K-Bro Linen (KBL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results, driven by acquisitions and strong seasonal performance in both healthcare and hospitality segments.

• Consolidated revenue reached CAD 104.5 million, up 20.2% year-over-year, with hospitality revenue up 36.8% and healthcare revenue up 6.0%.

• Adjusted EBITDA was CAD 23 million, a 27.2% increase from Q3 2023.

• Management remains focused on organic growth, disciplined M&A, and maintaining industry-leading service.

• Early contributions from recent acquisitions, especially Shortridge, were highlighted.

Financial highlights

• Q3 2024 consolidated revenue: $104.5M, up 20.2% from Q3 2023.

• Adjusted EBITDA: $23.0M, up 27.2% year-over-year; margin increased to 22.0%.

• Net earnings increased by 21.9% to CAD 8.1 million; adjusted net earnings up 17.5% to CAD 8.3 million.

• Wages and benefits rose to CAD 39.2 million, but as a percentage of revenue, decreased to 37.5%.

• Dividends declared: $0.30 per share for Q3 2024, totaling CAD 3.2 million for the quarter.

Outlook and guidance

• Expecting mid-single-digit organic growth, combining volume and price.

• Annual Adjusted EBITDA margins anticipated to remain at similar levels, following seasonal trends and supported by energy cost hedges.

• Hospitality volumes have recovered but are not expected to exceed mid-single-digit growth.

• Canadian healthcare organic volume growth expected to be low single-digit, with CPI-type price increases.

• 2024 capital spending planned at CAD 15–17 million.