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K-Bro reports first quarter revenue and EBITDA for 2020

(TSX: KBL)EDMONTON, May 7, 2020 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") today announces its 2020 Q1 financial and operating results. 2020 Financial and Operating Highlights

Revenue for the three months ended March 31, 2020 was $57.3 million and decreased by 0.9% over the comparable 2019 period. This reflects a period of significant growth through the end of February, with a significant decline in March after the COVID-19 restrictions began in Canada and the UK.



EBITDA decreased in the first quarter to $3.7 million compared to $9.1 million over the comparable 2019 period. This includes a non-cash impairment to goodwill of $5.5 million related to three smaller hospitality cash generating units within the Canadian Division, without which EBITDA would have been $9.2 million.



EBITDA margin for the first quarter including the impairment decreased to 6.5% from 15.8% for the comparative period of 2019. Excluding the non-cash impairment charge, EBITDA margin increased to 16.2% from 15.8%.



On a consolidated basis excluding IFRS 16 Leases ("IFRS 16") and the impairment of assets, the Corporation recorded adjusted EBITDA of $7.1 million, adjusted EBITDA margin of 12.4%, and adjusted net earnings of $1.0 million in the first quarter of 2020. This is an increase over the comparable 2019 period where adjusted EBITDA was $6.8 million, adjusted EBITDA margin was 11.8% and adjusted net earnings was $0.6 million.



Net earnings in the first quarter of 2020 decreased by $3.9 million to $-3.4 million compared to $0.5 million in the comparative period of 2019, and as a percentage of revenue decreased by 6.9% to 6.0% this includes the non-cash impairment charge of $5.5 million.



During the first quarter, K-Bro declared dividends of $0.300 per common share and distributable cash was $0.574 per common share on a fully diluted basis.

Linda McCurdy, President & CEO of K-Bro commented, "First and foremost, I would like to express my sincerest gratitude to the hundreds of front-line employees who are dedicated to ensuring our healthcare customers receive hygienically clean linen and our hotels continue to receive their products as required." A 
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