Financial Analysis

3. Acquisitions Fiscal 2026 Acquisitions ASN Acquisition On August 1, 2025 , the Company acquired ASN Laundry Group (ASN), a New York-based distributor of commercial laundry products and a provider of related technical installation and maintenance services. The consideration paid by the Company in connection with the acquisition consisted of $0.5 million in cash. In addition, the Company assumed $0.1 million of accrued liabilities of ASN in connection with the transaction. Fees and expenses related to the acquisition, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Companys consolidated statement of operations for fiscal 2026. The acquisition was treated for accounting purposes as a purchase of ASN using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805 , Business Combinations (ASC 805 ), pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The Company allocated $0.6 million to goodwill, which is expected to be amortized and deductible for tax purposes over 15 years. Goodwill is attributable primarily to the assembled workforce, as well as the expected benefits fro …

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14. Commitments and Contingencies In the ordinary course of business, certain of the Companys contracts require the Company to provide performance and payment bonds related to projects in process. These bonds are intended to provide a guarantee to the customer that the Company will perform under the terms of the contract and that the Company will pay subcontractors and vendors. If the Company fails to perform under the contract or pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company is required to reimburse the surety for expenses or outlays it incurs. No such performance bonds were outstanding at June 30, 2026. As of June 30, 2025, outstanding performance and payment bonds totaled $1.2 million. The Company may from time to time become subject to litigation and other legal and regulatory proceedings. Litigation and other proceedings may require the Company to incur significant expenses, including those relating to legal and other professional fees, as well as damages or other payments. Litigation and other proceedings are inherently uncertain, and adverse outcomes in litigation or other proceedings could adversely affect the Companys financial condition, cash flows, and operating results. …

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11. Debt The Companys long-term debt as of June 30, 2026 and 2025 was as follows (in thousands): June 30, June 30, 2026 2025 Long-term debt $ 51,000 $ 53,000 The Company is party, as borrower, to a syndicated credit agreement (the Credit Agreement). The Credit Agreement allows for borrowings 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. 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. As of June 30, 2026, $52.2 million was available to borrow under the revolving credit facility. Borrowings (other than swingline loans) under the Credit Agreement bear interest, at a rate, at the Companys 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 Companys 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 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"17. Equity Plan; Share Repurchase Program Equity Incentive Plan During 2015, the Companys board of directors and stockholders approved the Companys 2015 Equity Incentive Plan (the Plan). During December 2020, the Companys stockholders approved an amendment to the Plan to increase the number of shares of the Companys common stock authorized for issuance pursuant to awards granted under the Plan from 1,500,000 shares to 3,000,000 shares. During December 2024, the Companys stockholders approved an amendment to the Plan to, among other things, further increase the number of shares of the Companys common stock authorized for issuance pursuant to awards granted under the Plan to 3,500,000 shares. Pursuant to the terms of the 2015 Plan, as of November 13, 2025, the tenth anniversary of the effective date of the 2015 Plan, no further awards may be granted under the 2015 Plan. In December 2025, the Companys stockholders approved the Companys 2025 Equity Incentive Plan (the 2025 Plan and, together with the 2015 Plan, the ""Plans""). The terms of the 2025 Plan are substantially similar to the terms of the 2015 Plan, providing for a broad array of awards, including stock awards, restricted stock awards, restricted stock units, stock options, stock appreciation rights, performance awards, and other awards, including cash awards. A total of 3,000,000 shares of the Company's common stock are authorized for issuance pursuant to awards granted under the 2025 Plan. The fair value of awards gr …

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8. Goodwill and Intangible Assets The changes in the carrying amount of goodwill are as follows (in thousands): Balance at June 30, 2024 $ 75,102 Goodwill from fiscal 2025 acquisitions (as described in Note 3) 16,352 Goodwill from other acquisitions (1) 126 Working capital adjustments (2) 87 Balance at June 30, 2025 $ 91,667 Goodwill from fiscal 2026 acquisitions (as described in Note 3) 2,291 Working capital adjustments (3) (24 ) Balance at June 30, 2026 $ 93,934 (1) Relates to other, smaller-scale acquisitions consummated during fiscal 2025. (2) Relates to working capital adjustments from business acquisitions consummated by the Company during fiscal 2024. (3) Relates to working capital adjustments from business acquisitions consummated by the Company during fiscal 2025. Customer-related intangibles and tradenames as of June 30, 2026 and 2025 consisted of the following (dollars in thousands): Estimated Useful Lives June 30, (in years) 2026 2025 Customer-related intangibles 8-10 $ 31,897 $ 31,047 Tradenames Indefinite 14,455 14,175 46,352 45,222 Accumulated amortization (17,493 ) (14,347 ) $ 28,859 $ 30,875 Amortization expense was approximately $3.1 million in fiscal 2026 compared to approximately $2.5 million in fiscal 2025, and is included in selling, general and administrative expenses in the consolidated statements of operations. As of June 30, 2026, the weighted average remaining estimated useful lives for customer-related intangibles was 7.0 years. Based on the carryi …

