Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | EVI INDUSTRIES, INC. | |
Entity Central Index Key | 0000065312 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 11,736,268 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 59,290 | $ 43,673 | $ 163,436 | $ 105,995 |
Cost of sales | 45,867 | 32,500 | 126,615 | 80,604 |
Gross profit | 13,423 | 11,173 | 36,821 | 25,391 |
Selling, general and administrative expenses | 12,316 | 9,286 | 32,180 | 20,313 |
Operating income | 1,107 | 1,887 | 4,641 | 5,078 |
Interest expense, net | 403 | 193 | 942 | 376 |
Income before provision for income taxes | 704 | 1,694 | 3,699 | 4,702 |
Provision for income taxes | 238 | 558 | 1,172 | 1,493 |
Net income | $ 466 | $ 1,136 | $ 2,527 | $ 3,209 |
Net earnings per share - basic | $ 0.04 | $ 0.10 | $ 0.20 | $ 0.28 |
Net earnings per share - diluted | $ 0.04 | $ 0.09 | $ 0.20 | $ 0.27 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Current assets | ||
Cash and cash equivalents | $ 6,730 | $ 1,330 |
Accounts receivable, net of allowance for doubtful accounts of $350 and $233, respectively | 26,572 | 16,026 |
Inventories, net | 27,830 | 15,350 |
Vendor deposits | 1,044 | 606 |
Contract assets | 3,457 | 1,012 |
Other current assets | 3,290 | 2,050 |
Total current assets | 68,923 | 36,374 |
Equipment and improvements, net | 5,070 | 2,983 |
Intangible assets, net | 22,757 | 15,775 |
Goodwill | 54,554 | 37,061 |
Other assets | 3,923 | 3,281 |
Total assets | 155,227 | 95,474 |
Current liabilities | ||
Accounts payable and accrued expenses | 18,065 | 11,742 |
Accrued employee expenses | 3,346 | 4,248 |
Customer deposits | 10,498 | 11,624 |
Contract liabilities | 514 | 259 |
Current portion of long-term debt | 1,195 | |
Total current liabilities | 32,423 | 29,068 |
Deferred tax liabilities, net | 1,074 | 558 |
Long-term debt, net | 41,550 | 8,817 |
Total liabilities | 75,047 | 38,443 |
Commitments and contingencies (Note 11) | ||
Common stock related to acquiree's Employee Stock Ownership Plan ("ESOP") | 4,240 | |
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; 11,799,077 shares issued at March 31, 2019 and 11,239,656 shares issued at June 30, 2018, including shares held in treasury | 294 | 281 |
Additional paid-in capital | 72,537 | 49,950 |
Retained earnings | 8,419 | 7,511 |
Treasury stock, 62,809 shares at March 31, 2019 and 52,686 at June 30, 2018, at cost | (1,070) | (711) |
Common stock related to acquiree's ESOP | (4,240) | |
Total shareholders' equity | 75,940 | 57,031 |
Total liabilities and shareholders' equity | $ 155,227 | $ 95,474 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts and trade notes receivable, allowance for doubtful accounts | $ 350 | $ 233 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.025 | $ 0.025 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 11,799,077 | 11,239,656 |
Treasury stock, shares | 62,809 | 52,686 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Common Stock Related to Acquiree's ESOP [Member] | Total |
Balance, beginning at Jun. 30, 2017 | $ 262 | $ 27,018 | $ (4) | $ 4,948 | $ 32,224 | |
Balance, shares, beginning at Jun. 30, 2017 | 10,499,481 | 31,768 | ||||
Dividends paid | (1,403) | (1,403) | ||||
Share repurchases | $ (303) | (303) | ||||
Share repurchases, shares | 10,786 | |||||
Issuance of restricted shares | $ 1 | (1) | ||||
Issuance of restricted shares, shares | 27,778 | |||||
Issuance of shares in connection with acquisition | $ 17 | 21,359 | 21,376 | |||
Issuance of shares in connection with acquisition, shares | 686,475 | |||||
Stock compensation | 1,164 | 1,164 | ||||
Net income | 3,209 | 3,209 | ||||
Balance, ending at Mar. 31, 2018 | $ 280 | 49,540 | $ (307) | 6,754 | 56,267 | |
Balance, shares, ending at Mar. 31, 2018 | 11,213,734 | 42,554 | ||||
Balance, beginning at Dec. 31, 2017 | $ 271 | 36,809 | $ (307) | 5,618 | 42,391 | |
Balance, shares, beginning at Dec. 31, 2017 | 10,865,374 | 42,554 | ||||
Issuance of shares in connection with acquisition | $ 9 | 12,340 | 12,349 | |||
Issuance of shares in connection with acquisition, shares | 348,360 | |||||
Stock compensation | 391 | 391 | ||||
Net income | 1,136 | 1,136 | ||||
Balance, ending at Mar. 31, 2018 | $ 280 | 49,540 | $ (307) | 6,754 | 56,267 | |
Balance, shares, ending at Mar. 31, 2018 | 11,213,734 | 42,554 | ||||
Balance, beginning at Jun. 30, 2018 | $ 281 | 49,950 | $ (711) | 7,511 | 57,031 | |
Balance, shares, beginning at Jun. 30, 2018 | 11,239,656 | 52,686 | ||||
Dividends paid | (1,619) | (1,619) | ||||
Share repurchases | $ (359) | (359) | ||||
Share repurchases, shares | 10,123 | |||||
Issuance of restricted shares | ||||||
Issuance of restricted shares, shares | 28,170 | |||||
Issuance of shares from employee stock purchase plan | 23 | 23 | ||||
Issuance of shares from employee stock purchase plan, shares | 726 | |||||
Issuance of shares in connection with acquisition | $ 13 | 21,277 | (4,240) | 17,050 | ||
Issuance of shares in connection with acquisition, shares | 530,525 | |||||
Stock compensation | 1,287 | 1,287 | ||||
Net income | 2,527 | 2,527 | ||||
Balance, ending at Mar. 31, 2019 | $ 294 | 72,537 | $ (1,070) | 8,419 | (4,240) | 75,940 |
Balance, shares, ending at Mar. 31, 2019 | 11,799,077 | 62,809 | ||||
Balance, beginning at Dec. 31, 2018 | $ 290 | 65,440 | $ (1,070) | 7,953 | 72,613 | |
Balance, shares, beginning at Dec. 31, 2018 | 11,619,230 | 62,809 | ||||
Issuance of shares in connection with acquisition | $ 4 | 6,648 | (4,240) | 2,412 | ||
Issuance of shares in connection with acquisition, shares | 179,847 | |||||
Stock compensation | 449 | 449 | ||||
Net income | 466 | 466 | ||||
Balance, ending at Mar. 31, 2019 | $ 294 | $ 72,537 | $ (1,070) | $ 8,419 | $ (4,240) | $ 75,940 |
Balance, shares, ending at Mar. 31, 2019 | 11,799,077 | 62,809 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends paid per share | $ .13 | $ .12 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net income | $ 2,527 | $ 3,209 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation and amortization | 1,894 | 1,023 |
Amortization of debt discount | 82 | 14 |
Provision for bad debt expense | 181 | 25 |
Share-based compensation | 1,287 | 1,164 |
Inventory reserve | 125 | 77 |
Provision for deferred income taxes | 234 | 388 |
(Increase) decrease in operating assets: | ||
Accounts receivable | (4,847) | (1,630) |
Inventories | (5,759) | (900) |
Vendor deposits | (438) | 278 |
Contract assets | (2,445) | (2,792) |
Other assets | (1,384) | (731) |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued expenses | 2,899 | (4,327) |
Accrued employee expenses | (1,600) | 1,261 |
Customer deposits | (2,629) | 1,917 |
Contract liabilities | 255 | (466) |
Net cash used by operating activities | (9,618) | (1,490) |
Investing activities: | ||
Capital expenditures | (1,741) | (395) |
Cash paid for acquisitions, net of cash acquired | (12,542) | (13,352) |
Net cash used by investing activities | (14,283) | (13,747) |
Financing activities: | ||
Dividends paid | (1,619) | (1,403) |
Proceeds from borrowings | 110,963 | 58,387 |
Debt repayments | (79,435) | (40,650) |
Payment of debt issuance costs | (272) | |
Repurchases of common stock in satisfaction of employee tax withholding obligations | (359) | (303) |
Issuances of common stock | 23 | |
Net cash provided by financing activities | 29,301 | 16,031 |
Net increase in cash and cash equivalents | 5,400 | 794 |
Cash and cash equivalents at beginning of period | 1,330 | 727 |
Cash and cash equivalents at end of period | 6,730 | 1,521 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 799 | 300 |
Cash paid during the period for income taxes | 1,354 | 855 |
Supplemental disclosure of non-cash financing activities | ||
Common stock issued for acquisitions | $ 21,290 | $ 21,376 |
General
