EVI INDUSTRIES, INC.

EVI Industries, Inc. operates as a value-added distributor of commercial laundry equipment and provides advisory and technical services, specializing in washing, drying, finishing, material handling, water heating, power generation, and water reuse applications ¹. The company also sells related parts and accessories and provides installation, maintenance, and repair services through its network of commercial laundry technicians ². The commercial and industrial laundry distribution business is highly competitive and fragmented, with over 500 full-line or partial-line equipment distributors in the United States ³. Management believes no single competitor has a major share of the market, substantially all competitors are independently owned, and, with the exception of several regional distributors, distributors operate primarily in local markets ⁴. Competition is based primarily on a distributor's ability to effectively plan and design optimal commercial and industrial laundry facilities, competitive pricing, representation of reliable and high-quality products, in-house installation, maintenance, and repair services, available and on-time delivery of equipment, parts, and accessories, and the ability to provide continuous support services ⁵.

The company's primary competition in the United States comes from a number of independently owned distributors and certain foreign manufacturers which own distribution businesses operating in North America ⁶. In foreign markets, the company also competes with several independently owned distributors and manufacturer-owned distribution businesses ⁷. The company believes its relationships with manufacturers and suppliers provide certain competitive advantages, including exclusivity for certain products in certain areas and, in certain cases, favorable pricing and other terms ⁸. Purchases from four manufacturers accounted for a total of approximately 71% and 72% of the company's product purchases for fiscal 2026 and 2025, respectively ⁹¹⁰. The company's customer base consists of approximately 55,000 customers located primarily in the United States, Canada, the Caribbean, and Latin America ¹¹. No single customer accounted for more than 10% of the company's revenues for fiscal 2026 or fiscal 2025 ¹².

The company generates revenue through the sale and/or lease of commercial laundry equipment, related parts and accessories, and the provision of installation, maintenance, and repair services ¹³. Product purchases made by customers range from parts and accessories, to single or multiple units of equipment, to large complex systems ¹⁴. The company also provides planning, designing, and consulting services related to commercial laundry operations ¹⁵. Revenue is recognized when control transfers to customers, generally upon shipment, and for longer-term contracts involving installation and construction services, revenue is recognized over time using the cost-to-cost measure of progress ¹⁶. The company's customers include government, institutional, industrial, commercial and retail customers ¹⁷.

The company distributes commercial and industrial laundry equipment including 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 ¹⁸. Finishing equipment includes sheet feeders, flatwork ironers, automatic sheet folders, and stackers ¹⁹. Material handling equipment includes conveyor and rail systems ²⁰. Mechanical equipment includes boilers, hot water/steam systems, power generation products, water purification, reuse and recycling systems and air compressors ²¹. Boiler products include high efficiency, low emission steam boilers, steam systems and hot water systems used in the laundry and dry cleaning industry for temperature control, heating, pressing and de-wrinkling, and in the healthcare industry, food and beverage industry, and other industrial markets, for sterilization, product sealing and other purposes ²². The company also sells replacement parts and accessories for the products it distributes ²³.

During July 2026, the company announced plans to expand into the consumer garment care services industry and entered into a definitive agreement to acquire Miami, Florida-based Sudsies, Inc., a well-established operator in the garment care sector ²⁴. The acquisition of Sudsies was consummated on September 1, 2026 for a total purchase price of $37.4 million, subject to post-closing adjustments ²⁵. The company has established a new division, which will be a separate operating and reportable segment, for its consumer garment care services operations and investments ²⁶. This expansion marks the company's first dedicated expansion beyond the commercial laundry distribution and service industry since it began executing its 'buy-and-build' growth strategy in 2016 ²⁷. 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. for total consideration of $51.0 million, consisting of $54.8 million in cash, net of cash acquired, and the settlement of acquirer receivables of $3.8 million ²⁸²⁹³⁰. During fiscal 2026, the company acquired New York-based ASN Laundry Group and Ohio-based Belenky, Inc. for total consideration of $3.9 million, consisting of $3.1 million in cash and $0.8 million in amounts payable to the sellers as of June 30, 2026 ³¹³²³³. On July 28, 2026, the company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $10.0 million of the company's outstanding common stock ³⁴.

