K-BRO REPORTS RECORD Q1 RESULTS AND ANNOUNCEMENT OF TRANSFORMATIONAL ACQUISITION OF UK BASED STAR MAYAN

(TSX: KBL)

EDMONTON, AB, May 13, 2025 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") today announces its Q1 2025 financial and operating results.

Q1 2025 Financial and Operating Highlights

• Revenue
  • Revenue increased by 13.4% in Q1 2025 to $91.0 million compared to $80.2 million in 2024.
  • Healthcare revenue increased to $50.6 million for Q1 2025 compared to $47.5 million in 2024, or by 6.5%.
  • Hospitality revenue increased to $40.4 million for Q1 2025 compared to $32.7 million in 2024, or by 23.3%.
• Adjusted EBITDA¹, Adjusted EBITDA Margin¹ & Adjusted Net Earnings¹
  • Adjusted EBITDA increased to $15.0 million in Q1 2025 compared to $13.4 million in 2024.
  • Adjusted EBITDA margin remained consistent at 16.5% in Q1 2025 compared to 16.7% in Q1 2024.
  • Adjusted net earnings decreased by $0.2 million to $3.4 million in Q1 2025 from $3.6 million in 2024.
• EBITDA, EBITDA Margin & Net Earnings
  • EBITDA increased by $0.8 million to $12.4 million for Q1 2025 compared to $11.6 million in 2024.
  • EBITDA margin for the quarter decreased to 13.6% in 2025 compared to 14.5% in 2024.
  • Net earnings for the quarter decreased by $1.0 million to $0.8 million in 2025 from $1.8 million in 2024, and as a percentage of revenue decreased by 1.4% to 0.9% in 2025 from 2.3% in 2024.
• For the first quarter of 2025, K-Bro declared dividends of $0.300 per common share.
• Long-term debt at the end of Q1 2025 was $119.3 million compared to $123.8 million at the end of fiscal 2024.

(1)	Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Earnings are non-GAAP measures. See "Terminology" for further information on the definition and composition of these measures.

Linda McCurdy, President & CEO of K-Bro, commented that "Today, K-Bro announced the transformative acquisition of Star Mayan, K-Bro's largest acquisition in our history.  The Acquisition, combined with K-Bro's existing U.K. businesses, Fishers and Shortridge, creates a top three national platform in the attractive U.K. market serving both healthcare and hospitality customers.  K-Bro's acquisition of Star Mayan adds a leading U.K healthcare-focused platform, enhancing revenue diversification by geographic mix and business mix.  We believe the U.K. healthcare market shares similar characteristics and trends to the Canadian healthcare market.  For additional details, please refer to the acquisition press release."

McCurdy continued "I'm pleased with our strong first quarter results and positive outlook amid the evolving geopolitical and trade landscape. We remain focused on delivering industry-leading service and supporting our customers.

Both of K-Bro's healthcare and hospitality segments continue to experience steady volume trends.  In our healthcare segment, we expect steady increases to activity levels supported by a continued focus on reducing wait times and enhancing patient care.  In our hospitality segment, we expect solid activity levels from both business and leisure travel.  We continue to monitor the evolving state of tariffs and other trade protections.  Currently, we are not anticipating meaningful impacts as key customers and suppliers are not US-based.

Star Mayan will be integrated into K-Bro's existing U.K. business under a newly created U.K. managing director.  Star's business leads will report to the U.K. managing director, along with regional leads from K-Bro's other businesses.  K-Bro has established a transition team to spearhead the Star integration process." 

Highlights and Significant Events for Q1 2025

Business Acquisition - Star Mayan

For additional details on K-Bro's acquisition of Star Mayan, please refer to the acquisition press release filed on May 13, 2025.  A summary is included below.

