K Bro Linen : Third Quarter 2024 MDA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis ("MD&A") is supplemental to, and should be read in conjunction with, the unaudited interim Condensed Consolidated Financial Statements of K-Bro Linen Inc. ("the Corporation") for the nine months ended September 30, 2024 and the audited Consolidated Financial Statements, as well as the MD&A, for the year ended December 31, 2023. The Corporation and its wholly-owned subsidiaries, including K-Bro Linen Systems Inc., Buanderie C.M. Inc, Fishers Topco Ltd., and Shortridge Ltd. are collectively referred to as "K-Bro" in this MD&A.

Management is responsible for the information contained in this MD&A and its consistency with information presented to the Audit Committee and Board of Directors. All information in this document has been reviewed and approved by the Audit Committee and Board of Directors. This review was performed by management with information available as of November 13, 2024.

In the interest of providing current holders ("Shareholders") of common shares of K-Bro Linen Inc. ("Common Shares") and potential investors with information regarding current results and future prospects, our public communications often include written or verbal forward-looking statements. Forward-looking statements are disclosures regarding possible events, conditions, or results of operations that are based on assumptions about future economic conditions and courses of action, and include future-oriented financial information.

This MD&A 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 MD&A. 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;

1. K-Bro'sdependence 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; (x) textile demand; (xi) availability and access to labour; (xii) rising wage rates in all jurisdictions the Corporation operates and (xiii) intertest rate and 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) interest and foreign exchange rates; and (v) the level of capital expenditures. Although the forward-looking information contained in this MD&A 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 MD&A may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this MD&A. Forward looking information included in this MD&A 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 MD&A is qualified by these cautionary statements. Forward-looking information in this MD&A 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 MD&A 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.

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TABLE OF CONTENTS

Introduction	2	Liquidity and Capital Resources	22	Terminology	26
Selected Quarterly Financial Info	4	Dividends	23	Recent Accounting Pronouncements	30
Strategy	5	Distributable Cash Flow	25	Critical Risks and Uncertainties	31
Summary of Results and Key Events	6	Outstanding Common Shares	25	Controls and Procedures	32
Outlook	14	Related Party Transactions	26
Results of Operations	15	Critical Accounting Estimates	26

INTRODUCTION

Core Business

The Corporation 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 under two distinctive brands: K-Bro Linen Systems Inc. and Buanderie HMR. The Corporation operates 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 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. Since the early 1990's, Shortridge has operated as a family run laundry business. Shortridge specialises in providing high quality laundry services to local independent hospitality businesses, including hotels, B&Bs, self-catering units and restaurants.

Industry and Market

In Canada, K-Bro provides laundry and linen services to healthcare, hospitality and other commercial customers. Typical services offered by K-Bro include the processing, management and distribution of general and operating room linens, including sheets, blankets, towels, surgical gowns and drapes and other linen. Other types of processors in K-Bro's industry include independent privately-owned facilities (i.e., typically small, single facility companies), public sector central laundries and public and private sector on premise laundries (known as "OPLs"). Participants in other sectors of the Canadian laundry and linen services industry, such as uniform rental companies (which own and launder uniforms worn by their customers' employees) typically do not offer services that significantly overlap with those offered by K- Bro.

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In the UK, Fishers and Shortridge provide laundry and linen services to healthcare, hospitality and other commercial customers. Typical services offered by Fishers and Shortridge include the processing, management and distribution of general linen, workwear and clean room garment services. Other types of processors in Fishers' and Shortridge's industry in the UK include publicly traded companies, independent privately-owned facilities (i.e., typically, small single facility companies), public sector central laundries and public and private sector OPLs.

Our partnerships with healthcare institutions and hospitality clients across Canada and the UK demonstrate K-Bro's commitment to building relationships that foster continuous improvement, providing flexibility to adjust to changing circumstances as required and which incorporate incentives, penalties and the sharing of risks and rewards as circumstances warrant.

