UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 001-14757

EVI Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	11-2014231
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

4500 Biscayne Blvd., Suite 340, Miami, FL 33137

(Address of principal executive offices)

(305) 402-9300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.025 par value	EVI	NYSE American

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $.025 par value per share – 12,574,735 shares outstanding as of May 2, 2023.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Statements of Operations (Unaudited) for the nine and three months ended March 31, 2023 and 2022	3

	Condensed Consolidated Balance Sheets at March 31, 2023 (Unaudited) and June 30, 2022	4

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the nine and three months ended March 31, 2023 and 2022	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended March 31, 2023 and 2022	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29


PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	32

Signatures		33

	For the nine months ended March 31,				For the three months ended March 31,
	2023		2022		2023		2022

Revenues	$	260,132	$	184,485	$	94,066	$	60,042
Cost of sales		184,237		132,977		67,488		42,980
Gross profit		75,895		51,508		26,578		17,062
Selling, general and administrative expenses		63,403		47,680		22,113		16,874
Operating income		12,492		3,828		4,465		188
Interest expense, net		1,719		390		717		125
Income before income taxes		10,773		3,438		3,748		63
Provision for income taxes		2,952		851		998		23
Net income	$	7,821	$	2,587	$	2,750	$	40
Net earnings per share – basic	$	0.55	$	0.19	$	0.19	$	0.00
Net earnings per share – diluted	$	0.54	$	0.18	$	0.19	$	0.00

ASSETS
	March 31, 2023 (Unaudited)		June 30, 2022
Current assets
Cash	$	4,022	$	3,974
Accounts receivable, net of allowance for doubtful accounts of $2.0 million and $1.6 million, respectively		55,577		43,014
Inventories, net		62,928		49,359
Vendor deposits		2,193		1,728
Contract assets		909		1,519
Other current assets		6,928		6,018
Total current assets		132,557		105,612
Equipment and improvements, net		12,605		13,033
Operating lease assets		8,201		7,480
Intangible assets, net		24,655		26,234
Goodwill		73,095		71,039
Other assets		8,334		7,370
Total assets	$	259,447	$	230,768

LIABILITIES AND SHAREHOLDERS’ EQUITY
	March 31, 2023 (Unaudited)			June 30, 2022
Current liabilities
Accounts payable and accrued expenses	$	44,587		$	42,026
Accrued employee expenses		9,488			8,508
Customer deposits		23,679			21,288
Contract liabilities		668			507
Current portion of operating lease liabilities		2,867			2,518
Total current liabilities		81,289			74,847


Deferred tax liabilities, net		4,890			4,666
Long-term operating lease liabilities		6,203			5,736
Long-term debt, net		38,861			27,840
Total liabilities		131,243			113,089

Commitments and contingencies (Note 11)
Shareholders’ equity
Preferred stock, $1.00 par value; authorized shares – 200,000; none issued and outstanding		—			—
Common stock, $.025 par value; authorized shares - 20,000,000; 12,708,736 shares issued at March 31, 2023 and 12,650,126 shares issued at June 30, 2022, including shares held in treasury		318			316
Additional paid-in capital		100,371			97,544
Treasury stock, 134,001 shares at March 31, 2023 and 127,801 shares at June 30, 2022, at cost		(3,195	)		(3,070	)
Retained earnings		30,710			22,889
Total shareholders’ equity		128,204			117,679
Total liabilities and shareholders’ equity	$	259,447		$	230,768

	Nine months ended March 31, 2023
					Additional
	Common Stock				Paid-in			Treasury Stock					Retained
	Shares		Amount		Capital			Shares		Cost			Earnings		Total
Balance at June 30, 2022		12,650,126	$	316	$	97,544			127,801	$	(3,070	)	$	22,889	$	117,679

Share repurchases		—		—		—			6,200		(125	)		—		(125	)

Vesting of restricted shares		31,757		1		(1	)		—		—			—		—

Issuances of shares under employee stock purchase plan		2,610		—		59			—		—			—		59

Issuances of shares in connection with acquisitions		24,243		1		502			—		—			—		503

