K-BRO REPORTS RECORD Q3 REVENUE, EBITDA AND ADJUSTED EBITDA

Executive Summary

• K‑Bro Linen Inc. reported record Q3 2025 revenue of $155.9 M (+49.3% YoY) and Adjusted EBITDA of $33.5 M (+45.9% YoY).
• Completed the acquisition of Stellar Mayan on June 11 2025, financing it with 2.334 M common shares at $34.55 per share ($75.6 M net proceeds) and a $134.3 M four‑year amortizing term loan.
• Declared a quarterly dividend of $0.300 per common share; total debt rose to $220.3 M due to the acquisition financing.

Key Details

• Financial Highlights (Q3 2025 vs Q3 2024)
• Revenue: $155.9 M vs $104.5 M
  • Healthcare: $82.4 M (+66.8%)
  • Hospitality: $73.5 M (+33.6%)
• Adjusted EBITDA: $33.5 M vs $23.0 M (↑45.9%) – margin 21.5% (down 0.5 pts)
• EBITDA: $32.0 M vs $22.8 M (↑$9.2 M) – margin 20.5%
• Adjusted Net Earnings: $12.0 M vs $8.3 M (↑45.8%)
• Net earnings: $8.9 M vs $8.1 M
• Dividends
• Quarterly dividend declared: $0.300 per common share (monthly dividend of $0.10 for Nov 2025)
• Acquisition – Stellar Mayan
• Purchase price (net of cash acquired): $194.7 M; cash acquired $5.156 M.
• Consideration: 2,334,500 common shares at $34.55 each → gross proceeds $80.6 M; net proceeds $75.6 M after fees.
• Additional financing: $134.3 M four‑year amortizing term loan (part of amended credit facility).
• Net identifiable assets acquired: $127.9 M; goodwill $66.8 M.
• Assets contributed post‑closing (June 12–Sept 30 2025): Revenue $53.867 M, net deficit ($0.605 M). Pro‑forma Q3 revenue would have been $436.2 M.
• Credit Facility Amendment
• Added $134.3 M term loan; extended maturity to June 10 2029; reduced accordion from $75 M to $50 M.
• Combined interest rate as of Sept 30 2025: 5.70%.
• Other Acquisitions (finalized)
• Shortridge Ltd. (UK hospitality laundry) – no material adjustments in Q3.
• Buanderie C.M. (Montreal healthcare laundry) – no material adjustments in Q3.
• Capital Investment Plan FY 2025
• Total planned capex $10‑12 M (consolidated); additional $9.3 M for Stellar Mayan integration.
• Liquidity & Debt
• Debt net of cash: $220.3 M (up from $114.4 M FY 2024).
• Debt to total capital increased; payout ratio Q3 2025 = 19.9% (down from 22.3% YoY).
• Outlook
• Integration of Stellar Mayan expected to take 12‑18 months with cost synergies realized toward the end of that horizon.
• Management expects steady volume trends in healthcare and hospitality; no material impact anticipated from trade policies or US‑based customers/suppliers.

Notable Quotes

“On June 11, 2025, we completed the acquisition of Stellar Mayan establishing a national footprint in the UK commercial laundry and textile rental sector… We are excited to become a strategic supplier to the healthcare sector in the UK like we are in Canada.” – Linda McCurdy, President & CEO

All forward‑looking statements are subject to risks and uncertainties detailed in the release.