In this competitive industry, K-Bro is distinctive in its ability to deliver products and services that provide value to our customers. Management believes that the healthcare and hospitality sectors of the laundry and linen services industry represent a stable base of annual recurring business with opportunities for growth as additional healthcare beds and funds are made available to meet the needs of an aging demographic.

Industry Characteristics and Trends

Management believes that the industry in which K-Bro operates has historically exhibited the following characteristics and trends:

Generally Stable Industry with Moderate Cyclicality - As evidenced by the stability in the number of approved hospital beds in the healthcare system and hotel rooms in the hospitality industry. The potential for step-changesin volumes and revenues that align with contractual arrangements exists within this industry. Service relationships are generally formalized through contracts in the healthcare sector that are typically long term (from five to ten years), while contracts in the hospitality sector usually range from two to five years.

Outsourcing and Privatization - Healthcare institutions and regional authorities are facing funding pressures and must continually evaluate the allocation of scarce resources. Consequently, there are often advantages to healthcare institutions in outsourcing the processing of healthcare linen to private sector laundry companies such as K-Bro because of the economies of scale and significant management expertise that can be provided on a more comprehensive and cost- effective basis than customers can achieve in operating their own laundry facilities.

Fragmentation - Regional healthcare and hospitality markets remain fragmented within the laundry and linen services industry. Management believes that the presence of these operators provides consolidation opportunities for larger industry participants with the financial means to complete acquisitions. Management evaluates M&A opportunities on an ongoing basis and looks to leverage the Corporation's strong liquidity position, balance sheet and access to the capital markets to execute on these opportunities as they arise.

Customers and Product Mix

K-Bro's Canadian customers include some of the largest healthcare institutions and hospitality providers in Canada. In the UK, Fishers' customers include some of the largest hotel chains operating in Scotland and Shortridge's customers include local independent hospitality businesses, including hotels, B&Bs, self- catering units and restaurants.

Healthcare customers include acute care hospitals and long-term care facilities, primarily in Canada. Most of K-Bro's hospitality customers (typically greater than 250 rooms) have historically generated between 0.5

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million and 3 million pounds of linen per year. Most healthcare customers have historically generated between 0.5 million pounds of linen per year for a hospital and up to approximately 40 million pounds of linen per year for a Canadian healthcare region.

SELECTED QUARTERLY FINANCIAL INFORMATION

(In reporting currency $ Canadian)

				Three Months Ended September 30,
	Canadian	UK		Canadian	UK		Canadian	UK
	Division	Division		Division	Division		Division	Division
(thousands, except percentages and per share amounts)	2024	2024	2024	2023	2023	2023	2022	2022	2022

Revenue	$	69,610	$	34,859	$	104,469		$	63,379	$	23,513	$	86,892		$	55,067	$	18,561	$	73,628
EBITDA(1)		14,381		8,462		22,843				12,924		4,769		17,693			9,030		1,991		11,021
Adjusted EBITDA(2)		14,510		8,462		22,972				13,288		4,769		18,057			9,039		1,991		11,030
Net earnings (loss) (3)		3,659		4,470		8,129				4,169		2,498		6,667			2,122		334		2,456
Net earnings per share:					$	0.778
Basic	$	0.350	$	0.428	$	0.392	$	0.235	$	0.627		$	0.199	$	0.031	$	0.230
Diluted	$	0.347	$	0.424	$	0.771	$	0.389	$	0.233	$	0.622		$	0.197	$	0.031	$	0.228
Adjusted net earnings (loss) (3)		3,788		4,470		8,258				4,533		2,498		7,031			2,131		334		2,465
Adjusted net earnings (loss) per share: (3)					$	0.791
Basic	$	0.363	$	0.428	$	0.426	$	0.235	$	0.660		$	0.200	$	0.031	$	0.231
Diluted	$	0.359	$	0.424	$	0.783	$	0.422	$	0.233	$	0.655		$	0.199	$	0.031	$	0.230
Total assets					$	452,077							$	341,662						$	321,527
Long-term debt (excludes lease liabilities)						135,875							$	55,162							39,141
Weighted average number of shares outstanding:					10,446,055
Basic											10,645,029							10,659,322
Diluted					10,538,560								10,729,425							10,750,072

