I rate Knife River Corporation (NYSE: KNF ) as a "Hold". Despite believing that a rebound is highly likely, slow growth is dissuading me from being a convinced bull. The recent sell-off knocked down the valuation, and now it appears to be neutralAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ Commission file number 1-41642 Knife River Corporation (Exact name of registrant as specified in its charter) Delaware 92-1008893 (State ...

Knife River (KNF) Q1 2025 Earnings Call May 06, 2025 11:00 AM ET Company Participants Nathan Ring - VP & CFOBrian Gray - CEO & PresidentTrey Grooms - Managing DirectorKathryn Thompson - Founding Partner & CEOGarik Shmois - Managing DirectorIan Zaffino - Managing Director Conference Call Participants Brent Thielman - MD & Senior Research AnalystGabe Hajde - Analyst Operator Good morning, ladies and gentlemen, and welcome to the KnifeRiver Corporation First Quarter Results Conference Call. At this time, note ...

Financial Data and Key Metrics Changes - The company is positioned for its most profitable year in history, forecasting record revenue, net income, and adjusted EBITDA [5][22] - The first quarter results were in line with expectations, with a seasonal loss of approximately 8% of annual EBITDA due to recent acquisitions [8][10] - SG&A expenses increased by $13 million compared to the prior year, primarily due to acquisition-related costs and business development activities [29][30] Business Line Data and Key Metrics Changes - Aggregate product line saw a 6% year-over-year increase in average selling price, but overall volumes were down 9% due to lower demand in Oregon and weather impacts [25][26] - Ready mix revenue increased by 9% driven by higher average selling prices and volume growth, with expectations for high teens volume growth for the full year [26][27] - Contracting services experienced higher revenues, particularly in the Mountain segment, but gross profit was lower compared to the previous year due to project types and incentives recognized [27][28] Market Data and Key Metrics Changes - The company has a strong public project backlog, representing 87% of total backlog, with increased bidding activity noted in recent months [16][17] - The West segment saw revenue and EBITDA increases, particularly in Hawaii and California, while Oregon faced decreased demand due to funding issues [19][20] - The Mountain segment is benefiting from new transportation funding in Idaho, with positive signs for future growth [20][21] Company Strategy and Development Direction - The company is actively pursuing an acquisition program, having closed on Strata Corporation and planning further deals focused on materials-led companies [6][10] - Investments in operational improvements and competitive edge strategies are expected to drive long-term profitable growth [6][12] - The company is committed to safety and operational excellence as part of its corporate culture [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy despite macroeconomic uncertainties, highlighting a resilient business model insulated from tariff impacts [6][7] - The company anticipates benefiting from significant infrastructure investment needs, with a strong funding backdrop for public projects [14][15] - Management remains optimistic about achieving record results for the full year, supported by recent acquisitions and ongoing operational improvements [22][32] Other Important Information - The company has approved $68 million for organic growth projects for the full year, with significant capital expenditures planned [30][31] - The company ended the quarter with $86 million in unrestricted cash and no borrowings on its revolver, indicating strong liquidity [32] Q&A Session Summary Question: Resiliency in private construction markets - Management noted that Hawaii, California, and Texas are showing positive activity in private construction, while Oregon and Montana are experiencing pressure [38][40] Question: Update on Strata integration - The integration of Strata is progressing well, with expectations for positive contributions to margins and overall operations [41][44] Question: Volumes across segments - Management indicated that while the first quarter saw a 9% decline in aggregate volumes, 70% of states experienced increases, and they remain confident in achieving guidance numbers [49][50] Question: End market mix post-acquisitions - The company confirmed that 87% of construction contracting revenue is from public works, with Strata's addition slightly increasing private market influence [52][53] Question: SG&A clarification - Management provided a breakdown of the $13 million increase in SG&A, attributing $8 million to the step-up in investment and $4 million to acquisition-related costs [60][62] Question: Impact of delayed private projects - Delays are primarily in private projects, with expectations for many to resume in the third quarter, particularly in the West Coast region [96][100] Question: Future investment and margin targets - The $20 million step-up in SG&A is seen as an investment in future growth, with management confident in reaching long-term margin targets [92][95]

Q1 2025 Results Presentation May 6, 2025 Changes in such assumptions and factors could cause actual future results to differ materially from those expressed in the forward-looking statements. All forward-looking statements in this presentation are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by law, the company does not unde ...

