Exchange: AMEX | Sector: Industrials | Industry: Industrial Distribution
Q2 2025
Published: Feb 10, 2025
Earnings Highlights
Revenue of $92.71M up 1.5% year-over-year
EPS of $0.07 decreased by 13.4% from previous year
Gross margin of 29.7%
Net income of 1.13M
"N/A" - N/A
EVI Industries Inc (EVI) QQ2 2025 Earnings Analysis: Modest Revenue Growth with Margin Pressure and Solid Cash Flow
Executive Summary
EVI Industries reported QQ2 2025 results with a modest year-over-year (YoY) revenue uptick and a soft quarter-over-quarter (QoQ) trend. Revenue of $92.711 million rose 1.5% from QQ2 2024 (YoY), but declined 0.98% versus QQ1 2025, signaling a tempered demand environment in the industrial distribution space. Gross profit reached $27.522 million, translating to a gross margin of approximately 29.69%, while operating income was $2.39 million (2.58% margin). Net income came in at $1.13 million ($0.08 per basic share; $0.07 per diluted share), with EBITDA of $3.95 million and an EBITDA margin of about 4.27%. These metrics depict a company delivering positive cash generation against a backdrop of relatively modest profitability improvements.
Management commentary is not included in the provided transcript, so no direct quotes from the QQ2 2025 call are available. However, the quarterly dynamics point to several notable themes: disciplined cost management, a favorable mix in higher-margin product lines, and ongoing working-capital intensity that supports a positive but constrained operating cash flow profile. The balance sheet shows a robust equity base (Total stockholders’ equity of $138.0 million) and a manageable but meaningful debt load (total debt $36.99 million; net debt $33.09 million). Cash at period end was $3.91 million, with net cash flow from operations of $1.97 million and free cash flow of $1.10 million, underscoring the company’s ability to fund working capital needs, capex, and modest dividend/distribution activity going forward. The company’s liquidity ratios remain modest (current ratio 1.58; quick ratio 0.87; cash ratio 0.055), reflecting a working-capital-intensive model typical of a service-and-supply business in industrial distribution.
Looking ahead, there is no formal forward guidance in the data provided. Given the cyclicality of Industrials and ongoing macro uncertainty, investors should monitor demand momentum in government, institutional, and commercial laundry equipment markets, the pace of replacement-part spend, input-cost trends, and working-capital management. The QQ2 2025 print does not indicate an acceleration in profitability, but it does show positive cash generation and a debt profile that, while not insignificant, remains within a manageable range for a small-to-mid cap distributor.
Key Performance Indicators
Revenue
92.71M
QoQ: -0.98% | YoY:1.47%
Gross Profit
27.52M
29.69% margin
QoQ: -4.62% | YoY:4.23%
Operating Income
2.39M
QoQ: -52.09% | YoY:-19.01%
Net Income
1.13M
QoQ: -65.06% | YoY:-15.81%
EPS
0.08
QoQ: -68.00% | YoY:-13.42%
Revenue Trend
Margin Analysis
Key Insights
Revenue for QQ2 2025: $92.711 million, up 1.47% YoY but down 0.98% QoQ (vs QQ1 2025).
Gross profit: $27.522 million; gross margin 29.69% (YoY margin up vs prior year, QoQ margin declined).
Revenue and profitability:
- Revenue for QQ2 2025: $92.711 million, up 1.47% YoY but down 0.98% QoQ (vs QQ1 2025).
- Gross profit: $27.522 million; gross margin 29.69% (YoY margin up vs prior year, QoQ margin declined).
- Operating income: $2.39 million; operating margin 2.58% (YoY margin −19.01%; QoQ margin −52.09%).
- Net income: $1.129 million; net margin 1.22% (YoY −15.81%; QoQ −65.06%).
- Earnings per share (EPS): $0.08 basic; $0.07 diluted; YoY EPS −13.42%; QoQ −68.00%.
- EBITDA: $3.945 million; EBITDA margin ~4.27%.
- Tax and interest: Income tax expense $0.591 million; interest expense $0.670 million; effective tax rate 34.4%.
Liquidity and leverage:
- Cash and cash equivalents: $3.905 million.
- Net debt: $33.085 million; total debt $36.99 million; debt-to-equity 0.27.
- Current ratio 1.58; quick ratio 0.87; cash ratio 0.0545.
- Working capital dynamics: DSO 46.25 days; DIO 69.70 days; DPO 43.13 days; cash conversion cycle 72.82 days.
Cash flow and capex:
- Net cash provided by operating activities: $1.969 million.
- Capital expenditure: $(0.871) million.
- Free cash flow: $1.098 million.
- Net change in cash: $(0.468) million; cash at end of period $3.905 million.
Balance sheet snapshot:
- Total assets: $248.802 million.
- Total liabilities: $110.793 million; total stockholders’ equity: $138.009 million.
- Property, plant & equipment (net): $22.855 million; goodwill and intangible assets combined: $103.597 million.
- Working capital components (current assets $113.099 million; current liabilities $71.692 million) indicate a constructive liquidity profile but with working-capital intensity.
Note: All figures are in USD and reflect the QQ2 2025 period (fiscal year 2025, quarter ending around mid-2025). The YoY and QoQ figures for revenue and selected metrics align with the provided incomeMetrics section, which shows Revenue YoY +1.47% and QoQ −0.98%, Gross Margin YoY +4.23% and QoQ −4.62%, Operating Income YoY −19.01% and QoQ −52.09%, Net Income YoY −15.81% and QoQ −65.06%, and EPS YoY −13.42% and QoQ −68.00%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
92.71M
1.47%
-0.98%
Gross Profit
27.52M
4.23%
-4.62%
Operating Income
2.39M
-19.01%
-52.09%
Net Income
1.13M
-15.81%
-65.06%
EPS
0.08
-13.42%
-68.00%
Key Financial Ratios
currentRatio
1.58
grossProfitMargin
29.7%
operatingProfitMargin
2.58%
netProfitMargin
1.22%
returnOnAssets
0.45%
returnOnEquity
0.82%
debtEquityRatio
0.27
operatingCashFlowPerShare
$0.16
freeCashFlowPerShare
$0.09
dividendPayoutRatio
407%
priceToBookRatio
1.51
priceEarningsRatio
46.12
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript highlights not provided in the data. Earnings call transcript is empty (earningsTranscript: []). Accordingly, there are no management quotes to extract here. If a transcript is provided, a themes-based synthesis (strategy, operations, market conditions) with direct quotes will be added.
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Forward Guidance
No formal forward guidance was disclosed for QQ2 2025 in the provided data. Investors should monitor: (1) demand momentum across core irrigation, laundry, and replacement-part cycles in the US/Canada and international markets; (2) mix effects on gross margin (geographic and product mix shifts toward higher-margin services and replacement parts); (3) working-capital dynamics given extended CCC (~72.8 days) and elevated accounts receivable and payables balances; (4) cost controls and any commodity or logistics cost fluctuations that could affect margins; and (5) capital allocation, including any potential dividends, buybacks, or debt management. Based on current data, the absence of explicit guidance suggests management is leaving near-term targets flexible, emphasizing execution and cash flow optimization instead of aggressive top-line targets.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
EVI Focus
29.69%
2.58%
0.82%
46.12%
DXPE
30.90%
8.50%
4.34%
10.53%
GIC
35.20%
7.59%
7.51%
14.48%
CNM
26.40%
10.40%
7.24%
21.67%
WSO-B
27.10%
12.60%
6.95%
23.01%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
EVI presents a cautious yet positive investment thesis. The QQ2 2025 result shows positive cash flow, a manageable debt profile, and a defensible gross margin around 30%. The clear near-term hurdle is margin stability and cash generation discipline amid a cyclical industry. The company’s valuation (P/E around 46x, EV/EBITDA around 61x) implies market expectations for upside beyond the current quarter-to-quarter trajectory, likely hinging on improved profitability and/or revenue growth through mix optimization and potential international expansion. If management can sustain cash flow generation, reduce working-capital intensity, and stabilize margins, EVI could justify a re-rating. Investors should monitor demand trends, cost structures, and capital allocation decisions, particularly any steps to bolster liquidity or deleverage.
Key Investment Factors
Growth Potential
Moderate top-line growth supported by stable demand for industrial equipment, replacement parts, and maintenance services; potential margin uplift from cost controls and product mix optimization; possible expansion into underpenetrated international markets.
Profitability Risk
Macro cyclicality in Industrials; customer concentration risk in select institutional/government segments; working-capital intensity and modest liquidity; potential input-cost volatility and supply-chain disruptions; competition and price compression in a fragmented distribution landscape.
Financial Position
Positive operating cash flow and free cash flow generation with a manageable debt load; solid equity base; liquidity is tight on a pure cash basis (cash ratio ~0.055) but leverages a healthy balance sheet with strong equity capital.
SWOT Analysis
Strengths
Stable, albeit modest, revenue growth in QQ2 2025 (YoY +1.47%) with a gross margin near 30% (29.69%).