Knife River (KNF) investor relations material

Executive summary

• Revenue increased 16% year-over-year to $410.1 million, driven by higher ready-mix and aggregate volumes, favorable weather, and three aggregates-based acquisitions, expanding presence in Utah and Montana.

• Adjusted EBITDA improved 16% to $(31.8) million, with margin expanding by 290 basis points; EBITDA improved to $(35.4) million from $(41.5) million.

• Record quarter backlog reached $1.2 billion, with 88% related to public projects, providing strong visibility into future activity.

• Net loss widened to $79.2 million from $68.7 million, reflecting higher interest expense and increased SG&A costs from acquisitions.

• Growth strategy focuses on midsize, high-growth markets, vertical integration, margin improvement, and a strong company culture.

Financial highlights

• Aggregates volume grew 26% year-over-year to 4.88 million tons, ready-mix volumes increased 33% to 724k cubic yards, and asphalt volumes rose 42% to 283k tons.

• Gross profit margins in aggregates improved by 390 basis points; ready-mix by 260bps, asphalt by 1,180bps, and liquid asphalt by 1,930bps.

• SG&A expenses rose 14% to $83.5 million, mainly due to costs from acquired companies and higher payroll.

• Interest expense increased 35% to $20.7 million, reflecting higher debt balances.

• Cash used in operating activities decreased to $58.6 million from $125.3 million, mainly due to lower working capital needs.

Outlook and guidance

• Full-year 2026 revenue expected between $3.3 billion and $3.5 billion; Adjusted EBITDA guidance of $520–$560 million.

• Aggregates and asphalt volumes and pricing projected to rise mid-single digits; ready-mix volumes to increase mid-teens.

• Contracting services margins expected to improve in 2026 due to increased self-performed asphalt paving and project incentives.

• No concerns regarding gas tax holidays, Oregon DOT issues, or geopolitical events impacting guidance.

• Management expects continued strong public-sector demand, with 88% of backlog tied to public projects.