General | 9 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | Note (1) - General: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Article 10 of Regulation S-X related to interim period financial statements. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include certain information and footnotes required by GAAP for complete financial statements. However, in management’s opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals and adjustments) which are necessary in order to state fairly the Company’s results of operations, financial position, shareholders’ equity and cash flows as of and for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or any other future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes, including the Summary of Significant Accounting Policies, included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018. The June 30, 2018 balance sheet information contained herein was derived from the audited consolidated financial statements as of that date included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The estimates and assumptions made may not prove to be correct, and actual results could differ from the estimates. Certain prior period amounts in the accompanying unaudited condensed consolidated financial statements have been reclassified in order to be comparable to the current period’s classifications. These reclassifications had no effect on previously reported net income. The Company, through its wholly-owned subsidiaries, is a distributor that generates revenues by selling, leasing or renting, through its extensive sales organization, commercial, industrial and vended laundry, dry-cleaning, and material handling equipment, steam and hot water boilers, water reuse and filtration systems, and related replacement parts and accessories. Additionally, the Company, through its wholly-owned subsidiaries, designs, plans, and installs turn-key laundry, dry cleaning, boiler, and water filtration systems and provides maintenance services through its robust technical service organization. The Company’s customers include retail, commercial, industrial, institutional, and government customers. Purchases made by customers range from parts and accessories, to single or multiple units of equipment, to large complex systems, as well as installation and maintenance services. Prior to the completion of the Company’s first acquisition pursuant to its “buy-and-build” growth strategy, the Company’s operations consisted solely of the business and operations of Steiner-Atlantic Corp. (“Steiner-Atlantic”), a wholly-owned subsidiary of the Company. Beginning in 2015, the Company implemented a “buy-and-build” growth strategy and has since acquired eleven businesses under such growth strategy, including six business acquisitions consummated during the nine months ended March 31, 2019 (as described in further detail in Note 3). The financial position, including assets and liabilities, and results of operations of the acquired businesses following the respective closing dates are included in the Company’s consolidated financial statements. In addition to the activities described above, the Company, through an indirect wholly-owned subsidiary, also owns the worldwide rights to the name DRYCLEAN USA® and licenses the right to use such name for a fee to retail dry cleaners in the United States, the Caribbean and Latin America. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note (2) – Summary of Significant Accounting Policies: Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”). Topic 606 supersedes the revenue requirements in ASU Topic 605, “Revenue Recognition” ("Topic 605"), and requires the recognition of revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard also includes Subtopic 340-40, “Other Assets and Deferred Costs - Contracts with Customers” (“Subtopic 340-40”), which sets forth requirements relating to the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Collectively, the Company refers to Topic 606 and Subtopic 340-40 as the "New Revenue Standard." The Company adopted the New Revenue Standard on July 1, 2018 using the modified retrospective approach. The New Revenue Standard did not have an impact on the amount and timing of the Company’s revenue recognition through July 1, 2018. Results for reporting periods beginning on and after July 1, 2018 are presented under the New Revenue Standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. Revenue Recognition Performance Obligations Revenue primarily consists of revenues from the sale or leasing of commercial and industrial laundry and dry cleaning equipment and steam and hot water boilers manufactured by others; the sale of related replacement parts and accessories; and, to a lesser extent, the provision of installation and maintenance services. The Company generates revenue primarily from the sale of finished products to customers. Therefore, the majority of the Company’s contracts are short-term in nature and have a single performance obligation (to deliver products), and the Company’s performance obligation is satisfied when control of the product is transferred to the customer. Other contracts contain a combination of equipment sales and services expected to be performed in the near-term, which services are distinct and accounted for as separate performance obligations. Revenue is recognized on these contracts when control transfers to the Company’s customers via shipment of products or provision of services and the Company has the right to receive consideration for these products and services. Additionally, from time to time, the Company enters into longer-termed contracts which provide for the sale of the equipment by the Company and the provision by the Company of related installation and construction services. The installation on these types of contracts is usually completed within six to twelve months. From time to time, the Company also enters into maintenance contracts and ad hoc maintenance and installation service contracts. These longer-term contracts, maintenance contracts and ad hoc maintenance and installation service contracts have a single performance obligation where revenue is recognized over time. The Company measures revenue as the amount of consideration it expects to be entitled to receive in exchange for its goods or services, net of any taxes collected from customers and subsequently remitted to governmental authorities. Costs associated with shipping and handling activities performed after the customer obtains control are accounted for as fulfillment costs. Revenue from products transferred to customers at a point in time include commercial and vended laundry parts and equipment sales and accounted for approximately 80% of the Company’s revenue for both the three and nine months ended March 31, 2019. Revenue from products transferred to customers at a point in time is recognized when obligations under the terms of the contract with the Company’s customer are satisfied, which generally occurs with the transfer of control upon shipment. Revenues that are recognized over time include (i) longer-termed contracts that include equipment purchase with installation and construction services, (ii) maintenance contracts, and (iii) ad hoc maintenance and installation service contracts. Revenue from products and services that are recognized over time accounted for approximately 20% of the Company’s revenue for both the three and nine months ended March 31, 2019. Contract Assets and Liabilities Contract assets and liabilities are presented in the Company’s condensed consolidated balance sheets. Contract assets consist of unbilled amounts resulting from sales under longer-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. The Company typically receives progress payments on sales under longer-term contracts as work progresses, although for some contracts, the Company may be entitled to receive an advance payment. Contract liabilities consist of advanced payments, billings in excess of costs incurred and deferred revenue. Significant Accounting Policies Except for the New Revenue