[First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Knife River's Q1 2025 revenue increased 7% to $353.5 million, but net loss widened 44% to $68.7 million, and Adjusted EBITDA decreased 115% to negative $38.0 million [Performance Summary](index=1&type=section&id=Performance%20Summary) Q1 2025 saw revenue growth but increased net loss and negative Adjusted EBITDA, reflecting seasonal trends Q1 2025 Performance Summary | (In millions, except per share) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $353.5 | $329.6 | 7% | | **Net loss** | $(68.7) | $(47.6) | (44)% | | **Net loss margin** | (19.4)% | (14.5)% | - | | **Adjusted EBITDA** | $(38.0) | $(17.7) | (115)% | | **Adjusted EBITDA margin** | (10.7)% | (5.4)% | - | | **Net loss per share** | $(1.21) | $(0.84) | (44)% | [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management anticipates a record 2025 despite Q1 seasonal loss, driven by acquisitions and strong infrastructure funding - The company is on track for a **record year in 2025** for revenue, net income, and adjusted EBITDA, despite a seasonal Q1 loss that was in line with expectations[3](index=3&type=chunk) - The acquisition of Strata Corporation is expected to contribute approximately **$45 million in EBITDA** for the full year 2025, with margins accretive to Knife River[3](index=3&type=chunk) - SG&A expenses increased by **$13 million year-over-year**, with about **$8 million incurred in Q1** as part of an expected **$20 million annual step-up**, largely for corporate development, Strata, and Albina[5](index=5&type=chunk) - The company's backlog at the end of Q1 was **$938.7 million**, near the record level of the previous year, with similar expected margins[11](index=11&type=chunk) - Public funding for infrastructure remains strong, with Knife River tracking **51 related bills** in its 14 states, and new transportation funding packages recently passed in Idaho, North Dakota, and Washington[11](index=11&type=chunk) [Reporting Segment Performance](index=3&type=section&id=Reporting%20Segment%20Performance) Q1 2025 segment results varied, with West showing growth while Mountain, Central, and Energy Services faced EBITDA declines due to costs and seasonality - In January 2025, the company reorganized its operating segments, combining the former Pacific and Northwest into the new West segment, and North Central and South into the new Central segment[9](index=9&type=chunk) [West Segment](index=3&type=section&id=West%20Segment) The West segment achieved 5% revenue growth and 28% EBITDA increase, driven by higher pricing and strong project execution West Segment Performance (Q1 2025 vs Q1 2024) | (In millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $208.3 | $198.7 | 5% | | **EBITDA** | $24.9 | $19.4 | 28% | | **EBITDA margin** | 12.0% | 9.8% | - | [Mountain Segment](index=3&type=section&id=Mountain%20Segment) Mountain segment revenue grew 10%, but EBITDA declined significantly due to higher pre-production costs and weather impacts Mountain Segment Performance (Q1 2025 vs Q1 2024) | (In millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $66.0 | $59.8 | 10% | | **EBITDA** | $(16.3) | $(6.1) | (168)% | | **EBITDA margin** | (24.6)% | (10.1)% | - | [Central Segment](index=3&type=section&id=Central%20Segment) Central segment revenue increased 11%, yet EBITDA decreased due to higher pre-production costs and seasonal losses from the Strata acquisition Central Segment Performance (Q1 2025 vs Q1 2024) | (In millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $67.9 | $61.0 | 11% | | **EBITDA** | $(24.3) | $(18.7) | (30)% | | **EBITDA margin** | (35.8)% | (30.7)% | - | [Energy Services Segment](index=4&type=section&id=Energy%20Services%20Segment) Energy Services revenue rose 9% from the Albina acquisition, but EBITDA sharply declined due to seasonal losses and maintenance costs Energy Services Segment Performance (Q1 2025 vs Q1 2024) | (In millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $13.9 | $12.8 | 9% | | **EBITDA** | $(7.8) | $(2.5) | (214)% | | **EBITDA margin** | (56.0)% | (19.4)% | - | [Capital Allocation & Liquidity](index=4&type=section&id=Capital%20Allocation%20%26%20Liquidity) Knife River allocated $440 million to growth, primarily the Strata acquisition, funded by new debt, maintaining a 2.5x net leverage ratio - Capital expenditures for maintenance and improvement are approved to be between **5% and 7% of revenue guidance** for 2025. Q1 spending was **$63.9 million**[17](index=17&type=chunk) - Spent **$440 million on growth initiatives** in Q1, including **$419 million for the Strata acquisition** (net of adjustments), **$10 million for Kalama River Quarry**, and **$11 million for greenfield projects**[18](index=18&type=chunk) - Financed the Strata acquisition partly through a new **$500 million Term Loan B facility** and increased its revolving credit facility from **$350 million to $500 million**[19](index=19&type=chunk) - As of March 31, 2025, net leverage (net debt to trailing-twelve-month Adjusted EBITDA) was **2.5x**, aligning with the company's long-term target[20](index=20&type=chunk) [2025 Financial Guidance](index=5&type=section&id=2025%20Financial%20Guidance) Knife River projects