, including in “Item 1A. Risk Factors,” foreign purchases may also be impacted by governmental measures, including trade policies, barriers and tariffs.
Added
In addition, as previously described, the Company uses in-person classroom training, instructional videos and vendor sponsored seminars to educate and train its sales personnel about product information. In addition, the Company’s technical staff has prepared training manuals, written in English and Spanish, relating to specific training procedures.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company’s level of indebtedness may have several important effects on the Company’s operations, including, without limitation, that the Company uses cash to satisfy its debt service requirements, that outstanding indebtedness and the Company’s leverage position will increase the impact on the Company of negative changes in general economic and industry conditions, as well as competitive pressures, and that the Company’s ability to obtain additional financing for acquisitions, working capital or other corporate purposes may be impacted.
Biggest changeThe Company’s level of indebtedness may have several important effects on the Company’s operations, including, without limitation, that the Company uses cash to satisfy its debt service requirements, that outstanding indebtedness and the Company’s leverage position will increase the impact on the Company of negative changes in general economic and industry conditions, as well as competitive pressures, and that the Company’s ability to obtain additional financing for acquisitions, working capital or other corporate purposes may be impacted. 19 The Company is party, as borrower, to a syndicated credit agreement (the “Credit Agreement”) in the maximum aggregate principal amount of up to $150 million, with an accordion feature to increase the revolving credit facility by up to $50 million for a total of $200 million.
Under the Company’s Bylaws, directors are elected by a plurality vote and all other matters put to a vote of the Company’s stockholders require the affirmative vote of a majority of the shares of the Company’s common stock represented at a meeting, in person or by proxy, and entitled to vote on the matter unless a greater percentage is required by applicable law.
Under the Company’s Bylaws, directors are elected by a plurality vote and all other matters put to a vote of the Company’s stockholders require the affirmative vote of a majority of the shares of the 20 Company’s common stock represented at a meeting, in person or by proxy, and entitled to vote on the matter unless a greater percentage is required by applicable law.
Further, as the Company is dependent upon its ability to gather and promptly transmit accurate information to key decision makers, the Company’s business, results of operations and financial condition may be adversely affected if the Company’s information systems do not allow the Company to transmit accurate information, even for a short period of time.
Further, as 17 the Company is dependent upon its ability to gather and promptly transmit accurate information to key decision makers, the Company’s business, results of operations and financial condition may be adversely affected if the Company’s information systems do not allow the Company to transmit accurate information, even for a short period of time.
The interests of the Company’s management may conflict with the interests of the Company’s other stockholders and also could have the effect of delaying or preventing a change in control of the Company or its management and/or adversely impact the market price of the Company’s common stock or the ability 20 of the Company’s other stockholders to receive a premium for their shares in connection with any sale of the Company.
The interests of the Company’s management may conflict with the interests of the Company’s other stockholders and also could have the effect of delaying or preventing a change in control of the Company or its management and/or adversely impact the market price of the Company’s common stock or the ability of the Company’s other stockholders to receive a premium for their shares in connection with any sale of the Company.
As a “smaller reporting company,” the Company has relied on exemptions from certain disclosure requirements that are applicable to other public companies. The Company may continue to rely on such exemptions for so long as the Company remains a “smaller reporting company.” These exemptions include reduced financial disclosure and reduced disclosure obligations regarding executive compensation.
As a “smaller reporting company,” the Company has relied on exemptions from 21 certain disclosure requirements that are applicable to other public companies. The Company may continue to rely on such exemptions for so long as the Company remains a “smaller reporting company.” These exemptions include reduced financial disclosure and reduced disclosure obligations regarding executive compensation.
The Company faces risks related to its foreign sales . The Company’s revenues from foreign sales relate principally to the Company’s sales of commercial and industrial laundry and dry cleaning equipment and boilers to Canada, the Caribbean, and Latin America. All of the Company’s foreign sales require the customer to make payment in United States dollars.
The Company faces risks related to its foreign purchases and sales . The Company’s revenues from foreign sales relate principally to the Company’s sales of commercial and industrial laundry and dry cleaning equipment and boilers to Canada, the Caribbean, and Latin America. All of the Company’s foreign sales require the customer to make payment in United States dollars.
In addition, damage or disruption to the Company's systems could adversely impact the Company's ability to manage or operate its business. Further, conversions to new information technology systems 18 require effective change management processes and may result in cost overruns, delays or business interruptions.
In addition, damage or disruption to the Company's systems could adversely impact the Company's ability to manage or operate its business. Further, conversions to new information technology systems require effective change management processes and may result in cost overruns, delays or business interruptions.
Any disruptions, delays or deficiencies in the design and/or implementation of the new ERP system, or in the performance of legacy systems, particularly any disruptions, delays or deficiencies that impact the Company’s operations, could adversely affect the Company’s ability to effectively run and manage its information systems.
Any disruptions, delays or deficiencies in the design and/or implementation of the ERP system, or in the performance of legacy systems, particularly any disruptions, delays or deficiencies that impact the Company’s operations, could adversely affect the Company’s ability to effectively run and manage its information systems.
Any disruption to the 17 Company’s business due to such issues, or an increase in costs to cover these issues that is greater than anticipated, could have an adverse effect on the Company’s financial results and operations.
Any disruption to the Company’s business due to such issues, or an increase in costs to cover these issues that is greater than anticipated, could have an adverse effect on the Company’s financial results and operations.
In addition, while businesses acquired during the fiscal year covered by the applicable Annual Report on Form 10-K are permitted to be excluded from the scope of management’s report on internal 22 control over financial reporting and the related auditor attestation for such Annual Report on Form 10-K (as is the case with the exclusion of the businesses acquired by the Company in fiscal 2024 from the scope of management’s report on internal control over financial reporting and the related auditor attestation for this Report), the Company will face challenges and be required to incur expenses in connection with, and devote significant management time to, the internal control over financial reporting of acquired businesses.
In addition, while businesses acquired during the fiscal year covered by the applicable Annual Report on Form 10-K are permitted to be excluded from the scope of management’s report on internal control over financial reporting and the related auditor attestation for such Annual Report on Form 10-K (as is the case with the exclusion of the businesses acquired by the Company in fiscal 2025 from the scope of management’s report on internal control over financial reporting and the related auditor attestation for this Report), the Company will face challenges and be required to incur expenses in connection with, and devote significant management time to, the internal control over financial reporting of acquired businesses.
In addition, the Company is authorized under its Certificate of Incorporation to issue up to 20,000,000 shares of common stock. Inclusive of unvested restricted stock awards, there are currently approximately 14.0 million shares of common stock outstanding.
In addition, the Company is authorized under its Certificate of Incorporation to issue up to 20,000,000 shares of common stock. Inclusive of unvested restricted stock awards, there are currently approximately 14.2 million shares of common stock outstanding.
Nahmad, the Company’s Chairman, Chief Executive Officer and President, and the Company’s Board of Directors through stockholders agreement granting it the right to direct the voting of certain shares issued as consideration in acquisitions, may be deemed to control the Company as a result of their collective voting power over shares representing approximately 57.9% of the issued and outstanding shares of the Company’s common stock as of June 30, 2024.
Nahmad, the Company’s Chairman, Chief Executive Officer and President, and the Company’s Board of Directors through stockholders agreement granting it the right to direct the voting of certain shares issued as consideration in acquisitions, may be deemed to control the Company as a result of their collective voting power over shares representing approximately 57.4% of the issued and outstanding shares of the Company’s common stock as of June 30, 2025.
While the Company purchases the products it distributes from a number of manufacturers and suppliers, purchases from four manufacturers accounted for a total of approximately 73% and 70% of the Company’s product purchases for fiscal 2024 and fiscal 2023, respectively. The Company believes it has good working relationships with the manufacturers or suppliers from which the Company purchases its products.