Standard adopted on July 1, 2018, there have been no changes to the Company’s significant accounting policies from those described in Note 1 to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018. |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note (3) – Acquisitions SEI Acquisition On September 12, 2018, the Company completed the acquisition (the “SEI Acquisition”) of Scott Equipment Inc. (“SEI”), a Texas-based distributor of commercial, industrial, and vended laundry products and provider of installation and maintenance services to the new and replacement segments of the commercial, industrial and vended laundry industry. In the SEI Acquisition, the Company, indirectly through its newly-formed wholly-owned subsidiary, Scott Equipment Inc. (“Scott Equipment”), purchased substantially all of the assets of SEI for a purchase price consisting of approximately $6,500,000 in cash and 209,678 shares of the Company’s common stock. The Company funded the cash consideration with borrowings under its credit facility at the time of the SEI Acquisition. Fees and expenses related to the SEI Acquisition, consisting primarily of legal and other professional fees, totaled approximately $65,000 and are classified as selling, general and administrative expenses in the Company’s condensed consolidated statement of operations for the nine months ended March 31, 2019. The Company, indirectly through Scott Equipment, also assumed certain of the liabilities of SEI. The total purchase price for accounting purposes was $15.9 million, which included cash acquired of $2.8 million. The SEI Acquisition was treated for accounting purposes as a purchase of SEI using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations Purchase price consideration: Cash consideration, net of cash acquired (a) $ 3,709 Stock consideration (b) 9,436 Total purchase price consideration, net of cash acquired $ 13,145 (a)Includes $6,500,000 paid net of $2.8 million of cash acquired. (b)Calculated as 209,678 shares of the Company’s common stock, multiplied by $45.00, the closing price of the Company’s common stock on the closing date. Allocation of purchase price consideration: Accounts receivable $ 2,658 Inventory 1,595 Other assets 156 Property, plant and equipment 424 Intangible assets 3,100 Accounts payable and accrued expenses (740 ) Customer deposits (398 ) Total identifiable net assets 6,795 Goodwill 6,350 Total $ 13,145 The Company is continuing its valuation of the net assets acquired, which is subject to adjustment in accordance with the asset purchase agreement. Accordingly, the purchase price allocation set forth above reflects preliminary fair value estimates based on preliminary work and analyses performed by management and is subject to change as additional information to assist in determining the fair value of the net assets acquired at the closing date is obtained during the post-closing measurement period of up to one year. The Company is also still assessing certain working capital items. Intangible assets consist of $1.3 million allocated to the Scott Equipment trade name and $1.8 million allocated to customer-related intangible assets. The Scott Equipment trade name is indefinite-lived and therefore not subject to amortization. The Scott Equipment trade name will be evaluated for impairment annually or more frequently if an event occurs or circumstances change that indicate it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets will be amortized over 10 years. Goodwill is expected to be amortized and deductible for tax purposes over 15 years. Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the SEI Acquisition. PAC Acquisition On February 5, 2019, the Company completed the acquisition (the “PAC Acquisition”) of PAC Industries Inc. (“PAC”), a Pennsylvania-based distributor of commercial, industrial, and vended laundry products and provider of installation and maintenance services to the new and replacement segments of the commercial, industrial and vended laundry industry, pursuant to a merger whereby PAC merged with and into PAC Industries Inc., a newly-formed wholly-owned subsidiary of the Company (“PAC Industries”). The purchase price in the PAC Acquisition consisted of approximately $6,400,000 in cash and 179,847 shares of the Company’s common stock. The Company funded the cash consideration with borrowings under its credit facility. Fees and expenses related to the PAC Acquisition, consisting primarily of legal and other professional fees, totaled approximately $182,000 and are classified as selling, general and administrative expenses in the Company’s condensed consolidated statements of operations for the three and nine months ended March 31, 2019. The total purchase price for accounting purposes was $13.1 million, which included cash acquired of $1.1 million. The PAC Acquisition was treated for accounting purposes as a purchase of PAC using the acquisition method of accounting in accordance with ASC 805, Business Combinations Purchase price consideration: Cash consideration, net of cash acquired (a) $ 5,312 Stock consideration (b) 6,653 Total purchase price consideration, net of cash acquired $ 11,965 (a)Includes $6,400,000 paid net of $1.1 million of cash acquired. (b)Calculated as 179,847 shares of the Company’s common stock, multiplied by $36.99, the closing price of the Company’s common stock on the closing date. Allocation of purchase price consideration: Accounts receivable $ 2,231 Inventory 2,136 Other assets 158 Property, plant and equipment 357 Intangible assets 3,000 Accounts payable and accrued expenses (1,912 ) Customer deposits (465 ) Assumption of debt (200 ) Total identifiable net assets 5,305 Goodwill 6,660 Total $ 11,965 The Company is continuing its valuation of the net assets acquired, which is subject to adjustment in accordance with the merger agreement. Accordingly, the purchase price allocation set forth above reflects preliminary fair value estimates based on preliminary work and analyses performed by management and is subject to change as additional information to assist in determining the fair value of the net assets acquired at the closing date is obtained during the post-closing measurement period of up to one year. The Company is also still assessing certain working capital items. Intngible assets consist of $1.1 million allocated to the PAC Industries trade name and $1.9 million allocated to customer-related intangible assets. The PAC Industries trade name is indefinite-lived and therefore not subject to amortization. The PAC Industries trade name will be evaluated for impairment annually or more frequently if an event occurs or circumstances change that indicate it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets will be amortized over 10 years. Goodwill is expected to be amortized and deductible for tax purposes over 15 years. Goodwill is attributable primarily to the assembled workforce of PAC, as well as benefits from the increased scale of the Company as a result of the PAC Acquisition. In connection with the PAC Acquisition the Company transferred 114,634 shares to PAC’s ESOP. These shares cannot be traded until six months after the acquisition date. Per the terms of the ESOP agreement, if there is a distribution event during the six-month period where these shares cannot be traded, the Company would be required to purchase the participant’s shares at fair market value. Due to the Company’s obligation under this put option, the distributed shares subject to the put option and the shares held by the ESOP are classified as temporary equity in the mezzanine section of the consolidated balance sheets. Other Acquisitions In addition to the SEI Acquisition and the PAC Acquisition, during the nine months ended March 31, 2019, the Company completed the acquisition of four other companies (Industrial Laundry Services, Inc. on September 4, 2018, Washington Automated, Inc. on November 6, 2018, Skyline