Good morning, ladies and gentlemen, and welcome to the K-Bro Linen Systems Inc Third Quarter 2025 Results Conference Call. At this time, all lines are listen only. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, November 13th, 2025. I will now turn the conference over to Kristie Plaquin. Please go ahead. Thank you, Operator, and good morning, everyone. Thank you for joining us today, and welcome to our Third Quarter Results Conference Call. On the line with me today is Linda McCurdy, President and Chief Executive Officer. Before we begin, I'd like to remind everyone that statements made during our prepared remarks to the conference call with reference to management's expectations or our predictions of the future are forward-looking statements. All statements made today, which are not statements of historical fact, are considered to be forward-looking statements. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection, as reflected in the forward-looking information. Investors are also cautioned not to place undue reliance on these statements. Actual results could differ materially from those anticipated. Risk factors that could affect the results are detailed in the corporation's public filings. I'll now turn the call over to our CEO, Linda McCurdy, who will provide her insights and remarks on the quarter. Linda? Thank you, Kristie, and good morning to everyone. Thank you for joining today to review our 2025 third quarter results. I'll spend time focusing on the main highlights of the third quarter, and then I'll hand it over to Kristie to provide more details on our financial performance and the balance sheet. We are delighted to have reported record results for Q3, with revenue of CAD 156 million and adjusted EBITDA of CAD 33.5 million for the quarter. Q3 marks our sixth consecutive quarter of record results and includes early contributions from the Stellar Mayan acquisition. This acquisition has enabled us to establish a national footprint in the U.K. commercial laundry and textile rental sector and really enhances our revenue diversification by geography and business mix. Based on annualized consolidated revenue, K-Bro's combined business is now approximately evenly split between Canada and the U.K., with national platforms in both countries. We're excited to become a strategic supplier to the healthcare sector in the U.K., like we are in Canada. We believe the U.K. healthcare market shares similar characteristics and trends to the Canadian healthcare market. While it's still early, we're pleased with the progress of our ongoing integration efforts as we work towards optimizing our local and national footprints and positioning K-Bro for long-term growth. Consolidated revenue in the third quarter increased by 49% compared to Q3 2024, with healthcare revenue having increased by 67% and hospitality revenue by 34%. Healthcare revenues represented about 53% of our consolidated revenues, which is higher compared to 47% in 2024 due to the acquisition of Stellar. A key point, of course, is that strategic acquisitions of high-quality operators with leading market positions in key regions have always been an important contributor to our overall growth profile, and we continue to actively pursue these growth opportunities. Of course, we will continue to incur certain transaction, transition, and financing costs, which are reflected in our adjusted EBITDA number. In this context, we do believe that adjusted EBITDA before adjusting items will assist investors to assess our performance on a more consistent basis, as it is an indication of our capacity to generate income from operations. As always, we are focused on delivering industry-leading service, and we are proud of our talented combined team that focuses tirelessly on being dependable partners to our existing and new healthcare and hospitality customers. I'll now turn it over to Kristie to discuss our detailed financial results for the quarter, and then I will come back to you and talk about our outlook. Kristie, over to you. Thank you, Linda. The information we are discussing today is also highlighted in our 2025 third quarter earnings press release issued yesterday, and detailed supplemental financial information can also be found on our investor relations website under the heading Financials. As a result of the Stellar Mayan acquisition in June 2025, consolidated hospitality revenue for Q3 increased by 33.6% over the comparable period of 2024, and the corporation saw a 66.8% increase in consolidated healthcare revenue for an overall increase in consolidated revenue of 49.3%. As we've discussed in previous quarters, when reporting adjusted EBITDA, we've revised our adjusting items to reflect certain amounts which are not indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains and losses on settlement of contingent consideration, and any other non-recurring transactions as defined within our MD&A. We believe adjusted EBITDA will assist investors to assess our performance on a consistent basis, and details of the calculations and the adjustments can be found in our MD&A under terminology. Consolidated adjusted EBITDA increased in Q3 of 2025 to CAD 33.5 million, or by 45.9% compared to CAD 23 million in 2024. Adjusted EBITDA margin decreased to 21.5% in 2025 from 22% in 2024. The decrease is