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EI

EVI INDUSTRIES, INC. (EVI)·Q1 2026 Earnings Summary

Executive Summary

  • Record revenue ($108.27M) and gross profit ($33.89M) with consolidated gross margin at a record 31.3%; however operating income ($3.56M), net income ($1.85M) and adjusted EBITDA ($6.75M, 6.2%) declined year over year due to accelerated modernization, integration spending and expo-related costs .
  • Strong gross margin tailwind from inclusion of Continental (Girbau North America) acquired in FY25; excluding Continental, gross margin would have been ~30.2%, modestly below prior year on product mix .
  • Balance sheet supports continued buy-and-build strategy; paid largest special cash dividend ($0.33/share; ~$5.0M) in October, and net debt rose to $46.3M as of quarter-end amid working capital and investing activities .
  • Wall Street consensus estimates for Q1 FY2026 (EPS, revenue) were unavailable via S&P Global, limiting beat/miss analysis; investors should focus on margin durability and pace of opex normalization given integration and tech investments .

What Went Well and What Went Wrong

What Went Well

  • Record top-line and gross profit: revenue +16% to $108.27M; gross profit +17% to $33.89M; consolidated gross margin at a record 31.3% .
  • Strategic acquisition impact: Inclusion of Continental uplifted margins; management expects sustained enhanced margin profile with further gains from procurement, supply chain, pricing, and inventory initiatives .
  • Technology adoption KPIs: Field service platform supported ~9,000 appointments in September 2025 (vs. ~8,500 in June and ~1,000 a year ago), improving technician productivity and scheduling efficiency .
  • Management tone on strategy: “We’re growing, we’re modernizing, and we’re investing with confidence.” — Henry M. Nahmad .

What Went Wrong

  • Operating leverage compression: Operating income fell to $3.56M (from $4.99M), net income to $1.85M (from $3.23M), and adjusted EBITDA to $6.75M (from $7.61M), as accelerated modernization/integration spending and expo costs weighed on profitability .
  • SG&A step-up: SG&A increased to $30.33M, reflecting investments in technology modernization, service expansion, and acquired operations integration .
  • Tariffs and cost environment: Ongoing trade-policy uncertainty; pricing actions, diversified sourcing, and supplier agreements deployed to stabilize input costs, but risk persists .

Financial Results

Consolidated P&L and Profitability vs prior quarters

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$93.538 $109.956 $108.269
Gross Profit ($USD Millions)$28.055 $33.916 $33.892
Gross Margin %30.0% 30.8% 31.3%
SG&A ($USD Millions)$25.780 $29.802 $30.330
Operating Income ($USD Millions)$2.275 $4.114 $3.562
Net Income ($USD Millions)$1.041 $2.097 $1.847
Diluted EPS ($USD)$0.07 $0.14 $0.11
Adjusted EBITDA ($USD Millions)$5.067 $7.202 $6.752
Adjusted EBITDA Margin %5.4% 6.5% 6.2%

Notes: Q1 2026 margin uplift reflects Continental inclusion; excluding Continental, gross margin ~30.2% (slightly below prior-year due to historical product mix) .

Consensus vs. Actual (Q1 2026)

MetricS&P Global ConsensusActual
Revenue ($USD Millions)Unavailable via S&P Global$108.269
Diluted EPS ($USD)Unavailable via S&P Global$0.11

Estimates were unavailable via S&P Global; comparisons cannot be made.

Segment Breakdown

EVI does not report segment revenues; results discussed at consolidated level .

KPIs and Operational Metrics

KPIQ3 2025Q4 2025Q1 2026
Field service appointments (monthly)>8,500 in June 2025 —~9,000 in Sep 2025
CRM rolloutBuilding CRM platform; FSM deployed to >425 techs ERP/BI expanded to 28 of 31 units Phase 1 CRM completed at Continental; further rollouts planned
Backlog commentaryContracts exceeded fulfilled value Strong backlog across categories Not specifically updated; demand sustained

