ALH

Alliance Laundry is the world's largest designer and manufacturer of commercial laundry systems (Speed Queen and related brands), with a genuinely attractive, defensive business model. Management describes an estimated eight-million-unit global installed base on a ~10-year useful life, which drives consistent, predictable replacement demand across diversified end markets — on-premise (hospitality, healthcare, firefighting), vended (laundromats) and commercial in-home — that 'rarely move in tandem.' That incumbency and 100+ years of engineering translate into strong economics: FY2025 revenue grew 13.3% to $1.71B, gross margin is 37.6%, operating margin 18.6%, operating income rose 11.7% to $317M, and reported ROE is 26.0%.

The capital structure is in transition following the October 2025 IPO. The company used $497M of IPO proceeds plus cash to pay down $710M of long-term borrowings, cutting total liabilities 19.8% and lifting equity 241% to $392M. But leverage is still significant — a $1.4B term loan (due 2031, ~$79M annual interest) plus $618.6M of asset-backed securitization debt — which is why net margin is just 6.0% and diluted EPS only $0.56 despite the healthy operating margin: interest expense consumes much of operating income. The negative retained earnings (-$176M) reflect a $900M pre-IPO dividend to the prior owners in 2024, a legacy of the leveraged ownership rather than operating weakness.