Equipment, Inc. on November 14, 2018 and Worldwide Laundry, Inc. on November 16, 2018), each of which is a distributor of commercial, industrial, and vended laundry products and a provider of installation and maintenance services to the new and replacement segments of the commercial, industrial and vended laundry industry. Three of these acquisitions were completed by the Company, indirectly through a newly-formed wholly-owned subsidiary, which purchased substantially all of the assets and assumed certain of the liabilities of the acquired entity. The other acquisition was effected by a merger of the acquired entity with and into a newly-formed wholly-owned subsidiary of the Company. The total consideration for these four transactions consisted of $3.5 million in cash, net of $738,000 of cash acquired, and 141,000 shares of the Company’s common stock. The Company funded the cash consideration for each acquisition with credit facility borrowings. Each acquisition was treated for accounting purposes as a purchase of the acquired business using the acquisition method of accounting in accordance with ASC 805, Business Combinations Supplemental Pro Forma Results of Operations The following unaudited supplemental pro forma information presents the results of operations of the Company, after giving effect to the SEI Acquisition, the PAC Acquisition and the four other acquisitions noted above, as if the Company had completed each such acquisition on July 1, 2017, but using the preliminary estimates of the fair values of the assets acquired and liabilities assumed as of the respective closing dates of the acquisitions. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the Company would have been if the acquisitions had occurred on the date assumed, nor are they indicative of future results of operations. For the nine months ended (in thousands) 2019 2018 Revenues $ 187,270 $ 154,046 Net income 3,521 5,324 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note (4) - Earnings Per Share: For the nine months ended For the three months ended 2019 2018 2019 2018 Net income $ 2,527 $ 3,209 $ 466 $ 1,136 Less: distributed and undistributed 181 243 33 86 Net income allocated to $ 2,346 $ 2,966 $ 433 $ 1,050 Weighted average shares 11,463 10,728 11,666 11,020 Dilutive common share 497 417 479 499 Weighted average shares 11,960 11,145 12,145 11,519 Basic earnings per share $ 0.20 $ 0.28 $ 0.04 $ 0.10 Diluted earnings per share $ 0.20 $ 0.27 $ 0.04 $ 0.09 At March 31, 2019 and 2018, other than 909,277 shares and 919,224 shares, respectively, of unvested common stock subject to restricted stock awards or restricted stock units, there were no potentially dilutive securities outstanding. |
Debt
Debt | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note (5) - Debt: March 31, June 30, Term Loan $ — $ 6,375 Revolving Credit Facility/Line of Credit 41,800 3,697 Less: unamortized discount and deferred financing costs (250 ) (60 ) Total debt, net 41,550 10,012 Less: current maturities of long-term debt — (1,195 ) Total long-term debt $ 41,550 $ 8,817 On November 2, 2018, the Company entered into a syndicated credit agreement (the “2018 Credit Agreement”) for a five-year revolving credit facility in the maximum aggregate principal amount of up to $100 million, with an accordion feature to increase the revolving credit facility by up to $40 million for a total of $140 million. A portion of the revolving credit facility is available for swingline loans of up to a sublimit of $5 million and for the issuance of standby letters of credit of up to a sublimit of $10 million. Borrowings (other than swingline loans) under the 2018 Credit Agreement bear interest at a rate, at the Company’s election at the time of borrowing, equal to (a) LIBOR plus a margin that ranges from 1.25% to 1.75% depending on the Company’s consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the “Consolidated Leverage Ratio”) or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) the one month LIBOR rate plus 100 basis points (such highest rate, the “Base Rate”), plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. Swingline loans bear interest calculated at the Base Rate plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. The 2018 Credit Agreement has a term of five years and matures on November 2, 2023. The 2018 Credit Agreement contains certain covenants, including financial covenants requiring the Company to comply with maximum leverage ratios and minimum interest coverage ratios. The 2018 Credit Agreement also contains other provisions which may restrict the Company’s ability to, among other things, dispose of or acquire assets or businesses, incur additional indebtedness, make certain investments and capital expenditures, pay dividends, repurchase shares and enter into transactions with affiliates. At March 31, 2019, the Company was in compliance with its covenants under the 2018 Credit Agreement and $7.2 million was available to borrow under the revolving credit facility. The obligations of the Company under the 2018 Credit Agreement are secured by substantially all of the assets of the Company and certain of its subsidiaries, and are guaranteed, jointly and severally, by certain of the Company’s subsidiaries. Prior to entering into the 2018 Credit Agreement, the Company had a credit facility (the “Prior Credit Facility”) with another lender, which included a revolving line of credit of up to $20.0 million (subject to a cap determined using an asset-based formula) and a term loan. In connection with its entry into the 2018 Credit Agreement on November 2, 2018, the Company repaid all outstanding amounts under, and terminated, the Prior Credit Facility. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note (6) - Income Taxes: Income taxes are recorded in the Company’s quarterly financial statements based on the Company’s estimated annual effective income tax rate, subject to adjustment for discrete events, should they occur. As of March 31, 2019 and June 30, 3018, the Company had net deferred tax liabilities of approximately $1.1 million and $558,000, respectively. Consistent with the guidance of the FASB regarding accounting for income taxes, the Company regularly estimates its ability to recover deferred tax assets and establishes a valuation allowance against deferred tax assets to reduce the balance to amounts expected to be recoverable. This evaluation includes the consideration of several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods over which temporary differences reverse, the expected reversal of deferred tax liabilities, past and projected taxable income and available tax planning strategies. As of March 31, 2019, management believed that it was more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the net amount of the Company’s deferred tax assets over the periods during which temporary differences reverse. The Company follows ASC Topic 740-10-25, “Accounting for Uncertainty in Income Taxes” (“ASC 740”). ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. During the three and nine months ended March 31, 2019 and 2018, the Company’s accounting for income taxes in accordance with this standard did not result in any adjustment to the Company’s provision for income taxes. As of March 31, 2019, the Company was subject to potential federal and state tax examinations for the tax years 2015 through 2018. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Note (7) – Shareholders’ Equity: On December 12, 2017, the Company’s Board of Directors declared a cash dividend on the Company’s common stock of $0.12 per share (an aggregate of $1.4 million), which was paid on January 9, 2018 to stockholders of record at the close of business on December 26, 2017. |
Equity Incentive Plan
