K-BRO REPORTS SEVENTH CONSECUTIVE QUARTER OF RECORD RESULTS AND POSITIVE OUTLOOK

Executive Summary

• K‑Bro reported record 2025 results – revenue up 35.7% to $506.8 M, Adjusted EBITDA up 36.9% to $98.7 M and Adjusted net earnings up 39.8% to $30.4 M.
• Completed the acquisition of UK‑based Stellar Mayan for a total purchase price of $194.7 M (cash $194.7 M, funded by issuance of 2,334,500 common shares at $34.55 each and a new $134.3 M term loan).
• Declared a dividend of $1.20 per share; amended credit facility to add a $134.3 M amortizing term loan extending maturity to June 10 2029.

Key Details

• Revenue: $506.8 M (2025) vs $373.6 M (2024); Healthcare $276.5 M (+41.2%); Hospitality $230.3 M (+29.5%).
• Adjusted EBITDA: $98.7 M (up 36.9% YoY); Adjusted EBITDA margin 19.5%.
• Net Earnings: Adjusted net earnings $30.4 M (↑39.8%); GAAP net earnings $18.0 M (↓$0.7 M).
• Dividends: $1.20 per common share declared for FY 2025.
• Stellar Mayan Acquisition:
• Share purchase agreement signed 13 May 2025; closing 11 June 2025.
• Purchase price: $194,695 k (cash consideration net of $5,156 k cash acquired).
• Financing: 2,334,500 common shares @ $34.55/share → $75.6 M net proceeds; $134.3 M four‑year amortizing term loan.
• Net identifiable assets acquired: $126,974 k; Goodwill $67,721 k; Intangible assets $45,474 k (customer relationships $33.4 M, brands $12.1 M).
• Acquisition contributed $99.074 M revenue and a ($1.879 M) net deficit for the period 12 Jun‑31 Dec 2025. Pro‑forma FY 2025 revenue would have been $582.956 M.
• Credit Facility Amendment: Added $134.3 M term loan, extended maturity to 10 June 2029; reduced accordion from $75 M to $50 M. Debt (ex‑lease) end‑2025: $214.2 M.
• Capital Investment Plan FY 2026: Expected capex $20–22 M (incl. remaining Stellar Mayan spend).
• Outlook: Management expects positive outlook in Canada and UK; integration of Stellar Mayan to be 12–18 months with run‑rate cost synergies realized thereafter.

Notable Quotes

“2025 was a transformational year for K‑Bro… we are excited to extend that leadership into other global markets.” – Linda McCurdy, President & CEO
“Integration has been progressing as expected, and we anticipate run‑rate cost synergies will be realized over the twelve to twenty‑four months guided.” – Linda McCurdy

Materiality: Material – Positive (significant revenue/earnings growth and a major cross‑border acquisition).