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10. Income Taxes The following are the components of income taxes provision (benefit) (in thousands): Fiscal years ended June 30, 2026 2025 Current Federal $ 2,310 $ 3,200 State 357 1,148 2,667 4,348 Deferred Federal 1,170 (638 ) State 220 (183 ) 1,390 (821 ) $ 4,057 $ 3,527 In accordance with ASU 2023-09, the following table summarizes differences between income tax expense (benefit) at the statutory federal income tax rate and as presented on the consolidated statements of operations (dollars in thousands): Fiscal years ended June 30, 2026 2025 Tax at the statutory rate $ 2,473 21.0 % $ 2,313 21.0 % State income taxes, net of federal benefit (1) 445 3.8 % 745 6.8 % Nondeductible compensation 906 7.7 % 518 4.7 % Other 233 2.0 % (49 ) -0.5 % Effective income tax $ 4,057 34.5 % $ 3,527 32.0 % (1) State taxes in California and Illinois accumulated to over 50% of the tax effect in this category. Deferred income taxes reflect the net tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components of the Companys current and noncurrent deferred tax assets and liabilities as of June 30, 2026 and 2025 were as follows (in thousands): As of June 30, 2026 2025 Deferred tax assets: Allowance for credit losses $ 468 $ 472 Other reserves 1,166 1,048 Inventory capitalization 980 1,303 Stock compensation 1,602 1,325 Accrued liabilities 2,115 1,958 Lease liabilities 3,004 2,912 …

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Recently Issued Accounting Guidance In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) to enhance transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires greater standardization and disaggregation of categories within an entitys tax rate reconciliation disclosure, as well as disclosure of income taxes paid by jurisdiction, among other requirements. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 is effective on a prospective basis, with retrospective application permitted. The Company prospectively adopted ASU 2023-09, effective for the fiscal year ended June 30, 2026, and accordingly is providing enhanced tax rate reconciliation disclosures herein. See Note 10, Income Taxes. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03), to enhance the transparency and clarity of the components of specific expense categories in the income statement. ASU 2024-03 requires disclosure of additional information about specific expense categories underlying certain income statement expense line items. In January 2025, the FASB issued ASU 2025-01, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of …

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15. Retirement Plan The Company has participatory deferred compensation plans under which it matches 50% of employee contributions up to 6% of an eligible employees yearly compensation on a discretionary basis. Employees are eligible to participate in the plans after six months of service. The Company contributed approximately $875,000 and $833,000 to the plans during fiscal 2026 and fiscal 2025, respectively. The plans are qualified plans under Section 401(k) of the Internal Revenue Code. …

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12. Related Party Transactions Certain of the Companys subsidiaries lease warehouse and office space from one or more of the principals (or former principals) of the Company or its subsidiaries. These leases include the following: On October 10, 2016, the Companys wholly-owned subsidiary, Western State Design, entered into a lease agreement pursuant to which it leases 17,600 square feet of warehouse and office space from an affiliate of Dennis Mack, a director and employee of the Company, and Tom Marks, Executive Vice President, Business Development and President of the West Region of the Company. 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. 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. Payments under this lease totaled approximately $252,000 and $244,000 during fiscal 2026 and fiscal 2025, respectively. On November 1, 2018, the Companys wholly-owned subsidiary, AAdvantage Laundry Systems, entered into a lease agreement pursuant to which it leases warehouse and …

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18. Segment Reporting As of June 30, 2026, the Company had one operating and reporting segment: commercial laundry, which includes the distribution of commercial laundry equipment, related parts, supplies, and service. The segment is managed on a consolidated basis, with the CEO serving as the chief operating decision maker (the CODM). On a monthly basis, the CODM reviews financial information presented on a consolidated basis and uses consolidated operating income and net income to assess performance and allocate resources. Significant expenses within operating income and net income include cost of sales and selling, general and administrative expenses, which are each separately presented in the consolidated statements of income. Other segment items within net income include interest and income taxes. …

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2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (GAAP). The accompanying consolidated financial statements include the accounts of EVI Industries, Inc. and its subsidiaries, all of which are wholly-owned. All significant intercompany transactions and balances have been eliminated in consolidation. Revenue Recognition The Company recognizes revenue, net of sales taxes, when a sales arrangement with a customer exists (sales contract, purchase or sales order, or other indication of an arrangement), the transaction price is fixed and determinable, and the Company has satisfied the performance obligation(s) per the sales arrangement. Performance Obligations and Revenue Over Time Revenue primarily consists of revenues from the sale or leasing of commercial and industrial laundry and dry cleaning equipment and steam and hot water boilers manufactured by others; the sale of related replacement parts and accessories; and the provision of installation and maintenance services. The Company generates revenue primarily from the sale of equipment and parts to customers. Therefore, the majority of the Companys contracts are short-term in nature and have a single performance obligation (to deliver products), which is satisfied when control of the product is transferred to the customer. Other contracts contain a c …

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16. Shareholders Equity The declaration and payment of cash dividends with respect to the Companys common stock is determined by the Companys Board of Directors based on the Companys financial condition and liquidity needs and other factors deemed relevant by the Companys Board of Directors. In addition, the Companys Credit Agreement contains certain covenants which may, among other things, restrict the Companys ability to pay dividends, and any future facilities may contain similar or more stringent requirements. On September 11, 2024, the Companys Board of Directors declared a special cash dividend on the Companys 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 On September 11, 2025, the Companys Board of Directors declared a special cash dividend on the Companys common stock of $0.33 per share (totaling approximately $5.0 million in the aggregate), which was paid on October 6, 2025 to stockholders of record at the close of business on September 25, 2025. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing