K-Bro Linen (KBL) Q3 2024 earnings summary

Executive summary

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

• Q3 revenue reached CAD 104.5 million, up 20.2% year-over-year; Adjusted EBITDA was CAD 23 million, up 27.2%.

• Hospitality revenue surged 36.8%, healthcare revenue grew 6% compared to Q3 2023.

• Early contributions from recent acquisitions, notably Shortridge, Villeray, and Paranet, were highlighted.

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

Financial highlights

• Consolidated Adjusted EBITDA increased 27.2% to CAD 23 million; margin rose to 22%.

• Net earnings grew 21.9% to CAD 8.1 million; Adjusted net earnings up 17.5% to CAD 8.3 million.

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

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

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

Outlook and guidance

• Expecting mid-single-digit organic growth, with steady volumes in both healthcare and hospitality.

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

• CapEx for 2024 guided to upper end of CAD 15–17 million; 2025 expected around CAD 10 million.

• Anticipate continued M&A activity in 2025, with both small and larger acquisitions in the pipeline.

• Continued focus on strategic acquisitions and leveraging strong liquidity for growth.