Exchange: AMEX | Sector: Industrials | Industry: Industrial Distribution
Q3 2025
Published: May 12, 2025
Earnings Highlights
Revenue of $93.54M up 11.4% year-over-year
EPS of $0.07 increased by 6.2% from previous year
Gross margin of 30.0%
Net income of 1.04M
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EVI Industries Inc (EVI) QQ3 2025 Earnings Analysis: Revenue Momentum in Industrial Distribution with Modest Margin Expansion Risk
Executive Summary
EVI Industries reported Q3 2025 (quarter ending 2025-03-31) revenue of $93.54 million, up 11.38% year over year and 0.89% quarter over quarter. Gross profit reached $28.06 million for a gross margin of 29.99%, while operating income was $2.28 million (operating margin ~2.43%) and net income was $1.04 million (net margin ~1.11%), yielding an EPS of $0.07. EBITDA stood at $2.28 million with an EBITDA margin near 2.4%. The quarter delivered solid cash generation: operating cash flow of $9.15 million and free cash flow of $8.11 million, supporting a modest increase in cash to $5.91 million at period end. Despite healthy near-term cash flow, the balance sheet carries relatively high goodwill and intangible assets (~$104.04 million combined), suggesting elevated impairment risk should growth or gross margins deteriorate in the coming periods. Net debt stood at approximately $27.44 million, with total debt of $33.35 million and equity of $140.21 million, indicating conservative leverage in a niche industrial distribution business.
Key Performance Indicators
Revenue
93.54M
QoQ: 0.89% | YoY:11.38%
Gross Profit
28.06M
29.99% margin
QoQ: 1.94% | YoY:15.48%
Operating Income
2.28M
QoQ: -4.81% | YoY:-5.52%
Net Income
1.04M
QoQ: -7.79% | YoY:8.89%
EPS
0.07
QoQ: -12.50% | YoY:6.22%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $93.538 million; YoY +11.38%; QoQ +0.89%\n- Gross Profit: $28.055 million; Gross Margin 29.99%; YoY +15.48%; QoQ +1.94%\n- Operating Income: $2.275 million; Margin 2.43%; YoY -5.52%; QoQ -4.81%\n- Net Income: $1.041 million; Net Margin 1.11%; YoY +8.89%; QoQ -7.79%\n- EPS: $0.07; YoY +6.22%; QoQ -12.50%\n- EBITDA: $2.275 million; EBITDA Margin ~2.43%\n- Cash Flow: Operating CF $9.15 million; Free CF $8.11 million; Capex $1.04 million; Net Change in Cash +$2.01 million; Cash End $5.91 million\n- Balance Sheet: Total Assets $251.79 million; Total Liabilities $111.58 million; Cash & Equivalents $5.91 million; Total Debt $33.35 million; Net Debt $27.44 million; Equity $140.21 million; Goodwill $80.27 million; Intangible Assets $23.77 million; Current Assets $115.15 million; Current Liabilities $76.22 million; Working Capital positive ~ $38.93 million\n- Key Ratios: Gross Margin 29.99%; Operating Margin 2.43%; Net Margin 1.11%; P/E ~ 51.34x; P/S 2.29x; P/B 1.53x; Debt/Equity 0.07x; Interest Coverage ~4.03x; Cash Flow to Debt ~0.98x
Financial Highlights
- Revenue: $93.538 million; YoY +11.38%; QoQ +0.89%\n- Gross Profit: $28.055 million; Gross Margin 29.99%; YoY +15.48%; QoQ +1.94%\n- Operating Income: $2.275 million; Margin 2.43%; YoY -5.52%; QoQ -4.81%\n- Net Income: $1.041 million; Net Margin 1.11%; YoY +8.89%; QoQ -7.79%\n- EPS: $0.07; YoY +6.22%; QoQ -12.50%\n- EBITDA: $2.275 million; EBITDA Margin ~2.43%\n- Cash Flow: Operating CF $9.15 million; Free CF $8.11 million; Capex $1.04 million; Net Change in Cash +$2.01 million; Cash End $5.91 million\n- Balance Sheet: Total Assets $251.79 million; Total Liabilities $111.58 million; Cash & Equivalents $5.91 million; Total Debt $33.35 million; Net Debt $27.44 million; Equity $140.21 million; Goodwill $80.27 million; Intangible Assets $23.77 million; Current Assets $115.15 million; Current Liabilities $76.22 million; Working Capital positive ~ $38.93 million\n- Key Ratios: Gross Margin 29.99%; Operating Margin 2.43%; Net Margin 1.11%; P/E ~ 51.34x; P/S 2.29x; P/B 1.53x; Debt/Equity 0.07x; Interest Coverage ~4.03x; Cash Flow to Debt ~0.98x
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
93.54M
11.38%
0.89%
Gross Profit
28.06M
15.48%
1.94%
Operating Income
2.28M
-5.52%
-4.81%
Net Income
1.04M
8.89%
-7.79%
EPS
0.07
6.22%
-12.50%
Key Financial Ratios
grossProfitMargin
30%
operatingProfitMargin
2.43%
netProfitMargin
1.11%
returnOnEquity
0.74%
debtEquityRatio
0.07
operatingCashFlowPerShare
$0.72
freeCashFlowPerShare
$0.64
priceToBookRatio
1.53
priceEarningsRatio
51.34
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript data set contains no entries for EVI. As a result, there are no management quotes or verbatim commentary to extract in this section. The analysis below relies on the earnings release and SEC filing metrics to infer themes that management would typically emphasize (cash generation, balance sheet strength, and focus on disciplined capital allocation).