On May 13, 2025, the Corporation announced that it had signed a share purchase agreement with STAR Capital Partnership LLP to acquire 100% of U.K.-based STAR Mayan Limited ("Star Mayan") for a cash purchase price of £107.2 million (approximately $199.1 million), on a cash-free, debt-free basis, including a normalized level of working capital.  Star Mayan is an investment and holding company which owns 100% interests in three operating businesses: (i) Synergy Health Managed Services Limited ("Synergy"); (ii) Grosvenor Contracts (London) Limited ("Grosvenor"); and (iii) Aeroserve (MSP) Limited and Aeroserve Euro Limited, jointly referred to as Aeroserve Linen Services ("AeroServe"). Star Mayan, doing business as Synergy, Grosvenor and AeroServe, is a leading commercial laundry business in England, serving the healthcare and hospitality markets and has seven operating facilities strategically located across England: Bermondsey, Derby, Dunstable, Sheffield, Slough (2), and St. Helens, in addition to a distribution depot in Manchester.

Subscription Receipt Offering

On May 13, 2025, the Corporation has entered into an agreement to sell subscription receipts on a bought deal basis to a syndicate of underwriters led by TD Securities Inc. for gross proceeds of $70 million (the "Offering"). In addition, K-Bro has granted the syndicate an over-allotment option, exercisable for a period of 30 days following the closing of the Offering, which, if exercised, would increase the gross Offering size to $80.5 million.

Revolving Credit Facility

On May 13, 2025, the Corporation amended its existing three-year committed Syndicated Credit Facility Agreement to include a $150 million four-year amortizing term loan and to extend the term of the facility from March 25, 2027 to May 13, 2029. The amendment included a reduction in the accordion to $50 million from $75 million.

On March 26, 2024, the Corporation entered into a three-year committed Syndicated Credit Facility Agreement from March 26, 2024 to March 25, 2027. The agreement consists of a $175 million revolving credit facility plus a $75 million accordion.

The Corporation's incremental borrowing rate under its existing credit facility is determined by the Canadian prime rate plus an applicable margin based on the ratio of Funded Debt to EBITDA as defined in the credit agreement.

Business Acquisition - Shortridge

For the quarter ended March 31, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Shortridge Ltd, a private hospitality laundry provider based in the North West of England were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the quarter ended March 31, 2025. No new business acquisitions were made during the quarter ended March 31, 2025.

Business Acquisition - Buanderie C.M.

For the quarter ended March 31, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Buanderie C.M., a private laundry and linen operator located in Montreal serving the healthcare market were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the quarter ended March 31, 2025. No new business acquisitions were made during the quarter ended March 31, 2025.

Capital Investment Plan

For fiscal 2025, the Corporation's planned capital spending is expected to be in the range of $10.0 to $12.0 million on a consolidated basis. This guidance includes both strategic and maintenance capital requirements to support existing base business in both Canada and the UK. These amounts are not reflective of incremental capital required for the Star Mayan Acquisition.  We will continue to assess capital needs within our facilities and prioritize projects that have shorter term paybacks as well as those that are required to maintain efficient and reliable operations.

Economic Conditions

The Corporation's Credit Facility is subject to floating interest rates and, therefore, is subject to fluctuations in interest rates which are beyond the Corporation's control. Increases in interest rates, both domestically and internationally, could negatively affect the Corporation's cost of financing its operations and investments.

Evolving global and Canadian foreign policies, geopolitical events and economic conditions may impact inflation, energy pricing, labour availability, supply chain efficiency, trade policies, tariffs and/or other items, which may have a direct or indirect impact on the Corporation's business.

Uncertainty about judgments, estimates and assumptions made by management during the preparation of the Corporation's consolidated financial statements related to potential impacts of geopolitical events and rising interest rates on revenue, expenses, assets, liabilities, and note disclosures could result in a material adjustment to the carrying value of the asset or liability affected.

Financial Results

	For The Three Months Ended March 31,
(thousands, except per share amounts and percentages)	Canadian Division 2025	UK Division 2025	2025	Canadian Division 2024	UK Division 2024	2024	$ Change	% Change
Revenue	$           66,572	$           24,397	$          90,969	$           62,700	$            17,527	$           80,227	10,742	13.4 %
Expenses included in EBITDA	56,551	22,014	78,565	52,821	15,801	68,622	9,943	14.5 %
EBITDA^(1)	10,021	2,383	12,404	9,879	1,726	11,605	799	6.9 %
EBITDA as a % of revenue	15.1 %	9.8 %	13.6 %	15.8 %	9.8 %	14.5 %	-0.9 %	-6.2 %
Adjusted EBITDA^(1)	11,941	3,052	14,993	11,618	1,817	13,435	1,558	11.6 %
Adjusted EBITDA as a % of revenue	17.9 %	12.5 %	16.5 %	18.5 %	10.4 %	16.7 %	-0.2 %	-1.2 %
Net earnings (loss)	846	(20)	826	1,679	127	1,806	(980)	-54.3 %
Basic earnings (loss) per share	$             0.081	$            (0.002)	$             0.079	$             0.160	$              0.012	$             0.172	$          (0.093)	-54.1 %
Diluted earnings (loss) per share	$             0.080	$            (0.002)	$             0.078	$             0.159	$              0.012	$             0.171	$          (0.093)	-54.4 %
Dividends declared per diluted share			$             0.300			$             0.300	$                   -	0.0 %
Adjusted net earnings ^(1)	2,766	649	3,415	3,418	218	3,636	(221)	-6.1 %
Adjusted basic earnings per share ^(1)	$             0.263	$             0.062	$             0.325	$             0.325	$              0.021	$             0.345	$          (0.020)	-5.8 %
Adjusted diluted earnings per share^(1)	$             0.262	$             0.061	$             0.323	$             0.323	$              0.021	$             0.343	$          (0.020)	-5.8 %
Total assets			438,446			361,859	76,587	21.2 %
Long-term debt (excludes lease liabilities)			119,295			65,727	53,568	81.5 %
Cash provided by  operating activities			17,256			12,692	4,564	36.0 %
Net change in non-cash working capital items			7,409			3,192	4,217	132.1 %
Share-based compensation expense			649			508	141	27.8 %
Maintenance capital expenditures			720			387	333	86.0 %
Principal elements of lease payments			2,723			2,631	92	3.5 %
Distributable cash flow ^(1)			5,755			5,974	(219)	-3.7 %
Dividends declared			3,174			3,177	(3)	-0.1 %
Payout ratio ^(1)			55.1 %			53.2 %	1.9 %	3.6 %
(1) See "Terminology" for further details

Dividends

The Board of Directors has declared a monthly dividend of $0.10 per common share for the period from May 1 to May 31, 2025, to be paid on June 13, 2025, to shareholders of record on May 30, 2025. The Corporation's policy is for shareholders of record on the last business day of a calendar month to receive dividends during the fifteen days following the end of such month. K-Bro designates this dividend as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada) and similar provincial and territorial legislation.

OUTLOOK

K-Bro's acquisition of Star Mayan adds a leading U.K healthcare-focused platform, enhancing revenue diversification by geographic mix and business mix. Management believes the U.K. healthcare market shares similar characteristics and trends to the Canadian healthcare market.

The Corporation's healthcare and hospitality segments continue to experience steady volume trends. For the healthcare segment, management expects steady increases to activity levels supported by a continued focus on reducing wait times and enhancing patient care. For the hospitality segment, management expects solid activity levels from both business and leisure travel reflecting historical seasonal trends. 

Going forward, management expects combined Adjusted EBITDA margins will remain at similar levels to seasonally adjusted historical margins. The Corporation continues to monitor evolving global and Canadian foreign policies, geopolitical events and economic conditions, which could have a direct or indirect impact on the business.

In 2024, the Corporation modified its definition of Adjusted EBITDA.  As K-Bro actively pursues its growth opportunities, the Corporation will continue to incur certain transaction, transition, syndication/structural financing costs.  In this context, management believes Adjusted EBITDA assists investors to assess our performance on a consistent basis as it is an indication of our capacity to generate income from operations. Adjusting items are detailed in the tables within "Terminology".   

