EVI INDUSTRIES, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021

	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

	Commission file number 001-14757

EVI Industries, Inc.

(Exact name of registrant as specified in its charter)

	Delaware	11-2014231
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4500 Biscayne Blvd., Suite 340, Miami, FL 33137
(Address of principal executive offices)

(305) 402-9300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.025 par value	EVI	NYSE American

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $.025 par value per share – 12,278,431 shares outstanding as of November 1, 2021.



PART I – FINANCIAL INFORMATION
Item 1.Financial Statements		3
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended September 30, 2021 and 2020	3
Condensed Consolidated Balance Sheets at September 30, 2021 (Unaudited) and June 30, 2021	4
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended September 30, 2021 and 2020	6
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended September 30, 2021 and 2020	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.Controls and Procedures	28
PART II – OTHER INFORMATION
Item 1.Legal Proceedings	30
Item 1A.Risk Factors	30
Item 6.Exhibits	31
Signatures	32

	For the three months ended September 30,
	2021		2020
Revenues	$	63,741	$	57,878
Cost of sales		46,102		44,545
Gross profit		17,639		13,333
Selling, general and administrative expenses		14,970		12,437
Operating income		2,669		896
Interest expense, net		115		169
Income before income taxes		2,554		727
Provision for income taxes		535		209

Net income	$	2,019	$	518

Net earnings per share – basic	$	0.15	$	0.04

Net earnings per share – diluted	$	0.15	$	0.04

ASSETS
	September 30, 2021 (Unaudited)		June 30, 2021
Current assets
Cash	$	2,773	$	6,057
Accounts receivable, net of allowance for doubtful accounts of $1.1 million and $1.0 million, respectively		33,685		28,904
Inventories, net		29,055		25,129
Vendor deposits		410		367
Contract assets		125		347
Other current assets		5,595		4,419
Total current assets		71,643		65,223

Equipment and improvements, net		10,693		10,594
Operating lease assets		7,153		7,060
Intangible assets, net		23,190		23,677
Goodwill		63,895		63,881
Other assets		6,998		7,415

Total assets	$	183,572	$	177,850

LIABILITIES AND SHAREHOLDERS' EQUITY
	September 30, 2021 (Unaudited)			June 30, 2021
Current liabilities
Accounts payable and accrued expenses	$	23,774		$	26,227
Accrued employee expenses		7,210			7,528
Customer deposits		11,327			10,344
Contract liabilities		200			3,232
Current portion of operating lease liabilities		2,293			2,131
Total current liabilities		44,804			49,462

Deferred tax liabilities, net		4,046			4,208
Long-term operating lease liabilities		5,598			5,567
Long-term debt, net		19,886			11,873

Total liabilities		74,334			71,110

Commitments and contingencies (Note 10)

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; 12,399,137 shares issued at September 30, 2021 and June 30, 2021, including shares held in treasury		310			310
Additional paid-in capital		90,980			90,501
Treasury stock, 120,706 shares at September 30, 2021 and June 30, 2021, at cost		(2,865	)		(2,865	)
Retained earnings		20,813			18,794
Total shareholders’ equity		109,238			106,740
Total liabilities and shareholders’ equity	$	183,572		$	177,850

	Three months ended September 30, 2021
	Common Stock				Additional Paid-in		Treasury Stock					Retained
	Shares		Amount		Capital		Shares		Cost			Earnings		Total
Balance at June 30, 2021		12,399,137	$	310	$	90,501		120,706	$	(2,865	)	$	18,794	$	106,740

Stock compensation		-		-		479		-		-			-		479

Net income		-		-		-		-		-			2,019		2,019
Balance at September 30, 2021		12,399,137	$	310	$	90,980		120,706	$	(2,865	)	$	20,813	$	109,238

	Three months ended September 30, 2020
	Common Stock				Additional Paid-in		Treasury Stock					Retained
	Shares		Amount		Capital		Shares		Cost			Earnings		Total
Balance at June 30, 2020		12,029,910	$	301	$	79,127		95,396	$	(2,012	)	$	10,410	$	87,826

Stock compensation		-		-		578		-		-			-		578

Net income		-		-		-		-		-			518		518
Balance at September 30, 2020		12,029,910	$	301	$	79,705		95,396	$	(2,012	)	$	10,928	$	88,922

