EnviroStar, Inc. (NYSE American: EVI) today reported results for
the three months ended September 30, 2017.
First Quarter Fiscal 2018 Highlights
- Revenue increased 177% to $26.3
million,
- Operating income increased 74% to $1.0
million,
- Net income increased 60% to $0.6
million, and
- Adjusted EBITDA increased 169% to $1.6
million.
Henry M. Nahmad, EVI’s Chairman and CEO, stated: “Sales momentum
improved as the quarter closed, evidenced by a growing backlog of
customer orders which are expected to be filled during fiscal 2018
and beyond. We expect that we will continue our trend of
year-over-year increases in revenues and earnings during fiscal
2018.”
It is important to note that the timing of revenue recognition
related to the sale and installation of commercial, industrial, and
vended laundry products is occasionally impacted by delays related
to installation schedules. Additionally, although EVI delivered
record results, revenues in this quarter were negatively impacted
by the effects of Hurricane Irma in Florida and the Caribbean,
which caused delays in the placement of orders, the delivery and
shipment of laundry products, and the completion of installation
services.
In addition to the above results, as previously announced, EVI
completed its acquisition of Tri-State Technical Services, Inc. on
October 31, 2017. Tri-State is a Georgia-based distributor of
commercial, industrial, and vended laundry products and a provider
of related installation and maintenance services. EVI expects the
acquisition of Tri-State to be accretive to its earnings for fiscal
2018.
Mr. Nahmad added: “Tri-State has a proven record of delivering a
consistent sales mix with high operating margins derived from its
robust service operations. In addition to expanding its operations,
we believe Tri-State will be a catalyst in expanding service
operations for our existing Florida operations. While our
subsidiaries’ management teams develop and seek to execute organic
growth opportunities, we also remain focused on our strong
acquisition pipeline and are working towards adding quality
businesses to the EVI family in the future.”
Use of Non-GAAP Financial Information
In this release, EVI discloses the non-GAAP financial measure of
Adjusted EBITDA, which EVI defines as earnings before interest,
taxes, depreciation, amortization, and amortization of share-based
compensation. Adjusted EBITDA is determined by adding interest
expense, income taxes, depreciation, amortization, and amortization
of share-based compensation to net income as shown in the attached
statement of EVI’s Condensed Consolidated Earnings before Interest,
Taxes, Depreciation, Amortization, and Amortization of Share-based
Compensation. EVI considers Adjusted EBITDA to be an important
indicator of its operating performance. Adjusted EBITDA is also
used by companies, lenders, investors and others because it
excludes certain items that can vary widely across different
industries or among companies within the same industry. For
example, interest expense can be dependent on a company’s capital
structure, debt levels and credit ratings, and the tax positions of
companies can vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
jurisdictions in which they operate. Adjusted EBITDA should not be
considered as an alternative to net income or any other measure of
financial performance or liquidity, including cash flow, derived in
accordance with GAAP, or to any other method of analyzing EVI’s
results as reported under GAAP. In addition, EVI’s definition of
Adjusted EBITDA may not be comparable to definitions of Adjusted
EBITDA or other similarly titled measures used by other
companies.
About EnviroStar
EnviroStar, Inc. is a distributor of commercial, industrial, and
vended laundry equipment including power and air generation
systems, water reclamation products, and related parts and
supplies. Through its subsidiaries, EVI sells its products and
provides installation and maintenance services to thousands of
customers across the United States, Canada, the Caribbean, and
Latin America.
Safe Harbor Statement
Except for the historical matters contained herein, statements
in this press release are forward-looking and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are subject to a
number of known and unknown risks and uncertainties that may cause
actual results, trends, performance or achievements of EVI, or
industry trends and results, to differ from the future results,
trends, performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include,
among others, the risks related to EVI’s business, results
(including future revenues and profits), financial condition,
growth strategy and prospects, risks related to EVI’s ability to
successfully build its existing operations, risks related to
organic growth initiatives and their impact on EVI’s financial
condition and results of operations, risks associated with the
EVI’s buy and build growth strategy, including that EVI may not be
successful in identifying or consummating acquisitions or other
strategic opportunities when anticipated or at all, that the
potential benefits of acquisitions, including the acquisition of
Tri-State, may not be realized to the extent anticipated or at all,
integration risks, risks related to indebtedness incurred in
connection with acquisitions, dilution experienced by EVI’s
stockholders as a result of shares issued in connection with
acquisitions and the financing of acquisitions, and risks related
to the business, operations and prospects of acquired businesses,
risks related to EVI’s backlog and the fulfillment of orders, and
other economic, competitive, governmental, technological and other
risks and factors, including those discussed in EVI’s filings with
the Securities and Exchange Commission, including, without
limitation, EVI’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2017. Many of these risks and factors are beyond
EVI’s control. In addition, past performance and perceived trends
may not be indicative of future results. EVI cautions that the
foregoing factors are not exclusive. The reader should not place
undue reliance on any forward-looking statement, which speaks only
as of the date made. EVI does not undertake to, and specifically
disclaims any obligation to, update or supplement any
forward-looking statement, whether as a result of changes in
circumstances, new information, subsequent events or otherwise,
except as may be required by law.
EnviroStar, Inc.
Condensed Consolidated Results of Operations (in thousands)
3-Months Ended 3-Months Ended 09/30/17 09/30/16 Revenues
$26,273 $9,472 Cost of Sales 20,124 7,452 Gross Profit 6,149
2,020 SG&A 5,166 1,454 Operating Income 983 566 Interest
Expense, net 66 - Income before Income Taxes 917 566
Provision for Income Taxes 354 214 Net Income
$563
$353
Net Income per Share Basic $0.05 $0.05 Diluted $0.05 $0.05
Weighted Average Shares Outstanding Basic 10,468 7,034
Diluted 10,849 7,034 The table below reconciles net income,
the most comparable GAAP financial measure, to Adjusted EBITDA.
EnviroStar, Inc.
Condensed Consolidated Adjusted EBITDA (in thousands) Earnings
before Interest, Taxes, Depreciation, Amortization, and
Amortization of Share-Based Compensation 3-Months Ended
3-Months Ended 09/30/17 09/30/16 Net Income $563 $352
Interest Expense 66 - Provision for Income Taxes 354 214
Depreciation and Amortization 219 13 Amortization of Share-Based
Compensation 357 - Adjusted EBITDA
$1,559
$579
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version on businesswire.com: http://www.businesswire.com/news/home/20171114006028/en/
EnviroStar, Inc.Rob Lazar, 305-754-8676
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