Total revenues for fiscal 2026 increased by 15% compared to fiscal 2025, attributable to revenues generated by businesses acquired during fiscal 2025 and 2026 ³⁵. Net income for fiscal 2026 increased by 3% from fiscal 2025, primarily attributable to increases in revenue and gross margin, partially offset by increases in selling, general, and administrative expenses, interest expense, and income taxes ³⁶. Revenues for fiscal 2026 were $446.570 million compared to $389.830 million in fiscal 2025 ³⁷³⁸. Net income was $7.718 million in fiscal 2026 compared to $7.498 million in fiscal 2025 ³⁹⁴⁰. Diluted earnings per share were $0.48 in fiscal 2026 compared to $0.49 in fiscal 2025 ⁴¹⁴². Gross margin improved to 31.5% in fiscal 2026 from 30.4% in fiscal 2025 ⁴³⁴⁴.

The company's growth strategy includes the pursuit of organic growth initiatives and a 'buy-and-build' growth strategy, which involves the consideration and pursuit of acquisitions and other strategic transactions that management believes may complement the existing business or offer growth opportunities ⁴⁵. The 'build' component involves implementing a growth culture at acquired businesses based on the exchange of ideas and business concepts among management teams, as well as investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies ⁴⁶. The company is disciplined and conservative in its consideration of acquisitions and generally seeks to identify opportunities that fit certain financial and strategic criteria ⁴⁷.

The expansion into the consumer garment care services industry represents a significant growth vector, based on the company's belief that consumer garment care, which is a multibillion dollar industry, represents a compelling long-term opportunity ⁴⁸. The consumer garment care services industry serves an essential market that has historically displayed steady, recurring demand, and is served by thousands of independent, often family-owned businesses ⁴⁹. As consumers place growing value on quality, convenience, and service experience, the company sees a significant opportunity to build a leading consumer garment care business of national scale ⁵⁰. The acquisition of Sudsies was consummated on September 1, 2026 for a total purchase price of $37.4 million, and the company's financial position and results of operations of Sudsies will be included in the consolidated financial statements commencing in the quarter ending September 30, 2026 ⁵¹⁵².

The company's gross margin improved to 31.5% in fiscal 2026 from 30.4% in fiscal 2025, primarily attributable to favorable changes in product and customer mix and the company's efforts to drive higher quality sales opportunities from promoting solution selling as a value-added distributor ⁵³⁵⁴. Selling, general and administrative expenses increased by approximately $20.4 million (20%) in fiscal 2026 compared to fiscal 2025, primarily due to operating expenses of acquired businesses, increases in salary, stock compensation, rent, technology costs, professional fees, and insurance costs to support growth, and depreciation and amortization ⁵⁵⁵⁶. As a percentage of revenues, selling, general and administrative expenses increased to 28.0% in fiscal 2026 from 26.8% in fiscal 2025 ⁵⁷⁵⁸.

The company believes that its existing cash, anticipated cash from operations and funds available under its 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 ⁵⁹. 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 as part of its 'buy-and-build' growth strategy ⁶⁰. The company's primary sources of cash are sales of products and services, and borrowings under its credit facility ⁶¹. The company's primary uses of cash are purchases of the products sold, employee related costs, and cash consideration paid in connection with business acquisitions ⁶².

The company's research and development efforts and expenses are generally immaterial as most of its products are distributed for manufacturers that perform their own research and development ⁶³. The company invests in advanced technologies designed to improve the customer experience, including its enterprise resource planning system and field service platform ⁶⁴. The company had 900 full and part-time employees as of August 1, 2026, all based in the United States, and none subject to a collective bargaining agreement ⁶⁵⁶⁶⁶⁷. The company seeks to attract and retain experienced employees through performance-based pay, commission programs, cash incentives, and stock-based equity programs, including a voluntary employee stock purchase plan and an equity compensation plan ⁶⁸.