				Nine Months Ended September 30,
	Canadian	UK		Canadian	UK		Canadian	UK
	Division	Division		Division	Division		Division	Division
(thousands, except percentages and per share amounts)	2024	2024	2024	2023	2023	2023	2022	2022	2022

Revenue	$	196,979	$	81,184	$	278,163		$	178,039	$	60,381	$	238,420	$	157,584	$	48,368
	$	205,952
EBITDA(1)						51,021								42,527		24,620		3,146		27,766
	35,247		15,774					32,987		9,540
Adjusted EBITDA(2)		38,372		16,282		54,654				33,559		9,540		43,099		24,803		3,146		27,949
Net earnings (loss)		7,113		7,357		14,470				9,243		4,115		13,358		5,220		(1,594)		3,626
Net earnings (loss) per share:					$	1.382
Basic	$	0.679	$	0.703	$	0.865	$	0.385	$	1.250	$	0.490	$	(0.150)	$	0.340
Diluted	$	0.675	$	0.698	$	1.373	$	0.860	$	0.383	$	1.243	$	0.487	$	(0.149)	$	0.338
Adjusted net earnings (loss) (3)		10,238		7,865		18,103				9,815		4,115		13,930		5,403		(1,594)		3,809
Adjusted net earnings (loss) per share:					$	1.731
Basic	$	0.978	$	0.753	$	0.920	$	0.385	$	1.305	$	0.507			$	0.357
$	(0.150)
Diluted	$	0.970	$	0.747	$	1.717	$	0.914	$	0.383	$	1.297	$	0.504	$	(0.149)	$	0.355
Total assets					$	452,077							$	341,662					$	321,527
Long-term debt (excludes lease liabilities)						135,875							$	55,162						39,141
Weighted average number of shares outstanding:					10,523,759
Basic											10,689,006						10,650,136
Diluted					10,596,625								10,750,178						10,722,741

1. EBITDA is defined as revenue less operating expenses (which equates to net earnings before income tax, finance expense, and depreciation and amortization). See "Terminology".
2. The Corporation has modified its definition for Adjusted EBITDA (see "Terminology") and has updated its comparative quarters to reflect the modified definition. These non-GAAP measures are defined to exclude any costs, expenses, gains, losses, charges or any changes in fair value that are non-operating in nature that we believe are not reflective of our ongoing business performance and operational profitability. We believe these refined non-GAAP definitions provide more meaningful reflections of our normalized financial performance from operations and will enhance period-over-period comparability. A reconciliation of EBITDA to Adjusted EBITDA can be found in the "Terminology" section of the MD&A.
3. Adjusted Net Earnings and Adjusted EPS (see "Terminology") are non-GAAP measures. These non-GAAP measures are defined to exclude any costs, expenses, gains, losses, charges or any changes in fair value that are non-operating in nature that we believe are not reflective of our ongoing business performance and operational profitability. We believe these non-GAAP definitions provide more meaningful reflections of our normalized financial performance from operations and will enhance period-over-period comparability. A reconciliation of Net Earnings and Earnings per Share to Adjusted Net Earnings and Adjusted Earnings per Share can be found in the "Terminology" section of the MD&A.

STRATEGY

In 2023, K-Bro communicated its long-term sustainability strategy which prioritizes putting people first, supporting its partners and environmental stewardship. The strategy focuses on three pillars: People;

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Partners; and Planet, and builds on the Corporation's vision of delivering industry-leading service while embracing its responsibilities to society as a good corporate citizen - supporting the communities in which it operates, being a great place to work and a dependable partner for all its stakeholders.