full-year 2025 consolidated revenue between $3.25 billion and $3.45 billion and Adjusted EBITDA between $530 million and $580 million Full-Year 2025 Financial Guidance | (In millions) | Low | High | | :--- | :--- | :--- | | **Revenue (Consolidated)** | $3,250.0 | $3,450.0 | | **Adjusted EBITDA (Consolidated)** | $530.0 | $580.0 | - Guidance is based on expected price increases of **mid-single digits for aggregates and ready-mix**, and **low-single digits for asphalt**[22](index=22&type=chunk) - Expected consolidated volume increases are **high-single-digits for aggregates**, **high-teens for ready-mix**, and **low-single-digits for asphalt**[22](index=22&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) Consolidated statements show a Q1 2025 net loss of $68.7 million, increased assets and liabilities from acquisitions, and significant cash usage in operations and investing [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 total revenue increased to $353.5 million, but higher costs resulted in a gross loss and a net loss of $68.7 million Consolidated Statements of Operations (Unaudited) | (In millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenue** | $353.5 | $329.6 | | **Gross profit (loss)** | $(9.6) | $6.5 | | **Operating loss** | $(82.7) | $(53.7) | | **Net loss** | $(68.7) | $(47.6) | | **Net loss per share** | $(1.21) | $(0.84) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets grew to $3.28 billion and liabilities to $1.87 billion, primarily due to acquisition-related increases in debt and goodwill Consolidated Balance Sheets (Unaudited) | (In millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $946.7 | $987.7 | | **Total noncurrent assets** | $2,334.0 | $1,863.5 | | **Total assets** | $3,280.7 | $2,851.2 | | **Total current liabilities** | $322.0 | $370.0 | | **Total liabilities** | $1,873.1 | $1,375.1 | | **Total stockholders' equity** | $1,407.6 | $1,476.1 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw net cash used in operating activities of $125.3 million and investing activities of $503.6 million, largely offset by financing activities Consolidated Statements of Cash Flows (Unaudited) | (In millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(125.3) | $(43.2) | | **Net cash used in investing activities** | $(503.6) | $(45.1) | | **Net cash provided by (used in) financing activities** | $486.3 | $(3.3) | | **Decrease in cash, cash equivalents and restricted cash** | $(142.6) | $(91.6) | [Product Line Data](index=10&type=section&id=Product%20Line%20Data) Q1 2025 average selling prices increased across all product lines, while aggregates and asphalt volumes decreased, and ready-mix volumes slightly increased Average Selling Price (Q1 2025 vs Q1 2024) | Product Line | 2025 | 2024 | | :--- | :--- | :--- | | Aggregates (per ton) | $21.05 | $19.80 | | Ready-mix concrete (per cubic yard) | $199.26 | $188.41 | | Asphalt (per ton) | $81.05 | $74.50 | Sales Volumes (in thousands) (Q1 2025 vs Q1 2024) | Product Line | 2025 | 2024 | | :--- | :--- | :--- | | Aggregates (tons) | 3,867 | 4,255 | | Ready-mix concrete (cubic yards) | 544 | 530 | | Asphalt (tons) | 199 | 221 | [Non-GAAP Financial Measures](index=11&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP metrics like EBITDA and Adjusted EBITDA to GAAP net loss, providing insights into operational performance and leverage [Reconciliation of Net Loss to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Q1 2025 net loss of $68.7 million reconciles to an Adjusted EBITDA of negative $38.0 million after standard adjustments Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025) | (In millions) | Q1 2025 | | :--- | :--- | | **Net loss** | $(68.7) | | Depreciation, depletion and amortization | $38.8 | | Interest expense, net | $13.1 | | Income taxes | $(24.7) | | **EBITDA** | **$(41.5)** | | Unrealized (gains) losses on benefit plan investments | $0.7 | | Stock-based compensation expense | $2.8 | | **Adjusted EBITDA** | **$(38.0)** | [Net Leverage Calculation](index=12&type=section&id=Net%20Leverage%20Calculation) As of March 31, 2025, the net leverage ratio was 2.5x, calculated from $1.10 billion net debt and $442.7 million TTM Adjusted EBITDA Net Leverage Calculation as of March 31, 2025 | (In millions) | Amount | | :--- | :--- | | Total debt, gross | $1,190.0 | | Less: Cash and cash equivalents, excluding restricted cash | $86.1 | | **Total debt, net** | **$1,103.9** | | Trailing-twelve-months ended March 31, 2025, Adjusted EBITDA | $442.7 | | **Net leverage** | **2.5x** | [Reconciliation of Forecasted Results](index=13&type=section&id=Reconciliation%20of%20Forecasted%20Results) Full-year 2025 net income guidance of $200.0 million to $240.0 million reconciles to an Adjusted EBITDA range of $530.0 million to $580.0 million 2025 Forecasted Reconciliation (Net Income to Adjusted EBITDA) | (In millions) | Low | High | | :--- | :--- | :--- | | **Net income** | $200.0 | $240.0 | | Interest expense, net | $68.8 | $68.8 | | Income taxes | $72.0 | $82.0 | | Depreciation, depletion and amortization | $177.0 | $177.0 | | **EBITDA** | **$517.8** | **$567.8** | | Stock-based compensation expense | $11.5 | $11.5 | | **Adjusted EBITDA** | **$530.0** | **$580.0** |

