Market Overview

EnviroStar, Inc. ("EVI") Announces Record Year End Results


EnviroStar, Inc. (NYSE:EVI) ("EVI" or the "Company") reported
record results for the fiscal year ended June 30, 2018.

The record results reflect the Company's consistent execution of its
buy-and-build growth strategy. For the fiscal year ended June 30, 2018,
the Company generated revenues of approximately $150 million, an
increase of 60% over the prior fiscal year. As reported in the Company's
fiscal 2018 Annual Report on Form 10-K, pro forma revenue1
for fiscal 2018 reflecting the three business acquisitions consummated
during the year was approximately $177 million. In addition, as
described in further detail below, subsequent to the completion of
fiscal 2018, EVI completed the acquisitions of Industrial Laundry
Services, Inc. and Scott Equipment, Inc. The following are financial
highlights of EVI's fiscal 2018:

Fiscal 2018 Highlights (compared to EVI's results for the fiscal
year ended June 30, 2017):

  • Revenue increased 60% to a record $150 million,
  • Gross Margin increased from 22% to 24%,
  • Operating income increased 30% to a record $6.9 million,
  • Net income increased 25% to a record $4.0 million,
  • Adjusted EBITDA increased 59% to a record $10.1 million, and
  • Diluted earnings per share increased 6% to a record $0.33 per share.

Revenue increased 60% largely due to the acquisitions of Tri-State
Technical Services, Inc. ("Tri-State"), AAdvantage Laundry Systems, Inc.
("AAdvantage"), and Sky-Rent LP ("Sky-Rent") during fiscal 2018. Gross
margins improved from 22% to 24% reflecting the benefits of our
high-margin rental/lease portfolio and a more favorable product mix.
Revenue and gross profit growth were partially offset by increases in
SG&A, which primarily reflect increases to corporate level expenses in
connection with EVI's growth and in support of the execution of EVI's
buy-and-build growth strategy.

Buy-and-Build Growth Strategy

EVI executes a buy-and-build growth strategy, which involves buying
businesses that meet certain financial and strategic criteria and
building them through the implementation of a growth culture that
promotes collaboration between EVI's businesses on the execution of
long-term growth initiatives. EVI's "buy" opportunities are
predominantly focused on longstanding, well-run, family and/or
entrepreneur-owned businesses and EVI's "build" opportunities include
expanding its product offerings and enhancing its service capabilities
to build market share and increase revenue generation. EVI believes that
the consistent execution of its buy-and-build growth strategy will
deliver significant shareholder value over the long-term.

Buy Activity

During fiscal 2018, EVI continued the execution of its buy-and-build
growth strategy through the addition of market leading businesses,
Tri-State, a Georgia-based business, which EVI acquired on October 31,
2017, and AAdvantage and Sky-Rent, two Texas-based businesses, which EVI
acquired on February 9, 2018. The addition of AAdvantage and Sky-Rent
marked EVI's first investment in the Texas market and included a broad
portfolio of rental and lease agreements acquired through Sky-Rent.

Subsequent to the completion of fiscal 2018, EVI added Industrial
Laundry Services, a Florida-based business, on September 4, 2018, and
Scott Equipment, a Houston, Texas-based business, on September 12, 2018.
It is expected that the addition of ILS will bolster the service
capabilities of EVI's Florida operations and that the addition of Scott
Equipment will double EVI's market share in Texas. Combined, Industrial
Laundry Services and Scott Equipment generated over $25 million in
revenue during the twelve months ended December 31, 2017.

Since the completion of fiscal 2016 when EVI commenced the pursuit of
its buy-and-build growth strategy, EVI has added seven businesses. In
addition, while EVI's fiscal 2018 results do not reflect full year
results for three of those businesses (Tri-State, AAdvantage, and
Sky-Rent) nor any results for an additional two of those businesses
(Industrial Laundry Services and Scott Equipment), EVI's revenues for
fiscal 2018 represent a 317% increase compared to its revenues for
fiscal 2016. EVI maintains a deep pipeline of potential "buy"
opportunities of businesses of varying sizes and that meet its financial
and strategic criteria. To support its "buy" efforts, EVI recently
received a commitment letter for debt financing that, if consummated,
would significantly increase EVI's borrowing capacity.