due to the combination of the lower Stellar Mayan margin profile. Consolidated EBITDA increased in Q3 2025 to CAD 32 million, or by 40.2% compared to CAD 22.8 million in 2024. On a consolidated basis, EBITDA margin decreased to 20.5% in 2025 from 21.9% in 2024. For the Canadian division, the adjusted EBITDA margin in the third quarter of 2025 increased to 22.8% compared to 20.8% in 2024. The increase in adjusted EBITDA margin was largely due to labor efficiencies and the elimination of the Canadian carbon tax in 2025. EBITDA margin increased to 22.6% in the third quarter of 2025 from 20.7% in 2024. For the U.K. division, the adjusted EBITDA margin in the third quarter decreased to 20.3% in 2025 compared to 24.3% in 2024. The decrease is due to the combination of the lower Stellar Mayan margin profile. The EBITDA margin for the U.K. division decreased to 18.8% in the third quarter of 2025 compared to 24.3% in 2024, and the decrease in EBITDA margin is due to the adjusting items in the quarter related to Stellar Mayan's transaction and transition costs, in addition to the lower margin profile. Net earnings increased by CAD 0.8 million in the third quarter of 2025, or 8.9%, from CAD 8.1 million in 2024 to CAD 8.9 million in 2025. Net earnings as a percentage of revenue decreased to 5.7% in 2025 compared to 7.8% in 2024. Wages and benefits in the third quarter of 2025 increased by CAD 21.4 million to CAD 60.6 million compared to CAD 39.2 million in the comparative period of 2024, and as a percentage of revenue increased by 1.4 percentage points to 38.9%. The increase as a percentage of revenue is primarily due to the combination of the Stellar Mayan cost structure. Linen in the third quarter of 2025 increased by CAD 5.3 million to CAD 15.3 million compared to CAD 10 million in the comparative period of 2024, and as a percentage of revenue increased by 0.2 percentage points to 9.8%. Utilities in the third quarter of 2025 increased by CAD 2.1 million to CAD 9.5 million compared to CAD 7.4 million in the comparative period of 2024, and as a percentage of revenue decreased by 0.9 percentage points to 6.1%. The decrease as a percentage of revenue is primarily related to lower gas costs in the U.K. market and the elimination of the carbon tax in Canada in Q2 of 2025. Delivery in the third quarter of 2025 increased by CAD 4.7 million to CAD 16.9 million compared to CAD 12.2 million in the comparative period of 2024, and as a percentage of revenue decreased by 0.8 percentage points to 10.8%. The decrease as a percentage of revenue is primarily related to the combination of the Stellar Mayan cost structure, delivery route optimization, and lower fuel prices in Canada. Occupancy costs in the third quarter of 2025 increased by CAD 1.3 million to CAD 2.9 million compared to CAD 1.6 million in the comparative period of 2024, and as a percentage of revenue increased by 0.3 percentage points to 1.9%. The increase as a percentage of revenue is primarily related to higher facility operating costs. Materials and supplies in the third quarter of 2025 increased by CAD 3.8 million to CAD 7.4 million compared to CAD 3.6 million in the comparative period of 2024, and as a percentage of revenue increased by 1.3 percentage points to 4.8%. The increase as a percentage of revenue is primarily related to the combination of the Stellar Mayan cost structure. Repairs and maintenance in the third quarter of 2025 increased by CAD 2 million to CAD 5.9 million compared to CAD 3.9 million in the comparative period of 2024, and as a percentage of revenue increased by 0.1 percentage points to 3.8%. Corporate costs in the third quarter increased by CAD 1.1 million to CAD 5.3 million compared to CAD 4.2 million in the comparative period of 2024, and as a percentage of revenue decreased by 0.6 percentage points to 3.4%. The decrease as a percentage of revenue is primarily related to the combination of the Stellar Mayan cost profile. Now, looking at our capital resources, distributable cash for the third quarter of 2025 was CAD 19.6 million, and our payout ratio was just under 20%. The company paid out CAD 0.3 per share in dividends during the quarter for total consideration of CAD 3.9 million. The corporation had net working capital of CAD 95.7 million at September 30, 2025, compared to its working capital position of CAD 54.1 million at December 31st. The increase in working capital is primarily attributable to the acquisition of Stellar Mayan on June 11, 2025. With regards to credit and liquidity, we have a strong balance sheet and ample undrawn capacity on our syndicated revolving credit facility, which has an operating line of CAD 175 million, an amortizing term loan of CAD 134.3 million, and a further CAD 50 million accordion for growth purposes. At September 30th, we had an undrawn balance of close to CAD 54 million on our operating line without taking into account the accordion, which reinforces our strong liquidity. This results in a debt-to-EBITDA ratio on a pro forma basis, excluding leases, of about 2.7x. Debt-to-total capitalization for the period ended September 30th, 2025, was 49.5%. Total debt net of cash decreased in the quarter from CAD 228.3 million to CAD 220.3 million due to repayments of revolving debt and the amortizing term loan. I'll now turn things back over to Linda for additional commentary. Linda, please go ahead. Thank you so much, Kristie. Just want to point out that K-Bro went public 20 years ago with a vision to deliver industry-leading essential service to healthcare and hospitality customers. At the time of our IPO, we had four Canadian facilities and aspirations for national expansion. Today, we've grown our footprint to 25 facilities with national platforms in both Canada and the U.K. Our coast-to-coast footprints in both countries give us strategic national presence, scale and efficiencies, and we're excited by our growth opportunities ahead. While still early, we're pleased with the progress of our ongoing Stellar Mayan integration efforts. Our U.K. managing director, who is an experienced K-Bro veteran, oversees the combined U.K. operations, including the Stellar Mayan business integration plan. Our transition team is reviewing cost synergies, operational efficiencies, and platform optimizations, and we anticipate run rate cost synergies will be realized over the contemplated 24-month time horizon. On a consolidated basis, we're excited about the future potential of our combined business. We have been market leaders in the Canadian healthcare sector for over half a century, and we're excited to expand the scale of our U.K. healthcare business. Both of K-Bro's healthcare and hospitality segments continue to experience steady growth trends. In the healthcare segment, we expect activity levels to remain strong from continued focus on reduced wait times and enhanced patient care. In the hospitality segment, we expect solid activity levels from both business and leisure travel, reflecting historical seasonal trends. Going forward, we expect combined adjusted EBITDA margins will remain at similar levels to seasonally adjusted combined historical margins. In line with management's expectations, due to the lower EBITDA margin profile of Stellar, the consolidated U.K. divisional adjusted EBITDA margins will be lower than seasonally adjusted historical margins. We continue to monitor evolving global and Canadian foreign policies, geopolitical events, and economic conditions, which could have a direct or indirect impact on K-Bro. We're not currently expecting meaningful impacts on the business, as key customers and suppliers are not U.S.-based. On November 5th, you will have noticed we announced a new board appointment. We are absolutely delighted to announce the appointment of the Honorable Rona Ambrose to our Board of Directors. Ms. Ambrose is the Deputy Chairman at TD Bank Group's Investment Bank. She's also served on several corporate and nonprofit boards. She's the founder and chair of the Council of Women's CEOs, chair of Plan International Canada, and a passionate global champion for the rights of women and girls. I'm sure most of you know that prior to her retirement from politics in 2017, she was leader of Canada's official opposition in the House of Commons and leader of the Conservative Party of Canada. She's held many cabinet positions during her time, and we are absolutely delighted to add her as a board member to K-Bro. We are, going forward, committed to a sustainable future, and we're proud to say that we have seven decades of responsible, innovative growth. We are excited to publish our third annual sustainability report in the next month. It will be accessible on our website. We continue to collaborate with our shareholders to appreciate their priorities, solicit and receive feedback, and align around common goals. Our services are essential to the continuity of our customers' operations, and we're embodying sustainability practices to support them for the long term. I'll now open it up to any questions you may have as it relates to the third quarter. Thank you, Linda. Ladies and gentlemen, we will now begin the question-and-answer session. If you'd like to ask a question, please press star followed by number one on your telephone keypad. If your question has been answered and you'd like to withdraw from the queue, please press star followed by number two. If you're using a speakerphone, please lift your handset before pressing any keys. One moment, please, while we compile the roster. Your first question comes from Michael Glen with Raymond James. Please go ahead. Oh, hey, Linda. Good morning. Good morning, Kristie as well. Linda, just to start, with the U.K. division, if we're looking at the MD&A, there is this notable jump in wages and benefits, and you've explained that's related to Stellar Mayan. I'm just trying to get a sense here. When you look at that particular line and cost structure, do you think you can eventually, over time, get it back down to what your U.K. average was pre-transaction? I would say that we'll certainly gain ground there, Michael, and good morning to you. Getting it back to the historical% of revenue for wages and benefits, we'll probably not get all of the way there, but we certainly will gain some ground, and that'll come through operational efficiencies that we're working. Our Canadian team and our existing U.K. team are working with the Stellar team, both in terms of changing shift patterns, which will be helpful, eliminating night shifts, which are costly and not as efficient. It'll come through improvements as the result of the CapEx plan that we announced as part of the acquisition, and it'll also come from increased prices as we move forward as contracts renew. There will be improvement, Michael. It won't be in a one-quarter basis, but there are several key focuses that will result in improvements in that area. Okay. If we look back to Fishers, I believe there were some cost benefits you realized there from wages and benefits. Just recall how long that took to be realized. Up to the 24-month mark. Okay. Then. Which would be the plan. Okay. Just moving over to Canada, organic growth, as I'm calculating, year-over-year growth was 4.5%. That number, as far as I can tell, that's a pretty clean read on what organic growth is because you're not including—we're lapping all the M&A now. Can you just give a read on, is that the right rate for organic growth in Canada going forward? Where are you seeing some of the pockets of strength within that organic growth figure? I would say that from mid to mid-single digit is a reasonable expectation going forward or slightly higher. I think we've seen solid growth in the Quebec market, more to come there, as well as in the Toronto market. I'd say we're optimistic in both of those key markets, but we'll see consistent growth across the country, Michael. You would say that mid-single digit, based on what you see in front of you, that should continue through 2026? Yes. Yes. Okay. Okay. I'll get that. Correct. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you have any questions, please press star one. Your next question comes from Derek Lessard with TD Cowen. Please go ahead. Hey, good morning, Linda and Kristie. Another solid quarter, so congrats to you and the team and on your 20-year milestones. Thank you. Good morning, Derek. Just a couple of questions for me. Almost, I guess, six months into the Stellar Mayan acquisition now. Just curious if, from when you guys, I guess, first bought the business and you did your due diligence to now, have you maybe identified any other opportunities there or maybe opportunities bigger than you might have originally thought? I think what I would say is we always knew this was an asset that made so much sense for K-Bro to combine with Shortridge and Fishers acquisition. We're even more optimistic about it in the medium term. We have so much to offer that market in terms of our healthcare offering. I think I've relayed many times how we think new innovative products in that market to convert from disposable to reusables is even further reinforced. Having met with up to 15 customers since we have closed the transaction, they are very focused on sustainability. We do know that change does not happen. Clinical change does not happen quickly, but there is a desire. There is an interest, and the acquisition has been very well received with a healthcare player from a different market coming to the U.K. to offer new products and services. I think it's further reinforcement of what we believed, but now having one-on-one interaction with customers, I think, further makes us optimistic and enthusiastic about the acquisition. On the hospitality side of the business, I will comment quickly on the hospitality side of the business. Obviously, we service now the London market, one of the largest hospitality markets in all of Europe, if not the largest hospitality market. We have a huge platform for growth now there as well. I think our experience of the Fishers team and the Shortridge team and our commercial expertise and relationships will enable us to grow that part of the business very successfully going forward as well. Awesome. That's great color, Linda. Thanks for that. I agree with your great add to your board with Ms. Ambrose. Curious if maybe if you can add some color or maybe talk about how that relationship came to be. The Board and several members of the Board, we obviously have been looking to add an additional board member. Through existing relationships over a number of years, Rona had accepted to join us, and I think she brings an amazing skill set in terms of her knowledge of government, her knowledge of provincial and federal government, and just her exceptional experience on corporate boards. That is really the history there, Derek. Awesome. Thanks, guys, and congrats again. Thank you. Thank you. We have a follow-up from Michael. Please go ahead. Hey. Just looking at the CapEx outlook for the next few quarters, I know the CapEx guidance is unchanged, but are you able to just maybe give some indications about how we should model CapEx over the next, say, two or three quarters with both the maintenance and the Stellar Mayan indicated CapEx? 100%, Kristie. I'll let you address that if you could. Yeah. No, absolutely. I guess, in terms of the—maybe I'll take the two pieces separately. In terms of our ongoing capital, not specifically related to the Stellar GBP 5 million investment that we had guided on, I would say that with respect to that CapEx, the balance, which is probably in the GBP 2-ish million range, would be spent over the balance of 2025. I would anticipate in 2026 that our ongoing CapEx would be spent fairly evenly over the four quarters, Michael. In terms of the Stellar Mayan CapEx, specifically the GBP 5 million, I would suggest we've committed to about GBP 4 million so far of that amount. GBP 3 million will likely be spent in Q4. Some of that may trickle into Q1, and then the balance of that GBP 4 million would be spent within Q1 with the further million to be spent in Q2 of 2026. In terms of just to go back to the first comment on maintenance versus strategic, I would say that you would see maintenance CapEx at typical levels that you've seen historically spent evenly over the four quarters. Okay. For working capital, any thoughts on buckets of working capital, how they should trend over the next, say, coming year? We don't see any significant investment required in working capital. I would suggest that it would follow pretty much our historical trends. Okay. Can you update us on what type of tax rate we should be using for our modeling? Yes. I would suggest in the 25%-26% range would be a reasonable rate to use. Excellent. Thank you. Thanks, Michael. Thank you. Your next question comes from Justin Keywood with Stifel. Please go ahead. Good morning. Thanks for taking my call. Nice to see the results. On the Canadian federal budget, obviously, still some moving parts, but there's been some significant investments announced geared to Canadian hospitals. One mention of GBP 5 billion for a new healthcare infrastructure fund. I'm wondering how that could impact K-Bro Linen? Would there be additional expansion within these hospitals as far as expanding capacity to help alleviate the strain? How you're seeing that impacting the growth profile for the Canadian segment going forward? Yeah. Thank you, Justin. We obviously see this as very positive. Won't impact necessarily in the very short term, but every time we're adding beds, that has a very positive impact on more linen required. While it'll take some time, it plays right into our shorter or our medium-term growth that will result in additional volume going through our plants. In terms of how it would impact new markets, I don't think that in itself, a new hospital in Halifax, for example, wouldn't necessarily change our strategy. It would require a larger commitment of larger volumes to enter a new market. Obviously, the operating leverage associated or as part of our existing plants will mean it will be higher margin business as it comes online. Okay. That's very helpful. We saw a new laundry peer or comp have a substantial IPO, Alliance Laundry Holdings, a bit of a different business model, more from the equipment provider side, but similar end markets to K-Bro. I'm just wondering your thoughts on maybe potential expansion beyond Canada and Europe into the U.S. and maybe how you're seeing that company as compared to K-Bro. I would say that we remain very focused at the moment on Canadian footprint and platform. We still have work to do, obviously, with Stellar in terms of optimizing plants, securing, and rolling out new products and services. That does not mean that we do not keep our eyes on other markets. The U.S. is one of them, which will continue. We do remain pretty focused on our existing two platforms. The U.S. market, given the structure of healthcare, is significantly different than the Canadian or the U.K. platforms. To your point on Alliance, similar end markets, but really, I would say smaller, not necessarily focused on acute care hospitals. I would not say that there is a lot that is a lot of takeaways from Alliance that we could learn from. There are regional players in the U.S. that are of interest. Again, I temper that comment with the fact that we remain pretty focused on our two platforms in Canada and the U.K. Understood. Thank you for taking my questions. Thanks, Justin. Thank you. We have a follow-up from Derek. Please go ahead. Yeah. I was just hoping you could maybe give us an update on sort of the hospitality trends that you're seeing in Canada, I guess, particularly against the still-by-Canada backdrop. In speaking with our hospitality partners, they have had very, very solid years, both as the result of staycations, the result of, I think, a weaker Canadian dollar, as well as the conference market coming back. I think their expectations for next year remain very, very positive. I'd say, from a Canadian context, that works and is very positive for K-Bro looking into next year. I'd say in the U.K., the London market just always remains busy. There isn't, obviously, outside of COVID or the pandemic, but it remains a very, very active market. Up into Scotland and Edinburgh in particular, it as well remains a very high-traveled destination market. We haven't necessarily seen it, but the Lake District, where our Shortridge platform, where our customers are from our Shortridge platform, we've had a solid year. Hard to predict what that means for next year. It is dependent on its weather-related. The overall economy in the U.K. is also a factor, but we do not see any warning signs for hospitality in the U.K. either. We are pretty enthusiastic about hospitality in Canada for 2026, based on our feedback from our customers. Thanks again, Linda. Have a good day. You too. Thank you, Derek. There are no further questions at the phone line. I will turn it back to Linda for closing remarks. Thank you, everyone, for joining today. Kristie and I are available if there are follow-up questions, so please do not hesitate to reach out. Thank you again, and have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.