EVI Industries (EVI) 10-Q 14 Nov 16 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2016	Nov. 11, 2016
Document And Entity Information
Entity Registrant Name	EnviroStar, Inc.
Entity Central Index Key	65,312
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		9,980,541
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Net revenues	$ 9,471,992	$ 6,237,200
Cost of sales, net of discounts	7,451,671	4,803,118
Selling, general and administrative expenses	1,454,762	1,182,288
Total operating expenses	8,906,433	5,985,406
Operating income	565,559	251,794
Interest income	190	629
Earnings before provision for income taxes	565,749	252,423
Provision for income taxes	213,805	95,391
Net earnings	$ 351,944	$ 157,032
Net earnings per share - basic and diluted	$ 0.05	$ 0.02
Weighted average number of basic and diluted common shares outstanding:	7,033,732	7,033,732

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Current assets
Cash and cash equivalents	$ 1,456,492	$ 3,941,899
Accounts receivable, net of allowance for doubtful accounts of $145,000 and $160,000, respectively	5,078,654	1,832,597
Inventories, net	2,399,283	2,627,017
Vendor deposits	386,332	803,177
Deferred income taxes	96,752	108,883
Refundable income tax		62,063
Other current assets	162,356	610,631
Total current assets	9,579,869	9,986,267
Equipment and improvements, net	123,731	135,240
Intangible assets, net	24,939	26,644
Deferred income taxes	16,000	12,606
Total assets	9,744,539	10,160,757
Current liabilities
Accounts payable and accrued expenses	2,561,520	2,886,708
Accrued employee expenses	394,062	961,086
Income taxes payable	140,405
Deferred income	26,276	11,044
Customer deposits	1,181,492	1,213,079
Total current liabilities	4,303,755	5,071,917
Total liabilities	4,303,755	5,071,917
Commitments and contingencies
Shareholders' equity
Preferred stock, $1.00 par value: authorized shares - 200,000; none issued and outstanding
Common stock, $0.025 par value: authorized shares - 15,000,000; 7,065,500 shares issued, including shares held in treasury	176,638	176,638
Additional paid-in capital	2,095,069	2,095,069
Retained earnings	3,173,015	2,821,071
Treasury stock, 31,768 shares at cost	(3,938)	(3,938)
Total shareholders' equity	5,440,784	5,088,840
Total liabilities and shareholders' equity	$ 9,744,539	$ 10,160,757

Condensed Consolidated Balance4

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Statement of Financial Position [Abstract]
Accounts and trade notes receivable, allowance for doubtful accounts	$ 145,000	$ 160,000
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	200,000	200,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.025	$ 0.025
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	7,065,500	7,065,500
Treasury stock, shares	31,768	31,768

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net earnings	$ 351,944	$ 157,032
Adjustments to reconcile net earnings to net cash and cash equivalents provided (used) by operating activities:
Depreciation and amortization	13,214	13,212
Bad debt expense	(15,000)
Inventory reserve	1,593	11,097
Provision for deferred income taxes	8,737	4,729
(Increase) decrease in operating assets:
Accounts receivable	(3,231,057)	771,446
Inventories	226,141	496,402
Vendor deposits	416,845
Refundable income taxes	62,063	90,662
Other current assets	448,275	(125,798)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses	(325,188)	(11,670)
Accrued employee expenses	(567,024)	(337,853)
Income taxes payable	140,405
Deferred income	15,232	(6,495)
Customer deposits	(31,587)	3,334,567
Net cash (used) provided by operating activities	(2,485,407)	4,397,331
Net change in cash and cash equivalents	(2,485,407)	4,397,331
Cash and cash equivalents at beginning of period	3,941,899	3,908,974
Cash and cash equivalents at end of period	1,456,492	8,306,305
Cash paid during the period for:
Income taxes	$ 2,600

General

General	3 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
General	Note (1) - General: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Article 10 of Regulation S-X related to interim period financial statements. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include certain information and footnotes required by GAAP for complete financial statements. However, in management’s opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals and adjustments) which are necessary in order to state fairly the Company’s results of operations, financial position and cash flows as of and for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or any other future period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and related notes, including the Summary of Significant Accounting Policies, included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016. The June 30, 2016 balance sheet information contained herein was derived from the audited consolidated financial statements as of that date included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The estimates and assumptions made may not prove to be correct, and actual results could differ from the estimates.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Note (2) - Earnings Per Share:

Debt

Debt	3 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Debt	Note (3) - Debt: Effective October 7, 2016, the 2011 Credit Facility was terminated in connection with the Company’s entry into a new $20,000,000 credit agreement, consisting of a maximum $15,000,000 million revolving line of credit and a $5,000,000 term loan. See Note 10, Subsequent Events

Income Taxes

Income Taxes	3 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note (4) - Income Taxes: As of September 30, 2016 and June 30, 2016, the Company had deferred tax assets of $112,752 and $121,489 respectively. Consistent with the guidance of the Financial Accounting Standards Board (the “FASB”) regarding accounting for income taxes, the Company regularly estimates its ability to realize deferred tax assets and establishes a valuation allowance against deferred tax assets to reduce the balance to amounts expected to be recoverable. This evaluation includes the consideration of several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods over which temporary differences reverse, the expected reversal of deferred tax liabilities, past and projected taxable income, and available tax planning strategies. As of September 30, 2016 and June 30, 2016, management believed that it was more-likely-than not that the results of future operations will generate sufficient taxable income to realize the net amount of the Company’s deferred tax assets over the periods during which temporary differences reverse. The Company follows Accounting Standards Codification (“ASC”) Topic 740-10-25, “Accounting for Uncertainty in Income Taxes” (“ASC 740”). ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. During the three months ended September 30, 2016, the Company’s accounting for income taxes in accordance with this standard did not result in any adjustment to the Company’s provision for income taxes. As of September 30, 2016, the Company was subject to potential federal and state tax examinations for the tax years 2013 through 2016.