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Forward Guidance
The dataset does not include explicit forward guidance from EVI management for QQ4 2025 or beyond. In the absence of formal targets, the outlook is framed by industry dynamics and the quarter’s results: - Revenue trajectory appears positive with YoY growth of ~11% in Q3 and sequential momentum QoQ. Sustained demand for commercial and industrial equipment, parts, and service could support mid-single-digit growth into next year if mix remains favorable. - Profitability remains modest with operating margins around 2.4% and net margins near 1.1%, suggesting that structural margin expansion would likely require better price realization, mix shifts toward higher-margin services/parts, or cost discipline in SG&A. - Cash generation is a notable strength (operating CF of $9.15m and FCF of $8.11m in the quarter), which provides optionality for debt reduction, selective acquisitions, or return of capital if strategic opportunities arise. - Key risks include cyclicality in industrial demand, potential pressure on margins from competitive pricing, and impairment risk given elevated goodwill/intangible assets (~$104.0m). Investors should monitor: (1) trajectory of working capital and receivables turnover, (2) SG&A efficiency as revenue scales, (3) any management color on capital deployment priorities, and (4) changes in demand for replacement parts and service revenue.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
EVI Focus
29.99%
2.43%
0.74%
51.34%
DXPE
30.90%
8.37%
5.24%
9.96%
GIC
34.00%
6.48%
6.02%
19.36%
CNM
26.60%
10.90%
7.96%
16.49%
WSO-B
26.20%
11.60%
6.34%
29.22%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Strategic stance: Pragmatic and cash-generative, with a low-leverage balance sheet and positive operating cash flow support. The stock trades at a premium on earnings (P/E ~51x) but offers meaningful free cash flow and a conservative capital structure. The primary investment thesis rests on EVI’s ability to sustain revenue momentum while modestly improving margins through cost discipline and higher-margin service revenue. If management successfully monetizes service/parts growth and offsets SG&A with scale, then improved profitability could lift the valuation multiple over time. Monitoring points for investors include: (1) trend in gross and operating margins, (2) working capital efficiency (receivables, payables, inventory), (3) capex cadence and its impact on free cash flow, and (4) any explicit guidance or strategic road map from management on growth initiatives or M&A.
Key Investment Factors
Growth Potential
Growth potential rests on expanding service and replacement-part revenue, higher-margin maintenance contracts, and selective acquisitions in complementary industrial-distribution niches. The Q3 2025 revenue momentum supports a base-case growth trajectory in the low-to-mid single digits if demand remains resilient.
Profitability Risk
Key risk drivers include cyclicality in industrial activity, margin compression from competitive pricing or rising input costs, and impairment risk given substantial goodwill/intangible assets (~$104.0m). The modest operating margin (~2.4%) suggests any revenue growth must be accompanied by disproportionate cost control to lift returns.
Financial Position
Financial position is solid on cash flow and liquidity (Operating CF $9.15m; FCF $8.11m; Cash $5.91m) with conservative leverage (Total Debt $33.35m; Net Debt $27.44m; Debt/Equity ~0.07x). However, the balance sheet carries substantial goodwill/intangibles, which warrants sensitivity analysis to impairment risk amid margin or demand shifts.