People - Foster a customer-centric culture, take care of people, embrace diversity, and ensure K-Bro is a great place to work.

Partners - Be dependable, exemplify responsible business practices, support local communities, and anticipate evolving trends.

Planet - Operate responsibly, prioritize energy efficiency, embrace best management practices, and support environmental stewardship across the supply chain.

K-Bro maintains the following three-part growth focus:

Secure and Maintain Long-Term Contracts with Large Healthcare and Hospitality Customers - K-Bro'score service is providing high quality laundry and linen services at competitive prices to large healthcare and hospitality customers under long-termcontracts. K-Bro'scontracts in the healthcare sector typically range from five to ten years in length. Contracts in the hospitality sector typically range from two to five years.

Extend Core Services to New Markets - Management has demonstrated its ability to successfully expand K-Bro's business into new markets from its established bases. Since 2005, K-Bro has entered four new geographic markets across Canada, and in late 2017 entered into the UK market. In April 2024, K-Bro further expanded its UK footprint through the acquisition of Shortridge Ltd. ("Shortridge") a high-quality hospitality laundry provider based in the North West of England expanding K-Bro's geographic footprint in the UK (see "Summary of Interim Results and Key Events"). These new markets have contributed significantly to K-Bro's growth. Management believes that new outsourcing opportunities will continue to arise in the near to medium-term and that K-Bro is well-positioned for continued growth, particularly as healthcare and hospitality institutions continue to increase their focus on core services and confront pressures for capital and cost savings.

Management may in the future expand its core services to new markets either through acquisitions or by establishing new facilities. Its choice of areas for expansion will depend on the availability of suitable acquisition candidates, the volume of healthcare and hospitality linen to be processed and the policies of applicable governments.

Introduce Related Services - In addition to focusing on its core services, the Corporation also attempts to capitalize on attractive business opportunities by introducing closely-related services that enable it to provide more complete solutions to K-Bro's healthcare and hospitality customers. These related service offerings include K-Bro Operating Room services and on-site services. K-Bro performs the sterilization of operating room linen packs for nine major hospitals in Toronto and the four health authorities in the Vancouver area.

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SUMMARY OF INTERIM RESULTS AND KEY EVENTS

Net earnings for the third quarter of 2024 were $8.1 million or $0.78 per basic common share. Adjusted net earnings (see "Terminology") for the third quarter of 2024 were $8.3 million or $0.79 per basic common share. Adjusting items include non-recurring transaction and transition costs, as well as a gain on settlement of contingent consideration, as detailed in the tables within "Terminology". Cash flow from operating activities was $18.4 million and distributable cash flow was $14.2 million. Consolidated revenue for the third quarter of 2024 increased to $104.5 million or by 20.2% compared to 2023, primarily related to the acquisitions of Shortridge and C.M. in Q2 2024, the impact of full implementation of negotiated price adjustments, and the acquisition of Villeray in November 2023.

Adjusted EBITDA (see "Terminology") increased in the third quarter to $23.0 million or by 27.2% compared to $18.1 million in 2023. Adjusting items include non-recurring transaction and transition costs, as well as a gain on settlement of contingent consideration, as detailed in the tables within "Terminology". Without adjusting items, EBITDA (see "Terminology") increased in the third quarter 2024 to $22.8 million or by 29.1% compared to $17.7 million in 2023. On a consolidated basis, Adjusted EBITDA and EBITDA margin increased to 22.0% and 21.9% respectively in 2024 compared to 20.8% and 20.4% respectively in 2023.

For the Canadian division, Adjusted EBITDA margin (see "Terminology") in the third quarter remained consistent at 20.8% in 2024 from 21.0% in 2023. Without adjusting items, the EBITDA margin in the third quarter increased to 20.7% in 2024 from 20.4% in 2023. The increase in EBITDA margin is primarily related to third quarter 2023 non-recurring items including transaction and transition costs.

