Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2022 | May 04, 2022 | |
Cover [Abstract] | ||
Entity Central Index Key | 0000065312 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-14757 | |
Entity Registrant Name | EVI Industries, Inc. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 11-2014231 | |
Entity Address, Address Line One | 4500 Biscayne Blvd. | |
Entity Address, Address Line Two | Suite 340 | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33137 | |
City Area Code | 305 | |
Local Phone Number | 402-9300 | |
Title of 12(b) Security | Common Stock, $.025 par value | |
Trading Symbol | EVI | |
Name of Exchange on which Security is Registered | NYSE | |
Entity Information Former Legal Or Registered Name | Not Applicable | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,515,944 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 60,042 | $ 62,413 | $ 184,485 | $ 177,456 |
Cost of sales | 42,980 | 46,659 | 132,977 | 133,989 |
Gross profit | 17,062 | 15,754 | 51,508 | 43,467 |
Selling, general and administrative expenses | 16,874 | 15,025 | 47,680 | 41,330 |
Operating income | 188 | 729 | 3,828 | 2,137 |
Interest and other (expense) income, net | (125) | 197 | (390) | (122) |
Income before income taxes | 63 | 926 | 3,438 | 2,015 |
Provision for income taxes | 23 | 301 | 851 | 411 |
Net income | $ 40 | $ 625 | $ 2,587 | $ 1,604 |
Net earnings per share - basic | $ 0 | $ 0.05 | $ 0.19 | $ 0.12 |
Net earnings per share - diluted | $ 0 | $ 0.04 | $ 0.18 | $ 0.12 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Current assets | ||
Cash | $ 5,604 | $ 6,057 |
Accounts receivable, net of allowance for doubtful accounts of $1.1 million and $1.0 million, respectively | 33,124 | 28,904 |
Inventories, net | 40,781 | 25,129 |
Vendor deposits | 2,022 | 367 |
Contract assets | 357 | 347 |
Other current assets | 6,953 | 4,419 |
Total current assets | 88,841 | 65,223 |
Equipment and improvements, net | 12,140 | 10,594 |
Operating lease assets | 7,466 | 7,060 |
Intangible assets, net | 23,943 | 23,677 |
Goodwill | 65,861 | 63,881 |
Other assets | 6,930 | 7,415 |
Total assets | 205,181 | 177,850 |
Current liabilities | ||
Accounts payable and accrued expenses | 26,346 | 26,227 |
Accrued employee expenses | 6,420 | 7,528 |
Customer deposits | 21,114 | 10,344 |
Contract liabilities | 20 | 3,232 |
Current portion of operating lease liabilities | 2,458 | 2,131 |
Total current liabilities | 56,358 | 49,462 |
Deferred tax liabilities, net | 4,157 | 4,208 |
Long-term operating lease liabilities | 5,784 | 5,567 |
Long-term debt, net | 23,914 | 11,873 |
Total liabilities | 90,213 | 71,110 |
Commitments and contingencies (Note 12) | ||
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; 12,609,354 shares issued at March 31, 2022 and 12,399,137 shares issued at June 30, 2021, including shares held in treasury | 315 | 310 |
Additional paid-in capital | 96,342 | 90,501 |
Treasury stock, 127,801 shares at March 31, 2022 and 120,706 shares at June 30, 2021, at cost | (3,070) | (2,865) |
Retained earnings | 21,381 | 18,794 |
Total shareholders’ equity | 114,968 | 106,740 |
Total liabilities and shareholders’ equity | $ 205,181 | $ 177,850 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Jun. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1.1 | $ 1 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 25 | $ 25 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 12,609,354 | 12,399,137 |
Treasury stock, shares | 127,801 | 120,706 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total |
Balance, beginning at Jun. 30, 2020 | $ 301 | $ 79,127 | $ (2,012) | $ 10,410 | $ 87,826 |
Balance, shares, beginning at Jun. 30, 2020 | 12,029,910 | 95,396 | |||
Share repurchases | $ (629) | (629) | |||
Share repurchases, shares | 17,846 | ||||
Vesting of restricted shares | $ 1 | (1) | |||
Vesting of restricted shares, shares | 51,701 | ||||
Issuances of shares under employee stock plan | 21 | 21 | |||
Issuances of shares under employee stock plan, shares | 693 | ||||
Issuances of shares in connection with acquisitions | $ 7 | 8,870 | 8,877 | ||
Issuances of shares in connection with acquisitions, shares | 289,111 | ||||
Stock compensation | 1,834 | 1,834 | |||
Net income | 1,604 | 1,604 | |||
Balance, ending at Mar. 31, 2021 | $ 309 | 89,851 | $ (2,641) | 12,014 | 99,533 |
Balance, shares, ending at Mar. 31, 2021 | 12,371,415 | 113,242 | |||
Balance, beginning at Dec. 31, 2020 | $ 309 | 88,855 | $ (2,358) | 11,389 | 98,195 |
Balance, shares, beginning at Dec. 31, 2020 | 12,340,591 | 105,635 | |||
Share repurchases | $ (283) | (283) | |||
Share repurchases, shares | 7,607 | ||||
Vesting of restricted shares, shares | 20,098 | ||||
Issuances of shares in connection with acquisitions | 356 | 356 | |||
Issuances of shares in connection with acquisitions, shares | 10,726 | ||||
Stock compensation | 640 | 640 | |||
Net income | 625 | 625 | |||
Balance, ending at Mar. 31, 2021 | $ 309 | 89,851 | $ (2,641) | 12,014 | 99,533 |
Balance, shares, ending at Mar. 31, 2021 | 12,371,415 | 113,242 | |||
Balance, beginning at Jun. 30, 2021 | $ 310 | 90,501 | $ (2,865) | 18,794 | 106,740 |
Balance, shares, beginning at Jun. 30, 2021 | 12,399,137 | 120,706 | |||
Share repurchases | $ (205) | (205) | |||
Share repurchases, shares | 7,095 | ||||
Vesting of restricted shares | $ 1 | (1) | |||
Vesting of restricted shares, shares | 20,835 | ||||
Issuances of shares under employee stock plan | 59 | 59 | |||
Issuances of shares under employee stock plan, shares | 2,008 | ||||
Issuances of shares in connection with acquisitions | $ 4 | 3,836 | 3,840 | ||
Issuances of shares in connection with acquisitions, shares | 179,087 | ||||
Stock compensation | 1,947 | 1,947 | |||
Stock compensation, shares | 8,287 | ||||
Net income | 2,587 | 2,587 | |||
Balance, ending at Mar. 31, 2022 | $ 315 | 96,342 | $ (3,070) | 21,381 | 114,968 |
Balance, shares, ending at Mar. 31, 2022 | 12,609,354 | 127,801 | |||
Balance, beginning at Dec. 31, 2021 | $ 310 | 91,880 | $ (3,007) | 21,341 | 110,524 |
Balance, shares, beginning at Dec. 31, 2021 | 12,418,075 | 124,706 | |||
Share repurchases | $ (63) | (63) | |||
Share repurchases, shares | 3,095 | ||||
Vesting of restricted shares | $ 1 | (1) | |||
Vesting of restricted shares, shares | 12,192 | ||||
Issuances of shares under employee stock plan, shares | |||||
Issuances of shares in connection with acquisitions | $ 4 | 3,836 | 3,840 | ||
Issuances of shares in connection with acquisitions, shares | 179,087 | ||||
Stock compensation | 627 | 627 | |||
Stock compensation, shares | |||||
Net income | 40 | 40 | |||
Balance, ending at Mar. 31, 2022 | $ 315 | $ 96,342 | $ (3,070) | $ 21,381 | $ 114,968 |
Balance, shares, ending at Mar. 31, 2022 | 12,609,354 | 127,801 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities: | ||
Net income | $ 2,587 | $ 1,604 |
Adjustments to reconcile net income to net cash (used) provided by operating activities: | ||
Depreciation and amortization | 3,795 | 3,388 |
Amortization of debt discount | 41 | 41 |
Provision for bad debt expense | 231 | 252 |
Non-cash lease expense | 138 | 47 |
Stock compensation | 1,947 | 1,834 |
Inventory reserve | (274) | (178) |
(Benefit) provision for deferred income taxes | (51) | 953 |
Other | (24) | (277) |
(Increase) decrease in operating assets: | ||
