Episode Details

Alliance Laundry Holdings (ALH) Q2 2026 — Q2 2026 (quarter ended June 30; the Item 2.02 8-K cleared EDGAR 07:12 ET Thursday August 13, BEFORE the open, so Thursday IS the reaction session: it OPENED +7.9 pct - the high of the day - then closed -7.9 pct from that open, -0.6 pct on the session.) Alliance Laundry's pre-tax profit improved by USD33.4M year on year. Only about USD8.0M of it - 24 pct - came from the business getting better. The rest is a cash interest saving, a non-cash swap mark and a one-off refund. THE CALL: HOLD (3/5, MEDIUM - THE GAP IS ONE ASSUMPTION WIDE) — base-case value ~$23.27 vs ~$25.47 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD23.27 vs the USD25.47 close, -8.6 pct. Three roads weighted 40/35/25: a 9.0 pct DCF fading to a 2.5 pct tail USD22.97, 12.5x forward Adjusted EBITDA USD23.69, 17.5x forward adjusted EPS of USD1.32 USD23.15. BEAR USD16.02, BULL USD32.26. Street average USD31.25. - THE ANGLE - ONLY A QUARTER OF IT WAS THE BUSINESS. Adjusted pre-tax profit improved USD33.4M: operating income +USD11.8M, interest -USD21.6M. Inside that sit a USD4.87M non-cash swap mark (15 pct), USD3.8M of insurance and tariff refunds (11 pct), USD16.7M of cash interest saving (50 pct) - and USD8.0M of operating growth. - THE SWAP MARK IS NOT CASH. The derivative note shows the interest-rate swaps booked a USD3.245M GAIN inside interest expense this quarter against a USD1.625M LOSS a year ago. Across the half, reported interest fell USD48.6M while CASH paid for interest fell USD35.0M - the USD14.08M swap swing closes the gap exactly. - THE REFUND WAS NEVER ADJUSTED OUT. MD&A discloses USD3.8M of insurance proceeds and tariff refunds inside gross margin and inside North America segment EBITDA. Strip it and Adjusted EBITDA grew 8.8 pct, not the 12.0 pct headline, and the North America margin was 30.6 pct, not the 31.6 pct printed. - THE ANNUITY DID NOT GROW. Service parts - the installed-base revenue meant to be the defensive ballast - was USD43.742M against USD43.439M, up 0.7 pct. North America parts +3.7 pct, which MD&A attributes to price increases; International parts -7.0 pct. New equipment grew 7.6 pct, Commercial-In-Home 19 pct. - THE RAISE DID NOT RAISE REVENUE. Adjusted EBITDA guidance went to +8-10 pct from +7-8 pct; revenue guidance did not move at +6-7 pct. Against the filed first half that implies second-half revenue growth of 4.1-6.0 pct (H1 was 8.0 pct) and EBITDA growth of 5.2-9.2 pct against the 12.0 pct just posted. - THE PRINT: adjusted EPS USD0.41 vs a USD0.3415 bar, +20.1 pct - but revenue MISSED at USD476.8M vs USD479.4M. Basis proven both ways: GAAP 0.28 plus 0.34 equals the filed 0.62; adjusted 0.31 plus 0.41 equals the filed 0.72. The bar was NOT cut: last year rebased plus the interest saving is USD0.344. What to watch: UP: a return to mid-single-digit service parts growth, or International revenue turning positive - it is 25 pct of the top line and went backwards this quarter. DOWN: the November 12 print, where a USD0.32 consensus on USD461M has to absorb the 4-6 pct second-half revenue growth guidance implies. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.