Equity Incentive Plan | 9 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plan | Note (8) – Equity Incentive Plan: The following is a summary of the restricted stock awards and restricted stock units granted under the Plan during the nine and three months ended March 31, 2019 and 2018: Nine months ended Three months ended 2019 2018 2019 2018 Restricted Stock Awards 6,845 56,426 — 47,444 Restricted Stock Units 27,500 — 12,500 — Total 34,345 56,426 12,500 47,444 As of March 31, 2019, the Company had $14.5 million and $972,000 of total unrecognized compensation expense related to restricted stock awards and restricted stock units, respectively, granted under the Plan. The following is a summary of non-vested restricted stock activity as of and for the nine months ended March 31, 2019: Restricted Stock Awards Restricted Stock Units Shares Weighted- Shares Weighted- Non-vested awards or units outstanding at June 30, 2018 903,102 $ 18.41 — $ — Granted 6,845 36.53 27,500 36.24 Vested (28,170 ) 15.38 — — Forfeited — — — — Non-vested awards or units outstanding at March 31, 2019 881,777 $ 18.65 27,500 $ 36.24 Employee Stock Purchase Plan The Company’s employee stock purchase plan commenced on July 1, 2018 and provides for six-month offering periods, the first of which expired on December 31, 2018. During the nine months ended March 31, 2019, 726 shares of common stock were issued under the Company’s employee stock purchase plan for which the Company received net proceeds of $23,000. There were no shares issued under the Company’s employee stock purchase plan during the three months ended March 31, 2019. |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note (9) – Transactions with Related Parties: The Company’s wholly-owned subsidiary, Steiner-Atlantic, leases 28,000 square feet of warehouse and office space from an affiliate of Michael S. Steiner, a director and Executive Vice President and Secretary of the Company, pursuant to a lease agreement dated November 1, 2014, as amended. The lease term was extended during December 2018 to run through December 31, 2019. Monthly base rental payments under the lease are $12,000. In addition to base rent, Steiner-Atlantic is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Payments under this lease totaled approximately $108,000 and $101,000 during the nine months ended March 31, 2019 and 2018, respectively. On October 10, 2016, the Company’s wholly-owned subsidiary, Western State Design, Inc. (“Western State Design”), entered into a lease agreement pursuant to which it leases 17,600 square feet of warehouse and office space from an affiliate of Dennis Mack, a director and Executive Vice President, Corporate Strategy of the Company, and Tom Marks, Executive Vice President, Business Development of the Company. Monthly base rental payments are $12,000 during the initial term of the lease. In addition to base rent, Western State Design is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. The lease has an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. Payments under this lease totaled approximately $108,000 during each of the nine months ended March 31, 2019 and 2018. On October 31, 2017, the Company’s wholly-owned subsidiary, Tri-State Technical Services, Inc. (“Tri-State”), entered into lease agreements pursuant to which it leases a total of 81,000 square feet of warehouse and office space from an affiliate of Matt Stephenson, President of Tri-State. Monthly base rental payments total $21,000 during the initial terms of the leases. In addition to base rent, Tri-State is responsible under the leases for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Each lease has an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. Payments under these leases totaled approximately $189,000 during the nine months ended March 31, 2019 and $105,000 during the period from October 31, 2017 through March 31, 2018. On February 9, 2018, the Company’s wholly-owned subsidiary, AAdvantage Laundry Systems, Inc. (“AAdvantage”), entered into a lease agreement pursuant to which it leases a total of 5,000 square feet of warehouse and office space from an affiliate of Mike Zuffinetti, Chief Executive Officer of AAdvantage. Monthly base rental payments are $3,950 during the initial term of the lease. In addition to base rent, AAdvantage is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. The lease has an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. During February 2018, AAdvantage entered into a month-to-month lease agreement with an affiliate of Mike Zuffinetti for a total of 17,000 square feet of warehouse and office space. Monthly base rental payments under this lease were $13,500. This month-to-month lease was terminated on October 31, 2018. In addition, on November 1, 2018, AAdvantage entered into a lease agreement pursuant to which it leases warehouse and office space from an affiliate of Mike Zuffinetti. Monthly base rental payments were $26,000 initially. Pursuant to the lease agreement, on January 1, 2019, the lease expanded to cover additional warehouse space and, in connection therewith, monthly base rental payments increased to $36,000. In addition to base rent, AAdvantage is responsible under the lease for costs related to real estate taxes, utilities, maintenance, repairs and insurance. The lease has an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. Payments under the leases described in this paragraph totaled approximately $220,000 during the nine months ended March 31, 2019. Payments under the leases from February 9, 2018 through March 31, 2018 were approximately $35,000. On September 12, 2018, the Company’s wholly-owned subsidiary, Scott Equipment, entered into lease agreements pursuant to which it leases a total of 18,000 square feet of warehouse and office space from an affiliate of Scott Martin, President of Scott Equipment. Monthly base rental payments total $11,000 during the initial terms of the leases. In addition to base rent, Scott Equipment is responsible under the leases for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Each lease has an initial term of five years and provides for two successive three-year renewal terms at the option of the Company. Payments under these leases totaled approximately $77,000 during the nine months ended March 31, 2019. On February 5, 2019, the Company’s wholly-owned subsidiary, PAC Industries, entered into two lease agreements pursuant to which it leases a total of 29,500 square feet of warehouse and office space from an affiliate of Frank Costabile, President of PAC Industries, and Rocco Costabile, Director of Finance of PAC Industries. Monthly base rental payments total $14,600 during the initial terms of the leases. In addition to base rent, PAC Industries is responsible under the leases for costs related to real estate taxes, utilities, maintenance, repairs and insurance. Each lease has an initial term of four years and provides for two successive three-year renewal terms at the option of the Company. Payments under these leases totaled approximately $29,000 during the nine months ended March 31, 2019. |
Recently Issued Accounting Guid
Recently Issued Accounting Guidance | 9 Months Ended |
Mar. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Guidance | Note (10) – Recently Issued Accounting Guidance In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which is designed to simplify the subsequent measurement of goodwill. The new guidance will eliminate the second step from the goodwill impairment test required in computing the implied fair value of goodwill. Instead, under the new guidance, an entity will be required to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and, if applicable, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the charge recognized should not exceed the total amount of goodwill allocated to that reporting unit. If applicable, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when performing the goodwill impairment test. The amendments in this guidance are effective for public business entities for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 (the fiscal year ending June 30, 2021 for the Company), with early adoption permitted. The Company is currently evaluating the impact that adopting this guidance may have on its consolidated financial statements. Other than as described above, management does not believe that accounting standards and updates which have been issued but are not yet effective will have a material impact on the Company’s consolidated financial statements upon adoption. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note (11) – Commitments and Contingencies |