While the Company purchases the products it distributes from a number of manufacturers and suppliers, purchases from four manufacturers accounted for a total of approximately 72% and 73% of the Company’s product purchases for fiscal 2025 and 2024, respectively. The Company believes it has good working relationships with the manufacturers or suppliers from which the Company purchases its products.
The Company attempts to ensure that its assets, including the equipment and parts that it sells, are adequately insured to cover property and casualty losses as well as any other liabilities to which the Company is reasonably expected to be subject.
The Company’s assets may suffer uninsured losses. The Company attempts to ensure that its assets, including the equipment and parts that it sells, are adequately insured to cover property and casualty losses as well as any other liabilities to which the Company is reasonably expected to be subject.
Further, the Company may be subject to lawsuits if, among other things, any of the products it distributes fails to operate properly or causes property or other physical damage.
Further, the Company may be subject to lawsuits if, among other things, any of the products it distributes fails to operate properly or causes property or other physical damage. 14 The Company faces substantial competition.
The Company faces substantial competition. 14 The commercial and industrial laundry distribution and service business is highly competitive and fragmented, with over 500 full-line or partial-line equipment distributors and service providers in the United States.
The commercial and industrial laundry distribution and service business is highly competitive and fragmented, with over 500 full-line or partial-line equipment distributors and service providers in the United States.
Although the Company has certain limited protection afforded by insurance, the Company’s business, earnings and financial condition could be materially adversely affected if it suffers damages to, or disruptions at, its facilities.
Damages to, or disruptions at, the Company’s facilities or the facilities of a supplier or customer could adversely impact the Company’s business, operating results and financial condition. Although the Company has certain limited protection afforded by insurance, the Company’s business, earnings and financial condition could be materially adversely affected if it suffers damages to, or disruptions at, its facilities.
These conditions include shortages of qualified labor for suppliers, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, weather conditions, transportation interruptions, unavailability of fuel or increases in fuel costs, product recalls, competitive demands, civil insurrection or social unrest, terrorist attacks, natural disasters, epidemics, pandemics or other disease outbreaks or catastrophic events.
These conditions include shortages of qualified labor for suppliers, governmental regulations and measures, including the imposition of tariffs and effects thereof, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, weather conditions, transportation interruptions, unavailability of fuel or increases in fuel costs, product recalls, competitive demands, civil insurrection or social unrest, terrorist attacks, natural disasters, epidemics, pandemics or other disease outbreaks or catastrophic events.
In addition to the foregoing, delays in construction of customers’ facilities, whether due to supply or labor shortages or any other factors, have resulted, and may continue to result in, delays in the Company’s fulfillment of orders to such facilities, which may adversely impact the Company’s operating results and financial condition.
In addition to the foregoing, delays in construction of customers’ facilities, whether due to supply or labor shortages or any other factors, have resulted, and may continue to result in, delays in the Company’s fulfillment of orders to such facilities, which may adversely impact the Company’s operating results and financial condition. 13 Labor shortages and increases in labor costs may have a material adverse impact on the Company’s business and results of operations.
Further, the Company may incur significant compliance costs in the event of changes to applicable laws and regulations. Unexpected events, such as public health issues, natural disasters, geopolitical conflicts, civil unrest, severe weather and terrorist activities, may disrupt the Company’s operations and increase its costs. The outbreak of a pandemic or public health crisis may adversely impact the Company.
Unexpected events, such as public health issues, natural disasters, geopolitical conflicts, civil unrest, severe weather and terrorist activities, may disrupt the Company’s operations and increase its costs. The outbreak of a pandemic or public health crisis may adversely impact the Company.
Borrowings (other than swingline loans) under the Credit Agreement bear interest at a rate, at the Company’s election at the time of borrowing, equal to (a) the Bloomberg Short-Term Bank Yield Index rate (the “BSBY rate”) plus a margin that ranges from 1.25% to 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings 19 before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) the BSBY rate plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio.
Borrowings (other than swingline loans) under the Credit Agreement bear interest, at a rate, at the Company’s election at the time of borrowing, equal to (a) the Secured Overnight Financing Rate (“SOFR”) plus 0.11% to 0.43%, plus an additional adjustment margin that ranges between 1.25% and 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) SOFR plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated Leverage Ratio.
Further, damages to the facility of a customer may adversely impact the business of the customer and its need for products or services from the Company or result in delays in the delivery of products or provision of services to the customer.
Further, damages to the facility of a customer may adversely impact the business of the customer and its need for products or services from the Company or result in delays in the delivery of products or provision of services to the customer. Any of these events may materially and adversely impact the Company’s business, operating results and financial condition.
A portion of the revolving credit facility is available for swingline loans of up to a sublimit of $5 million and for the issuance of standby letters of credit of up to a sublimit of $10 million. The maturity date of the Credit Agreement is May 6, 2027.
A portion of the revolving credit facility is available for swingline loans of up to a sublimit of $7.5 million and for the issuance of standby letters of credit of up to a sublimit of $15 million. The maturity date of the Credit Agreement is March 26, 2030.
The Company had $13.0 million outstanding under the Credit Agreement as of June 30, 2024.
The Company had $53.0 million outstanding borrowings under the Credit Agreement as of June 30, 2025.
Further, conducting an international business inherently involves a number of difficulties, risks and uncertainties, such as: ● export and trade restrictions; ● inconsistent and changing regulatory requirements; ● tariffs and other trade barriers; ● cultural issues; ● problems in collecting accounts receivable; ● political instability and international hostilities; ● local economic downturns; and ● potentially adverse tax consequences.
Further, conducting an international business inherently involves a number of other difficulties, risks and uncertainties, such as: ● export and trade restrictions; ● inconsistent and changing regulatory requirements; ● cultural issues; ● problems in collecting accounts receivable; ● political instability and international hostilities; ● local economic downturns; and ● potentially adverse tax consequences. 16 Any of the above factors may materially and adversely affect the Company’s business, prospects, operating results or financial condition.
Labor shortages and increases in labor costs may have a material adverse impact on the Company’s business and results of operations. 13 The market for qualified employees is highly competitive, particularly in light of recent labor shortages. The Company may be unable to continue to attract and retain qualified personnel.
The market for qualified employees is highly competitive, particularly in light of recent labor shortages. The Company may be unable to continue to attract and retain qualified personnel. In addition, increases in labor costs have resulted in, and may continue to result in, increases in the Company’s operating expenses.
Any future pandemic or public health crisis may have similar or worse effects than those experienced in connection with the COVID-19 pandemic and may exacerbate certain of the other risks set forth herein. 15 The occurrence of other unexpected events, including natural disasters, civil unrest, geopolitical conflicts (including the current conflict between Ukraine and Russia as well as the conflict in the Middle East) and/or terrorist activities could adversely affect the Company’s operations and financial performance, including that the escalation of any conflicts or the expansion of any conflicts to impact additional regions could heighten many of the other risk factors included in this Item 1A.
In addition, the occurrence of other unexpected events, including natural disasters, civil unrest, geopolitical conflicts (including the current conflict between Ukraine and Russia as well as the conflict in the Middle East) and/or terrorist activities could adversely affect the Company’s operations and financial performance, including that the escalation of any conflicts or the expansion of any conflicts to impact additional regions could heighten many of the other risk factors included in this Item 1A.
The Company's systems may also be disrupted or damaged, and/or sensitive information could be released, due to other system failures, viruses, operator error or inadvertent releases of data.
As a result of a security incident or breach in the Company's systems, the Company's systems could be interrupted or 18 damaged, and/or sensitive information could be accessed by third parties. The Company's systems may also be disrupted or damaged, and/or sensitive information could be released, due to other system failures, viruses, operator error or inadvertent releases of data.
