Alliance Laundry (NYSE:ALH) reported higher second-quarter revenue, profit and cash flow, citing broad-based demand across North America and continued growth in Asia-Pacific markets. The commercial laundry equipment company raised its full-year adjusted EBITDA growth outlook while maintaining its revenue growth forecast.
Chief Executive Officer Mike Schoeb said the company’s results reflected its exposure to replacement-driven and non-discretionary commercial laundry end markets, including hospitals, elder care facilities, hospitality customers, industrial users and emergency responders.
Second-Quarter Results and Margin Expansion
Second-quarter net revenue increased 7% from a year earlier, with pricing contributing slightly more than half of the increase and volume accounting for most of the remainder, according to Chief Financial Officer Dean Ducker.
- Gross profit rose 9%, and gross margin expanded about 90 basis points to 39.8%.
- Adjusted EBITDA increased 12% year over year, while adjusted EBITDA margin rose 135 basis points to 28.1%.
- Adjusted net income increased approximately 55% from the prior-year quarter.
- Adjusted earnings per share rose 32% to $0.41.
- Operating cash flow totaled $66 million during the quarter.
Ducker said the quarter’s adjusted EBITDA included about $3.8 million in tariff refunds and a business interruption insurance claim. Excluding those items, adjusted EBITDA increased 9% and margin expanded 60 basis points.
Lower interest expense also supported adjusted net income. Interest expense declined by roughly $22 million from the prior-year quarter, Ducker said.
North America was the largest contributor to growth, with revenue up 9%, adjusted EBITDA up 17%, and adjusted EBITDA margin reaching 31.6%. Excluding the tariff refunds and insurance recovery, North American adjusted EBITDA growth was more than 12%, Ducker said. The company cited broad-based end-market growth and a modestly favorable mix effect.
International Trends Remain Uneven
International revenue was approximately flat year over year, though Alliance Laundry said underlying conditions differed by region. Asia-Pacific posted strong growth, particularly in developing vended laundry markets, while Europe remained steady across end markets.
Schoeb said European operators continue to invest in new laundromats, fleet upgrades and energy-efficient equipment. He said the company sees continuing vended-market growth in Europe alongside opportunities in on-premise laundry, including hospitality customers.
However, results in the Middle East and Africa were affected by regional conflict and higher energy costs. The region accounts for less than 2% of global revenue, according to management. Schoeb said the more significant effects included shipping and vessel delays, customer caution in certain international markets, and elevated energy costs that affected Europe and other regions.
The company expects Middle East and Africa demand to remain down for the year, although Schoeb said the region had a good start to the third quarter. He also pointed to longer-term opportunity in Africa. Management said international profitability may be more variable quarter to quarter because of the segment’s smaller base, regional mix and investments in people and products.
Pricing, Tariffs and Operations
Management said pricing actions already in place helped offset tariff exposure and inflationary pressures. Schoeb said the company’s domestic manufacturing footprint provides an advantage and that it intends to use pricing, cost-reduction efforts and operational improvements to protect margins if costs rise further.
The company has locked in steel costs through the first quarter of 2027, Schoeb said. While management sees the potential for a somewhat hotter inflation environment in 2027, it said it is too early to determine the extent of the impact.
On tariffs, management said it expects the second half to be broadly similar to the first half and views the current impact as relatively neutral. Any additional tariff refunds beyond the amount received in the second quarter are not included in the company’s full-year guidance, according to Bob Kalberer, outgoing head of investor relations and future international chief operating officer.
Debt Reduction and Raised EBITDA Outlook
Alliance Laundry repaid $50 million of debt in the second quarter, bringing year-to-date debt repayment to $115 million. Over the 12 months ended June 30, the company repaid $825 million against its term loan, funded through organic cash generation and IPO proceeds.
Net leverage declined to 2.4 times adjusted EBITDA at quarter-end, down from 4.6 times a year earlier. Ducker said Moody’s and S&P upgraded the company’s corporate and senior debt ratings, reducing borrowing costs on its term loan by 25 basis points going forward.
For 2026, Alliance Laundry maintained its forecast for revenue growth of 6% to 7%, with volume and pricing expected to contribute equally. The company raised its adjusted EBITDA growth outlook to 8% to 10% and expects revenue to be relatively consistent between the third and fourth quarters. Margin expansion is expected to be more heavily weighted toward the fourth quarter due to geographic mix and seasonal patterns.
The company now expects year-end net leverage of 2.0 times, full-year interest expense of about $80 million, and an effective tax rate of 23%. Management said capital expenditure and share-count guidance were unchanged.
Looking ahead, Schoeb highlighted growing laundromat demand in Southeast Asia, particularly Thailand, where the company’s June event generated hundreds of qualified leads. He said urbanization, middle-class growth and the adoption of out-of-home laundry are supporting new-store development, while the resulting installed base could create future replacement demand.
About Alliance Laundry (NYSE:ALH)
Alliance Laundry Systems (NYSE: ALH) is a manufacturer and distributor of commercial and residential laundry equipment and related services. The company designs, produces and sells a range of coin-operated and vended machines, on-premises washers and dryers, and allied equipment for laundromats, multi-housing, hospitality, healthcare and other institutional customers. Alliance’s product strategy emphasizes durable, high-throughput machines for professional laundry operators as well as appliances geared to self-service and multi-dwelling applications.
Its product portfolio includes coin-operated and card-operated washers and dryers, stacked and single-pocket models, industrial-grade on-premises equipment, and parts and accessories.