Accounts receivable | (3,129) | 2,799 |
Inventories | (13,476) | (674) |
Vendor deposits | (1,485) | (1,459) |
Contract assets | (10) | (8,873) |
Other assets | (1,214) | (2,153) |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued expenses | (829) | 3,323 |
Accrued employee expenses | (1,170) | 684 |
Customer deposits | 10,081 | 2,062 |
Contract liabilities | (3,212) | 2,117 |
Net cash (used) provided by operating activities | (6,054) | 5,490 |
Investing activities: | ||
Capital expenditures | (3,066) | (1,934) |
Cash paid for acquisitions, net of cash acquired | (3,187) | (4,818) |
Net cash used by investing activities | (6,253) | (6,752) |
Financing activities: | ||
Proceeds from long-term debt | 46,000 | 37,500 |
Debt repayments | (34,000) | (42,500) |
Repurchases of common stock in satisfaction of employee tax withholding obligations | (205) | (629) |
Issuances of common stock under employee stock purchase plan | 59 | 21 |
Net cash provided (used) by financing activities | 11,854 | (5,608) |
Net decrease in cash | (453) | (6,870) |
Cash at beginning of period | 6,057 | 9,789 |
Cash at end of period | 5,604 | 2,919 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 320 | 388 |
Cash paid during the period for income taxes | $ 261 | $ 526 |
Supplemental disclosure of non-cash financing activities: | ||
Common stock issued for acquisitions | 3,840 | 8,877 |
Forgiveness of PPP Loan | $ 916 |
General
General | 9 Months Ended |
Mar. 31, 2022 | |
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 Company’s 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, 2021. The June 30, 2021 balance sheet information contained herein was derived from the Company’s 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, 2021. 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. The Company, through its wholly-owned subsidiaries, is a value-added distributor, and provides advisory and technical services. Through its vast sales organization, the Company provides its customers with planning, designing, and consulting services related to their commercial laundry operations. The Company sells and/or leases its customers commercial laundry equipment, specializing in washing, drying, finishing, material handling, water heating, power generation, and water reuse applications. In support of the suite of products it offers, the Company sells related parts and accessories. Additionally, through the Company’s robust network of commercial laundry technicians, the Company provides its customers with installation, maintenance, and repair services. The Company’s customers include government, institutional, industrial, commercial and retail customers. Product purchases made by customers range from parts and accessories, to single or multiple units of equipment, to large complex systems. The Company also provides its customers with the services described above. The Company’s growth strategy includes organic growth initiatives and business acquisitions pursuant to the Company’s “buy-and-build” growth strategy, which was implemented in 2015. The COVID-19 pandemic has negatively impacted, and may continue to negatively impact, the Company’s business and results. Specifically, beginning at the end of the quarter ended March 31, 2020, the COVID-19 pandemic and accompanying economic disruption caused delays and declines in the placement of customer orders, the completion of equipment and parts installations, and the fulfillment of parts orders. In response to the economic and business disruption during 2020, the Company took actions to reduce costs and spending across the organization, including changes to inventory stock levels, renegotiating payment terms with suppliers, and reducing hiring activities. During the fiscal year ended June 30, 2021, the COVID-19 pandemic had a resurgence with the increased presence and spread of the Delta variant. In addition, the Omicron variant emerged as a variant of concern towards the end of the quarter ended December 31, 2021 and had adverse effects. Factors arising from the COVID-19 pandemic that have impacted, or may in the future negatively impact, the Company’s business and results, including sales and gross margin, include, but are not limited to: supply chain disruptions, which resulted in, and may continue to result in, delays in delivering products or services to the Company’s customers; labor shortages; limitations on the ability of the Company’s employees to perform their work due to sickness or other impacts caused by the pandemic or local, state, federal or foreign orders that may restrict the Company’s operations or the operations of its customers, or require that employees be quarantined; limitations on the ability of carriers to deliver products to the Company’s facilities and customers; risks associated with vaccine mandates, including the potential loss of employees, fines for noncompliance and loss of, or future inability to secure, certain contracts, including with the federal government; adverse impacts of the pandemic on certain industries and customers of the Company which operate in those industries, including the hospitality industry; and potential decreased demand for products and services, including potential limitations on the ability of, or adverse changes in the desire of, the Company’s customers to conduct their business, purchase products and services, and pay for purchases on a timely basis or at all. Further, the Company may continue to experience adverse impacts to its business as a result of, among other things, any adverse impact that has occurred or may occur in the future in the economy or markets generally, and changes in customer or supplier behavior, in each case, in connection with the pandemic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note (2) – Summary of Significant Accounting Policies: |
Recently Issued Accounting Guid
Recently Issued Accounting Guidance | 9 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Accounting Guidance | Note (3) – Recently Issued Accounting Guidance: In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The new guidance provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | Note (4) - Acquisitions: CLK Acquisition On February 7, 2022, the Company acquired Consolidated Laundry Equipment, Inc. and Central Equipment Company, LLC (collectively “CLK”), pursuant to a merger whereby CLK merged with and into, and became, a wholly-owned subsidiary of the Company (the “CLK Acquisition”). CLK is a North Carolina-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. This acquisition expanded the Company’s footprint in the Southeast region of the United States. The consideration paid by the Company in connection with the merger consisted of $4.4 million in cash and 179,087 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 CLK Acquisition, consisting primarily of legal and other professional fees, totaled approximately $45,000 and are classified as selling, general and administrative expenses in the Company’s consolidated statements of operations for the three and nine months ended March 31, 2022. The total purchase price for accounting purposes was $7.0 million, net of cash acquired of $1.2 million. The CLK Acquisition was treated for accounting purposes as a purchase of CLK using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Under the acquisition method of accounting, the aggregate consideration in the CLK Acquisition was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to intangible assets and goodwill. 