With continued momentum in existing operations, management has refocused attention on strategic acquisitions, such as the acquisitions of Star Mayan, C.M., Shortridge, Villeray and Paranet, to accelerate growth in North America, Europe, and similar geographies which remain highly fragmented. K-Bro will look to leverage its strong liquidity position, balance sheet and access to the capital markets to execute on these opportunities, should they arise. For further information about the impact of other economic factors on our business, see the "Summary of Interim Results and Key Events". 

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada and a market leader for laundry and textile rental services in Scotland and the North of England. K­­­‑Bro and its wholly-owned subsidiaries operate across Canada and the UK, providing a range of linen services to healthcare institutions, hotels and other commercial accounts that include the processing, management and distribution of general linen and operating room linen.

The Corporation's operations in Canada include eleven processing facilities and two distribution centres in ten Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Prince Albert, Edmonton, Calgary, Vancouver and Victoria.

The Corporation's operations in the UK include two distinctive brands, Fishers Topco Ltd. ("Fishers") which was acquired by K-Bro on November 27, 2017 and Shortridge Ltd. ("Shortridge"), which was acquired by K-Bro on April 30, 2024. 

Fishers was established in 1900 and is an operator of laundry and linen processing facilities in Scotland, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North of England. The company operates in five cities, in Scotland and the North of England with facilities in Cupar, Perth, Newcastle, Livingston and Coatbridge.

Shortridge is headquartered in North West England, with laundry processing sites in Lillyhall and Dumfries and a distribution centre in Darlington. Shortridge, established in 1845, specialises in providing high quality laundry services to local independent hospitality businesses, including hotels, B&Bs, self-catering units and restaurants.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedarplus.ca; the System for Electronic Document Analysis and Retrieval ("SEDAR +").

TERMINOLOGY

Throughout this news release and other documents referred to herein, and in order to provide a better understanding of the financial results, K-Bro uses the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "debt to total capital", "distributable cash" and "payout ratio". These terms do not have any standardized meaning under International Financial Reporting Standards ("IFRS Accounting Standards") as set out in the CICA Handbook. Therefore, EBITDA, adjusted EBITDA, adjusted net earnings, adjusted net earnings per share, distributable cash and payout ratio may not be comparable to similar measures presented by other issuers. Specifically, the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "distributable cash", and "payout ratio" have been defined as follows:

EBITDA

EBITDA (Earnings before interest, taxes, depreciation and amortization) comprises revenues less operating costs before financing costs, capital asset and intangible asset amortization, and income taxes.

EBITDA is a sub‑total presented within the statement of earnings. EBITDA is not considered an alternative to net earnings in measuring K‑Bro's performance. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. 

		Three Months Ended March 31,
(thousands)		2025		2024
Net earnings		$               826		$             1,806
Add:
	Income tax (recovery) expense	(311)		569
	Finance expense	2,837		1,923
	Depreciation of property, plant and equipment	7,935		7,006
	Amortization of intangible assets	1,117		301
EBITDA		$          12,404		$           11,605

Non-GAAP Measures

Adjusted EBITDA

K‑Bro reports Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) as a key measure used by management to evaluate performance. We believe Adjusted EBITDA assists investors to assess our performance on a consistent basis as it is an indication of our capacity to generate income from operations before taking into account management's financing decisions as well as costs of acquiring tangible and intangible capital assets.  The Corporation modified its definition for Adjusted EBITDA in 2024 and has updated its comparative quarters to reflect the modified definition.

"Adjusted EBITDA" is EBITDA (defined above) with the addition or deduction of certain amounts incurred which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration and any other non-recurring transactions.

The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability. 

