Alliance Laundry Holdings reported higher third-quarter revenue and profits, with gains in North America and improved margins across both operating segments. The commercial laundry equipment maker also raised its full-year adjusted EBITDA growth outlook to the high end of its prior range, while maintaining its revenue forecast.
The quarter’s results included a benefit from tariff refunds, alongside stronger volume and product mix, pricing actions and cost-efficiency improvements. Alliance also continued to reduce debt while returning capital to shareholders through a $75 million stock repurchase.
Third-quarter results
- Revenue rose 5% to $461 million, from $438 million a year earlier. Higher volume and a more favorable product mix accounted for about half of the increase, with pricing providing the rest. North American growth was partly offset by lower international revenue and an approximately 1% foreign-currency drag on that segment.
- Gross profit increased 12% to $182 million. Gross margin expanded by about 240 basis points to 39.4%, reflecting volume and mix, pricing and operational improvements. Tariff refunds provided an additional, discrete benefit that helped offset higher input costs.
- Net income was $65 million, compared with $33 million a year earlier, and net income margin was 14.1%. Adjusted net income rose about 57% to $76 million from $48 million, helped by higher operating earnings and approximately $20 million less in interest expense.
- Adjusted EBITDA increased 14% to $127 million, with a margin of 27.5%, up about 220 basis points year over year. Volume leverage, supply-chain efficiency and operational improvements contributed to the increase, as did tariff refunds.
Segment performance
- North America revenue rose 8% to $356 million. Adjusted EBITDA was $115 million, and the segment’s margin increased by more than 300 basis points from a year earlier. Growth was led by Commercial In-Home and On-Premise Laundry, both supported by higher volume.
- On-Premise Laundry benefited from steady, replacement-driven demand. In Vended Laundry, which includes laundromat and multi-housing customers, results were affected by the timing of new-store projects and longer permitting and construction timelines. Customers continued to move toward larger-capacity machines.
- Steel and freight remained significant cost pressures in North America, partly offset by pricing and tariff refunds. The company said its U.S. manufacturing footprint also provides a structural cost advantage.
- International revenue slipped 1% to $105 million, mainly because of currency effects. Adjusted EBITDA increased to $27 million, with a 25.3% margin. Europe was steady, Latin America grew, and Asia-Pacific revenue reflected the timing of projects after stronger prior quarters. The Middle East and Africa stabilized, supported by hospitality demand and growth in markets less affected by the regional conflict.
Cash, debt and capital returns
- Operating cash flow was $84 million, up from $66 million a year earlier, reflecting strong cash conversion and working-capital efficiency.
- Alliance repaid $45 million of debt during the quarter, bringing year-to-date debt reduction to $160 million. It also repurchased $75 million of common stock.
- At September 30, total debt was $1.21 billion and net debt was $1.07 billion. Net leverage fell to 2.25 times, from about 2.4 times at the end of June and about 2.8 times at the end of the prior year.
Updated 2026 outlook
- The company maintained its forecast for revenue growth of 6% to 7%.
- It now expects adjusted EBITDA growth of about 10%, the high end of its previous 8% to 10% range. Alliance cited volume and mix, pricing, cost-reduction efforts and tariff refunds as factors supporting the higher outlook.
- The year-end net leverage outlook is now about 2.1 times, compared with a previous target of 2.0 times. The updated expectation includes the third-quarter share repurchase and assumes no other capital-allocation opportunities.
- Alliance expects 2026 interest expense of about $75 million and a share count of approximately 203 million. Its capital-spending assumption remains about 3% of revenue; the company said its effective tax-rate assumption is also unchanged.
What changes for investors
Alliance’s updated outlook raises its expected adjusted EBITDA growth but leaves its revenue forecast intact. Its leverage target is now higher than the previous 2.0-times goal, while still reflecting continued debt reduction and including the cost of the completed share repurchase. The tariff refunds helped third-quarter results, but the company also pointed to volume, pricing and operating improvements as sources of earnings growth.