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) $ 3,187 Stock consideration (b) 3,840 Total purchase price consideration, net of cash acquired $ 7,027 (a) Includes $4.4 million paid net of $1.2 million of cash acquired. (b) Calculated as 179,087 shares of the Company’s common stock, multiplied by $21.44, the closing price of the Company’s common stock on the closing date. Allocation of purchase price consideration: Accounts receivable $ 1,322 Inventories 1,902 Vendor Deposits 170 Other assets 835 Equipment and improvements 841 Intangible assets 1,700 Accounts payable and accrued expenses (948 ) Accrued employee expenses (62 ) Customer deposits (689 ) Total identifiable net assets 5,071 Goodwill 1,956 Total $ 7,027 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 as of the closing date is obtained during the post-closing measurement period of up to one year. The Company has finalized its assessment of the assets acquired and liabilities assumed, except for certain working capital items, including accounts receivable, inventories, other assets and accounts payable and accrued expenses. Intangible assets consist of $800,000 allocated to the Consolidated Laundry Equipment trade name and $900,000 allocated to customer-related intangible assets. The Consolidated Laundry Equipment trade name is indefinite-lived and therefore not subject to amortization. The Consolidated Laundry 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 are being amortized over 10 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 CLK Acquisition. The goodwill from the CLK Acquisition is not deductible for income tax purposes. 12 Index EVI Industries, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 (Unaudited) Supplemental Pro Forma Results of Operations The following supplemental pro forma information presents the results of operations of the Company, after giving effect to the CLK Acquisition as described above, as if the Company had completed such transaction on July 1, 2020, using the estimated fair values of the assets acquired and liabilities assumed. The 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 transaction had occurred on the date assumed, nor are they indicative of future results of operations. For the nine months ended March 31, (in thousands) 2022 (Unaudited) 2021 (Unaudited) Revenues $ 192,731 $ 188,058 Net income 3,350 2,585 The Company’s consolidated results of operations for the nine months ended March 31, 2022 include total revenue of approximately $2.4 million and total net income of approximately $186,000 attributable to CLK, based on the consolidated effective tax rate. These results of the acquired business do not include the effects of acquisition costs or interest expense associated with the consideration paid in connection with the acquisitions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note (5) - Earnings Per Share: For the nine months ended March 31, For the three months ended March 31, 2022 (Unaudited) 2021 (Unaudited) 2022 (Unaudited) 2021 (Unaudited) Net income $ 2,587 $ 1,604 $ 40 $ 625 Less: distributed and undistributed income allocated to unvested restricted common stock 261 143 4 56 Net income allocated to EVI Industries, Inc. shareholders $ 2,326 $ 1,461 $ 36 $ 569 Weighted average shares outstanding used in basic earnings per share 12,321 12,101 12,402 12,252 Dilutive common share equivalents 375 444 261 533 Weighted average shares outstanding used in diluted earnings per share 12,696 12,545 12,663 12,785 Basic earnings per share $ 0.19 $ 0.12 $ 0.00 $ 0.05 Diluted earnings per share $ 0.18 $ 0.12 $ 0.00 $ 0.04 At March 31, 2022 and 2021, other than 1,400,105 shares and 1,202,275 shares, respectively, of common stock subject to unvested restricted stock awards or restricted stock units, there were no potentially dilutive securities outstanding. |
Interest and other (expense) in
Interest and other (expense) income, net | 9 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Interest and other (expense) income, net | Note (6) – Interest and other (expense) income, net: For the nine months ended March 31, For the three months ended March 31, 2022 (Unaudited) 2021 (Unaudited) 2022 (Unaudited) 2021 (Unaudited) Bargain purchase gain $ - $ 361 $ - $ 361 Interest (expense), net (390 ) (483 ) (125 ) (164 ) Interest and other (expense) income, net $ (390 ) $ (122 ) $ (125 ) $ 197 |
Debt
Debt | 9 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note (7) - Debt: March 31, 2022 June 30, 2021 Revolving credit facility $ 24,000 $ 12,000 Less: unamortized discount and deferred financing costs (86 ) (127 ) Total long-term debt, net $ 23,914 $ 11,873 On November 2, 2018, the Company entered into a syndicated credit agreement (the “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. Prior to the amendment described below, borrowings (other than swingline loans) under the Credit Agreement accrued interest at a rate, at the Company’s election at the time of borrowing, equal to (a) LIBOR plus a margin that ranged 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, plus a margin that ranged from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. Swingline loans accrued interest calculated at the base rate determined in accordance with clause (b) of the preceding sentence plus a margin that ranged from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. The Credit Agreement had an initial term of five years with a scheduled maturity date of November 2, 2023. As of March 31, 2022, $27.5 million was available to borrow under the revolving credit facility. On May 6, 2022, the Company entered into an amendment to the Credit Agreement which, among other things, (i) in connection with the phasing out of LIBOR, replaced LIBOR with the Bloomberg Short-Term Bank Yield Index (“BSBY”), and (ii) extended the maturity date of the Credit Agreement from November 2, 2023 to May 6, 2027. See Part II, Item 5 of this Quarterly Report on Form 10-Q for additional information relating to the amendment to the Credit Agreement. The Credit Agreement contains certain covenants, including financial covenants requiring the Company to comply with maximum leverage ratios and minimum interest coverage ratios. The 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. As of March 31, 2022 and the date of the amendment, the Company was in compliance with its covenants under the Credit Agreement. The obligations of the Company under the 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. In connection with the Company’s acquisition of Yankee Equipment Systems, Inc. (“YES”) during November 2020, the Company, indirectly through its wholly-owned subsidiary, assumed the approximately $916,000 loan previously obtained by YES under the Paycheck Protection Program (“PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Under the merger agreement related to the acquisition, the Company was entitled to indemnification for any required repayment of the loan to YES under the PPP. During the quarter ended March 31, 2021, the loan to YES under the PPP was forgiven by the U.S. Small Business Administration (“SBA”). The Company determined that the fair value of its right to indemnification was equal to the amount forgiven by the SBA. Accordingly, the Company did not recognize any gain on the extinguishment of this debt. |