		Three Months Ended March 31,
		Canadian Division 2025	UK Division 2025	2025	Canadian Division 2024	UK Division 2024	2024
(thousands)
EBITDA		$           10,021	$             2,383	$          12,404	$             9,879	$             1,726	$           11,605
Adjusting Items:
	Transaction Costs ^1	1,488	669	2,157	30	91	121
	Syndication/Structural Finance Costs ^2	432	-	432	1,500	-	1,500
	Transition Costs ^3	-	-	-	209	-	209
					-	-	-
Adjusted EBITDA		$           11,941	$             3,052	$           14,993	$           11,618	$             1,817	$           13,435
	^1Relates to legal, professional and consulting fee expenditures made related to acquisitions.
	^2Relates to costs incurred for syndication and credit agreement restructuring costs.
	^3Relates to transition costs incurred as a result of the Corporation's acquisitions.

Adjusted Net Earnings and Adjusted Earnings per Share

Adjusted Net Earnings and Adjusted Earnings per Share are non-GAAP measures. These non-GAAP measures are defined to exclude certain amounts which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration and any other non-recurring transactions. The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability. 

		Three Months Ended March 31,
		Canadian Division 2025	UK Division 2025	2025	Canadian Division 2024	UK Division 2024	2024
(thousands)
Net Earnings		$               846	$                (20)	$               826	$             1,679	$                127	$             1,806
Adjusting Items:
	Transaction Costs ^1	1,488	669	2,157	30	91	121
	Syndication/Structural Finance Costs ^2	432	-	432	1,500	-	1,500
	Transition Costs ^3	-	-	-	209	-	209
					-	-	-
Adjusted Net Earnings		$             2,766	$               649	$             3,415	$             3,418	$                218	$             3,636
^1Relates to legal, professional and consulting fee expenditures made related to acquisitions.
^2Relates to costs incurred for syndication and credit agreement restructuring costs.
^3Relates to transition costs incurred as a result of the Corporation's acquisitions.

		Three Months Ended March 31,
		Canadian Division 2025	UK Division 2025	2025	Canadian Division 2024	UK Division 2024	2024
(thousands)
Basic Earnings per Share		0.081	(0.002)	0.079	0.160	0.012	0.172
Adjusting Items:
	Transaction Costs ^1	0.141	0.064	0.205	0.003	0.009	0.011
	Syndication/Structural Finance Costs ^2	0.041	-	0.041	0.142	-	0.142
	Transition Costs ^3	-	-	-	0.020	-	0.020
					-	-	-
Adjusted Basic Earnings per Share		0.263	0.062	0.325	0.325	0.021	0.345
	^1Relates to legal, professional and consulting fee expenditures made related to acquisitions.
	^2Relates to costs incurred for syndication and credit agreement restructuring costs.
	^3Relates to transition costs incurred as a result of the Corporation's acquisitions.

		Three Months Ended March 31,
		Canadian Division 2025	UK Division 2025	2025	Canadian Division 2024	UK Division 2024	2024
(thousands)
Diluted Earnings per Share		0.080	(0.002)	0.078	0.159	0.012	0.171
Adjusting Items:
	Transaction Costs ^1	0.141	0.063	0.204	0.003	0.009	0.012
	Syndication/Structural Finance Costs ^2	0.041	-	0.041	0.141	-	0.141
	Transition Costs ^3	-	-	-	0.020	-	0.020
					-	-	-
Adjusted Diluted Earnings per Share		0.262	0.061	0.323	0.323	0.021	0.343
^1Relates to legal, professional and consulting fee expenditures made related to acquisitions.
^2Relates to costs incurred for syndication and credit agreement restructuring costs.
^3Relates to transition costs incurred as a result of the Corporation's acquisitions.

Distributable Cash Flow

Distributable cash flow is a measure used by management to evaluate the Corporation's performance. While the closest IFRS Accounting Standards measure is cash provided by operating activities, distributable cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures. It should be noted that although we consider this measure to be distributable cash flow, financial and non‑financial covenants in our credit facilities and dealer agreements may restrict cash from being available for dividends, re‑investment in the Corporation, potential acquisitions, or other purposes. Investors should be cautioned that distributable cash flow may not actually be available for growth or distribution from the Corporation. Management refers to "Distributable cash flow" as to cash provided by (used in) operating activities with the addition of net changes in non‑cash working capital items, less share‑based compensation, maintenance capital expenditures and principal elements of lease payments.