For the UK division, both Adjusted EBITDA and EBITDA margin (see "Terminology") in the third quarter increased to 24.3% in 2024 from 20.3% in 2023. The improvement in Adjusted EBITDA and EBITDA margin is primarily related to the acquisition of Shortridge in April 2024, delivery and labour cost efficiencies, and the impact of price increases implemented in 2023.

Key events in our markets are summarized below.

Business Acquisition - Paranet

On March 1, 2023 the Corporation completed the acquisition of 100% of the share capital of Buanderie Para-Net ("Paranet") operating as Paranet (the "Paranet Acquisition"), a private laundry and linen services company operating in Québec City, Quebec. The Paranet Acquisition was completed through a share purchase agreement consisting of existing working capital, fixed assets, contracts and an employee base. The contracts acquired are in the Quebec healthcare and hospitality sector, which complements the existing business of the Corporation. Based on the Corporation's evaluation of the Paranet Acquisition and the criteria in the identification of a business combination established in IFRS 3, the Paranet Acquisition has been accounted for using the acquisition method, whereby the purchase consideration is allocated to the fair values of the net assets acquired.

The Corporation financed the Paranet Acquisition and transaction costs from existing loan facilities.

The purchase price allocated to the net assets acquired, based on their estimated fair values, is as follows:

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Cash consideration	$	11,074
Contingent consideration	$	945
Total purchase price	$	12,019

The assets and liabilities recognized as a result of the Paranet Acquisition are as follows:

Net Assets Acquired:		1,317
Accounts receivable
Prepaid expenses and deposits		137
Linen in service		970
Accounts payable and accrued liabilities (2)		(1,552)
Lease liabilities		(1,176)
Deferred income taxes		(1,474)
Property, plant and equipment(1,2)		6,142
Intangible assets		2,450
Net identifiable assets acquired		6,814
Goodwill		5,205
Net assets acquired	$	12,019

1. Includes ROUA from the Canadian Division of $1,176 comprised of buildings of $964 and vehicles of $212
2. Includes provision of $219 for asset retirement obligation

The intangible assets acquired are made up of $2,450 for the customer contracts along with related relationships and customer lists. The goodwill is attributable to the workforce, and the efficiencies and synergies created between the existing business of the Corporation and the acquired business. Goodwill will not be deductible for tax purposes. As at March 31, 2024, the purchase price allocation is no longer provisional and has been finalized for Paranet.

Contingent consideration

In the event that a certain EBITDA target was achieved by Paranet for the twelve month period ended August 31, 2023, additional undiscounted consideration of up to $1,890 would have been payable in cash during the fourth quarter of 2023. While performance was in-line with expectations, the target was not achieved; therefore, no payment was made.

During the first three quarters of 2023, the estimated fair value of the possible payment was classified as contingent consideration. The fair value of the contingent consideration was estimated by considering the probability-adjusted future expected cash flows in regards to Paranet achieving the target that would result in consideration being paid. The impact of discounting these future cash flows was not considered because the impact would be nominal. Given that the EBITDA target was not achieved for the twelve month period ended August 31, 2023, the contingent consideration amount of $945 has been derecognized and a gain on settlement of contingent consideration has been recorded in Consolidated Statement of Earnings and Comprehensive Income for the twelve months ended December 31, 2023.

Business Acquisition - Villeray

On November 1, 2023, the Corporation completed the acquisition of 100% of the share capital of Buanderie Villeray and its affiliate Buanderie La Relance (the "Villeray Acquisition"), a private laundry and linen services company incorporated in Canada and operating in Montréal, Quebec. The Villeray

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Acquisition was completed through a share purchase agreement consisting of existing working capital, fixed assets, customer relationships and an employee base. Villeray operates in the hospitality and healthcare sector, which complements the existing business of the Corporation. As part of the transaction, the Corporation closed its Granby facility and consolidated existing volumes into Villeray. Based on the Corporation's evaluation of the Villeray Acquisition and the criteria in the identification of a business combination established in IFRS 3, the Villeray Acquisition has been accounted for using the acquisition method, whereby the purchase consideration is allocated to the fair values of the net assets acquired.