Leases
Leases | 9 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Note (8) – Leases: Company as Lessee The Company leases warehouse and distribution facilities, administrative office space and service and other fleet vehicles, generally for terms of three The Company applies ASC Topic 842, Leases (“ASC 842” or “Topic 842”), which, among other things, requires lessees to recognize substantially all leases on their balance sheets and disclose certain additional key information about leasing arrangements. The standard established a right-of-use model that requires a lessee to recognize a right-of-use asset and liability on the balance sheet for all leases with a term longer than 12 months. Leases are required to be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted this standard effective July 1, 2019 using the modified retrospective transition approach, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption without restatement of prior periods. The Company made the election to not apply the recognition requirements in Topic 842 to short-term leases (i.e., leases of 12 months or less). Instead, the Company, as permitted by Topic 842, recognizes the lease payments under its short-term leases in profit or loss on a straight-line basis over the lease term. The Company elected this accounting policy for all classes of underlying assets. In addition, in accordance with Topic 842, variable lease payments in the period in which the obligation for those payments is incurred are not included in the recognition of a lease liability or right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and right-of-use liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, certain of the Company’s leases do not provide a readily determinable implicit rate. For such leases, the Company estimates the incremental borrowing rate to discount lease payments based on information available at lease commencement. The Company uses instruments with similar characteristics when calculating its incremental borrowing rates. The Company has options to extend certain of its operating leases for additional periods of time and the right to terminate several of its operating leases prior to its contractual expiration, in each case, subject to the terms and conditions of the lease. The lease term consists of the non-cancellable period of the lease and the periods covered by Company options to extend the lease when it is reasonably certain that the Company will exercise such options. The Company's lease agreements do not contain residual value guarantees. The Company has elected to not separate non-lease components from the associated lease component for all underlying classes of assets with lease and non-lease components. As of March 31, 2022, the Company had 29 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2022 and 2030. Rent expense consists of monthly rental payments under the terms of the Company’s lease agreements recognized on a straight-line basis. The following table provides details of the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of March 31, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. Fiscal years ending June 30, Total Operating Lease Obligations (in thousands) 2022 (remainder of) $ 688 2023 2,579 2024 1,727 2025 1,169 2026 803 Thereafter 1,921 Total minimum lease payments $ 8,887 Less: amounts representing interest 645 Present value of minimum lease payments $ 8,242 Less: current portion 2,458 Long-term portion $ 5,784 15 Index EVI Industries, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 (Unaudited) The table below presents additional information related to the Company’s operating leases (in thousands): Nine months ended March 31, Three months ended March 31, 2022 2021 2022 2021 Operating lease cost Operating lease cost (1) 1,781 1,475 $ 671 $ 482 Short-term lease cost (1) - 12 - - Variable lease cost (1) 320 287 44 122 Total lease cost 2,101 1,774 $ 715 $ 604 (1) Expenses are classified within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. The table below presents lease-related terms and discount rates as of March 31, 2022: March 31, 2022 Weighted average remaining lease terms Operating leases 4.9 years Weighted average discount rate Operating leases 3.1% The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the nine months ended March 31, 2022 and 2021 (in thousands): Nine months ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: $ 1,919 $ 1,475 Operating lease right-of-use assets obtained in exchange for operating lease liabilities: $ 2,010 $ 3,793 Company as Lessor The Company derives a portion of its revenue from equipment leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided, maintenance, and interest. These arrangements meet the criteria to be accounted for as sales type leases. Accordingly, revenue from the provision of the equipment is recognized upon delivery of the equipment and its acceptance by the customer. Upon the recognition of such revenue, an asset is established for the investment in sales type leases. Maintenance revenue and interest are recognized monthly over the lease term. 16 Index EVI Industries, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 (Unaudited) The future minimum lease payments receivable for sales type leases are as follows (in thousands): Fiscal years ending June 30, Total Minimum Lease Payments Receivable Amortization of Unearned Income Net Investment in Sales Type Leases 2022 (remainder of) $ 1,004 $ 595 $ 409 2023 3,356 1,995 1,361 2024 2,577 1,476 1,101 2025 1,825 973 852 2026 1,211 551 660 Thereafter 935 419 516 $ 4,899 * * Excludes residual values of $2.5 million. The total net investments in sales type leases, including stated residual values, as of March 31, 2022 and June 30, 2021 was $7.4 million and $6.7 million, respectively. The current portion of $1.8 million and $0.9 million is included in other current assets in the consolidated balance sheets as of March 31, 2022 and June 30, 2021, respectively, and the long term portion of $5.6 million and $5.8 million is included in other assets in the consolidated balance sheets as of March 31, 2022 and June 30, 2021, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note (9) - Income Taxes: As of both March 31, 2022 and June 30, 2021, the Company had net deferred tax liabilities of approximately $4.2 million. 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, 2022, 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 nine and three months ended March 31, 2022 and 2021, the Company’s accounting for income taxes in accordance with this standard did not result in a material adjustment to the Company’s provision for income taxes. As of March 31, 2022, the Company was subject to potential federal and state tax examinations for the tax years 2018 through 2021. |
Equity Plans
