K-Bro Announces 3sHealth Services Contract

(TSX: KBL)

EDMONTON, Dec. 12, 2013 /CNW/ - K‐Bro Linen Inc. ("K‐Bro" or the "Corporation") announced today the award of a ten-year contract with Health Shared Services Saskatchewan ("3sHealth") for laundry and linen services for the Province of Saskatchewan.  This award is the result of K‐Bro being selected pursuant to 3sHealth's Request for Strategic Partner ("RFSP") process that commenced in 2012.

The contract encompasses a comprehensive linen supply and service program covering general, operating room and specialty linens as well as delivery services to all facilities.  Services under the terms and conditions of this contract will commence during the second quarter of 2015. The contract is renewable for two additional terms of three years at 3sHealth's option.

Concurrently with the signing of a services agreement with 3sHealth, the Corporation has commenced project planning for the construction of a state-of-the-art processing facility to be located in the City of Regina and distribution centres in Saskatoon and Prince Albert.  The total expected costs of commissioning the processing facility, including the distribution centres, are expected to be approximately $22 million, including processing equipment and related construction costs, as well as new linen and carts for the regional health authorities.  It is anticipated that the Regina facility will be operational by Q2, 2015.

"We are excited to enter into a long-term contract with 3sHealth, as partners focused on the needs of patients," said Linda McCurdy, President & CEO. "It is rewarding to be selected in a competitive process and to expand our existing partnership with the Saskatoon Health Region throughout the Province. We wish to thank 3sHealth, the regional health authorities, the Ministry of Health and the citizens of Saskatchewan for their confidence in K‐Bro."

3sHealth was created in 2012 with a mandate to provide efficient, customer-focused, quality, province-wide shared services to the Saskatchewan health sector to and on behalf of the regional health authorities and the Saskatchewan Cancer Agency.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts.  K-Bro currently operates eight processing facilities under three distinctive brands, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze, in seven Canadian cities: Québec City, Montréal, Toronto, Edmonton, Calgary, Vancouver and Victoria.

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.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").

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K-Bro est le plus important propriétaire et exploitant de buanderies au Canada. K-Bro fournit une gamme étendue de services de buanderie aux établissements de soins de santé, hôtels et autres clients commerciaux. K-Bro exploite actuellement huit usines sous trois marques distinctives, incluant K-Bro Linen Systems Inc., Buanderie HMR et Les Buanderies Dextraze, dans sept villes canadiennes: Québec, Montréal, Toronto, Edmonton, Calgary, Vancouver et Victoria.

Vous pouvez obtenir des renseignements supplémentaires sur la Société, y compris les documents déposés auprès des autorités de réglementation, sur notre site Web, au www.k-brolinen.com et sur le site Web des autorités canadiennes en valeurs mobilières au www.sedar.com, le site Web du Système électronique de données, d'analyse et de recherche (« SEDAR »).

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 inherent 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 the possibility of undisclosed material liabilities; (ii) K-Bro's competitive environment; (iii) utility and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk, (v) increased capital expenditure requirements; (vi) reliance on key personnel; and (vii) the availability of future financing. 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) utility costs; (iii) expected impact of labour cost initiatives; and (iv) the level of capital expenditures. 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.

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, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

SOURCE: K-Bro Linen Inc.

Linda McCurdy
President & Chief Executive Officer

Chris Burrows
Vice-President & Chief Financial Officer

K-Bro Linen Inc.  (TSX: KBL)
Phone: [phone] 
Email: [email protected]
Web: www.k-brolinen.com