Detailed narrative
Record Fiscal 2026 Performance
EVI Industries achieved its best year in history in fiscal 2026, reporting record revenue of approximately $447 million and record gross profit of approximately $141 million. The gross margin reached a record 31.5%, demonstrating that gross profit grew faster than revenue, indicating improved business quality and earnings potential. The company also generated approximately $21 million in operating cash flow for the fiscal year.
Strategic Acquisitions and New Division Launch
During and shortly after year-end, EVI completed three acquisitions: two in commercial laundry and one that established its second division, Consumer Garment Care Services. The new division, starting with the Sudsies business, represents an expansion into a different end customer within the laundry sector, leveraging EVI's principles of fragmented markets, recurring customer needs, and decentralized leadership. The company sees potential to build a significant second division with meaningful earnings and cash flow.
Operating Leverage and Margin Expansion
The fourth quarter highlighted meaningful operating leverage, with commercial laundry operating businesses achieving an Adjusted EBITDA margin above 10% (adjusted solely for stock-based compensation expense) before corporate expenses. This improvement is attributed to investments in people, technology, processes, and capabilities aimed at delivering a better customer experience and enhancing operational effectiveness, rather than just cost reduction.
Entrepreneurial Culture and Acquisition Strategy
EVI's culture fosters entrepreneurship, allowing acquired business leaders to retain authority and build their brands while gaining access to capital, technology, and broader enterprise resources. This approach has become a competitive advantage, attracting successful owners who want to be part of EVI. The company maintains a disciplined acquisition strategy, evaluating a substantial pipeline of opportunities based on people, culture, economics, and strategic fit.
Financial Discipline and Long-Term Value Creation
The company ended June with approximately $44 million of net debt, essentially unchanged from the prior year despite completing two acquisitions and continued investments. This financial strength provides flexibility to pursue opportunities. Over half of EVI is collectively owned by executives and original owners, aligning long-term interests. The company prioritizes long-term value over short-term optics, investing through cycles and building capabilities proactively.
Commercial Laundry Foundation and Future Growth
Commercial laundry remains EVI's foundation, characterized by durable demand through economic cycles due to essential equipment, service, and consumables needs. EVI serves the full spectrum of commercial laundry, providing comprehensive solutions from planning and design to installation, maintenance, and technical expertise. The company sees substantial opportunity for organic growth, further acquisitions, and expansion of recurring service and consumables revenue within this segment.