Goodwill
Goodwill | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note (12) – Goodwill Balance at June 30, 2018 $ 37,061 Goodwill from the SEI Acquisition 6,350 Goodwill from the PAC Acquisition 6,660 Goodwill from the other acquisitions (as described in Note 3) 4,483 Balance at March 31, 2019 $ 54,554 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Adoption of New Revenue Standard | Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”). Topic 606 supersedes the revenue requirements in ASU Topic 605, “Revenue Recognition” ("Topic 605"), and requires the recognition of revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard also includes Subtopic 340-40, “Other Assets and Deferred Costs - Contracts with Customers” (“Subtopic 340-40”), which sets forth requirements relating to the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Collectively, the Company refers to Topic 606 and Subtopic 340-40 as the "New Revenue Standard." The Company adopted the New Revenue Standard on July 1, 2018 using the modified retrospective approach. The New Revenue Standard did not have an impact on the amount and timing of the Company’s revenue recognition through July 1, 2018. Results for reporting periods beginning on and after July 1, 2018 are presented under the New Revenue Standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. |
Revenue Recognition | Revenue Recognition Performance Obligations Revenue primarily consists of revenues from the sale or leasing of commercial and industrial laundry and dry cleaning equipment and steam and hot water boilers manufactured by others; the sale of related replacement parts and accessories; and, to a lesser extent, the provision of installation and maintenance services. The Company generates revenue primarily from the sale of finished products to customers. Therefore, the majority of the Company’s contracts are short-term in nature and have a single performance obligation (to deliver products), and the Company’s performance obligation is satisfied when control of the product is transferred to the customer. Other contracts contain a combination of equipment sales and services expected to be performed in the near-term, which services are distinct and accounted for as separate performance obligations. Revenue is recognized on these contracts when control transfers to the Company’s customers via shipment of products or provision of services and the Company has the right to receive consideration for these products and services. Additionally, from time to time, the Company enters into longer-termed contracts which provide for the sale of the equipment by the Company and the provision by the Company of related installation and construction services. The installation on these types of contracts is usually completed within six to twelve months. From time to time, the Company also enters into maintenance contracts and ad hoc maintenance and installation service contracts. These longer-term contracts, maintenance contracts and ad hoc maintenance and installation service contracts have a single performance obligation where revenue is recognized over time. The Company measures revenue as the amount of consideration it expects to be entitled to receive in exchange for its goods or services, net of any taxes collected from customers and subsequently remitted to governmental authorities. Costs associated with shipping and handling activities performed after the customer obtains control are accounted for as fulfillment costs. Revenue from products transferred to customers at a point in time include commercial and vended laundry parts and equipment sales and accounted for approximately 80% of the Company’s revenue for both the three and nine months ended March 31, 2019. Revenue from products transferred to customers at a point in time is recognized when obligations under the terms of the contract with the Company’s customer are satisfied, which generally occurs with the transfer of control upon shipment. Revenues that are recognized over time include (i) longer-termed contracts that include equipment purchase with installation and construction services, (ii) maintenance contracts, and (iii) ad hoc maintenance and installation service contracts. Revenue from products and services that are recognized over time accounted for approximately 20% of the Company’s revenue for both the three and nine months ended March 31, 2019. Contract Assets and Liabilities Contract assets and liabilities are presented in the Company’s condensed consolidated balance sheets. Contract assets consist of unbilled amounts resulting from sales under longer-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. The Company typically receives progress payments on sales under longer-term contracts as work progresses, although for some contracts, the Company may be entitled to receive an advance payment. Contract liabilities consist of advanced payments, billings in excess of costs incurred and deferred revenue. |
Significant Accounting Policies | Significant Accounting Policies Except for the New Revenue Standard adopted on July 1, 2018, there have been no changes to the Company’s significant accounting policies from those described in Note 1 to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Business Acquisition [Line Items] | |
Schedule of Allocation of Purchase Price Consideration | These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the Company would have been if the acquisitions had occurred on the date assumed, nor are they indicative of future results of operations. For the nine months ended (in thousands) 2019 2018 Revenues $ 187,270 $ 154,046 Net income 3,521 5,324 |
SEI Technical Services [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price | The computation of the purchase price consideration and the preliminary allocation of the consideration to the net assets acquired are presented in the following tables (in thousands): Purchase price consideration: Cash consideration, net of cash acquired (a) $ 3,709 Stock consideration (b) 9,436 Total purchase price consideration, net of cash acquired $ 13,145 (a)Includes $6,500,000 paid net of $2.8 million of cash acquired. (b)Calculated as 209,678 shares of the Company’s common stock, multiplied by $45.00, the closing price of the Company’s common stock on the closing date. |
Schedule of Allocation of Purchase Price Consideration | Allocation of purchase price consideration: Accounts receivable $ 2,658 Inventory 1,595 Other assets 156 Property, plant and equipment 424 Intangible assets 3,100 Accounts payable and accrued expenses (740 ) Customer deposits (398 ) Total identifiable net assets 6,795 Goodwill 6,350 Total $ 13,145 |
PAC Industries Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price | The computation of the purchase price consideration and the preliminary allocation of the consideration to the net assets acquired are presented in the following tables (in thousands): Purchase price consideration: Cash consideration, net of cash acquired (a) $ 5,312 Stock consideration (b) 6,653 Total purchase price consideration, net of cash acquired $ 11,965 (a)Includes $6,400,000 paid net of $1.1 million of cash acquired. (b)Calculated as 179,847 shares of the Company’s common stock, multiplied by $36.99, the closing price of the Company’s common stock on the closing date. |
