Knife River Corporation Reports First Quarter Financial Results
Achieved record first quarter revenue
Increased backlog at higher expected margins
Advanced organic and acquisition growth initiatives
PERFORMANCE SUMMARY |
||||||||
|
First Quarter |
|||||||
(In millions, except per share) |
2024 |
2023 |
% Change |
|||||
Revenue |
$ |
329.6 |
|
$ |
307.9 |
|
7 |
% |
Gross profit |
$ |
6.5 |
|
$ |
4.1 |
|
59 |
% |
Net loss |
$ |
(47.6 |
) |
$ |
(41.3 |
) |
(15 |
)% |
Net loss margin |
|
(14.5 |
)% |
|
(13.4 |
)% |
|
|
|
|
|
|
|||||
EBITDA |
$ |
(20.6 |
) |
$ |
(14.1 |
) |
(46 |
)% |
EBITDA margin |
|
(6.2 |
)% |
|
(4.6 |
)% |
|
|
|
|
|
|
|||||
Adjusted EBITDA |
$ |
(17.7 |
) |
$ |
(13.7 |
) |
(29 |
)% |
Adjusted EBITDA margin |
|
(5.4 |
)% |
|
(4.5 |
)% |
|
|
|
|
|
|
|||||
Net loss per share |
$ |
(0.84 |
) |
$ |
(0.73 |
) |
(15 |
)% |
Note: EBITDA, Adjusted EBITDA, EBITDA margin and Adjusted EBITDA margin are non-GAAP financial measures. For more information on all non-GAAP measures and a reconciliation to the nearest GAAP measure, see the section entitled "Non-GAAP Financial Measures." |
MANAGEMENT COMMENTARY |
“In the first quarter of 2024, we continued to make good progress on our ‘Competitive EDGE’ initiatives, including our pricing strategy, disciplined bidding to target higher-margin work and investing in growth opportunities,” said Knife River President and CEO
"We advanced a number of organic growth investments, including upgraded plants to add capacity, a greenfield ready-mix operation in our Central segment and the redistribution of plant assets into markets where we believe we can achieve higher returns as we optimize our portfolio," Gray said. "Additionally, on
“At the same time, we have been busy adding to our backlog,” Gray continued. “At the end of the first quarter, contracting services backlog was
“Today, we are reaffirming the 2024 guidance we shared last quarter, including mid-to-high single-digit price growth and flat to low-single-digit volume declines,” Gray said. “We are also reaffirming revenue guidance in the range of
FIRST QUARTER 2024 RESULTS |
For the three months ended
In the fourth quarter of 2023, we realigned our reportable segments to better support our operational strategies. The liquid asphalt and related services portion of the Pacific segment’s businesses are now reported under the Energy Services segment. In addition, the North Central and South operating segments have been aggregated into one reportable segment, Central. We also reallocated certain amounts to the operating segments that were previously reported within Corporate Services. All periods have been recast to conform with the revised presentation.
See the section entitled "Non-GAAP Financial Measures" for more information on all non-GAAP measures and a reconciliation to the nearest GAAP measure.
