Knife River pany(KNF) - 2025 Q3 - Quarterly Results

Financial Performance - Knife River Corporation reported third quarter 2025 revenue of $1,203.7 million, a 9% increase from $1,105.3 million in 2024[2]. - Net income for the third quarter was $143.2 million, down 3% from $148.1 million in the same period last year, resulting in a net income margin of 11.9%[2]. - Adjusted EBITDA increased by 11% to $272.8 million, with an adjusted EBITDA margin of 22.7%, up from 22.2% in 2024[2][5]. - Total revenue for Q3 2025 reached $1,203.7 million, a 8.9% increase from $1,105.3 million in Q3 2024[31]. - Construction materials revenue increased to $647.3 million, up 18.6% from $545.7 million year-over-year[31]. - Gross profit for the nine months ended September 30, 2025, was $432.0 million, down 5.2% from $455.7 million in the same period of 2024[31]. - Net income for Q3 2025 was $143.2 million, a decrease of 3.3% compared to $148.1 million in Q3 2024[31]. - Consolidated EBITDA for Q3 2025 was $269.2 million, with a margin of 22.4%, compared to $244.6 million and a margin of 22.1% in Q3 2024[36]. - The gross profit for the three months ended September 30, 2025, was $284.3 million, with a gross profit margin of 23.6%, compared to $273.0 million and a margin of 24.7% in 2024[40]. - EBITDA for the three months ended September 30, 2025, was $269.2 million, compared to $244.6 million in 2024, reflecting an increase of 10.0%[48]. - Adjusted EBITDA for the three months ended September 30, 2025, was $272.8 million, up from $245.2 million in the same period of 2024, indicating a growth of 11.3%[48]. Backlog and Future Revenue Potential - The company has a record backlog of $995 million, which is 32% higher than the same period last year, with 87% of this backlog being public work[6]. - The Central Segment backlog increased by 83% year-over-year, primarily due to increased activity in Texas and the acquisition of Strata Corporation[11]. - The Mountain Segment backlog reached a record $386 million, up 38% year-over-year, driven by growth in Idaho and increased bidding activity[11]. - The backlog for the company indicates strong future revenue potential, although specific figures were not disclosed in the provided content[36]. Capital Expenditures and Debt - Capital expenditures for the nine months ended September 30, 2025, totaled $154.8 million, with $663.5 million spent on growth initiatives, including $528 million on acquisitions[21]. - Capital expenditures for the nine months ended September 30, 2025, were $290.3 million, significantly higher than $127.2 million in the same period of 2024[35]. - The company issued $520.0 million in long-term debt during the nine months ended September 30, 2025[35]. - Total long-term debt as of September 30, 2025, is $1,176.0 million, with total debt at $1,187.8 million[52]. - As of September 30, 2025, Knife River had $30.7 million in unrestricted cash, $1.2 billion in gross debt, and a net leverage ratio of 2.6x[23]. - Adjusted EBITDA for the trailing twelve months ended September 30, 2025, is $458.3 million, resulting in a net leverage ratio of 2.6x[52]. Guidance and Projections - Knife River narrowed its full-year 2025 revenue guidance to a range of $3.1 billion to $3.15 billion and adjusted EBITDA guidance to $475 million to $500 million[10][24]. - Projected net income for 2025 ranges from $140.0 million to $160.5 million, with Adjusted EBITDA expected between $475.0 million and $500.0 million[53]. - The company anticipates a long-term Adjusted EBITDA margin, although specific projections for 2025 EBITDA contributions are not provided due to the unpredictability of non-GAAP adjustment items[53]. - Forward-looking statements highlight growth strategies and potential benefits from acquisitions, but there is no assurance these will be achieved[55]. - The company emphasizes that changes in assumptions could lead to actual results differing materially from forward-looking statements[56]. Pricing and Sales Volume - The company expects price increases of high-single digits for aggregates and mid-single digits for ready-mix, while asphalt pricing is anticipated to decrease slightly[24]. - The average selling price of aggregates increased to $18.78 per ton in Q3 2025 from $17.32 per ton in Q3 2024, a rise of 8.4%[39]. - The company reported a decrease in asphalt sales volume to 3,111 tons in Q3 2025 from 3,150 tons in Q3 2024, a decline of 1.2%[39]. - The company’s contracting services backlog is expected to have slightly lower margins as of September 30, 2025, compared to the previous year[37]. - Approximately 87% of the company's contracting services backlog is related to publicly funded projects, including street and highway construction[37].