Knife River pany(KNF) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for the three months ended September 30, 2024, was $1,105.3 million, a 1.8$1,090.4 million in the same period of 2023[125]. - Gross profit for the three months ended September 30, 2024, was $273.0 million, compared to$269.4 million in the prior year, reflecting a gross margin of 24.7%[133]. - Net income for the three months ended September 30, 2024, was $148.1 million, up from$146.7 million in the same period of 2023, representing a net margin of 13.4%[133]. - EBITDA for the three months ended September 30, 2024, was $244.6 million, compared to$241.4 million in the prior year, with an EBITDA margin of 22.1%[133]. - Total segment revenues for the three months ended September 30, 2024, were $1,125.0 million, an increase from$1,117.3 million in the same period of 2023[133]. - For the nine months ended September 30, 2024, revenue increased by $58.3 million, largely due to additional contracting services activity[142]. - Gross profit for the nine months improved by$29.2 million, with gross margin increasing by 80 basis points[143]. - Net income for the nine months ended September 30, 2024, was $178.4 million, an increase of$16.2 million from $162.2 million in the same period of 2023[198]. Segment Performance - The Pacific segment reported revenues of$165.0 million for the three months ended September 30, 2024, compared to $157.3 million in the prior year[133]. - The Northwest segment's revenue increased to$218.1 million for the three months ended September 30, 2024, from $209.4 million in the same period of 2023[133]. - The Mountain segment generated$261.1 million in revenue for the three months ended September 30, 2024, up from $255.1 million in the prior year[133]. - Revenue in the Northwest region for the three months ended September 30, 2024, was$218.1 million, a 4% increase from $209.4 million in the prior year[156]. - Revenue for the Mountain region increased by 2$261.1 million for the three months ended September 30, 2024, with gross profit remaining flat at $61.1 million[164]. - Revenue in the Energy Services segment decreased by$14.7 million to $125.9 million for the three months ended September 30, 2024, primarily due to lower pricing[182]. Backlog and Project Funding - Knife River's contracting services backlog was$755.1 million as of September 30, 2024, compared to $732.2 million in 2023 and$662.2 million in December 2023[116]. - Approximately 87% of the backlog at September 30, 2024, relates to publicly funded projects, primarily driven by state departments of transportation[117]. - The Infrastructure Investment and Jobs Act (IIJA) is expected to provide $1.2 trillion in funding through 2026, with 48$4.7 million year-over-year, primarily due to increased payroll-related costs[139]. - Average selling prices for aggregates increased to $17.32 per ton, up from$16.10 per ton, while ready-mix concrete prices rose to $185.97 per cubic yard from$169.98[135]. Cash Flow and Capital Expenditures - As of September 30, 2024, the company had unrestricted cash and cash equivalents of $220.4 million and working capital of$733.5 million[191]. - Capital expenditures for 2024 are estimated to be between $170 million and$200 million, with $127.2 million spent as of September 30, 2024[193]. - Cash used in investing activities increased to$137.8 million for the nine months ended September 30, 2024, compared to $82.9 million in 2023, primarily due to higher capital expenditures and three acquisitions[200]. - Cash flows from financing activities resulted in a net outflow of$7.0 million for the nine months ended September 30, 2024, a decrease of $43.1 million compared to a net inflow of$36.1 million in 2023, largely due to changes in the company's debt structure[202]. Interest and Debt Management - The company reported an interest expense of $13.9 million for the three months ended September 30, 2024, down from$15.3 million in the same period of 2023[125]. - Interest expense decreased by $1.4 million due to lower average debt balances[140]. - As of September 30, 2024, the company had$266.4 million in term loans outstanding at a variable interest rate of 6.45%[221]. - A hypothetical increase of 1.00% in interest rates would raise the company's interest expense by $2.7 million over the next 12 months[221]. - The company has no outstanding interest rate hedges as of September 30, 2024[222].