Build Activity

In addition to the acquisitions described above, EVI's leadership teams
have undertaken growth initiatives, including the addition of new
product lines, the enhancement of installation and service capabilities,
and the implementation of scalable technologies. EVI believes that these
growth initiatives may have a positive impact on the Company's future
performance. To lead and fulfill these and other growth initiatives,
during fiscal 2018, EVI successfully recruited, and continues to
recruit, talented and long-term focused professionals.

Henry M. Nahmad, Chairman, Chief Executive Officer and President of EVI,
commented: "Our goal is to build a significant and sustainable
enterprise that delivers substantial shareholder value. In that pursuit,
the execution of our buy-and-build growth strategy requires time,
patience, and thoughtful execution. We believe that EVI represents a
compelling opportunity for well-respected owners of high-quality
businesses to achieve a new level of personal diversification, including
investing in our high-growth enterprise, and to make meaningful
contributions to our collective growth. We are pleased with the growth
of EVI's entrepreneurial family and we remain focused on achieving our
growth goals over the short, mid, and long-term."

Use of Non-GAAP Financial Information

In this press 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
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., through its wholly-owned subsidiaries, is a
distributor that sells, leases, and rents commercial, industrial, and
vended laundry and dry cleaning equipment and steam and hot water
boilers manufactured by others, supplies related replacement parts and
accessories, designs and plans turn-key laundry, dry cleaning, and
boiler systems, and provides installation and maintenance services to
thousands of customers, which include commercial, industrial,
institutional, government, and retail customers. These activities are
conducted in 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, financial condition, growth strategy, market share
and prospects, risks related to EVI's ability to successfully build its
existing operations, risks related to organic growth initiatives,
including EVI's recruitment efforts, including that such initiatives may
not be successful or otherwise have a positive 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, that the potential benefits of acquisitions 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 risks related to the business,
operations and prospects of acquired businesses, risks related to EVI's
and its acquired businesses' relationships with principal suppliers and
customers and the impact that the loss of any principal supplier or
customer could have on EVI's results and financial condition, the risk
that the financing contemplated by the commitment letter discussed in
this press release may not be received on the contemplated terms, when
expected, or at all, risks related to EVI's indebtedness, including
increases in its debt position, and other economic, competitive,
governmental, technological and other risks and factors, including those
discussed in the Company's filings with the Securities and Exchange
Commission, including, without limitation, the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2018. Many of these
risks and factors are beyond EVI's control. In addition, pro forma
information is prepared based on a number of assumptions and using
certain pro forma adjustments, is presented for illustrative purposes
only, and may not be indicative of would EVI's actual results for the
fiscal year ended June 30, 2018 would have been had the transactions
occurred on the date assumed or of EVI's results for any future period.
Further, past performance of EVI and its acquired businesses 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.

1 Pro forma revenue was calculated as if the acquisition of
each of Tri-State, AAdvantage and Sky-Rent was consummated on July 1,
2017 and based on other assumptions and adjustments described in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,

EnviroStar, Inc.        
Condensed Consolidated Results of Operations (in thousands)    
Fiscal Year Ended
June 30, 2018   June 30, 2017
Revenues $150,007 $93,978
Cost of Sales 113,501   73,639
Gross Profit 36,506 20,339
SG&A 29,572   14,989
Operating Income 6,934 5,350
Interest Expense, net 552   160
Income before Income Taxes 6,382 5,190
Provision for Income Taxes 2,416   2,023
Net Income $3,966   $3,167
Net Income per Share
Basic $0.34 $0.31
Diluted $0.33 $0.31
Weighted Average Shares Outstanding
Basic 10,840 9,449
Diluted 11,277 9,537

The following table reconciles net income, the most comparable GAAP
financial measure, to Adjusted EBITDA.

EnviroStar, Inc.        
Condensed Consolidated Earnings before Interest, Taxes,
Depreciation, Amortization, and Amortization of Share-based
Compensation (in thousands)
Fiscal Year Ended
June 30, 2018 June 30, 2017
Net Income $3,966 $3,167
Provision for Income Taxes 2,416 2,023
Interest Expense 552 160
Depreciation and Amortization 1,579 576
Amortization of Share-based Compensation 1,575   421
Adjusted EBITDA $10,088   $6,347

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