Equity Plans | 9 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Plans | Note (10) – Equity Plans: Equity Incentive Plan In November 2015, the Company’s stockholders approved the Company’s 2015 Equity Incentive Plan (the “Plan”). During December 2020, the Company’s stockholders approved an amendment to the Plan to increase the number of shares of the Company’s common stock authorized for issuance pursuant to awards granted under the Plan to 3,000,000 shares. The fair value of awards granted under the Plan is expensed on a straight-line basis over the vesting period of the awards. Share-based compensation expense is included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. During the nine months ended March 31, 2022, restricted stock awards of a total of 134,612 shares, 135,816 restricted stock units, and 8,287 stock awards were granted under the Plan. Stock awards represent shares of the Company’s common stock issued under the Plan which are held by the recipient upon grant without any future risk of forfeiture. During the three months ended March 31, 2022, restricted stock units of a total of 79,393 shares were granted under the Plan. No restricted stock awards or stock awards were granted under the Plan during the three months ended March 31, 2022. During the nine months ended March 31, 2022, restricted stock awards of a total of 13,203 shares were forfeited and returned to the Plan. There were no restricted stock awards forfeited during the three months ended March 31, 2022. There were 9,457 and 1,130 restricted stock units forfeited during the nine and three months ended March 31, 2022, respectively. During the nine months ended March 31, 2021, restricted stock awards of a total of 8,624 shares and 204,014 restricted stock units were granted under the Plan. During the three months ended March 31, 2021, 2,400 restricted stock units were granted under the Plan. During the nine months ended March 31, 2021, restricted stock awards of a total of 1,492 shares were forfeited and returned to the Plan. There were no shares forfeited during the three months ended March 31, 2021. For the nine and three months ended March 31, 2022, non-cash share-based compensation expense related to awards granted under the Plan (which, in each case, included restricted stock units and, for the nine-month period, also included restricted stock awards and stock awards, as described above) totaled $1.9 million and $627,000, respectively. For the nine and three months ended March 31, 2021, non-cash share-based compensation expense related to awards granted under the Plan (which, in each case, included restricted stock units and, for the nine-month period, also included restricted stock awards, as described above) totaled $1.8 million and $640,000, respectively. As of March 31, 2022, the Company had $18.5 million and $9.5 million of total unrecognized compensation expense related to restricted stock awards and restricted stock units, respectively, granted under the Plan, which is expected to be recognized over the weighted-average period of 17.1 years and 10.8 years, respectively. The following is a summary of non-vested restricted stock activity as of and for the nine months ended March 31, 2022: Restricted Stock Awards Restricted Stock Units Shares Weighted- Average Grant Date Fair Value Shares Weighted- Average Grant Date Fair Value Non-vested awards or units outstanding at June 30, 2021 919,259 $ 19.59 253,913 $ 30.92 Granted 134,612 35.32 135,816 24.54 Vested (14,485) 25.11 (6,350) - Forfeited (13,203) 14.20 (9,457) 33.68 Non-vested awards or units outstanding at March 31, 2022 1,026,183 $ 21.65 373,922 $ 28.56 18 Index EVI Industries, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 (Unaudited) Employee Stock Purchase Plan During 2017, the Company’s stockholders approved the Company’s 2017 Employee Stock Purchase Plan, which, subject to the terms of the plan, allows eligible employees the opportunity to purchase shares of the Company’s common stock at a 5% discount. The Company’s employee stock purchase plan provides for six-month offering periods ending on December 31 and June 30 of each year. During the nine months ended March 31, 2022, 2,008 shares of common stock were issued under the Company’s employee stock purchase plan for which the Company received net proceeds of $59,000. During the nine months ended March 31, 2021, 693 shares of common stock were issued under the Company’s employee stock purchase plan for which the Company received net proceeds of $21,000. No shares were issued under the Company’s employee stock purchase plan during the three months ended March 31, 2022 or 2021. |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note (11) – Transactions with Related Parties: During October 2016 During October 2017 During February 2018 19 Index EVI Industries, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 (Unaudited) During September 2018 During February 2019 During November 2020 During February 2022 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note (12) – Commitments and Contingencies The Company may from time to time become subject to litigation and other legal proceedings. Litigation and other legal proceedings may require the Company to incur significant expenses, including those relating to legal and other professional fees, as well as damages or other payments. Litigation and other legal proceedings are inherently uncertain, and adverse outcomes in litigation or other legal proceedings could adversely affect the Company’s financial condition, cash flows, and operating results. |
Goodwill
Goodwill | 9 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note (13) – Goodwill Balance at June 30, 2021 $ 63,881 Goodwill from acquisition (1) 1,956 Working capital adjustments (2) 24 Balance at March 31, 2022 $ 65,861 (1) Relates to the CLK Acquisition which was consummated during February 2022, as described in Note 4, “Acquisitions.” (2) Represents working capital adjustments related to business acquisitions consummated by the Company during the fiscal year ended June 30, 2021. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note (14) – Subsequent Events: On April 25, 2022, the Company entered into a definitive purchase agreement to acquire substantially all of the assets of Clean Designs, Inc. and Clean Route, LLC (collectively “Clean Designs”). Clean Designs is a Colorado-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 connection with the acquisition, the Company will also assume certain liabilities of Clean Designs. The anticipated consideration to be paid by the Company in connection with the acquisition is not expected to be material to the Company on a consolidated basis. Closing of the acquisition is subject to certain conditions precedent. There is no assurance that the acquisition will be consummated on the contemplated terms, when expected, or at all. On April 29, 2022, the Company, indirectly through a wholly-owned subsidiary, acquired substantially all of the assets of LS Acquisition, LLC (d/b/a Laundry South Systems and Repair) (“Laundry South Systems and Repair”), a Mississippi-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 connection with the transaction, the Company, indirectly through its wholly-owned subsidiary, also assumed certain of the liabilities of Laundry South Systems and Repair. The consideration paid by the Company in connection with the transaction was not material to the Company on a consolidated basis. The financial condition and results of operations of Laundry South