EVI Industries, Inc. (EVI) research, news, and more from GeoInvesting

Company description

Mon, 11 Nov 2013 05:00:00 GMT

EnviroStar, Inc. distributes commercial and industrial laundry equipment, dry cleaning equipment, and steam and hot waters boilers in the United States, the Caribbean, and Latin America. The company also supplies replacement parts and accessories, as well as provides maintenance services. It distributes commercial and industrial laundry equipment, such as washers and dryers, tunnel systems, and coin-operated machines; finishing equipment, including sheet feeders, flatwork ironers, automatic sheet folders, stackers, and rail systems, and hot water/steam systems; and dry cleaning machines comprising garment presses, finishing equipment, sorting and storage conveyors, and accessories. The company also offers boiler products consisting of low emission steam boilers, steam systems, and hot water systems that are used in the laundry and dry cleaning industry for temperature control, heating, pressing, and de-wrinkling, as well as in the healthcare industry, food and beverage industry, and other industrial markets for sterilization and product sealing. In addition, it owns the worldwide rights to the name DRYCLEAN USA, which the company franchises and licenses to retail drycleaners. EnviroStar, Inc. sells its commercial and industrial laundry equipment and boilers to laundry plants, hotels, motels, cruise lines, hospitals, hospital combines, nursing homes, government institutions, distributors, and specialized users; and dry cleaning equipment to independent and franchise dry cleaning stores, chains, and higher-end hotels. The company was formerly known as DRYCLEAN USA, Inc. and changed its name to EnviroStar, Inc. in December 2009. EnviroStar, Inc. was founded in 1963 and is based in Miami, Florida.

Research

Mon, 05 Jun 2017 19:48:34 GMT

EVI ($19.65) announced the acquisition of Martin-Ray Laundry Systems for a purchase price of $4 million ($2 million in cash; $2 million in stock). Martin-Ray generated approximately $11.5 million in annual sales in the period ending March 31, 2017. EVI’s ttm revenues were $76 million. The acquisition broadens EVI’s presence into the mountain states, but the release does not give any color on if the deal is accretive.

In our February 13, 2017 note we stated that we would continue to track for any acquisition announcements despite the stock selling at an extremely high P/E (49 at that time). We were surprised at the magnitude of the market’s positive reaction to this news. Shares went on a tear, rising 40% over the next week. We will continue to track to see if the Company announces any transformative acquisitions.

Research

Mon, 13 Feb 2017 16:03:35 GMT

EVI ($17.80) (laundromats) - announced Q2 results:

Sales of $33.4 million vs $8.6 million in the prior year
EPS of $0.13 vs $0.05 in the prior year

Quotes from management:

“The results of our operations reflect the addition of Western to the EVI family and the financial strength of our combined operations. We continue to pursue our goal of becoming the largest distributor and service provider in the commercial laundry industry through the execution of our buy and build growth strategy, including ongoing efforts to build existing operations through collaboration across our business units. We believe the results of these initiatives will result in continued growth of the EVI family and our financial results.”

With a trailing P/E of 49 , the stock is not cheap. But we are watching EVI close for any acquisition announcements. The stock price has been on fire since its last accretive acquisition announced in 2016. Acquisition are part of a strategy to shift into growth mode in a "boring" industry.

Research

Tue, 04 Oct 2016 15:39:36 GMT

EVI ($9.08) - On September 8, 2016 we stated that EVI announced an accretive acquisition that more than doubles the size of the Company. The stock ran from $4.99 to high of $7.00 on the day of the announcement.

Just last week, on September 28, 2016 we issued a follow-up note when the stock was trading at $6.80. We stated we were planning on interviewing management to determine if EVI met our growth + value criteria where we look for dividend-paying companies that tend to be viewed as boring, but are about to experience near to mid-term growth catalysts.

Unfortunately, EVI’s stock did not wait as shares have taken the next leg up hitting a high of $9.30 in yesterday’s trading session. We will continue to monitor for pullback opportunities.

Research

Wed, 28 Sep 2016 15:24:18 GMT

EVI ($6.96)

On September 8, 2016 we issued the following tweet regarding a significant acquisition announced by EVI:

EVI acquisition more than doubles the size of the Company. Selling at P/E of 20, EV/Sales of 0.95, dividend yield 4.2%. Accretive to [2017]*.

*original tweet said 2016, but since the company is in fiscal 2017, the tweet above reflects this revision

The stock ran from $4.99 to high of $7.00 on the day of the announcement. Shares retraced to the mid-$5 level before reclaiming $7 in yesterday's trading session.

We've been tracking EVI internally for a few years. Aside from a couple of outlier quarters, the Company’s growth in revenue and EPS has been muted since 2005. Because the Company pays a dividend and is embarking on a growth fueled acquisition strategy we are going to take a closer look at its operations and interview management.

This is the first time we noticed this passage in the company's 10-K’s. The industry the Company serves is highly fragmented and likely ripe for acquisition opportunities.

Buy-and-Build Growth Strategy

In addition to organic growth, the Company’s current business strategy also includes the consideration and pursuit of acquisitions and other strategic transactions that would complement the Company’s existing business or that might otherwise offer growth opportunities for the Company. In connection therewith, the Company intends to seek to identify and acquire what the Company believes are well-run businesses and help build them through certain initiatives, which may include investments in new locations, additional product lines, expanded service capabilities and advanced technologies. There is no assurance that the Company’s buy-and-build growth strategy will be successful.

Our goal is to determine if EVI meets our growth + value criteria. In these situations we are looking for companies that tend to be viewed as boring, paying dividends that are about to experience near to mid-term growth catalysts.

Reasons For Tracking

Wed, 28 Sep 2016 04:00:00 GMT

EVI ($6.96)

On September 8, 2016 we issued the following tweet regarding a significant acquisition announced by EVI:

EVI acquisition more than doubles the size of the Company. Selling at P/E of 20, EV/Sales of 0.95, dividend yield 4.2%. Accretive to [2017]*.

*original tweet said 2016, but since the company is in fiscal 2017, the tweet above reflects this revision

The stock ran from $4.99 to high of $7.00 on the day of the announcement. Shares retraced to the mid-$5 level before reclaiming $7 in yesterday's trading session.

This is the first time we noticed this passage in the company's 10-K’s. The industry the Company serves is highly fragmented and likely ripe for acquisition opportunities.

Buy-and-Build Growth Strategy

In addition to organic growth, the Company’s current business strategy also includes the consideration and pursuit of acquisitions and other strategic transactions that would complement the Company’s existing business or that might otherwise offer growth opportunities for the Company. In connection therewith, the Company intends to seek to identify and acquire what the Company believes are well-run businesses and help build them through certain initiatives, which may include investments in new locations, additional product lines, expanded service capabilities and advanced technologies. There is no assurance that the Company’s buy-and-build growth strategy will be successful.