The Company’s reliance on these exemptions may result in the public finding the Company’s common stock to be less attractive and adversely impact the market price of, or trading market for, the Company’s common stock. 21 The issuance of preferred stock and common stock, and the authority of the Company’s Board of Directors to approve issuances of preferred stock and common stock, could adversely affect the rights of the Company’s stockholders and have an anti-takeover effect .
The Company’s reliance on these exemptions may result in the public finding the Company’s common stock to be less attractive and adversely impact the market price of, or trading market for, the Company’s common stock.
The Company has experienced threats to, and incidents involving, its systems and information, and while none have been material to date, cyber-attacks are generally becoming more frequent, intense, and sophisticated. As a result of a security incident or breach in the Company's systems, the Company's systems could be interrupted or damaged, and/or sensitive information could be accessed by third parties.
The Company has experienced threats to, and incidents involving, its systems and information, and while none have been material to date, cyber-attacks are generally becoming more frequent, intense, and sophisticated.
Foreign sales may be affected by the strength of the United States dollar relative to the currencies of the countries in which customers and competitors are located, as well as the strength of the economies of the countries in which the Company’s customers are located.
The Company also purchases products from a number of foreign suppliers. The Company’s purchases from foreign suppliers and sales to foreign buyers may be affected by the strength of the United States economy and dollar relative to the economies and currencies of the countries where its customers and suppliers are located.
Swingline loans bear interest calculated at the Base Rate plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. During November 2023, Bloomberg Index Services Limited announced it will discontinue the BSBY rate on November 15, 2024.
Swingline loans generally bear interest at the Base Rate plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated Leverage Ratio.
While the material weakness in internal control identified as of June 30, 2023 has been remediated (as discussed in further detail under Item 9A (“Controls and Procedures”) of this Report), there can be no assurance that additional material weaknesses will not be identified in the future (or, if identified, remedied in a timely fashion or at all), any of which may adversely affect the market price of the Company’s common stock.
However, there is no assurance that the Company will continue to timely comply with such requirements nor can there be assurance that significant deficiencies and/or material weaknesses will not be identified by management or the Company’s independent registered public accounting firm (or, if identified, remedied in a timely fashion or at all), any 22 of which may adversely affect the market price of the Company’s common stock.
Removed
In addition, increases in labor costs have resulted in, and may continue to result in, increases in the Company’s operating expenses.
Added
Further, the Company may incur significant compliance costs in the event of changes to applicable laws and regulations. The Company’s business and results may be impacted by international trade policies, including the imposition of tariffs.
Removed
As previously disclosed, the Company was adversely impacted by the COVID-19 pandemic beginning at the end of the quarter ended March 31, 2020; specifically, due to delays and declines in the placement of customer orders, the completion of equipment and parts installations, and the fulfillment of parts orders.
Added
During the first half of 2025, the U.S. government announced numerous changes to its trade policy, including changes to existing trade agreements and the use of tariffs to enforce trade policy. The tariffs impact various jurisdictions from where the Company sources its products.
Removed
Any of the above factors may materially and adversely affect the Company’s business, prospects, operating results or financial condition. Damages to, or disruptions at, the Company’s facilities or the facilities of a supplier or customer could adversely impact the Company’s business, operating results and financial condition.
Added
While the tariffs have not to date had a significant impact on the Company’s results, the trade policies are subject to change with limited or no advance notice and it is uncertain what, if any, impact tariffs or other trade policies may have on the Company in the future, including on its ability to purchase products sourced internationally or the prices 15 thereof.
Removed
Any of these events may materially and adversely impact the Company’s business, operating results and financial condition. 16 The Company’s assets may suffer uninsured losses.
Added
The tariffs could significantly increase the cost of the Company’s products and/or limit the availability of those products. The Company plans to address the risk through supplier negotiations and increasing selling prices. However, there is no assurance that any such efforts will be successful. If the Company’s efforts are unsuccessful, its gross profit and other results could be negatively impacted.
Removed
The Company is consolidating across a number of its subsidiaries ERP software systems and related processes to perform various functions and improve on the efficiency of the Company’s business. This is a lengthy and expensive process that diverts resources from other operations, and may result in cost overruns, project delays or business interruptions.
Added
Without limiting the generality of the foregoing, there is no assurance that the Company will be able to successfully increase its sales prices in order to offset any increase in the prices of the products it purchases, and price increases may result in reduced customer demand.
Removed
The Company is a party, as borrower, to a syndicated credit agreement (the “Credit Agreement”) in the maximum aggregate principal amount of up to $100 million, with an accordion feature to increase the revolving credit facility by up to $40 million for a total of $140 million.
Added
The actual impact of tariffs is subject to a number of factors, including the duration of such tariffs, changes to the countries included in the scope of tariffs, changes to amounts, potential retaliatory tariffs imposed by other countries, and other variables, as well as the success of any actions taken by the Company in connection therewith.
Removed
Pursuant to the terms of the Credit Agreement, in connection with the discontinuation of the BSBY rate, when determined by the administrative agent under the Credit Agreement, the BSBY rate will be replaced with the Secured Overnight Financing Rate (“SOFR”) plus a SOFR adjustment ranging from a minimum of 0.11% to a maximum of 0.43%.
Added
Particularly, a weaker U.S. dollar would result in increased costs, which in turn would negatively affect the Company’s operating results. Foreign sales and purchases may also be affected by governmental measures, including trade policies, barriers and tariffs (as discussed under “The Company’s business and results may be impacted by international trade policies, including the imposition of tariffs” above).
Removed
This Report includes such attestation. However, there is no assurance that the Company will continue to timely comply with such requirements.
Added
The issuance of preferred stock and common stock, and the authority of the Company’s Board of Directors to approve issuances of preferred stock and common stock, could adversely affect the rights of the Company’s stockholders and have an anti-takeover effect .

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDuring the fiscal year ended June 30, 2024, the Company has not identified any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Biggest changeDuring the fiscal year ended June 30, 2025, the Company did not identify any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Upon identification and assessment of risks, the Company develops and implements what 23 management believes to be appropriate measures in order to manage these risks, which may involve enhancing security controls, implementing new technologies, training employees, or changing business processes.
Upon identification and assessment of risks, the Company develops and implements what management believes to be appropriate measures in order to manage these risks, which may involve enhancing security controls, implementing new technologies, training employees, or changing business processes.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeAt June 30, 2024, the Company had a total of 32 warehousing and distribution facilities and administrative facilities located across 19 U.S. states. Senior management and support staff are located at the Company’s principal executive offices and other administrative offices mostly adjacent to the Company’s warehousing and distribution facilities.
Biggest changeAt June 30, 2025, the Company had a total of 36 warehousing and distribution facilities and administrative facilities located across 22 U.S. states. Senior management and support staff are located at the Company’s principal executive offices and other administrative offices mostly adjacent to the Company’s warehousing and distribution facilities.
The facilities have an aggregate of approximately 400,000 square feet of space. The Company believes that its facilities are sufficient to meet the Company’s present operating needs.
The facilities have an aggregate of approximately 547,000 square feet of space. The Company believes that its facilities are sufficient to meet the Company’s present operating needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. In the ordinary course of business, the Company may from time to time be involved in, or subject to, legal and regulatory claims, proceedings, demands or actions. Litigation and other proceedings are inherently uncertain and the outcome thereof cannot be predicted or determined in advance.
Biggest changeItem 3. Legal Proceedings. In the ordinary course of business, the Company may from time to time be involved in, or subject to, legal and regulatory claims, proceedings, demands or actions. Litigation and other proceedings are 24 inherently uncertain and the outcome thereof cannot be predicted or determined in advance.