The Corporation financed the Villeray Acquisition and transaction costs from existing loan facilities.

The purchase price allocated to the net assets acquired, based on their estimated fair values, is as follows:

Cash consideration	$	11,204
Contingent consideration	$	500
Total purchase price	$	11,704

The assets and liabilities recognized as a result of the Villeray Acquisition are as follows:

Net Assets Acquired:		907
Accounts receivable
Prepaid expenses and deposits		187
Income tax receivable		69
Accounts payable and accrued liabilities (2)		(807)
Lease liabilities		(2,706)
Deferred income taxes		(1,416)
Property, plant and equipment(1,2)		7,161
Intangible assets		2,530
Net identifiable assets acquired		5,925
Goodwill		5,779
Net assets acquired	$	11,704

1. Includes ROUA from the Canadian Division of $2,706 related to buildings
2. Includes provision of $97 for asset retirement obligation

The provisional intangible assets acquired are made up of $2,530 related to customer relationships. The goodwill is attributable to the workforce, and the efficiencies and synergies created between the existing business of the Corporation and the acquired business. Goodwill will not be deductible for tax purposes.

Contingent consideration

In the event that a certain EBITDA target is achieved by Villeray for the twelve month period ended October 31, 2024, additional undiscounted consideration ranging from $500 to $1,000 would be payable in cash during the first quarter of 2025. At the end of September 2024, the former owner-operator of Villeray retired from the business and was replaced by a new Montreal General Manager. Amid the leadership transition, the Corporation has determined that the target will not be achieved given the proximity to October 31, 2024. Therefore, no payment is expected to be made.

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During the first two quarters of 2024, the estimated fair value of the possible payment was classified as contingent consideration. The fair value of the contingent consideration was estimated by considering the probability-adjusted future expected cash flows in regards to Villeray achieving the target that would result in consideration being paid. The impact of discounting these future cash flows was not considered because the impact would be nominal. Given that the EBITDA target will not be achieved for the twelve month period ended October 31, 2024, the contingent consideration amount of $500 has been derecognized and a gain on settlement of contingent consideration has been recorded in Consolidated Statement of Earnings and Comprehensive Income for the three and nine month periods ended September 30, 2024.

Acquisition related costs

For the nine months ended September 30, 2024, $108 in professional fees associated with the Villeray Acquisition has been included in Corporate expenses.

Business Acquisition - Shortridge

On April 30, 2024 the Corporation completed the acquisition of 100% of the share capital of Shortridge Ltd. ("Shortridge Acquisition"), a private hospitality laundry provider based in the North West of England, expanding K-Bro's geographic footprint in the UK. The Shortridge Acquisition was completed through a share purchase agreement consisting of existing working capital, fixed assets, contracts and an employee base. The contracts acquired are in the hospitality sector in England and Scotland, which complements the existing business of the Corporation. Based on the Corporation's evaluation of the Shortridge Acquisition and the criteria in the identification of a business combination established in IFRS 3, the Shortridge Acquisition has been accounted for using the acquisition method, whereby the purchase consideration is allocated to the fair values of the net assets acquired.

At the time the financial statements were authorized for issue, and due to the timing of the Acquisition, the Corporation has not yet completed the accounting for the Shortridge Acquisition. This includes the accounting for the amounts attributable to property, plant and equipment, intangible assets and the associated goodwill.

The Corporation financed the Shortridge Acquisition and transaction costs from the syndicated revolving credit facility.

The preliminary purchase price allocated to the net assets acquired, based on their estimated fair values, is as follows:

The assets and liabilities recognized as a result of the Shortridge Acquisition are as follows:

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