	For the three months ended
	September 30, 2021			September 30, 2020
Operating activities:
Net income	$	2,019		$	518
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization		1,236			985
Amortization of debt discount		13			14
Provision for bad debt expense		108			96
Non-cash lease expense		100			29
Share-based compensation		479			578
Inventory reserve		(31	)		(26	)
Benefit for deferred income taxes		(162	)		(760	)
Other		(14	)		60
(Increase) decrease in operating assets:
Accounts receivable		(4,889	)		530
Inventories		(3,895	)		(585	)
Vendor deposits		(43	)		1,049
Contract assets		222			(5,211	)
Other assets		(759	)		(1,667	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		(2,453	)		3,229
Accrued employee expenses		(318	)		(208	)
Customer deposits		983			2,847
Contract liabilities		(3,032	)		2,841
Net cash (used) provided by operating activities		(10,436	)		4,319
Investing activities:
Capital expenditures		(848	)		(997	)
Net cash used by investing activities		(848	)		(997	)
Financing activities:
Proceeds from borrowings		15,000			12,000
Debt repayments		(7,000	)		(20,000	)
Net cash provided (used) by financing activities		8,000			(8,000	)
Net decrease in cash		(3,284	)		(4,678	)
Cash at beginning of period		6,057			9,789
Cash at end of period	$	2,773		$	5,111

	For the three months ended September 30,
	2021 (Unaudited)		2020 (Unaudited)

Net income	$	2,019	$	518
Less: distributed and undistributed income allocated to unvested restricted common stock		176		42
Net income allocated to EVI Industries, Inc. shareholders	$	1,843	$	476
Weighted average shares outstanding used in basic earnings per share		12,278		11,935
Dilutive common share equivalents		381		344
Weighted average shares outstanding used in diluted earnings per share		12,659		12,279
Basic earnings per share	$	0.15	$	0.04
Diluted earnings per share	$	0.15	$	0.04

	September 30, 2021			June 30, 2021
Revolving Line of Credit	$	20,000		$	12,000
Less: unamortized discount and deferred financing costs		(114	)		(127	)
Total long-term debt, net	$	19,886		$	11,873

Fiscal years ending June 30,	Total Operating Lease Obligations (in thousands)
2022 (remainder of)	$	1,878
2023		2,182
2024		1,303
2025		834
2026		603
Thereafter		1,692
Total minimum lease payments	$	8,492
Less: amounts representing interest		601
Present value of minimum lease payments	$	7,891
Less: current portion		2,293
Long-term portion	$	5,598

	Three months ended September 30,
		2021		2020
Operating lease cost
Operating lease cost (1)	$	621	$	474
Short-term lease cost (1)		-		12
Variable lease cost (1)		35		116
Total lease cost	$	656	$	602


(1)		Expenses are classified within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

Fiscal years ending June 30,	Total Minimum Lease Payments Receivable		Amortization of Unearned Income		Net Investment in Sales Type Leases
2022 (remainder of)	$	2,470	$	1,489	$	981
2023		2,639		1,549		1,090
2024		2,055		1,135		920
2025		1,448		746		702
2026		928		412		516
Thereafter		629		279		350
					$	4,559*
* Excludes residual values of $2.4 million.

	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		10,303		24.75		-			-
Vested		-		-		-			-
Forfeited		-		-		(8,327	)		33.50
Non-vested awards or units outstanding at September 30, 2021		929,562	$	19.65		245,586		$	30.84


⁽¹⁾	Represents working capital adjustments related to business acquisitions consummated by the Company during the fiscal year ended June 30, 2021.

		September 30, 2021
Weighted average remaining lease terms
Operating leases		5.1 years
Weighted average discount rate
Operating leases		2.9%

	Three months ended September 30, 2021
		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:	$	621	$	474
Operating lease right-of-use assets obtained in exchange for operating lease liabilities:	$	610	$	1,928

Balance at June 30, 2021	$	63,881
Working capital adjustments (1)		14
Balance at September 30, 2021	$	63,895

Exhibit
Number	Description

*31.01	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*31.02	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

+32.01	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+32.02	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Date: November 9, 2021		EVI Industries, Inc.


	By:	/s/ Robert H. Lazar
		Robert H. Lazar
		Chief Financial Officer

SEC Form 10-Q filed by EVI Industries, Inc.