As of the date of filing of this Report, the Company is not aware of any pending legal proceedings to which the Company, including any of its subsidiaries, is a party which is expected to be material to the Company. 24
As of the date of filing of this Report, the Company is not aware of any pending legal proceedings to which the Company, including any of its subsidiaries, is a party which is expected to be material to the Company.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed4 unchanged
Biggest changeThe Company does not have in place any formal share repurchase plans or programs. Upon request by a recipient of awards granted under the Company’s equity incentive plan, the Company may issue shares upon vesting of restricted stock awards or upon issuance of stock awards, net of the statutory withholding requirements that the Company pays on behalf of its employees.
Biggest changeUpon request by a recipient of awards granted under the Company’s equity incentive plan, the Company may issue shares upon vesting of restricted stock awards or units or upon the issuance of stock awards, in each case, net of 25 the statutory withholding requirements that the Company pays on behalf of its employees.
For financial statement purposes, the shares withheld are treated as being repurchased by the Company and are reflected as repurchases in the Company’s condensed consolidated statements of cash flows and shareholders’ equity as they reduce the number of shares that would have been issued upon vesting.
For financial statement purposes, the shares withheld are treated as being repurchased by the Company and are reflected as repurchases in the Company’s consolidated statements of cash flows and shareholders’ equity as they reduce the number of shares that would have been issued upon vesting.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is traded on the NYSE American under the symbol “EVI.” As of September 5, 2024, there were approximately 157 holders of record of the Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is traded on the NYSE American under the symbol “EVI.” As of September 5, 2025, there were approximately 144 holders of record of the Company’s common stock.
On October 4, 2023, the Company’s Board of Directors declared a special cash dividend on the Company’s common stock of $0.28 per share (totaling approximately $4.1 million in the aggregate), which was paid on October 26, 2023 to stockholders of record at the close of business on October 16, 2023. No dividends were declared or paid during fiscal year 2023.
On October 4, 2023, the Company’s Board of Directors declared a special cash dividend on the Company’s common stock of $0.28 per share (totaling approximately $4.1 million in the aggregate), which was paid on October 26, 2023 to stockholders of record at the close of business on October 16, 2023.
On September 11, 2024, the Company’s Board of Directors declared a special cash dividend on the Company’s common stock of $0.31 per share to be paid on October 7, 2024 to stockholders of record at the close of business on September 26, 2024.
On September 11, 2024, the Company’s Board of Directors declared a special cash dividend on the Company’s common stock of $0.31 per share (totaling approximately $4.6 million in the aggregate), which was paid on October 7, 2024 to stockholders of record at the close of business on September 26, 2024.
During the quarter ended June 30, 2024, the Company did not repurchase any shares of its common stock.
During the quarter ended June 30, 2025, the Company did not repurchase any shares of its common stock other than 1,499 shares treated as repurchased upon the vesting of restricted stock units, as described above.
Added
On September 11, 2025, the Company’s Board of Directors declared a special cash dividend on the Company’s common stock of $0.33 per share to be paid on October 6, 2025 to shareholders of record at the close of business on September 25, 2025.
Added
The Company does not have in place any formal share repurchase plans or programs.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

48 edited+15 added−12 removed38 unchanged
Biggest changeThese decreases were offset in part by price increases established throughout the Company’s product lines and service offerings aimed at maintaining or increasing margins to cover incremental product and operating cost increases, and revenues generated by businesses acquired by the Company during fiscal 2024 as well as businesses acquired by the Company during fiscal 2023 whose results were consolidated in the Company’s financial statements for all of fiscal 2024 as compared to just the period of fiscal 2023 from the respective closing date of the acquisition through the end of fiscal 2023. 26 Net income for fiscal 2024 decreased by 42% from fiscal 2023.
Biggest changeThe increase was attributable to revenues generated by businesses acquired by the Company during fiscal 2025 as well as price increases established throughout the Company’s product lines and service offerings aimed at maintaining or increasing margins to cover incremental product and operating cost increases. Net income for fiscal 2025 increased by 33% from fiscal 2024.
Total estimated costs to complete projects include various costs such as direct labor, material and subcontract costs. Changes in these estimates can have a significant impact on the revenue recognized each period. From time to time, the Company also enters into maintenance and service contracts.
Total estimated costs to complete projects include various costs such as direct labor, material and subcontract 32 costs. Changes in these estimates can have a significant impact on the revenue recognized each period. From time to time, the Company also enters into maintenance and service contracts.
Revenues that are recognized over time include (i) longer-termed contracts that include an equipment purchase with installation and construction services, (ii) maintenance contracts, and (iii) service contracts. Contract Assets and Liabilities Contract assets and liabilities are presented in the Company’s condensed consolidated balance sheets.
Revenues that are recognized over time include (i) longer-termed contracts that include an equipment purchase with installation and construction services, (ii) maintenance contracts, and (iii) service contracts. Contract Assets and Liabilities Contract assets and liabilities are presented in the Company’s consolidated balance sheets.
If the 33 reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss.
If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss.
Significant judgment may be required by management in the cost estimation process for these contracts, which is based on the knowledge and experience of the Company’s 32 project managers, subcontractors and financial professionals.
Significant judgment may be required by management in the cost estimation process for these contracts, which is based on the knowledge and experience of the Company’s project managers, subcontractors and financial professionals.
The Credit Agreement also contains other provisions which may restrict the Company’s ability to, among other things, dispose of or acquire assets or businesses, incur additional indebtedness, make certain investments and capital expenditures, pay dividends, repurchase shares and enter into transactions with affiliates. As of June 30, 2024, the Company was in compliance with its covenants under the Credit Agreement.
The Credit Agreement also contains other provisions which may restrict the Company’s ability to, among other things, dispose of or acquire assets or businesses, incur additional indebtedness, make certain investments and capital expenditures, pay dividends, repurchase shares and enter into transactions with affiliates. As of June 30, 2025, the Company was in compliance with its covenants under the Credit Agreement.
Beginning in 2015, the Company implemented a “buy-and-build” growth strategy which includes (i) the consideration and pursuit of acquisitions and other strategic transactions which management believes may complement the Company’s existing business or otherwise offer growth opportunities for, or benefit, the Company and (ii) the implementation of a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain additional initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
The Company’s “buy-and-build” growth strategy includes (i) the consideration and pursuit of acquisitions and other strategic transactions which management believes may complement the Company’s existing business or otherwise offer growth opportunities for, or benefit, the Company and (ii) the implementation of a growth culture at acquired businesses based on the exchange of ideas and business concepts among the management teams of the Company and the acquired businesses as well as through certain additional initiatives, which may include investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies.
Recently Issued Accounting Guidance See Note 2 to the Consolidated Financial Statements included in Item 8 of this Report for a description of Recently Issued Accounting Guidance . 34
Recently Issued Accounting Guidance See Note 2 to the Consolidated Financial Statements included in Item 8 of this Report for a description of Recently Issued Accounting Guidance .
The Company believes that its existing cash, anticipated cash from operations and funds available under the Company’s Credit Agreement will be sufficient to fund its operations and anticipated capital expenditures for at least the next twelve months from the filing of this Report, and thereafter.
The Company believes that its existing cash, anticipated cash from operations and funds available under the Company’s Credit Agreement will be sufficient to fund its operations and anticipated capital expenditures for at least the next twelve months from the filing of this Report, and the foreseeable future thereafter.
The identification and measurement of goodwill impairment involves the estimation of the fair value of the reporting unit and involves uncertainty because management must use judgment in determining appropriate assumptions to be used in the measurement of fair value. The Company performed its annual impairment test on April 1, 2024 and determined there was no impairment.
The identification and measurement of goodwill impairment 33 involves the estimation of the fair value of the reporting unit and involves uncertainty because management must use judgment in determining appropriate assumptions to be used in the measurement of fair value. The Company performed its annual impairment test on April 1, 2025 and determined there was no impairment.
