Evi Industries, Inc. (NYSE: EVI)

Sector: Industrials Industry: Industrial Distribution CIK: 0000065312
Market Cap 305.16 Mn
P/B 2.12
P/E 41.49
P/S 0.71
ROIC (Qtr) 5.05
Div Yield % 0.00
Rev 1y % (Qtr) 24.36
Total Debt (Qtr) 71.22 Mn
Debt/Equity (Qtr) 0.49
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About

EVI Industries, Inc., with the ticker symbol EVI, is a company that operates in the commercial laundry equipment and boilers industry. The company has a rich history, having been incorporated in 1963 and undergoing significant changes over the years, including a name change to its current moniker in 2

Investment thesis

Bull case

  • Strong tangible asset base of 194.09M provides 2.73x coverage of total debt 71.22M, indicating robust asset backing and low credit risk.
  • Tangible assets of 194.09M provide exceptional 64.10x coverage of deferred revenue 3.03M, showing strong service capability backing.
  • Robust free cash flow of 17.79M exceeds capital expenditure of 6.36M by 2.80x, indicating strong organic growth funding capability.
  • Operating cash flow of 24.15M provides strong 7.98x coverage of deferred revenue 3.03M, indicating service delivery capability.
  • Robust tangible asset base of 194.09M provides 3.46x coverage of working capital 56.13M, indicating strong operational backing.

Bear case

  • Operating cash flow of 24.15M barely covers its investment activities of (47.47M), with a coverage ratio of -0.51, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 4.25M against inventory of 78.04M, the 0.05 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 24.15M provides thin coverage of dividend payments of (4.98M) with a -4.85 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 4.25M provide limited coverage of acquisition spending of (41.11M), which is -0.10x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 24.15M shows concerning coverage of stock compensation expenses of 4.94M, with a 4.89 ratio indicating potential earnings quality issues.

Breakdown of Revenue (2020)

Peer comparison

Companies in the Industrial Distribution
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GWW W.W. Grainger, Inc. 79.03 Bn 100.02 8.17 2.72 Bn
2 FAST Fastenal Co 53.26 Bn 103.14 13.77 0.44 Bn
3 FERG Ferguson Enterprises Inc. /DE/ 51.30 Bn 26.23 1.65 6.02 Bn
4 WCC Wesco International Inc 14.66 Bn 22.69 0.62 6.53 Bn
5 WSO Watsco Inc 14.11 Bn 154.32 4.58 0.46 Bn
6 POOL Pool Corp 12.34 Bn 638.65 8.05 1.39 Bn
7 CNM Core & Main, Inc. 10.88 Bn 25.02 1.40 2.43 Bn
8 AIT Applied Industrial Technologies Inc 10.79 Bn 28.81 2.41 0.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.16 2.41
EV to Cash from Ops. EV/CFO 15.13 40.73
EV to Debt EV to Debt 5.13 16.40
EV to EBIT EV/EBIT 25.74 18.05
EV to EBITDA EV/EBITDA 16.70 36.64
EV to Free Cash Flow [EV/FCF] EV/FCF 20.55 77.53
EV to Market Cap EV to Market Cap 1.20 1.51
EV to Revenue EV/Rev 0.86 2.64
Price to Book Value [P/B] P/B 2.12 8.70
Price to Earnings [P/E] P/E 41.49 55.05
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.48 49.20
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 22.67
Dividend per Basic Share Div per Share (Qtr) 0.00 1.88
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 41.28
Interest Coverage Int. cover (Qtr) 3.96 35.27
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -37.88 -47.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.83 77.69
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 6.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.48 -84.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.34 -13.74
EBIT Growth (1y) % EBIT 1y % (Qtr) 5.66 -33.83
EBT Growth (1y) % EBT 1y % (Qtr) -4.72 -41.73
EPS Growth (1y) % EPS 1y % (Qtr) -3.92 -109.80
FCF Growth (1y) % FCF 1y % (Qtr) -8.10 -14.68
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 19.96 1.31
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.35 1.45
Cash Payout Ratio Cash Payout (Qtr) 0.16 0.20
Cash Ratio Cash Ratio (Qtr) 0.04 0.34
Current Ratio Curr Ratio (Qtr) 1.58 2.47
Debt to Equity Ratio Debt/Equity (Qtr) 0.49 0.88
Interest Cover Ratio Int Coverage (Qtr) 3.96 35.27
Times Interest Earned Times Interest Earned (Qtr) 3.96 35.27
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.10 7.33
EBIT Margin % EBIT Margin % (Qtr) 3.33 5.34
EBT Margin % EBT Margin % (Qtr) 2.48 4.29
Gross Margin % Gross Margin % (Qtr) 30.80 28.45
Net Profit Margin % Net Margin % (Qtr) 1.70 2.59