			Three Months Ended March 31,
(thousands)			2025	2024
Cash provided by  operating activities			$           17,256	$           12,692
Deduct (add):
	Net changes in non-cash working capital items		7,409	3,192
	Share-based compensation expense		649	508
	Maintenance capital expenditures		720	387
	Principal elements of lease payments		2,723	2,631
Distributable cash flow			$             5,755	$             5,974

Payout Ratio

"Payout ratio" is defined by management as the actual cash dividend divided by distributable cash. This is a key measure used by investors to value K-Bro, assess its performance and provide an indication of the sustainability of dividends. The payout ratio depends on the distributable cash and the Corporation's dividend policy.

			Three Months Ended March 31,
(thousands)			2025	2024
	Cash dividends		3,174	3,177
	Distributable cash flow		5,755	5,974
Payout ratio			55.1 %	53.2 %

Debt to Total Capital

"Debt to total capital" is defined by management as the total long‑term debt (excludes lease liabilities) divided by the Corporation's total capital. This is a measure used by investors to assess the Corporation's financial structure.

Distributable cash flow, payout ratio, debt to total capital adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share are not calculations based on IFRS Accounting Standards and are not considered an alternative to IFRS Accounting Standards measures in measuring K‑Bro's performance. Distributable cash Flow, payout ratio, adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share do not have standardized meanings in IFRS Accounting Standards and are therefore not likely to be comparable with similar measures used by other issuers.

FORWARD LOOKING STATEMENTS

This news release contains forward‑looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward‑looking information. Statements regarding such forward‑looking information reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things: (i) risks associated with acquisitions, including (a) the possibility of undisclosed material liabilities, disputes or contingencies, (b) challenges or delays in achieving synergy and integration targets, (c) the diversion of management's time and focus from other business concerns and (d) the use of resources that may be needed in other parts of our business; (ii) K-Bro's competitive environment; (iii) utility costs, minimum wage legislation and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk and the risks associated with maintaining short term contracts; (v) increased capital expenditure requirements; (vi) reliance on key personnel; (vii) changing trends in government outsourcing; (viii) changes or proposed changes to minimum wage laws in Ontario, British Columbia, Alberta, Quebec, Saskatchewan and the United Kingdom (the "UK"); (ix) the availability and terms of future financing; * textile demand; (xi) availability and access to labour; (xii) rising wage rates in all jurisdictions the Corporation operates and (xiii) foreign currency risk. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) expected impact of labour cost initiatives; (iii) frequency of one-time costs impacting quarterly and annual financial results; (iv) foreign exchange rates; (v) the level of capital expenditures and (vi) the expected impact of the COVID-19 pandemic on the Corporation. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. Forward looking information included in this news release includes the expected annual healthcare revenues to be generated from the Corporation's contracts with new customers, calculation of costs, including one-time costs impacting the quarterly financial results, anticipated future capital spending and statements with respect to future expectations on margins and volume growth.

All forward‑looking information in this news release is qualified by these cautionary statements. Forward‑looking information in this news release is presented only as of the date made. Except as required by law, K‑Bro does not undertake any obligation to publicly revise these forward‑looking statements to reflect subsequent events or circumstances.

This news release also makes reference to certain measures in this document that do not have any standardized meaning as prescribed by IFRS Accounting Standards and, therefore, are considered non‑GAAP measures. These measures may not be comparable to similar measures presented by other issuers. Please see "Terminology" for further discussion.

SOURCE K-Bro Linen Inc.

For more information, please contact: Linda McCurdy, Chief Executive Officer, K-Bro Linen Inc. (TSX: KBL), Phone: [phone], Email: [email protected], Web: www.k-brolinen.com