The Company’s operating expenses consist primarily of (a) selling, general and administrative expenses, primarily salaries, and commissions and marketing expenses that are variable and correlate to changes in sales, (b) expenses related to the operation of warehouse facilities, including a fleet of installation and service vehicles, and facility rent, which are payable mostly under non-cancelable operating leases, and (c) operating expenses at the parent company, including compensation expenses, fees for professional services, expenses associated with being a public company, including increased expenses attributable to the Company’s investments for future growth, and expenses in furtherance of the Company’s “buy-and-build” growth strategy.
The Company’s operating expenses consist primarily of (a) selling, general and administrative expenses, primarily salaries, and commissions and marketing expenses that are variable and correlate to changes in sales, (b) expenses related to the operation of warehouse facilities, including a fleet of installation and service vehicles, and facility rent, which are payable mostly under non-cancelable operating leases, and (c) operating expenses at the parent company, including compensation expenses, fees for professional services, expenses associated with being a public company and investments and other expenses in furtherance of the Company’s “buy-and-build” growth strategy and other growth and optimization initiatives.
However, the Company faces risks relating to inflation, including the current inflationary trend, 30 which may have an adverse impact on the market for the Company’s products and services, including that there is no assurance that the Company will be able to effectively increase the price of its products and services to offset increased costs.
However, the Company faces risks relating to inflation, including the current inflationary trend, and other price increases (including due to the imposition of tariffs), which may have an adverse impact on the market for the Company’s products and services, including that there is no assurance that the Company will be able to effectively increase the price of its products and services to offset increased costs.
Payments under these leases totaled approximately $493,000 and $306,000 during fiscal 2024 and fiscal 2023, respectively. On November 1, 2018, the Company’s wholly-owned subsidiary, AAdvantage Laundry Systems, entered into a lease agreement pursuant to which it leases warehouse and office space from an affiliate of Mike Zuffinetti, former Chief Executive Officer of AAdvantage.
Payments under this lease totaled approximately $244,000 and $252,000 during fiscal 2025 and fiscal 2024, respectively. On November 1, 2018, the Company’s wholly-owned subsidiary, AAdvantage Laundry Systems, entered into a lease agreement pursuant to which it leases warehouse and office space from an affiliate of Mike Zuffinetti, former Chief Executive Officer of AAdvantage.
Liquidity and Capital Resources The Company had approximately $4.6 million of cash at June 30, 2024 compared to $5.9 million of cash at June 30, 2023.
Liquidity and Capital Resources The Company had approximately $8.9 million of cash at June 30, 2025 compared to $4.6 million of cash at June 30, 2024.
Cost of Sales and Selling, General and Administrative Expenses Fiscal Year Ended June 30, 2024 2023 As a percentage of revenues: Cost of sales, net 70.2 % 70.7 % As a percentage of revenues: Selling, general and administrative expenses 26.5 % 24.6 % Cost of sales, expressed as a percentage of revenues, decreased to 70.2% in fiscal 2024 from 70.7% in fiscal 2023, representing gross margins of 29.8% in fiscal 2024 and 29.3% in fiscal 2023.
Cost of Sales and Selling, General and Administrative Expenses Fiscal Year Ended June 30, 2025 2024 As a percentage of revenues: Cost of sales, net 69.6 % 70.2 % As a percentage of revenues: Selling, general and administrative expenses 26.8 % 26.5 % Cost of sales, expressed as a percentage of revenues, decreased to 69.6% in fiscal 2025 from 70.2% in fiscal 2024, representing gross margins of 30.4% in fiscal 2025 and 29.8% in fiscal 2024.
A portion of the revolving credit facility is available for swingline loans of up to a sublimit of $5 million and for the issuance of standby letters of credit of up to a sublimit of $10 million.
A portion of the revolving credit facility is available for swingline loans and for the issuance of standby letters of credit. The amendment increased the sublimit for swingline loans from $5 million to $7.5 million and the sublimit for standby letters of credit from $10 million to $15 million.
On November 3, 2020, the Company’s wholly-owned subsidiary, Yankee Equipment Systems, entered into a lease agreement pursuant to which it leases a total of 12,500 square feet of warehouse and office space from an affiliate of Peter Limoncelli, President of Yankee Equipment Systems. Monthly base 31 rental payments were $11,000 during the initial term of the lease.
On November 3, 2020, the Company’s wholly-owned subsidiary, Yankee Equipment Systems, entered into a lease agreement pursuant to which it leases a total of 12,500 square feet of warehouse and office space from an affiliate of Peter Limoncelli, President of Yankee Equipment Systems.
The lease had an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. Monthly base rental payments were $12,000 during the initial term of the lease. The Company exercised its option to renew the lease for the first three-year renewal term, which commenced in October 2021.
The lease had an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. The Company exercised its option to renew the lease for the first three-year renewal term, which commenced in October 2021, and the second three-year renewal term, which commenced in October 2024.
The financial position, including assets and liabilities, and results of operations of Laundry Pro of Florida, Inc. following the July 1, 2024 closing date of the acquisition will be included in the Company’s consolidated financial statements commencing in the quarter ending September 30, 2024.
The financial position, including assets and liabilities, and results of operations of ASN Laundry Group following the August 1, 2025 closing date of 27 the acquisition will be included in the Company’s consolidated financial statements commencing in the quarter ending September 30, 2025.
The following table summarizes the Company’s Consolidated Statements of Cash Flows (in thousands): Fiscal Year Ended June 30, Net cash provided (used) by: 2024 2023 Operating activities $ 32,652 $ 940 Investing activities $ (6,816 ) $ (5,986 ) Financing activities $ (27,199 ) $ 6,993 For fiscal 2024, operating activities provided cash of approximately $32.7 million compared to cash provided by operating activities of approximately $0.9 million in fiscal 2023.
The following table summarizes the Company’s Consolidated Statements of Cash Flows (in thousands): Fiscal Year Ended June 30, Net cash provided (used) by: 2025 2024 Operating activities $ 21,265 $ 32,652 Investing activities $ (51,786 ) $ (6,816 ) Financing activities $ 34,815 $ (27,199 ) For fiscal 2025, operating activities provided cash of approximately $21.3 million compared to cash provided by operating activities of approximately $32.7 million in fiscal 2024.
The financial position, including assets and liabilities, and results of operations of the acquired businesses following the respective closing dates of the acquisitions are included in the Company’s consolidated financial statements. In addition to the foregoing, on July 1, 2024, the Company acquired Florida-based Laundry Pro of Florida, Inc. for total consideration of $5.9 million in cash.
The financial position, including assets and liabilities, and results of operations of the acquired businesses following the respective closing dates of the acquisitions are included in the Company’s consolidated financial statements. In addition to the foregoing, on August 1, 2025, the Company acquired New York-based ASN Laundry Group for total consideration of $0.6 million in cash.
Base rent for the first renewal term is $19,000 per month. In addition to base rent, Western State Design is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Payments under this lease totaled approximately $252,000 and $228,000 during fiscal 2024 and fiscal 2023, respectively.
Base rent for the initial term was $36,000 per month. Base rent for the first renewal term is $40,000 per month. In addition to base rent, AAdvantage is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Payments under this lease totaled approximately $480,000 and $464,000 during fiscal 2025 and fiscal 2024, respectively.
As of June 30, 2024, $66.0 million was available to borrow under the revolving credit facility. 28 Borrowings (other than swingline loans) under the Credit Agreement bear interest at a rate, at the Company’s election at the time of borrowing, equal to (a) the Bloomberg Short-Term Bank Yield Index rate (the “BSBY rate”) plus a margin that ranges from 1.25% to 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) the BSBY rate plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio.
As a result, borrowings (other than swingline loans) under the Credit Agreement bear interest, at a rate, at the Company’s election at the time of borrowing, equal to (a) SOFR plus 0.11% to 0.43%, plus an additional adjustment margin that ranges between 1.25% and 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) SOFR plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated Leverage Ratio.
The decrease in cash was primarily due to optional debt repayments in excess of borrowings under the Company’s credit facility, cash consideration paid in connection with the Company’s business acquisitions during fiscal 2024 and capital expenditures, offset in part by increases to cash generated from operations.
The increase in cash was primarily due to cash generated from operations and borrowings on the Company’s credit facility, offset in part by cash consideration paid in connection with the Company’s business acquisitions during fiscal 2025 and capital expenditures, as well the timing of optional payments on the Company’s credit facility.
Selling, general and administrative expenses increased by approximately $6.4 million (7%) in fiscal 2024 compared to fiscal 2023, primarily due to (a) operating expenses of acquired businesses, including additional operating expenses at the acquired businesses in pursuit of future growth and in connection with the Company’s optimization initiatives, (b) increases in salary, rent, technology costs, professional fees, and insurance costs to support the Company’s growth, and (c) stock compensation, including an increase from the acceleration of the vesting of certain restricted stock awards and restricted stock units in accordance with their terms during fiscal 2024.
Selling, general and administrative expenses increased by approximately $11.0 million (12%) in fiscal 2025 compared to fiscal 2024, primarily due to (a) operating expenses of acquired businesses, including additional operating expenses at the acquired businesses in pursuit of future growth and in connection with the Company’s optimization initiatives, (b) increases in salary, stock compensation, rent, technology costs, professional fees, and insurance costs to support the Company’s growth, and (c) depreciation and amortization.
Each lease had an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. The Company exercised its option to renew the leases for the first three-year renewal term, which commenced in October 2022. Base rent for the first renewal term is $25,000.
The lease had an initial term of three years and provides for three successive three-year renewal terms at the option of the Company. The Company exercised its option to renew this lease for the first three-year renewal term, which commenced in November 2023. Base rent for the initial term was $11,000 per month.
Acquisitions are generally effected by the Company through a separate wholly-owned subsidiary formed by the Company for the purpose of effecting the transaction, whether by an asset purchase or merger, and operating the acquired business following the transaction. The Company, indirectly through its applicable wholly-owned subsidiary, also assumes certain of the liabilities of the acquired business.
Acquisitions are generally effected by the Company through an existing or newly-formed subsidiary which acquires (whether by an asset purchase, stock purchase or merger) and operates the acquired business following the transaction. The Company, indirectly through its subsidiary, also assumes certain of the liabilities of the acquired business.
The Company is a party, as borrower, to a syndicated credit agreement (the “Credit Agreement”) in the maximum aggregate principal amount of up to $100 million, with an accordion feature to increase the revolving credit facility by up to $40 million for a total of $140 million.
Prior to the amendment described below, the agreement allowed for borrowings in the maximum aggregate principal amount of up to $100 million, with an accordion feature to increase the revolving credit facility by up to $40 million for a total of $140 million.
The Company may also seek to raise funds through the issuance of equity and/or debt securities or the incurrence of additional secured or unsecured indebtedness, including in connection with acquisitions or other transactions pursued by the Company as part of its “buy-and-build” growth strategy.
The Company may also seek to raise funds through the issuance of equity and/or debt securities or the incurrence of additional secured or unsecured indebtedness, including in connection with acquisitions or other transactions pursued by the Company as part of its “buy-and-build” growth strategy. 29 Off-Balance Sheet Financing As of June 30, 2025, the Company had no off-balance sheet financing arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
In the event the expected future cash flows become less than the carrying amount of the assets, an impairment loss would be recorded in the period the determination is made based on the fair value of the related assets. Income Taxes The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 740, “Income Taxes” (“ASC 740”).
In the event the expected future cash flows become less than the carrying amount of the assets, an impairment loss would be recorded in the period the determination is made based on the fair value of the related assets.
Pursuant to the terms of the Credit Agreement, in connection with the discontinuation of the BSBY rate, when determined by the administrative agent under the Credit Agreement, the BSBY rate will be replaced with the Secured Overnight Financing Rate (“SOFR”) plus a SOFR adjustment ranging from a minimum of 0.11% to a maximum of 0.43%.
Pursuant to the terms of the Credit Agreement, in connection with the discontinuation of the Bloomberg Short-Term Bank Yield Index rate (the “BSBY rate”), during October 2024, the BSBY rate was replaced as the reference rate under the Credit Agreement by the Secured Overnight Financing Rate (“SOFR”) plus a SOFR adjustment ranging from a minimum of 0.11% to a maximum of 0.43%.
Investing activities used cash of approximately $6.8 million during fiscal 2024 compared to approximately $6.0 million in fiscal 2023. The $0.8 million increase in cash used by investing activities is due primarily to a greater amount of cash consideration paid for capital expenditures in fiscal 2024 as compared to fiscal 2023.
The $45.0 million increase in cash used by investing activities is due primarily to a greater amount of cash consideration paid in connection with business acquisitions in fiscal 2025 as compared to fiscal 2024. Financing activities provided cash of approximately $34.8 million in fiscal 2025 compared to cash used by financing activities of approximately $27.2 million in fiscal 2024.
In addition to base rent, Yankee Equipment Systems is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. The lease had an initial term of three years and provides for three successive three-year renewal terms at the option of the Company.
Base rent for the first year of the renewal term was $12,500 per month. Base rent for the second year of the renewal term is $12,750 per month. In addition to base rent, Yankee Equipment Systems is responsible under the lease for 31 costs related to real estate taxes, utilities, maintenance, repairs and insurance.
The decrease in net income was attributable primarily to increases in selling, general, and administrative expenses.
The increase in net income was primarily attributable to increases in revenue (as described above) and gross margin, partially offset by increases in selling, general, and administrative expenses.
The total consideration for these transactions consisted of $1.9 million in cash and the issuance of 8,621 shares of the Company’s common stock. The acquired companies generally distribute commercial, industrial, and vended laundry products and provide installation and maintenance services to the new and replacement segments of the commercial, industrial and vended laundry industry.
The acquired companies generally distribute commercial, industrial, and vended laundry products and provide installation and maintenance services to the new and replacement segments of the commercial, industrial and vended laundry industry.
The Credit Agreement contains certain covenants, including financial covenants requiring the Company to comply with maximum leverage ratios and minimum interest coverage ratios.
Swingline loans generally bear interest at the Base Rate plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated Leverage Ratio. The Credit Agreement contains certain covenants, including financial covenants requiring the Company to comply with maximum leverage ratios and minimum interest coverage ratios.
These decreases were offset in part by price increases established throughout the Company’s product lines and service offerings aimed at maintaining or 29 increasing margins to cover incremental product and operating cost increases, and revenues generated by businesses acquired by the Company during fiscal 2024 as well as businesses acquired by the Company during fiscal 2023 whose results were consolidated in the Company’s financial statements for all of fiscal 2024 as compared to just the period of fiscal 2023 from the respective closing date of the acquisition through the end of fiscal 2023.
The increase was primarily attributable to revenues generated by businesses acquired by the Company during fiscal 2025 as well as price increases established throughout the Company’s product lines and service offerings aimed at maintaining or increasing margins to cover incremental product and operating cost increases.
Provision for Income Taxes The Company’s effective income tax rate was 36.4% for fiscal 2024 compared to 30.6% in fiscal 2023. The increase in the effective income tax rate in fiscal 2024 is attributable to an increase in the net impact of permanent book-tax differences resulting primarily from nondeductible compensation and lower net income.
The decrease in the effective income tax rate in fiscal 2025 is attributable to a decrease in the net impact of permanent book-tax differences resulting primarily from nondeductible compensation and higher net income. Inflation Inflation did not have a significant effect on the Company’s results during fiscal 2025 or fiscal 2024.
In addition to base rent, AAdvantage is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. The lease had an initial term of five years and provides for two successive three-year renewal terms at the option of the Company.
