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 ...

KNIFE RIVER CORPORATION REPORTS FIRST QUARTER 2025 FINANCIAL RESULTS Closed on acquisition of Strata Corporation On track for record full-year revenue, net income and adjusted EBITDA Updated full-year 2025 guidance BISMARCK, N.D. — May 6, 2025 — Knife River Corporation (NYSE: KNF), an aggregates-led, vertically integrated construction materials and contracting services company, today announced financial results for the first quarter ended March 31, 2025. PERFORMANCE SUMMARY | | | | | Three Months Ended Marc ...

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 ...

Group 1 - The overall market has faced challenges, with major indices declining due to concerns over broader economic conditions [1] - Despite the market downturn, certain companies, particularly in the oil and natural gas sector, have shown resilience and potential for value and growth [1] - Crude Value Insights provides an investment service focused on cash flow generation in the oil and natural gas industry, highlighting companies with strong financial prospects [1] Group 2 - Subscribers to Crude Value Insights benefit from a model account featuring over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2] - The service aims to enhance investment strategies in the oil and gas market, offering tools and insights for better decision-making [2] - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas investment community [3]

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]

Financial Data and Key Metrics Changes - Knife River Corporation achieved record full-year revenue, adjusted EBITDA, and adjusted EBITDA margin in 2024, with adjusted EBITDA growing by 48% and adjusted EBITDA margins increasing by 360 basis points over the last two years [8][9]. - The company reported a net leverage improvement to 1.0% at year-end, with a long-term target of 2.5% and $237 million of unrestricted cash available for capital priorities [52]. Business Line Data and Key Metrics Changes - Aggregates: The average selling price increased by 7%, with gross margin reaching a record 21%. Volumes are expected to increase low single digits in 2025 [42][43]. - Ready-Mix: The average selling price rose by 10%, with gross margin also improving to a record 16%. Volumes were down 9% due to pricing initiatives, but low single-digit volume increases are anticipated for 2025 [44][45]. - Asphalt: A 2% price increase was realized, with gross margin improving by 180 basis points, the highest among product lines. Volumes and pricing are expected to increase low single digits in 2025 [46]. - Contracting Services: Achieved record revenue of $1.4 billion and a gross margin of 13%, with a strong backlog compared to the previous year [47][48]. Market Data and Key Metrics Changes - The company's backlog increased by 13% year-over-year to $746 million, with a majority of contracting work being public projects [14][16]. - Infrastructure spending remains at or near record levels, with nearly half of the IIJ funds yet to be obligated in the states where Knife River operates [17][48]. Company Strategy and Development Direction - Knife River is focused on its EDGE strategy, which includes dynamic pricing, operational efficiencies, and disciplined bidding to enhance margins across all product lines [8][10][28]. - The company is pursuing acquisitions, including the pending acquisition of Strata Corporation for $454 million, which is expected to close in the first half of 2025 [19][20]. - Organic growth projects are also underway, with $70 million approved for 2025, including expansions in South Dakota and new operations in Idaho [26][23]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong backlog and the potential for margin improvements across all regions, particularly in the Pacific region [65]. - The company anticipates continued demand for contracting services driven by robust public funding and infrastructure projects [88][90]. - Management expects another year of record revenue and adjusted EBITDA in 2025, with guidance for consolidated revenue between $3 billion and $3.2 billion [54]. Other Important Information - SG&A expenses increased by 5% due to higher labor costs and acquisition-related expenses, with an additional $20 million allocated for acquisition support and EDGE initiatives in 2025 [49][50]. - The company streamlined its reporting segments from five to four to enhance regional support for local teams [30]. Q&A Session Summary Question: Which regions are expected to see more meaningful improvement in profitability and margins in 2025? - Management indicated that all regions are improving, with the Pacific region showing the most upside potential due to strong backlog and project opportunities [65]. Question: Can you elaborate on the $20 million step-up related to acquisition costs? - Management clarified that the $20 million is aimed at supporting a robust pipeline of opportunities and enhancing EDGE initiatives, which are expected to generate strong returns [75][78]. Question: What is the outlook for raw material inflation in the ready-mix market? - Management expects mid-single-digit price increases to outpace costs, leading to continued margin expansion in the ready-mix segment [117]. Question: How is the cadence of the year expected to play out regarding EBITDA growth? - Management noted that the first quarter typically sees a 5% loss in annual EBITDA, with stronger performance expected in the second half of the year due to increased private work opportunities [128][130]. Question: What would it take for margins to reach the high end of the EBITDA margin guidance? - Management highlighted that private work opportunities and successful implementation of EDGE initiatives could significantly impact margins, particularly in aggregates and ready-mix [145].