Schedule of Allocation of Purchase Price Consideration | Allocation of purchase price consideration: Accounts receivable $ 2,231 Inventory 2,136 Other assets 158 Property, plant and equipment 357 Intangible assets 3,000 Accounts payable and accrued expenses (1,912 ) Customer deposits (465 ) Assumption of debt (200 ) Total identifiable net assets 5,305 Goodwill 6,660 Total $ 11,965 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted earnings per share for the nine and three months ended March 31, 2019 and 2018 are computed as follows (in thousands, except per share data): For the nine months ended For the three months ended 2019 2018 2019 2018 Net income $ 2,527 $ 3,209 $ 466 $ 1,136 Less: distributed and undistributed 181 243 33 86 Net income allocated to $ 2,346 $ 2,966 $ 433 $ 1,050 Weighted average shares 11,463 10,728 11,666 11,020 Dilutive common share 497 417 479 499 Weighted average shares 11,960 11,145 12,145 11,519 Basic earnings per share $ 0.20 $ 0.28 $ 0.04 $ 0.10 Diluted earnings per share $ 0.20 $ 0.27 $ 0.04 $ 0.09 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Long-term debt as of March 31, 2019 and June 30, 2018 are as follows (in thousands): March 31, June 30, Term Loan $ — $ 6,375 Revolving Credit Facility/Line of Credit 41,800 3,697 Less: unamortized discount and deferred financing costs (250 ) (60 ) Total debt, net 41,550 10,012 Less: current maturities of long-term debt — (1,195 ) Total long-term debt $ 41,550 $ 8,817 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Awards and Restricted Stock Units | The following is a summary of the restricted stock awards and restricted stock units granted under the Plan during the nine and three months ended March 31, 2019 and 2018: Nine months ended Three months ended 2019 2018 2019 2018 Restricted Stock Awards 6,845 56,426 — 47,444 Restricted Stock Units 27,500 — 12,500 — Total 34,345 56,426 12,500 47,444 |
Schedule of Non-vested Restricted Stock Activity | The following is a summary of non-vested restricted stock activity as of and for the nine months ended March 31, 2019: Restricted Stock Awards Restricted Stock Units Shares Weighted- Shares Weighted- Non-vested awards or units outstanding at June 30, 2018 903,102 $ 18.41 — $ — Granted 6,845 36.53 27,500 36.24 Vested (28,170 ) 15.38 — — Forfeited — — — — Non-vested awards or units outstanding at March 31, 2019 881,777 $ 18.65 27,500 $ 36.24 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): Balance at June 30, 2018 $ 37,061 Goodwill from the SEI Acquisition 6,350 Goodwill from the PAC Acquisition 6,660 Goodwill from the other acquisitions (as described in Note 3) 4,483 Balance at March 31, 2019 $ 54,554 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - Revenue [Member] | 3 Months Ended | 9 Months Ended |
Mar. 31, 2019 | Mar. 31, 2019 | |
Revenue from products transferred to customers at point in time [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 80.00% | 80.00% |
Revenues that are recognized over time [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | 20.00% |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) | Feb. 05, 2019 | Sep. 12, 2018 | Mar. 31, 2019 |
SEI Technical Services [Member] | |||
Business Acquisition [Line Items] | |||
Cash Consideration | $ 6,500,000 | ||
Stock Consideration | 209,678 | ||
Acquisition legal and other professional fees | $ 65,000 | ||
Total purchase price for accounting purposes | 15,900,000 | ||
Cash acquired | $ 2,800,000 | ||
Closing price | $ 45 | ||
SEI Technical Services [Member] | Customer-related intangible assets [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets acquired | $ 1,800,000 | ||
Amortized life | 10 years | ||
SEI Technical Services [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Indefinite lived intangible assets acquired | $ 1,300,000 | ||
SEI Technical Services [Member] | Goodwill [Member] | |||
Business Acquisition [Line Items] | |||
Amortized life | 15 years | ||
PAC Technical Services [Member] | |||
Business Acquisition [Line Items] | |||
Cash Consideration | $ 6,400,000 | ||
Stock Consideration | 179,847 | ||
PAC Technical Services [Member] | Customer-related intangible assets [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets acquired | $ 1,100,000 | ||
Amortized life | 10 years | ||
PAC Technical Services [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Indefinite lived intangible assets acquired | $ 1,900,000 | ||
PAC Technical Services [Member] | Goodwill [Member] | |||
Business Acquisition [Line Items] | |||
Amortized life | 15 years | ||
PAC Industries Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares transferred to PAC's ESOP | 114,634 | ||
Acquisition legal and other professional fees | $ 182,000 | ||
Total purchase price for accounting purposes | 13,100,000 | ||
Cash acquired | $ 1,100,000 | ||
Closing price | $ 36.99 | ||
Other Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Cash Consideration | $ 3,500,000 | ||
Stock Consideration | 141,000 | ||
Cash acquired | $ 738,000 | ||
Other Acquisition [Member] | Customer-related intangible assets [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets acquired | 1,300,000 | ||
Other Acquisition [Member] | Goodwill [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets acquired | 4,500,000 | ||
Other Acquisition [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Indefinite lived intangible assets acquired | $ 690,000 |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase Price) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Purchase price consideration: | |||
Cash consideration, net of cash acquired | $ 12,542 | $ 13,352 | |
SEI Technical Services [Member] | |||
Purchase price consideration: | |||
Cash consideration, net of cash acquired | [1] | 3,709 | |
Stock consideration | [2] | 9,436 | |
Total purchase price consideration, net of cash acquired | 13,145 | ||
PAC Industries Inc. [Member] | |||
Purchase price consideration: | |||
Cash consideration, net of cash acquired | [3] | 5,312 | |
Stock consideration | [4] | 6,653 | |
Total purchase price consideration, net of cash acquired | $ 11,965 | ||
[1] | Includes $6,500,000 paid net of $2.8 million of cash acquired. | ||
[2] | Calculated as 209,678 shares of the Company's common stock, multiplied by $45.00, the closing price of the Company's common stock on the closing date. | ||
[3] | Includes $6,400,000 paid net of $1.1 million of cash acquired. | ||
[4] | Calculated as 179,847 shares of the Company's common stock, multiplied by $36.99, the closing price of the Company's common stock on the closing date. |
Acquisitions (Schedule of Alloc
Acquisitions (Schedule of Allocation of purchase price consideration) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Allocation of purchase price consideration: | ||
Goodwill | $ 54,554 | $ 37,061 |
SEI Technical Services [Member] | ||
Allocation of purchase price consideration: | ||
Accounts receivable | 2,658 | |
Inventory | 1,595 | |
Other assets | 156 | |
Property, plant and equipment | 424 | |
Intangible assets | 3,100 | |
Accounts payable and accrued expenses | (740) | |
Customer deposits | (398) | |
Total identifiable net assets | 6,795 | |
Goodwill | 6,350 | |
Total | 13,145 | |
PAC Industries Inc. [Member] | ||
Allocation of purchase price consideration: | ||
Accounts receivable | 2,231 | |
Inventory | 2,136 | |
Other assets | 158 | |
Property, plant and equipment | 357 | |
Intangible assets | 3,000 | |
Accounts payable and accrued expenses | (1,912) | |
Customer deposits | (465) | |
Assumption of debt | (200) | |
Total identifiable net assets | 5,305 | |
Goodwill | 6,660 | |
Total | $ 11,965 |
Acquisitions (Schedule of Suppl
Acquisitions (Schedule of Supplemental Pro Forma Results of Operations) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Combinations [Abstract] | ||
Revenues | $ 187,270 | $ 154,046 |
Net income | $ 3,521 | $ 5,324 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) | 9 Months Ended |
Mar. 31, 2019shares | |