Base rent for the first renewal term was $19,000 per month. Base rent for the second renewal term is $21,000 per month. In addition to base rent, Western State Design is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance.
Buy-and Build Growth Strategy The Company’s acquisitions under its “buy-and-build” growth strategy described above during fiscal 2023 and fiscal 2024 were as follows: During fiscal 2023, the Company acquired Massachusetts-based Aldrich Clean-Tech Equipment Corp., North Carolina-based K&B Laundry Service, LLC, Alabama-based Wholesale Commercial Laundry Equipment Company SE, LLC, and Maryland-based Gluno, Inc. (d/b/a Express Parts and Services).
Buy-and Build Growth Strategy The Company’s acquisitions under its “buy-and-build” growth strategy described above during fiscal 2024 and fiscal 2025 were as follows: During fiscal 2024, the Company acquired Pennsylvania-based ALVF, Inc. (d/b/a ALCO Washer Center) and Texas-based Signature Services Corporation (d/b/a Ed Brown Distributors).
The Company also provides its customers with the services described above.
The Company also provides its customers with the services described above. The Company’s growth strategy includes the pursuit of organic growth initiatives and a “buy-and-build” growth strategy.
See “Buy-and-Build Growth Strategy” below for information regarding business acquisitions consummated during the fiscal year ended June 30, 2023 (“fiscal 2023”) and the fiscal year ended June 30, 2024 (“fiscal 2024”). The Company reports its results of operations through a single operating and reportable segment. Total revenues for fiscal 2024 decreased by less than 1% compared to fiscal 2023.
See “Buy-and-Build Growth Strategy” below for information regarding business acquisitions consummated during the fiscal year ended June 30, 2024 (“fiscal 2024”) and the fiscal year ended June 30, 2025 (“fiscal 2025”), as well as an acquisition consummated subsequent to fiscal 2025 year-end.
As a percentage of revenues, selling, general and administrative expenses increased to 26.5% in fiscal 2024 from 24.6% in fiscal 2023. Interest Expense Interest expense, net increased by approximately $0.2 million (9%) in fiscal 2024 compared to fiscal 2023. The increase is due primarily to increases in the average outstanding debt balance.
As a percentage of revenues, selling, general and administrative expenses increased to 26.8% in fiscal 2025 from 26.5% in fiscal 2024.
Consolidated Financial Condition The Company’s total assets decreased from $253.8 million at June 30, 2023 to $230.7 million at June 30, 2024.
See Note 3 to the Consolidated Financial Statements included in Item 8 of this Report for additional information about the acquisitions described above. Consolidated Financial Condition The Company’s total assets increased from $230.7 million at June 30, 2024 to $307.0 million at June 30, 2025.
Financing activities used cash of approximately $27.2 million in fiscal 2024 compared to cash provided by financing activities of approximately $7.0 million in fiscal 2023. The $34.2 million increase in cash used by financing activities was attributable primarily to optional repayments of borrowings under the Company’s credit facility and a cash dividend paid during fiscal 2024.
The $62.0 million increase in 28 cash provided by financing activities was attributable primarily to borrowings under the Company’s credit facility to fund the Company’s acquisitions in fiscal 2025. The Company is party, as borrower, to a syndicated credit agreement (the “Credit Agreement”).
The total consideration for these transactions consisted of $2.4 million in cash and the issuance of 24,243 shares of the Company’s common stock. During fiscal 2024, the Company acquired Pennsylvania-based ALVF, Inc. (d/b/a ALCO Washer Center) and Texas-based Signature Services Corporation (d/b/a Ed Brown Distributors).
The total consideration for these transactions consisted of $2.0 million in cash and the issuance of 8,621 shares of the Company’s common stock. During fiscal 2025, the Company acquired Florida-based Laundry Pro of Florida, Inc., Indiana-based O’Dell Equipment & Supply, Inc., Illinois-based Haiges Machinery, Inc., and Wisconsin-based Girbau North America, Inc.
The $31.8 million increase in cash provided by operating activities was primarily attributable to decreases in accounts receivable as a result of improved collections and decreases in inventory as result of a tightening supply chain and reduced lead times, offset by decreases in net income and operating liabilities.
The $11.4 million decrease in cash provided by operating activities was primarily attributable to an increase in accounts receivable, offset in part by increases in accounts payable, accrued expenses, and net income. Investing activities used cash of approximately $51.8 million during fiscal 2025 compared to approximately $6.8 million in fiscal 2024.
The decrease in total assets was primarily attributable to a decrease in current assets, as 27 described below under “Liquidity and Capital Resources.” The Company’s total liabilities decreased from $122.9 million at June 30, 2023 to $94.1 million at June 30, 2024, primarily due to decreases in accounts payable and long-term debt.
The Company’s total liabilities increased from $94.1 million at June 30, 2024 to $163.6 million at June 30, 2025, primarily due to increases in payables related to acquired businesses and long-term debt used to acquire such businesses.
Removed
The decrease in revenues during fiscal 2024 is due primarily to the timing of receipt and delivery of products to customers due to construction or other delays which impacted the ability of certain customers to receive products. Additionally, there were large industrial jobs completed during fiscal 2023 which generated significant revenues.
Added
The Company reports its results of operations through a single operating and reportable segment. 26 Total revenues for fiscal 2025 increased by 10% compared to fiscal 2024.
Removed
See Note 3 to the Consolidated Financial Statements included in Item 8 of this Report for additional information about the acquisitions completed by the Company during fiscal 2023 and fiscal 2024, as well as the subsequent acquisition of Laundry Pro of Florida, Inc.
Added
The total consideration for these transactions was $51.0 million, consisting of $50.6 million in cash, net of cash acquired, $4.2 million in amounts payable to a seller as of June 30, 2025 related to post-closing working capital adjustments, and the settlement of acquirer receivables of $3.8 million.
Removed
Swingline loans bear interest calculated at the Base Rate plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. During November 2023, Bloomberg Index Services Limited announced it will discontinue the BSBY rate on November 15, 2024.
Added
The increase in total assets was primarily attributable to the assets of the businesses acquired during fiscal 2025, including accounts receivable, inventory, intangible assets, and goodwill.
Removed
Off-Balance Sheet Financing As of June 30, 2024, the Company had no off-balance sheet financing arrangements within the meaning of Item 303(a)(4) of Regulation S-K. Results of Operations Revenues Revenues for fiscal 2024 decreased by approximately $0.6 million (less than 1%) from fiscal 2023.
Added
On March 26, 2025, the Company amended the Credit Agreement to increase the maximum aggregate principal amount from $100 million to $150 million and increase the accordion feature from $40 million to $50 million, for a total of $200 million.
Removed
The decrease in revenues during fiscal 2024 is due primarily to the timing of receipt and delivery of products to the Company’s customers due to construction or other delays which impacted the ability of certain customers to receive products. Additionally, there were large industrial jobs completed during the fiscal 2023 which generated significant revenues.
Added
In addition, as part of the amendment, the maturity date of the Credit Agreement was extended from May 6, 2027 to March 26, 2030. As of June 30, 2025, $56.1 million was available to borrow under the revolving credit facility.
Removed
Longer-term federal government contracts entered into during fiscal 2024 lowered gross margins by 30 basis points.
Added
Results of Operations Revenues Revenues for fiscal 2025 increased by approximately $36.3 million (10%) from fiscal 2024.
Removed
Inflation Inflation did not have a significant effect on the Company’s results during fiscal 2024 or fiscal 2023.
Added
Interest Expense Interest expense, net remained flat in fiscal 2025 compared to fiscal 2024 as increases in the average outstanding debt balances were offset by decreases in the effective interest rate incurred on outstanding borrowings. 30 Provision for Income Taxes The Company’s effective income tax rate was 32.0% for fiscal 2025 compared to 36.4% in fiscal 2024.