Systems and Repair subsequent to the April 29, 2022 closing date of the transaction will be included within the Company’s consolidated financial statements commencing with the quarter ending June 30, 2022. On May 5, 2022, the Company, indirectly through a wholly-owned subsidiary, acquired substantially all of the assets of Spynr, Inc. (“Spynr”), a Delaware-based digital marketing and technology company which provides digital marketing services to customers and vendors within the commercial, industrial and vended laundry industries. In connection with the transaction, the Company, indirectly through its wholly-owned subsidiary, also assumed certain of the liabilities of Spynr. The consideration paid by the Company in connection with the transaction was not material to the Company on a consolidated basis. The financial condition and results of operations of Spynr subsequent to the May 5, 2022 closing date of the transaction will be included within the Company’s consolidated financial statements commencing with the quarter ending June 30, 2022. See also Note 7, “Debt” and Part II, Item 5 of this Quarterly Report on Form 10-Q for a description of the amendment to the Company’s Credit Agreement that was entered into on May 6, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note (2) – Summary of Significant Accounting Policies: |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price | The CLK Acquisition was treated for accounting purposes as a purchase of CLK using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Under the acquisition method of accounting, the aggregate consideration in the CLK Acquisition was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to intangible assets and goodwill. 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) $ 3,187 Stock consideration (b) 3,840 Total purchase price consideration, net of cash acquired $ 7,027 (a) Includes $4.4 million paid net of $1.2 million of cash acquired. (b) Calculated as 179,087 shares of the Company’s common stock, multiplied by $21.44, 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 $ 1,322 Inventories 1,902 Vendor Deposits 170 Other assets 835 Equipment and improvements 841 Intangible assets 1,700 Accounts payable and accrued expenses (948 ) Accrued employee expenses (62 ) Customer deposits (689 ) Total identifiable net assets 5,071 Goodwill 1,956 Total $ 7,027 |
Schedule of Supplemental Pro Forma Results of Operations | The following supplemental pro forma information presents the results of operations of the Company, after giving effect to the CLK Acquisition as described above, as if the Company had completed such transaction on July 1, 2020, using the estimated fair values of the assets acquired and liabilities assumed. The 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 transaction had occurred on the date assumed, nor are they indicative of future results of operations. For the nine months ended March 31, (in thousands) 2022 (Unaudited) 2021 (Unaudited) Revenues $ 192,731 $ 188,058 Net income 3,350 2,585 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Note (5) - Earnings Per Share: For the nine months ended March 31, For the three months ended March 31, 2022 (Unaudited) 2021 (Unaudited) 2022 (Unaudited) 2021 (Unaudited) Net income $ 2,587 $ 1,604 $ 40 $ 625 Less: distributed and undistributed income allocated to unvested restricted common stock 261 143 4 56 Net income allocated to EVI Industries, Inc. shareholders $ 2,326 $ 1,461 $ 36 $ 569 Weighted average shares outstanding used in basic earnings per share 12,321 12,101 12,402 12,252 Dilutive common share equivalents 375 444 261 533 Weighted average shares outstanding used in diluted earnings per share 12,696 12,545 12,663 12,785 Basic earnings per share $ 0.19 $ 0.12 $ 0.00 $ 0.05 Diluted earnings per share $ 0.18 $ 0.12 $ 0.00 $ 0.04 At March 31, 2022 and 2021, other than 1,400,105 shares and 1,202,275 shares, respectively, of common stock subject to unvested restricted stock awards or restricted stock units, there were no potentially dilutive securities outstanding. |
Interest and Other Income (Expe
Interest and Other Income (Expense), Net (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of interest and other income (expense), net | For the nine months ended March 31, For the three months ended March 31, 2022 (Unaudited) 2021 (Unaudited) 2022 (Unaudited) 2021 (Unaudited) Bargain purchase gain $ - $ 361 $ - $ 361 Interest (expense), net (390 ) (483 ) (125 ) (164 ) Interest and other (expense) income, net $ (390 ) $ (122 ) $ (125 ) $ 197 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Note (7) - Debt: March 31, 2022 June 30, 2021 Revolving credit facility $ 24,000 $ 12,000 Less: unamortized discount and deferred financing costs (86 ) (127 ) Total long-term debt, net $ 23,914 $ 11,873 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | The following table provides details of the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of March 31, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. Fiscal years ending June 30, Total Operating Lease Obligations (in thousands) 2022 (remainder of) $ 688 2023 2,579 2024 1,727 2025 1,169 2026 803 Thereafter 1,921 Total minimum lease payments $ 8,887 Less: amounts representing interest 645 Present value of minimum lease payments $ 8,242 Less: current portion 2,458 Long-term portion $ 5,784 |
Schedule of Operating Leases | The table below presents additional information related to the Company’s operating leases (in thousands): Nine months ended March 31, Three months ended March 31, 2022 2021 2022 2021 Operating lease cost Operating lease cost (1) 1,781 1,475 $ 671 $ 482 Short-term lease cost (1) - 12 - - Variable lease cost (1) 320 287 44 122 Total lease cost 2,101 1,774 $ 715 $ 604 (1) Expenses are classified within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. The table below presents lease-related terms and discount rates as of March 31, 2022: March 31, 2022 Weighted average remaining lease terms Operating leases 4.9 years Weighted average discount rate Operating leases 3.1% |
Schedule of Supplemental Cash Flow Information Related to Company's Long-Term Operating Lease Liabilities | The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the nine months ended March 31, 2022 and 2021 (in thousands): Nine months ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: $ 1,919 $ 1,475 Operating lease right-of-use assets obtained in exchange for operating lease liabilities: $ 2,010 $ 3,793 |
Schedule of Minimum future rental commitments | The future minimum lease payments receivable for sales type leases are as follows (in thousands): Fiscal years ending June 30, Total Minimum Lease Payments Receivable Amortization of Unearned Income Net Investment in Sales Type Leases 2022 (remainder of) $ 1,004 $ 595 $ 409 2023 3,356 1,995 1,361 2024 2,577 1,476 1,101 2025 1,825 973 852 2026 1,211 551 660 Thereafter 935 419 516 $ 4,899 * * Excludes residual values of $2.5 million. |
Equity Plans (Tables)
Equity Plans (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