Restricted Stock Awards [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Dilutive securities outstanding | 909,277 |
Restricted stock Units [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Dilutive securities outstanding | 919,224 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 466 | $ 1,136 | $ 2,527 | $ 3,209 |
Less: distributed and undistributed income allocated to unvested restricted common stock | 33 | 86 | 181 | 243 |
Net income allocated to EVI Industries, Inc. shareholders | $ 433 | $ 1,050 | $ 2,346 | $ 2,966 |
Weighted average shares outstanding used in basic earnings per share | 11,666 | 11,020 | 11,463 | 10,728 |
Dilutive common share equivalents | 479 | 499 | 497 | 417 |
Weighted average shares outstanding used in diluted earnings per share | 12,145 | 11,519 | 11,960 | 11,145 |
Basic earnings per share | $ 0.04 | $ 0.10 | $ 0.20 | $ 0.28 |
Diluted earnings per share | $ 0.04 | $ 0.09 | $ 0.20 | $ 0.27 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Thousands | Nov. 02, 2018 | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Instrument [Line Items] | |||
Revolving line of credit facility amount outstanding | $ 41,800 | $ 3,697 | |
Debt outstanding | 41,550 | $ 10,012 | |
Credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving line of credit facility maximum borrowing capacity | $ 100,000 | 20,000 | |
Revolving line of credit facility amount outstanding | $ 40,000 | ||
Debt outstanding | $ 5,000 | ||
Basis of variable interest rate | LIBOR plus a margin that ranges from 1.25% to 1.75% depending on the Company's consolidated leverage ratio, which is a ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) (the "Consolidated Leverage Ratio") or (b) the highest of (i) prime, (ii) the federal funds rate plus 50 basis points, and (iii) the one month LIBOR rate plus 100 basis points (such highest rate, the "Base Rate"), plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. Swingline loans bear interest calculated at the Base Rate plus a margin that ranges from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. | ||
Expiration date | Nov. 2, 2023 | ||
Credit facility term | 5 years | 5 years | |
Amount available for borrowing under the revolving line of credit facility | $ 7,200 | ||
Revolving line of credit [Member] | |||
Debt Instrument [Line Items] | |||
Debt outstanding | $ 10,000 | ||
Maximum [Member] | Credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving line of credit facility maximum borrowing capacity | $ 140,000 |
Debt (Schedule of Long-term deb
Debt (Schedule of Long-term debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Disclosure [Abstract] | ||
Term Loan | $ 6,375 | |
Revolving Credit Facility/Line of Credit | 41,800 | 3,697 |
Less: unamortized discount and deferred financing costs | (250) | (60) |
Total debt, net | 41,550 | 10,012 |
Less: current maturities of long-term debt | (1,195) | |
Total long-term debt | $ 41,550 | $ 8,817 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax liabilities, net | $ 1,074 | $ 558 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 11, 2018 | Dec. 12, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Stockholders' Equity Note [Abstract] | ||||
Cash dividends declared | $ 0.13 | $ 0.12 | ||
Dividends | $ 1,600 | $ 1,400 | $ 1,619 | $ 1,403 |
Dividend paid date | Jan. 8, 2019 | Jan. 9, 2018 | ||
Dividend record date | Dec. 26, 2018 | Dec. 26, 2017 |
Equity Incentive Plan (Narrativ
Equity Incentive Plan (Narrative) (Details) | 9 Months Ended |
Mar. 31, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized under 2015 Equity Incentive Plan | shares | 1,500,000 |
Restricted stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of estimated forfeitures, related to non-vested restricted stock | $ 14,500,000 |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net of estimated forfeitures, related to non-vested restricted stock | $ 972,000 |
Common Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock issued under employee stock purchase plan | shares | 726 |
Proceeds from issuance | $ 23,000 |
Equity Incentive Plan (Schedule
Equity Incentive Plan (Schedule of Restricted Stock Awards and Restricted Stock Units) (Details) (USD $) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 12,500 | 47,444 | 34,345 | 56,426 |
Restricted Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 47,444 | 6,845 | 56,426 | |
Restricted stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 12,500 | 27,500 |
Equity Incentive Plan (Schedu_2
Equity Incentive Plan (Schedule of Non-vested Restricted Stock Activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 12,500 | 47,444 | 34,345 | 56,426 |
Restricted Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-vested awards or units outstanding, beginning of period | 903,102 | |||
Granted | 47,444 | 6,845 | 56,426 | |
Vested | (28,170) | |||
Forfeited | ||||
Non-vested awards or units outstanding, end of period | 881,777 | 881,777 | ||
Weighted-average grant date fair value, beginning of period | $ 18.41 | |||
Granted | 36.53 | |||
Vested | 15.38 | |||
Forfeited | ||||
Weighted-average grant date fair value, end of period | $ 18.65 | $ 18.65 | ||
Restricted stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-vested awards or units outstanding, beginning of period | ||||
Granted | 12,500 | 27,500 | ||
Vested | ||||
Forfeited | ||||
Non-vested awards or units outstanding, end of period | 27,500 | 27,500 | ||
Weighted-average grant date fair value, beginning of period | ||||
Granted | 36.24 | |||
Vested | ||||
Forfeited | ||||
Weighted-average grant date fair value, end of period | $ 36.24 | $ 36.24 |
Transactions with Related Par_2
Transactions with Related Parties (Details) | 1 Months Ended | 9 Months Ended | |
Jan. 04, 2019USD ($) | Mar. 31, 2019USD ($)ft² | Mar. 31, 2018USD ($) | |
Michael S. Steiner [Member] | |||
Related Party Transaction [Line Items] | |||
Area of lease | ft² | 28,000 | ||
Lease start date | Nov. 1, 2014 | ||
Annual rent payment, year one | $ 12,000 | ||
Rental expense | $ 108,000 | $ 101,000 | |
Dennis Mack and Tom Marks [Member] | Western State Design [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 5 years | ||
Area of lease | ft² | 17,600 | ||
Annual rent payment, year one | $ 12,000 | ||
Rental expense | $ 108,000 | 108,000 | |
Matt Stephenson [Member] | Tri-State [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 5 years | ||
Area of lease | ft² | 81,000 | ||
Annual rent payment, year one | $ 21,000 | ||
Rental expense | $ 189,000 | 105,000 | |
Mike Zuffinetti [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 5 years | 5 years | |
Area of lease | ft² | 17,000 | ||
Annual rent payment, year one | $ 13,500 | ||
Rental expense | $ 36,000 | $ 26,000 | |
Mike Zuffinetti [Member] | AAdvantage [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 5 years | ||
Area of lease | ft² | 5,000 | ||
Annual rent payment, year one | $ 3,950 | ||
Rental expense | $ 220,000 | $ 35,000 | |
Scott Martin [Member] | Scott Equipment [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 5 years | ||
Area of lease | ft² | 18,000 | ||
Annual rent payment, year one | $ 11,000 | ||
Rental expense | $ 77,000 | ||
Frank Costabile [Member] | PAC Industries Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Original lease term | 4 years | ||
Area of lease | ft² | 29,500 | ||
Annual rent payment, year one | $ 14,600 | ||
Rental expense | $ 29,000 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding performance and payment bonds | $ 9,200 | $ 8,300 |
Estimated costs to complete projects secured by performance and payment bonds | $ 494 | $ 4,400 |
Goodwill (Schedule of Carrying
Goodwill (Schedule of Carrying Amount of Goodwill) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at June 30, 2018 | $ 37,061 |
Goodwill from the SEI Acquisition | 6,350 |
Goodwill from the PAC Acquisition | 6,660 |
Goodwill from the other acquisitions | 4,483 |
Balance at March 31, 2019 | $ 54,554 |