Removed
On October 31, 2017, the Company’s wholly-owned subsidiary, Tri-State Technical Services, entered into lease agreements pursuant to which it leases a total of 81,000 square feet of warehouse and office space from an affiliate of Matt Stephenson, former President of Tri-State. Monthly base rental payments totaled $21,000 during the initial terms of the leases.
Added
Pursuant to the lease agreement, on January 1, 2019, the lease expanded to cover additional warehouse space. The lease had an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. The Company exercised its option to renew the lease for the first three-year renewal term, which commenced in November 2023.
Removed
In addition to base rent, Tri-State is responsible under the leases for costs related to real estate taxes, utilities, maintenance, repairs and insurance. From May 1, 2023 through May 31, 2024, Tri-State Technical Services also leased an additional 50,000 square feet of space from Mr. Stephenson for a base rental payment of $15,000 per month.
Added
Payments under this lease totaled approximately $152,000 and $150,000 during fiscal 2025 and fiscal 2024, respectively.
Removed
Monthly base rental payments under this lease were $26,000 initially. Pursuant to the lease agreement, on January 1, 2019, the lease expanded to cover additional warehouse space and, in connection therewith, monthly base rental payments under this lease increased to $36,000.
Added
Business Combinations The determination of the fair value of net assets acquired in a business combination requires estimates and judgments of future cash flow expectations for the acquired business and the related identifiable tangible and intangible assets. Fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques.
Removed
The Company exercised its option to renew the lease for the first three-year renewal term. Base rent for the first renewal term is $40,000 per month. Payments under this lease totaled approximately $464,000 and $432,000 during fiscal 2024 and fiscal 2023, respectively.
Added
Consideration paid generally consists of cash and, from time to time, shares of the Company’s common stock. Due to the time required to gather and analyze the necessary data for each acquisition, GAAP provides a “measurement period” of up to one year from the date of acquisition in which to finalize these fair value determinations.
Removed
The Company exercised its option to renew this lease for the first three-year renewal term. Base rent for the first year of the renewal term is $12,500 per month. Payments under this lease totaled approximately $150,000 and $146,000 during fiscal 2024 and fiscal 2023, respectively.
Added
During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existing as of the date of the acquisition, or based on the final net assets and working capital of the acquired business, as prescribed in the applicable purchase agreement.
Added
Such adjustments may result in the recognition of, or an adjustment to the fair values of, acquisition-related assets and liabilities and/or consideration paid, and are referred to as “measurement period” adjustments. Measurement period adjustments are recorded to goodwill.
Added
Other revisions to fair value estimates, including those relating to facts and circumstances that occur subsequent to the date of the acquisition, are reflected as income or expense, as appropriate.
Added
Significant changes in the assumptions or estimates for a particular acquisition or in the underlying acquisition-related valuations, including the expected profitability or cash flows of an acquired business or assumptions related to the existence or amount of the acquired assets or assumed liabilities, could result in materially different estimates of the fair value of the net assets acquired in the acquisition, which could positively or negatively affect the Company’s financial results in future periods. 34 Income Taxes The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 740, “Income Taxes” (“ASC 740”).

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−2 removed3 unchanged
Biggest changeAs of June 30, 2024, the Company had approximately $13.0 million of outstanding borrowings under the Credit Agreement, which accrued interest at a weighted average rate of 6.64%. Based on the amounts outstanding at June 30, 2024, a hypothetical 1% increase in daily interest rates would increase the Company’s annual interest expense by approximately $130,000.
Biggest changeBased on the amounts outstanding at June 30, 2025, a hypothetical 1% increase in daily interest rates would increase the Company’s annual interest expense by approximately $530,000. The Company’s revenues from foreign sales relate principally to sales of commercial and industrial laundry and dry cleaning equipment and boilers to Canada, the Caribbean, and Latin America.
The Company’s indebtedness may also have other important impacts on the Company, including that the Company will be required to utilize cash flow to service the debt, indebtedness may make the Company more vulnerable to economic downturns, and the Company’s indebtedness subjects the Company to covenants, which may place restrictions on its operations and activities, including its ability to pay dividends and take certain other actions.
The Company’s indebtedness may also have other important impacts on the Company, including that the Company will be required to utilize cash flow to service its debt, indebtedness may make the Company more vulnerable to economic downturns, and the terms of the Company’s indebtedness include certain covenants, which may place restrictions on the Company’s operations and activities, including its ability to pay dividends and take certain other actions.
While depositary accounts are covered by Federal Deposit Insurance Corporation (“FDIC“) insurance and the Company does not currently believe that it is exposed to significant credit risk due to the financial position of the banks in which the Company’s cash is held, there recently have been adverse events related to the soundness of financial institutions, including a number of smaller bank failures, and the Company has exposure to the extent its cash balances exceed the current $250,000 in maximum FDIC coverage. 35
While depositary accounts are covered by Federal Deposit Insurance Corporation (“FDIC“) insurance and the Company does not currently believe that it is exposed to significant credit risk due to the financial position of the banks in which the Company’s cash is held, and the Company has exposure to the extent its cash balances exceed the current $250,000 in maximum FDIC coverage. 36
Interest on borrowings under the Company’s Credit Agreement accrue at a rate, at the Company’s election at the time of borrowing, equal to (a) the BSBY rate plus a margin that ranges from 1.25% to 1.75% depending on the Company’s Consolidated Leverage Ratio or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) the BSBY rate plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio.
Interest on borrowings under the Company’s Credit Agreement accrue at a rate, at the Company’s election at the time of borrowing, equal to (a) SOFR plus 0.11% to 0.43%, plus an additional adjustment margin that ranges between 1.25% and 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) SOFR plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated Leverage Ratio.
All of the Company’s export sales require the customer to make payment in United States dollars.
All of the Company’s foreign sales require the customer to make payment in United States dollars. The Company also purchases products from a number of foreign suppliers.
The Company had no foreign exchange contracts outstanding at June 30, 2024 or 2023. The Company’s cash is maintained in bank accounts which bear interest at prevailing interest rates.
The Company’s cash is maintained in bank accounts which bear interest at prevailing interest rates.
Accordingly, foreign sales may be affected by the strength of the United States dollar relative to the currencies of the countries in which the Company’s customers are located, as well as the strength of the economies of the countries in which the Company’s customers are located. The Company has, at times in the past, paid certain suppliers in Euros.
The Company’s purchases from foreign suppliers and sales to foreign buyers may be affected by the strength of the United States dollar relative to the currencies of the countries where its customers and suppliers are located. Particularly, a weaker U.S. dollar would result in increased costs, which in turn would negatively affect the Company’s operating results.
Removed
During November 2023, Bloomberg Index Services Limited announced it will discontinue the BSBY rate on November 15, 2024.
Added
Swingline loans generally bear interest at the Base Rate plus a margin that ranges between 0.25% and 0.75% depending on the Consolidated 35 Leverage Ratio. As of June 30, 2025, the Company had approximately $53.0 million of outstanding borrowings under the Credit Agreement, which accrued interest at a weighted average rate of 5.68%.
Removed
Pursuant to the terms of the Credit Agreement, in connection with the discontinuation of the BSBY rate, when determined by the administrative agent under the Credit Agreement, the BSBY rate will be replaced with the Secured Overnight Financing Rate (“SOFR”) plus a SOFR adjustment ranging from a minimum of 0.11% to a maximum of 0.43%.
Added
The Company has, at times in the past, paid certain suppliers in Euros. The Company had no foreign exchange contracts outstanding at June 30, 2025 or 2024. As discussed elsewhere in this Report, including in “Item 1A. Risk Factors,” foreign sales and purchases may also be impacted by governmental measures, including trade policies, barriers and tariffs.

Other EVI 10-K year-over-year comparisons