Stock compensation		—		—		2,267			—		—			—		2,267

Net income		—		—		—			—		—			7,821		7,821
Balance at March 31, 2023		12,708,736	$	318	$	100,371			134,001	$	(3,195	)	$	30,710	$	128,204

	Three months ended March 31, 2023
					Additional
	Common Stock				Paid-in			Treasury Stock					Retained
	Shares		Amount		Capital			Shares		Cost			Earnings		Total
Balance at December 31, 2022		12,697,444	$	317	$	99,587			131,122	$	(3,136	)	$	27,960	$	124,728

Share repurchases		—		—		—			2,879		(59	)		—		(59	)

Vesting of restricted shares		11,292		1		(1	)		—		—			—		—

Stock compensation		—		—		785			—		—			—		785

Net income		—		—		—			—		—			2,750		2,750
Balance at March 31, 2023		12,708,736	$	318	$	100,371			134,001	$	(3,195	)	$	30,710	$	128,204

	Nine months ended March 31, 2022
					Additional
	Common Stock				Paid-in			Treasury Stock					Retained
	Shares		Amount		Capital			Shares		Cost			Earnings		Total
Balance at June 30, 2021		12,399,137	$	310	$	90,501			120,706	$	(2,865	)	$	18,794	$	106,740

Share repurchases		—		—		—			7,095		(205	)		—		(205	)

Vesting of restricted shares		20,835		1		(1	)		—		—			—		—

Issuances of shares under employee stock purchase plan		2,008		—		59			—		—			—		59

Issuances of shares in connection with acquisitions		179,087		4		3,836			—		—			—		3,840

Stock compensation		8,287		—		1,947			—		—			—		1,947

Net income		—		—		—			—		—			2,587		2,587
Balance at March 31, 2022		12,609,354	$	315	$	96,342			127,801	$	(3,070	)	$	21,381	$	114,968

	Three months ended March 31, 2022
					Additional
	Common Stock				Paid-in			Treasury Stock					Retained
	Shares		Amount		Capital			Shares		Cost			Earnings		Total
Balance at December 31, 2021		12,418,075	$	310	$	91,880			124,706	$	(3,007	)	$	21,341	$	110,524

Share repurchases		—		—		—			3,095		(63	)		—		(63	)

Vesting of restricted shares		12,192		1		(1	)		—		—			—		—

Issuances of shares in connection with acquisitions		179,087		4		3,836			—		—			—		3,840

Stock compensation		—		—		627			—		—			—		627

Net income		—		—		—			—		—			40		40
Balance at March 31, 2022		12,609,354	$	315	$	96,342			127,801	$	(3,070	)	$	21,381	$	114,968

	For the nine months ended
	March 31, 2023			March 31, 2022
Operating activities:
Net income	$	7,821		$	2,587
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization		4,409			3,795
Amortization of debt discount		21			41
Provision for bad debt expense		523			231
Non-cash lease expense		95			138
Stock compensation		2,267			1,947
Inventory reserve		(723	)		(274	)
Provision (Benefit) for deferred income taxes		224			(51	)
Other		(183	)		(24	)
(Increase) decrease in operating assets:
Accounts receivable		(12,759	)		(3,129	)
Inventories		(11,561	)		(13,476	)
Vendor deposits		(429	)		(1,485	)
Contract assets		610			(10	)
Other assets		(1,845	)		(1,214	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		1,893			(829	)
Accrued employee expenses		878			(1,170	)
Customer deposits		1,950			10,081
Contract liabilities		161			(3,212	)
Net cash used by operating activities		(6,648	)		(6,054	)
Investing activities:
Capital expenditures		(2,291	)		(3,066	)
Cash paid for acquisitions, net of cash acquired		(1,947	)		(3,187	)
Net cash used by investing activities		(4,238	)		(6,253	)
Financing activities:
Proceeds from long-term debt		62,000			46,000
Debt repayments		(51,000	)		(34,000	)
Repurchases of common stock in satisfaction of employee tax withholding obligations		(125	)		(205	)
Issuances of common stock under employee stock purchase plan		59			59
Net cash provided by financing activities		10,934			11,854
Net increase (decrease) in cash		48			(453	)
Cash at beginning of period		3,974			6,057
Cash at end of period	$	4,022		$	5,604