On September 11, 2024, the company's Board of Directors declared a special cash dividend of $0.31 per share, totaling approximately $4.6 million in the aggregate, paid on October 7, 2024 ⁶⁹⁷⁰. On September 11, 2025, the company's Board of Directors declared a special cash dividend of $0.33 per share, paid on October 6, 2025 ⁷¹. On July 28, 2026, the company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $10.0 million of the company's outstanding common stock ⁷². The share repurchase program does not obligate the company to repurchase any specific amount of shares, has no expiration date, and may be modified, suspended or terminated at any time without prior notice at the discretion of the Board of Directors ⁷³.

The company faces risks related to international trade policies, including the imposition of tariffs, which could significantly increase the cost of its products and/or limit the availability of those products ⁷⁴. While 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 certain tariffs have been struck down by the United States Supreme Court ⁷⁵. The company has attempted to mitigate the risks and uncertainties relating to tariffs through supplier negotiations and increasing selling prices, but there is no assurance that such efforts will be successful, and price increases may result in reduced customer demand ⁷⁶. The company also faces risks related to inflation and other price increases, including that there is no assurance it will be able to effectively increase the price of its products and services to offset increased costs ⁷⁷.

The company's business and results may be adversely affected if it does not maintain its relationships with its significant suppliers or customers ⁷⁸. Purchases from four manufacturers accounted for approximately 71% and 72% of product purchases for fiscal 2026 and 2025, respectively ⁷⁹⁸⁰. The company does not have contracts with all of its manufacturers, and certain contracts are short term agreements that can be terminated on short notice ⁸¹. The company also faces risks related to labor shortages and increases in labor costs, which have resulted in, and may continue to result in, increases in operating expenses ⁸². The company's ability to manage its business and monitor results is highly dependent upon information and communication systems, and a failure of these systems or the company's ERP implementation could disrupt its business ⁸³.

The company's business is highly dependent on maintaining relationships with its significant suppliers, as purchases from four manufacturers accounted for approximately 71% and 72% of product purchases for fiscal 2026 and 2025, respectively ⁸⁴⁸⁵. The loss of any of these relationships, or the inability to mitigate such loss, could materially and adversely impact the company's business and results ⁸⁶. The company's expansion into the consumer garment care services industry may not be successful, and there is no assurance as to the applicability and success of its buy-and-build strategy in that industry, or the anticipated strategic, competitive, and financial advantages of leveraging its commercial laundry capabilities, infrastructure, and supply relationships ⁸⁷. The company faces environmental liabilities relating to the use, handling and disposal of hazardous substances, including perchloroethylene (PCE), a solvent historically used in the garment care industry, which could result in significant costs and have a material adverse effect on the company's business, financial condition and results of operations ⁸⁸. The company's indebtedness may impact its financial condition and results of operations, and the terms of its Credit Agreement may place restrictions on the company, including covenants requiring compliance with maximum leverage ratios and minimum interest coverage ratios ⁸⁹. The company's management may be deemed to control the company, with collective voting power over shares representing approximately 52.3% of the issued and outstanding shares of common stock as of June 30, 2026, which could delay or prevent a change in control and adversely impact the market price of the common stock ⁹⁰.

Management's message emphasizes the company's 'buy-and-build' growth strategy, which has driven revenue growth of 15% in fiscal 2026, and the expansion into the consumer garment care services industry as a compelling long-term opportunity ⁹¹⁹². The company's strategic priorities include the pursuit of acquisitions and other strategic transactions, the implementation of a growth culture at acquired businesses, and investments in additional sales and service personnel, new product lines, enhanced service operations and capabilities, new and improved facilities, and advanced technologies ⁹³. Management also highlights the company's focus on driving higher quality sales opportunities through solution selling as a value-added distributor, which contributed to gross margin expansion to 31.5% in fiscal 2026 from 30.4% in fiscal 2025 ⁹⁴⁹⁵. The company believes that its existing cash, anticipated cash from operations and funds available under its Credit Agreement will be sufficient to fund its operations and anticipated capital expenditures for at least the next twelve months ⁹⁶.