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, 2022: Restricted Stock Awards Restricted Stock Units Shares Weighted- Average Grant Date Fair Value Shares Weighted- Average Grant Date Fair Value Non-vested awards or units outstanding at June 30, 2021 919,259 $ 19.59 253,913 $ 30.92 Granted 134,612 35.32 135,816 24.54 Vested (14,485) 25.11 (6,350) - Forfeited (13,203) 14.20 (9,457) 33.68 Non-vested awards or units outstanding at March 31, 2022 1,026,183 $ 21.65 373,922 $ 28.56 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | Note (13) – Goodwill Balance at June 30, 2021 $ 63,881 Goodwill from acquisition (1) 1,956 Working capital adjustments (2) 24 Balance at March 31, 2022 $ 65,861 (1) Relates to the CLK Acquisition which was consummated during February 2022, as described in Note 4, “Acquisitions.” (2) Represents working capital adjustments related to business acquisitions consummated by the Company during the fiscal year ended June 30, 2021. |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Feb. 07, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Business Acquisition [Line Items] | |||||
Revenues | $ 60,042 | $ 62,413 | $ 184,485 | $ 177,456 | |
Net income | 40 | $ 625 | 2,587 | $ 1,604 | |
CLK Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash Consideration | $ 4,400 | ||||
Stock Consideration | 179,087 | ||||
Acquisition legal and other professional fees | 45,000 | 45,000 | |||
Total purchase price for accounting purposes | 7,000 | ||||
Cash acquired | $ 1,200 | ||||
Indefinite lived intangible assets acquired | 800,000 | 800,000 | |||
Finite lived intangible assets acquired | $ 900,000 | $ 900,000 | |||
Amortized life | 10 years | ||||
Total revenue | $ 2,400 | ||||
Total net income | $ 186,000 |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase price) (Details) - USD ($) $ in Thousands | Feb. 07, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Purchase price consideration: | ||||
Cash Consideration, net of cash acquired | $ 3,187 | $ 4,818 | ||
CLK Acquisition [Member] | ||||
Purchase price consideration: | ||||
Cash Consideration, net of cash acquired | [1] | $ 3,187 | ||
Stock Consideration | [2] | 3,840 | ||
Total purchase price consideration, net of cash acquired | $ 7,027 | |||
[1] | Includes $4.4 million paid net of $1.2 million of cash acquired. | |||
[2] | Calculated as 179,087 shares of the Company’s common stock, multiplied by $21.44, the closing price of the Company’s common stock on the closing date. |
Acquisitions (Schedule of Alloc
Acquisitions (Schedule of Allocation of purchase price consideration) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 | Nov. 03, 2020 |
Allocation of purchase price consideration: | |||
Goodwill | $ 65,861 | $ 63,881 | |
CLK Acquisition [Member] | |||
Allocation of purchase price consideration: | |||
Accounts receivable | $ 1,322 | ||
Inventories | 1,902 | ||
Vendor Deposits | 170 | ||
Other assets | 835 | ||
Equipment and improvements | 841 | ||
Intangible assets | 1,700 | ||
Accounts payable and accrued expenses | (948) | ||
Accrued employee expenses | (62) | ||
Customer deposits | (689) | ||
Total identifiable net assets | 5,071 | ||
Goodwill | 1,956 | ||
Total | $ 7,027 |
Acquisitions (Schedule of Suppl
Acquisitions (Schedule of Supplemental Pro Forma Results of Operations) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Combinations [Abstract] | ||
Revenues | $ 192,731 | $ 188,058 |
Net income | $ 3,350 | $ 2,585 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restricted Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 1,400,105 | 1,202,275 |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 1,400,105 | 1,202,275 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 40 | $ 625 | $ 2,587 | $ 1,604 |
Less: distributed and undistributed income allocated to unvested restricted common stock | 4 | 56 | 261 | 143 |
Net income allocated to EVI Industries, Inc. shareholders | $ 36 | $ 569 | $ 2,326 | $ 1,461 |
Weighted average shares outstanding used in basic earnings per share | 12,402 | 12,252 | 12,321 | 12,101 |
Dilutive common share equivalents | 261 | 533 | 375 | 444 |
Weighted average shares outstanding used in diluted earnings per share | 12,663 | 12,785 | 12,696 | 12,545 |
Basic earnings per share | $ 0 | $ 0.05 | $ 0.19 | $ 0.12 |
Diluted earnings per share | $ 0 | $ 0.04 | $ 0.18 | $ 0.12 |
Interest and other (expense) _2
Interest and other (expense) income, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | ||||
Bargain purchase gain | $ 361 | $ 361 | ||
Interest (expense), net | (125) | (164) | (390) | (483) |
Interest and other (expense) income, net | $ (125) | $ 197 | $ (390) | $ (122) |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Millions | Nov. 02, 2018 | Mar. 31, 2022 |
Standby Letters of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Amount available for borrowing under the revolving line of credit facility | $ 10 | |
Credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving line of credit facility maximum borrowing capacity | 100 | |
Revolving line of credit facility amount outstanding | $ 40 | |
Basis of variable interest rate | LIBOR plus a margin that ranged 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, plus a margin that ranged from 0.25% to 0.75% depending on the Consolidated Leverage Ratio. Swingline loans accrued interest calculated at the base rate determined in accordance with clause (b) of the preceding sentence plus a margin that ranged 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 | $ 27.5 | |
Credit facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Revolving line of credit facility maximum borrowing capacity | $ 140 | |
Swingline Loans [Member] | ||
Debt Instrument [Line Items] | ||
Amount available for borrowing under the revolving line of credit facility | $ 5 | |
Paycheck Protection Program Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal loan amount | $ 916,000 |
Debt (Schedule of Long-term deb
Debt (Schedule of Long-term debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Debt Disclosure [Abstract] | ||
Revolving credit facility | $ 24,000 | $ 12,000 |
Less: unamortized discount and deferred financing costs | (86) | (127) |
Total long-term debt, net | $ 23,914 | $ 11,873 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | Mar. 31, 2022USD ($)Facilities | Jun. 30, 2021USD ($) |
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | ||
Number of facilities financed under operating leases | Facilities | 29 | |
Total net investment in sales type leases | $ 5.6 | $ 5.8 |
Current portion Sales type leases | 1.8 | 0.9 |
Long term portion sales type leases | $ 7.4 | $ 6.7 |
Minimum [Member] | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | ||
Lease term | 3 years | |
Maximum [Member] | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | ||
Lease term | 10 years |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Operating leases | ||
2022 (remainder of) | $ 688 | |
2023 | 2,579 | |
2024 | 1,727 | |
2025 | 1,169 | |
2026 | 803 | |
Thereafter | 1,921 | |
Total minimum lease payments | 8,887 | |
Less: amounts representing interest | 645 | |
Present value of minimum lease payments | 8,242 | |
Less: current portion | 2,458 | $ 2,131 |
Long-term portion | $ 5,784 | $ 5,567 |
Leases (Schedule of Operating L
Leases (Schedule of Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Operating lease cost | ||||
Operating lease cost | $ 671 | $ 482 | $ 1,781 | $ 1,475 |
Short-term lease cost | 12 | |||
Variable lease cost | 44 | 122 | 320 | 287 |
