As of June 30, 2022, the Company had 30 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2022 and 2030. Rent expense consists of monthly rental payments under the terms of the Company’s lease agreements recognized on a straight-line basis.

EVI Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The following table sets forth the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of June 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

Fiscal years ending	Maturity of Operating Lease Liabilities (in thousands)

2023	$	2,749
2024		1,898
2025		1,339
2026		902
2027		735
Thereafter		1,281
Total lease payments	$	8,904
Less: amounts representing interest		650
Present value of lease liabilities	$	8,254
Less: current portion		2,518
Long-term portion	$	5,736

Table of Contents

EVI Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The table below presents additional information related to the Company’s operating leases (in thousands):

Operating lease cost	Twelve months ended June 30, 2022		Twelve months ended June 30, 2021

Operating lease cost (1)	$	2,612	$	2,109
Short-term lease cost (1)		-		12
Variable lease cost (1)		289		351
Total lease cost	$	2,901	$	2,472

(1) Expenses are classified within selling, general and administrative expenses in the Company’s consolidated statements of operations for the years ended June 30, 2022 and 2021.

The table below presents lease-related terms and discount rates as of June 30, 2022 and 2021:

	June 30, 2022			June 30, 2021
Weighted average remaining lease terms
Operating leases		4.8 years			5.4 years
Weighted average discount rate
Operating leases		3.2	%		2.9	%

The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the years ended June 30, 2022 and 2021 (in thousands):

Twelve months

ended

June 30, 2022

Twelve months

ended

June 30, 2021

Cash paid for amounts included in the measurement of lease liabilities:

2,612

2,109

Operating lease right-of-use assets obtained in exchange for operating lease liabilities:

2,658

3,649

Company as Lessor

The Company derives a portion of its revenue from equipment leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided, maintenance, and interest. These arrangements meet the criteria to be accounted for as sales type leases. Accordingly, revenue related to the provision of the equipment is recognized upon delivery of the equipment and its acceptance by the customer. Upon the recognition of such revenue, an asset is established for the investment in sales type leases. Maintenance revenue and interest are recognized monthly over the lease term.

Table of Contents

EVI Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The future minimum lease payments receivable for sales type leases are as follows (in thousands):

Fiscal years ending June 30,	Total Minimum Lease Payments to be Received		Amortization of Unearned Income		Net Investment in Sales Type Leases

2022	$	3,768	$	2,262	$	1,506
2023		2,907		1,699		1,208
2024		2,133		1,156		977
2025		1,484		691		793
2026		702		302		400
Thereafter		506		206		300
					$	5,184	*

* Excludes non-guaranteed residual values of $2.6 million.

The total net investments in sales type leases, including stated residual values, as of June 30, 2022 and June 30, 2021 was $7.7 million and $6.7 million, respectively. The current portion of $2.0 million and $0.9 million is included in other current assets in the consolidated balance sheets as of June 30, 2022 and June 30, 2021, respectively, and the long term portion of $5.7 million and $5.8 million is included in other assets in the consolidated balance sheets as of June 30, 2022 and June 30, 2021, respectively.