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2026 and FY2026Not providedNot provided; management emphasizes sustaining enhanced margin profile and long-term growth via acquisitions and tech modernization Maintained no formal guidance
Gross MarginFY2026 trajectoryNot providedExpect sustained enhanced profile due to Continental plus procurement/supply chain/pricing/inventory initiatives Positive qualitative
OpEx (SG&A)Near-termNot providedElevated near-term due to modernization, service expansion, and integration; expected to enhance future margins Clarified upward near-term
DividendSpecial cash dividendPrior special dividend $0.31/share (Oct 2024) $0.33/share paid Oct 6, 2025 (~$5.0M) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2025)Previous Mentions (Q4 2025)Current Period (Q1 2026)Trend
Buy-and-build acquisitionsClosed GNA (Continental) Apr 1; transformational scale/logistics/customer reach Completed four acquisitions in FY25; Continental adds ~$50M annual revenue; master distributor channel Four acquisitions since Q1 FY2025; integration accelerating; sustained focus on pipeline Expanding scale; integration phase
Technology modernization (ERP/BI/CRM/FSM)FSM deployed to >425 techs; CRM/e-commerce under build ERP at 28/31 units; BI dashboards; e-commerce expected FY2026 FSM ~9,000 appointments in Sep; CRM phase 1 live at Continental; e-commerce development ongoing Adoption increasing; visible productivity gains
Margins and operating leverageGross margin 30%; SG&A investments temper near-term leverage Q4 gross margin 30.8%; aiming for operating margin goal as spending moderates Record 31.3% margin (ex-Continental ~30.2%); near-term profitability impacted by modernization/expo costs Margin profile improving; leverage delayed
Tariffs/macroGeneral trade/inflation risks cited Continued tariff monitoring; pricing adjustments Pricing and sourcing diversification; supplier agreements to stabilize pricing Ongoing mitigation actions
Capital allocationStrong liquidity; credit facility increased to $200M (Mar 2025) $21.3M FY25 CFO; $0.33 special dividend; net debt $44.1M $0.33 special dividend paid; net debt $46.3M; continued borrowing capacity Balanced growth investment and returns

Management Commentary

  • “Our record results this quarter highlight the success of our sales organization and our ongoing progress in capturing market share across key regions… we are well positioned to sustain growth” — Henry M. Nahmad .
  • “We’re growing, we’re modernizing, and we’re investing with confidence… positioning EVI for sustainable, long-term growth” — Henry M. Nahmad .
  • Gross margin strategy: Expect sustained enhanced profile via Continental and initiatives in procurement, supply chain, pricing, and inventory management; BI tools to enable data-driven decisions .
  • Tariff response: Adjusted pricing, diversified sourcing, supplier agreements to stabilize costs .

Q&A Highlights

  • Q1 FY2026 was delivered as a pre-recorded call available on the company’s website; no separate transcript or live Q&A was filed in the document set .

Estimates Context

  • S&P Global consensus estimates for Q1 FY2026 EPS and revenue were unavailable; no beat/miss determination can be made from S&P Global data for this quarter. Values retrieved from S&P Global.*
  • Implication: Near-term estimate revisions likely focus on raised gross margin baseline from Continental inclusion and elevated SG&A cadence tied to modernization/integration; net income and EBITDA trajectories may be revised lower near term but offset longer term by margin initiatives and service scale .

Key Takeaways for Investors

  • Margin durability: The record 31.3% gross margin (ex-Continental ~30.2%) signals a structurally higher margin mix; watch procurement/supply chain/pricing/inventory programs for incremental gains .
  • Near-term opex drag: Elevated SG&A from tech and integration is suppressing operating leverage; monitor trajectory of opex normalization and integration milestones (CRM rollouts, FSM productivity) .
  • Cash returns and flexibility: Special dividend ($0.33/share) validates confidence; liquidity and revolver capacity support continued M&A in a fragmented market .
  • Service-led growth: FSM adoption (9,000 monthly appointments) enhances efficiency and creates sales leads, supporting recurring revenue and customer stickiness .
  • Continental synergy path: Master distributor platform can improve sourcing/purchasing power and expand product availability; margin and revenue synergy realization should be a medium-term catalyst .
  • Tariff and input cost mitigation: Pricing and sourcing actions reduce volatility risk; still prudent to track policy developments and supplier stability .
  • Trading lens: In absence of S&P Global estimates, focus on sequential profitability cadence vs Q4 and quality-of-margins narrative; any signs of SG&A tapering or incremental gross margin wins could drive positive sentiment .