K-Bro Linen (KBL) Q1 2026 earnings summary

Executive summary

• Achieved eighth consecutive quarter of record results, with Q1 2026 revenue of CAD 139 million and adjusted EBITDA of CAD 22.6 million, driven by steady healthcare and hospitality trends and successful integration of Stellar Mayan.

• Consolidated revenue increased 53% year-over-year, with healthcare revenue up 67% and hospitality revenue up 35%, reflecting the impact of the Stellar Mayan acquisition.

• Integration of Stellar Mayan progressing as planned, with anticipated cost synergies over 12–24 months.

• Maintains a resilient business model as an essential service provider, with a positive outlook for 2026.

Financial highlights

• Q1 2026 consolidated revenue rose 52.9% year-over-year to CAD 139.1 million; 90% of this growth was from the Stellar Mayan acquisition.

• Adjusted EBITDA increased 50.4% year-over-year to CAD 22.6 million; adjusted EBITDA margin was 16.2%, down 0.3% due to Stellar Mayan's margin profile.

• Adjusted net earnings for Q1 2026 were CAD 4.6 million, up 35% year-over-year, including CAD 2.3 million in transaction and transition costs.

• Distributable cash flow was CAD 9.4 million, with a payout ratio of 41.5% for the quarter and 29.7% trailing 12 months.

• Paid CAD 0.30 per share in dividends, totaling CAD 3.9 million.

Outlook and guidance

• Management expects combined adjusted EBITDA margins to remain at levels similar to seasonally adjusted historical margins.

• Organic growth for the remainder of 2026 is expected in the mid-single digit range (around 5%).

• Anticipates continued stable volume trends in both healthcare and hospitality segments.

• Expects some margin pressure from energy costs, with a potential 0.5% decrease in consolidated margins if diesel prices persist.

• 2026 capital spending guidance (excluding right-of-use assets) set at CAD 20–22 million, including remaining Stellar Mayan investment.