Total lease cost | $ 715 | $ 604 | $ 2,101 | $ 1,774 |
Other information | ||||
Weighted average remaining lease terms - operating leases | 4 years 10 months 24 days | 4 years 10 months 24 days | ||
Weighted average discount rate - operating leases | 3.10% | 3.10% |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Cash Flow Information Related to Company's Long-Term Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities: | $ 1,919 | $ 1,475 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities: | $ 2,010 | $ 3,793 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Lease Payments Receivable) (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |
2022 (remainder of) | $ 409 |
2023 | 1,361 |
2024 | 1,101 |
2025 | 852 |
2026 | 660 |
Thereafter | 516 |
Future minimum lease payments receivable | 4,899 |
Total Minimum Lease Payments Receivable [Member] | |
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |
2022 (remainder of) | 1,004 |
2023 | 3,356 |
2024 | 2,577 |
2025 | 1,825 |
2026 | 1,211 |
Thereafter | 935 |
Amortization of Unearned Income [Member] | |
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |
2022 (remainder of) | 595 |
2023 | 1,995 |
2024 | 1,476 |
2025 | 973 |
2026 | 551 |
Thereafter | $ 419 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Deferred tax liabilities, net | $ 4,157 | $ 4,208 |
Income Taxes [Member] | ||
Deferred tax liabilities, net | $ 42,000 | $ 42,000 |
Equity Plans (Narrative) (Detai
Equity Plans (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares authorized under 2015 Equity Incentive Plan | 3,000,000 | 3,000,000 | ||
Non-cash share-based compensation expense | $ 627 | $ 640 | $ 1,900 | $ 1,800 |
Common Stock [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock issued under employee stock purchase plan | 2,008 | 693 | ||
Proceeds from issuance | $ 59 | $ 21 | ||
2017 Employee Stock Purchase Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Discount rate on purchase of common stock | 5.00% | 5.00% | ||
Restricted Stock Awards [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares granted | 134,612 | 8,624 | ||
Unrecognized compensation expense, net of estimated forfeitures, related to non-vested restricted stock | $ 18,500 | $ 18,500 | ||
Weighted-average period | 17 years 1 month 6 days | |||
Number of stock Forfeited | 13,203 | 1,492 | ||
Restricted Stock Units [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares granted | 79,393 | 2,400 | 135,816 | 204,014 |
Unrecognized compensation expense, net of estimated forfeitures, related to non-vested restricted stock | $ 9,500 | $ 9,500 | ||
Weighted-average period | 10 years 9 months 18 days | |||
Number of stock Forfeited | 1,130 | 9,457 | ||
Stock Awards [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares granted | 8,287 |
Equity Plans (Schedule of Non-v
Equity Plans (Schedule of Non-vested Restricted Stock Activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Restricted Stock Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Non-vested awards or units outstanding at June 30, 2021 | 919,259 | ||
Granted | 134,612 | ||
Vested | (14,485) | ||
Forfeited | (13,203) | (1,492) | |
Non-vested awards or units outstanding at March 31, 2022 | 1,026,183 | 1,026,183 | |
Weighted-Average Grant Date Fair Value June 30, 2021 | $ 19.59 | ||
Granted | 35.32 | ||
Vested | 25.11 | ||
Forfeited | 14.20 | ||
Weighted-Average Grant Date Fair Value March 31, 2022 | $ 21.65 | $ 21.65 | |
Restricted Stock Units [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Non-vested awards or units outstanding at June 30, 2021 | 253,913 | ||
Granted | 135,816 | ||
Vested | (6,350) | ||
Forfeited | (1,130) | (9,457) | |
Non-vested awards or units outstanding at March 31, 2022 | 373,922 | 373,922 | |
Weighted-Average Grant Date Fair Value June 30, 2021 | $ 30.92 | ||
Granted | 24.54 | ||
Vested | |||
Forfeited | 33.68 | ||
Weighted-Average Grant Date Fair Value March 31, 2022 | $ 28.56 | $ 28.56 |
Transactions with Related Par_2
Transactions with Related Parties (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 04, 2019USD ($) | Mar. 31, 2022USD ($)ft² | Mar. 31, 2021USD ($) | Mar. 31, 2022USD ($)ft² | Mar. 31, 2021USD ($) | |
Dennis Mack and Tom Marks [Member] | Western State Design [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 5 years | 5 years | |||
Area of lease | ft² | 17,600 | 17,600 | |||
Lease start date | Oct. 31, 2016 | ||||
Annual rent payment, year one | $ 12,000 | $ 12,000 | |||
Monthly base rent | 19,000 | ||||
Rental expense | $ 57,000 | $ 36,000 | $ 150,000 | $ 108,000 | |
Matt Stephenson [Member] | Tri-State [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 5 years | 5 years | |||
Area of lease | ft² | 81,000 | 81,000 | |||
Lease start date | Oct. 31, 2017 | ||||
Annual rent payment, year one | $ 21,000 | $ 21,000 | |||
Rental expense | $ 63,000 | 63,000 | $ 189,000 | 189,000 | |
Mike Zuffinetti [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 5 years | ||||
Rental expense | $ 36,000 | ||||
Mike Zuffinetti [Member] | AAdvantage [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 5 years | 5 years | |||
Area of lease | ft² | 5,000 | 5,000 | |||
Lease start date | Feb. 28, 2018 | ||||
Annual rent payment, year one | $ 4,000 | $ 4,000 | |||
Monthly base rent | 26,000 | ||||
Rental expense | $ 120,000 | 120,000 | $ 360,000 | 360,000 | |
Scott Martin [Member] | Scott Equipment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 5 years | 5 years | |||
Area of lease | ft² | 18,000 | 18,000 | |||
Lease start date | Sep. 30, 2018 | ||||
Annual rent payment, year one | $ 11,000 | $ 11,000 | |||
Rental expense | $ 35,000 | 35,000 | $ 103,000 | 103,000 | |
Frank Costabile [Member] | PAC Industries Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 4 years | 4 years | |||
Area of lease | ft² | 29,500 | 29,500 | |||
Lease start date | Feb. 28, 2019 | ||||
Annual rent payment, year one | $ 15,000 | $ 15,000 | |||
Rental expense | $ 46,000 | 45,000 | $ 137,000 | 135,000 | |
Peter Limoncelli [Member] | Yankee Equipment Systems [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 3 years | 3 years | |||
Area of lease | ft² | 12,500 | 12,500 | |||
Lease start date | Nov. 30, 2020 | ||||
Annual rent payment, year one | $ 11,000 | $ 11,000 | |||
Rental expense | $ 36,000 | $ 35,000 | $ 106,000 | $ 57,000 | |
William Kincaid [Member] | Consolidated Laundry Equipment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Original lease term | 3 years | 3 years | |||
Area of lease | ft² | 20,300 | 20,300 | |||
Lease start date | Feb. 28, 2022 | ||||
Annual rent payment, year one | $ 20,000 | $ 20,000 | |||
Rental expense | $ 20,000 | $ 20,000 |
Goodwill (Schedule of Carrying
Goodwill (Schedule of Carrying Amount of Goodwill) (Details) $ in Thousands | 9 Months Ended | |
Mar. 31, 2022USD ($) | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance at June 30, 2021 | $ 63,881 | |
Goodwill from acquisition | 1,956 | [1] |
Working capital adjustments | 24 | [2] |
Balance at March 31, 2022 | $ 65,861 | |
[1] | Relates to the CLK Acquisition which was consummated during February 2022, as described in Note 4, “Acquisitions.” | |
[2] | Represents working capital adjustments related to business acquisitions consummated by the Company during the fiscal year ended June 30, 2021. |