K-Bro Linen (KBL) Q4 2023 earnings summary

Executive summary

• Record FY2023 results: revenue $320,884k, EBITDA $56,806k and net earnings $17,607k, all above FY2022; healthcare and hospitality revenue grew in both Canada and the UK.

• FY2024 outlook is positive, with steady healthcare and hospitality demand expected and EBITDA margins forecast to follow historical seasonal trends.

Financial highlights

• FY2023 revenue rose to $320,884k from $276,623k; Q4 revenue was $82,464k versus $70,671k.

• FY2023 EBITDA was $56,806k versus $36,492k; Q4 EBITDA was $14,279k versus $8,726k.

• Adjusted EBITDA, excluding the $945k contingent-consideration settlement gain, was $55,861k for FY2023 and $13,334k for Q4, versus $36,492k and $8,726k in 2022.

• FY2023 net earnings were $17,607k versus $3,906k; Q4 net earnings were $4,249k versus $280k.

• FY2023 diluted EPS was $1.640 versus $0.364; Q4 diluted EPS was $0.399 versus $0.026.

Outlook and guidance

• Healthcare activity is expected to remain strong, supported by efforts to reduce wait times and enhance patient care; hospitality activity is expected to benefit from business and leisure travel and seasonal trends.

• FY2024 capital spending is expected to be $15.0m–$17.0m, including Villeray-related expenditures and strategic and maintenance needs in Canada and the UK.

• EBITDA margins benefited from pricing that offset inflation-related costs in 2023; management expects margins to follow historical seasonal trends.

• Acquisition opportunities remain a strategic focus, with an active pipeline and stated intent to remain disciplined while using liquidity, the balance sheet and capital-market access.