	For the nine months ended March 31,				For the three months ended March 31,
	2023 (Unaudited)		2022 (Unaudited)		2023 (Unaudited)		2022 (Unaudited)

Net income	$	7,821	$	2,587	$	2,750	$	40
Less: distributed and undistributed income allocated to unvested restricted common stock		958		261		337		4
Net income allocated to EVI Industries, Inc. shareholders	$	6,863	$	2,326	$	2,413	$	36
Weighted average shares outstanding used in basic earnings per share		12,545		12,321		12,570		12,402
Dilutive common share equivalents		208		375		380		261
Weighted average shares outstanding used in diluted earnings per share		12,753		12,696		12,950		12,663
Basic earnings per share	$	0.55	$	0.19	$	0.19	$	0.00
Diluted earnings per share	$	0.54	$	0.18	$	0.19	$	0.00

	March 31, 2023			June 30, 2022
Revolving credit facility	$	39,000		$	28,000
Less: unamortized discount and deferred financing costs		(139	)		(160	)
Total long-term debt, net	$	38,861		$	27,840

Fiscal years ending June 30,	Total Operating Lease Obligations (in thousands)
2023 (remainder of)	$	930
2024		2,814
2025		2,095
2026		1,458
2027		1,019
Thereafter		1,442
Total minimum lease payments		9,758
Less: amounts representing interest		(688	)
Present value of minimum lease payments		9,070
Less: current portion		(2,867	)
Long-term portion	$	6,203

		March 31, 2023
Weighted average remaining lease terms
Operating leases		4.3 years
Weighted average discount rate
Operating leases		3.4 %

Fiscal years ending June 30,	Total Minimum Lease Payments Receivable		Amortization of Unearned Income		Net Investment in Sales Type Leases
2023 (remainder of)	$	1,185	$	726	$	459
2024		3,953		2,524		1,429
2025		3,011		1,898		1,113
2026		2,384		1,335		1,049
2027		1,600		796		804
Thereafter		1,275		572		703
					$	5,557	*

	Restricted Stock Awards					Restricted Stock Units
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Non-vested awards or units outstanding at June 30, 2022		1,026,183		$	21.65		416,465		$	26.75
Granted		222,672			16.30		122,109			16.23
Vested		(20,973	)		28.51		(10,784	)		31.11
Forfeited		—			—		(996	)		25.03
Non-vested awards or units outstanding at March 31, 2023		1,227,882		$	20.56		526,794		$	24.23

	Nine months ended March 31,				Three months ended March 31,
	2023		2022		2023		2022
Operating lease expense
Operating lease cost	$	2,581	$	1,781	$	965	$	671
Variable lease cost		156		320		12		44
Total operating lease expense (1)	$	2,737	$	2,101	$	977	$	715

Balance at June 30, 2022	$	71,039
Goodwill from acquisitions (1)		1,873
Working capital adjustments (2)		183
Balance at March 31, 2023	$	73,095

	Nine Months Ended March 31,
	2023			2022
Net cash provided (used) by:
Operating activities	$	(6,648	)	$	(6,054	)
Investing activities	$	(4,238	)	$	(6,253	)
Financing activities	$	10,934		$	11,854

Period	Total Number of Shares Purchased		Average Price Per Share		Total Number of Shares Purchased as a Part of Publicly Announced Programs		Maximum Number of Shares That May Yet Be Purchased Under the Program
January 1 – January 31, 2023		—	$	—		—		—
February 1 – February 28, 2023		2,879		20.74		—		—
March 1 –March 31, 2023		—		—		—		—
Total		2,879	$	20.74		—		—

Exhibit
Number	Description
*31.01	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.02	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
+32.01	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
+32.02	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Date: May 10, 2023		EVI Industries, Inc.


	By:	/s/ Robert H. Lazar
		Robert H. Lazar
		Chief Financial Officer

SEC Form 10-Q filed by EVI Industries Inc.