Vendor Deposits

Vendor Deposits	3 Months Ended
	Sep. 30, 2016
Deposit Assets Disclosure [Abstract]
Vendor Deposits	Note (5) – Vendor Deposits:

Segment Information

Segment Information	3 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
Segment Information	Note (6) - Segment Information:

Recently Issued Accounting Guid

Recently Issued Accounting Guidance	3 Months Ended
	Sep. 30, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recently Issued Accounting Guidance	Note (7) – Recently Issued Accounting Guidance In December 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU No. 2015-17”). The amendments in ASU No. 2015-17 eliminate the current requirement for organizations to separate deferred tax assets and liabilities into current and noncurrent amounts in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The standard is effective for annual reporting periods beginning after December 15, 2016. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is evaluating the impact, if any, that adopting this standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”) which is designed to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard will require an entity to recognize the following for all leases (with the exception of short-term leases) at the commencement date (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact, if any, that adopting this standard will have on its consolidated financial statements. While there can be no assurance, management believes the impact of other issued accounting standards and updates, which are not yet effective, will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows upon adoption.

Transactions with Related Parti

Transactions with Related Parties	3 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
Transactions with Related Parties	Note (8) – Transactions with Related Parties: See also Note 10, Subsequent Events

Equity Incentive Plan

Equity Incentive Plan	3 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity Incentive Plan	Note (9) – Equity Incentive Plan:

Subsequent Events

Subsequent Events	3 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	Note (10) – Subsequent Events:

Earnings Per Share (Details)

Earnings Per Share (Details)	Sep. 30, 2016shares
Earnings Per Share [Abstract]
Options outstanding

Debt (Details)

Debt (Details) - USD ($)	Oct. 07, 2016	Sep. 30, 2016	Jun. 30, 2016
Subsequent Event [Member]
Line of Credit Facility [Line Items]
Total amount of credit agreement	$ 20,000,000
Subsequent Event [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Debt instrument face amount	$ 5,000,000
Spread on variable interest rate basis	2.85%
2011 Revolving credit facility [Member]
Line of Credit Facility [Line Items]
Revolving line of credit facility amount		$ 2,250,000
Basis of variable interest rate		Adjusted LIBOR Market Index Rate
Spread on variable interest rate basis		2.50%
Expiration date		Nov. 1, 2016
Line of credit amount outstanding
2016 Revolving credit facility [Member] | Subsequent Event [Member]
Line of Credit Facility [Line Items]
Revolving line of credit facility amount	$ 15,000,000
Basis of variable interest rate	daily one-month LIBOR plus
Spread on variable interest rate basis	2.25%
Expiration date	Oct. 10, 2021

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended
	Sep. 30, 2016	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Federal statutory tax rate	34.00%
Total deferred income tax assets	$ 112,752	$ 121,489

Transactions with Related Par19

Transactions with Related Parties (Details) - Michael S. Steiner [Member]	3 Months Ended
	Sep. 30, 2016USD ($)ft²	Sep. 30, 2015USD ($)
Related Party Transaction [Line Items]
Original lease term	3 years
Area of lease | ft²	27,000
Lease start date	Nov. 1, 2014
Annual rent payment, year one	$ 10,275
Annual rent payment, year two	10,580
Annual rent payment, year three	10,900
Rental expense	$ 34,000	$ 33,000

Equity Incentive Plan (Details)

Equity Incentive Plan (Details)	3 Months Ended
	Sep. 30, 2016shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of shares authorized under 2015 Equity Incentive Plan	1,500,000
Awards granted under 2015 Equity Incentive Plan	0

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event [Member]	Oct. 10, 2016USD ($)ft²shares	Oct. 07, 2016USD ($)
Subsequent Event [Line Items]
Total amount of credit agreement		$ 20,000,000
Symmetric Capital II [Member]
Subsequent Event [Line Items]
Proceeds from private placement	$ 6,000,000
Stock issued through private placement | shares	1,290,323
Term Loan [Member]
Subsequent Event [Line Items]
Total consideration for acquisition		4,900,000
Payment of fees, costs and expenses arising in connection with closing of line of credit facility		66,000
Debt instrument face amount		$ 5,000,000
Spread on variable interest rate basis		2.85%
2016 Revolving credit facility [Member]
Subsequent Event [Line Items]
Total consideration for acquisition		$ 7,600,000
Maximum revolving line of credit		$ 15,000,000
Spread on variable interest rate basis		2.25%
Basis of variable interest rate		daily one-month LIBOR plus
Credit facility term		5 years
Maturity date		Oct. 10, 2021
Western State Design [Member] | Symmetric Capital II [Member]
Subsequent Event [Line Items]
Area of lease | ft²	17,600
Rental payments of lease	$ 12,000
Western State Design [Member] | Scenario, Forecast [Member]
Subsequent Event [Line Items]
Total consideration for acquisition	28,000,000
Cash consideration for acquisition	$ 18,000,000
Common stock consideration offered for acquisition | shares	2,044,990
Western State Design [Member] | Scenario, Actual [Member]
Subsequent Event [Line Items]
Cash consideration for acquisition	$ 18,500,000
Common stock consideration offered for acquisition | shares	1,656,486
Amount of cash consideration treated as escrow deposit for business acquisition	$ 2,800,000
Total number of common shares remaining to be issued, requiring shareholder approval | shares	388,504