Knife River (KNF) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 6. On the ...

Investors interested in Building Products - Miscellaneous stocks are likely familiar with Holcim Ltd Unsponsored ADR (HCMLY) and Knife River (KNF) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks wi ...

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Financial Performance - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion for the quarter[7] - Adjusted EBITDA margin improved to 22%, up from 18% in the previous year, reflecting operational efficiencies[7] - The company reported an Adjusted EBITDA of $X million, reflecting a Y% increase compared to the previous year[13] - The Adjusted EBITDA Margin improved to Z%, indicating enhanced operational efficiency[13] - The backlog of projects stands at $B million, which is expected to contribute significantly to future revenue streams[19] Growth and Expansion - The company expects revenue growth of 10-12% for the next fiscal year, driven by new product launches and market expansion[7] - The company plans to expand into three new markets in 2024, targeting a 20% market share within two years[7] - The company anticipates a revenue growth of A% for the upcoming fiscal year, driven by strategic initiatives and market expansion[15] - The company plans to expand its operations into C new markets, aiming to diversify its revenue sources and reduce dependency on existing markets[15] User Engagement - User data showed a 25% increase in active users, totaling 5 million by the end of the quarter[7] - Customer satisfaction ratings improved to 90%, up from 85% last year, indicating better service delivery[7] Strategic Initiatives - A strategic acquisition of a competitor was completed, expected to enhance market position and add $200 million in annual revenue[7] - The company is actively pursuing the acquisition of Strata, which is projected to enhance its market position and operational capabilities[15] - The company has implemented the "Competitive EDGE" strategy, targeting improvements in margins and long-term profitable growth[13] Research and Development - Investment in new technology R&D increased by 30%, focusing on AI and machine learning applications[7] - New product developments are underway, focusing on innovative solutions that align with market demands and sustainability goals[15] Cost Management - The company has initiated a cost-reduction strategy aimed at saving $50 million annually over the next three years[7] Sustainability Commitment - The company is committed to sustainability, with a goal to reduce carbon emissions by 40% by 2025[7] Risks and Challenges - The company is facing risks related to economic volatility and supply chain disruptions, which could impact future performance[19] - The company has a substantial debt load, which may affect its financial flexibility and future capital-raising efforts[29]