Knife River (KNF) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $806.9 million, net income of $77.9 million, and adjusted EBITDA of $154.3 million, with all metrics up year-over-year, driven by price increases, operational improvements, and strong public infrastructure demand.

• Margins improved across most segments, with adjusted EBITDA margin expanding to 19.1% and trailing-twelve-month margin reaching 15.9%, supported by disciplined bidding and project execution.

• Backlog remains robust at $988.5 million, with 87% related to public projects and expected higher margins than the prior year.

• Raised full-year 2024 guidance for revenue to $2.8–$3.0 billion and adjusted EBITDA to $445–$485 million, reflecting strong market demand and successful execution of strategic initiatives.

• Continued focus on infrastructure investment, safety, operational excellence, and a people-first culture supports long-term growth.

Financial highlights

• Q2 2024 revenue was $806.9 million, up 3% year-over-year; adjusted EBITDA reached $154.3 million, up 22%; net income was $77.9 million, up 37%.

• Gross profit for the quarter was $176.2 million, with gross margin improving to 21.8% from 19.5% year-over-year.

• Average selling prices increased: aggregates up 8%, ready-mix up 11%, asphalt up 1%; volumes declined across product lines.

• Industry-leading ROIC for the trailing twelve months was 15.9%.

• Interest expense decreased due to lower average debt balances.

Outlook and guidance

• 2024 consolidated revenue guidance raised to $2.8–$3.0 billion; adjusted EBITDA guidance increased to $445–$485 million.

• Capital expenditures expected at 5–7% of revenue, excluding acquisitions.

• High single-digit price increases anticipated for aggregates and ready-mix; asphalt pricing flat to up low single digits; volumes expected flat to low-single-digit decline.

• Backlog at June 30, 2024 was $988.5 million, with 87% public projects and higher expected margins.

• Guidance assumes normal weather, economic, and operating conditions for the remainder of the year.