REPORTING SEGMENT PERFORMANCE |
||||||||
Pacific |
|
|
|
|||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2024 |
|
2023 |
|
% Change |
|||
|
(In millions) |
|||||||
Revenue |
$ |
78.4 |
|
$ |
65.7 |
|
19 |
% |
Gross profit |
$ |
3.8 |
|
$ |
4.4 |
|
(14 |
)% |
Gross margin |
|
4.8 |
% |
|
6.7 |
% |
|
|
EBITDA |
$ |
(.7 |
) |
$ |
.1 |
|
(602 |
)% |
EBITDA margin |
|
(.9 |
)% |
|
.2 |
% |
|
First quarter revenue improved 19% year-over-year, led by increased contracting services revenues in
Northwest |
|
|
|
|||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2024 |
|
2023 |
|
% Change |
|||
|
(In millions) |
|||||||
Revenue |
$ |
120.3 |
|
$ |
115.9 |
|
4 |
% |
Gross profit |
$ |
20.2 |
|
$ |
16.6 |
|
22 |
% |
Gross margin |
|
16.8 |
% |
|
14.3 |
% |
|
|
EBITDA |
$ |
20.1 |
|
$ |
14.0 |
|
44 |
% |
EBITDA margin |
|
16.8 |
% |
|
12.1 |
% |
|
First quarter revenue improved 4% year-over-year to a record
Mountain |
|
|
|
|||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2024 |
|
2023 |
|
% Change |
|||
|
(In millions) |
|||||||
Revenue |
$ |
59.8 |
|
$ |
60.6 |
|
(1 |
)% |
Gross profit |
$ |
(3.7 |
) |
$ |
(3.0 |
) |
(23 |
)% |
Gross margin |
|
(6.2 |
)% |
|
(5.0 |
)% |
|
|
EBITDA |
$ |
(6.1 |
) |
$ |
(3.8 |
) |
(62 |
)% |
EBITDA margin |
|
(10.1 |
)% |
|
(6.2 |
)% |
|
First quarter revenue was comparable with prior year revenue. EBITDA decreased
Central |
|
|
|
|||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2024 |
|
2023 |
|
% Change |
|||
|
(In millions) |
|||||||
Revenue |
$ |
61.0 |
|
$ |
57.6 |
|
6 |
% |
Gross profit |
$ |
(12.9 |
) |
$ |
(12.2 |
) |
(6 |
)% |
Gross margin |
|
(21.2 |
)% |
|
(21.0 |
)% |
|
|
EBITDA |
$ |
(18.7 |
) |
$ |
(16.9 |
) |
(11 |
)% |
EBITDA margin |
|
(30.7 |
)% |
|
(29.3 |
)% |
|
During the first quarter of 2024, revenue improved 6% year-over-year, benefiting from increased pricing across all core product lines. EBITDA decreased 11% year-over-year, as the northern markets experienced an earlier start to its pre-construction season activities, which includes higher expenses for maintenance-related work, plant mobilization and crew training. The decrease was partially offset by strong aggregates margins in
Energy Services |
|
|
|
|||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2024 |
|
2023 |
|
% Change |
|||
|
(In millions) |
|||||||
Revenue |
$ |
12.8 |
|
$ |
9.4 |
|
36 |
% |
Gross profit |
$ |
(1.3 |
) |
$ |
(1.8 |
) |
28 |
% |
Gross margin |
|
(10.2 |
)% |
|
(19.6 |
)% |
|
|
EBITDA |
$ |
(2.5 |
) |
$ |
(3.0 |
) |
17 |
% |
EBITDA margin |
|
(19.4 |
)% |
|
(31.7 |
)% |
|
First quarter revenue improved 36% year-over-year, despite liquid asphalt volumes remaining relatively flat. Activity in the
CAPITAL ALLOCATION & LIQUIDITY |
As of
During the first quarter of 2024, we invested approximately
2024 FINANCIAL GUIDANCE |
Knife River is reaffirming the following financial guidance ranges for the full year 2024, based on normal weather, economic and operating conditions.
2024 Full Year Guidance |
|
|
||
|
Low |
High |
||
|
(In millions) |
|||
Revenue |
|
|
||
Revenue (Knife River Consolidated) |
$ |
2,750.0 |
$ |
2,950.0 |
|
|
|
||
Adjusted EBITDA |
|
|
||
Geographic Segments (including Corporate Services) |
$ |
375.0 |
$ |
415.0 |
Energy Services |
$ |
50.0 |
$ |
60.0 |
Knife River Consolidated |
$ |
425.0 |
$ |
475.0 |
FIRST QUARTER 2024 RESULTS CONFERENCE CALL |
Knife River will host a conference call at
To participate in the live call:
- Domestic: 1-888-259-6580
-
International: 1-416-764-8624
Conference ID: 74896485
ABOUT |
|
||||||
Consolidated Statements of Operations |
||||||
(Unaudited) |
||||||
|
Three Months Ended |
|||||
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
(In millions, except per share amounts) |
|||||
Revenue: |
|
|
||||
Construction materials |
$ |
204.1 |
|
$ |
192.9 |
|
Contracting services |
|
125.5 |
|
|
115.0 |
|
Total revenue |
|
329.6 |
|
|
307.9 |
|
Cost of revenue: |
|
|
||||
Construction materials |
|
209.8 |
|
|
194.1 |
|
Contracting services |
|
113.3 |
|
|
109.7 |
|
Total cost of revenue |
|
323.1 |
|
|
303.8 |
|
Gross profit |
|
6.5 |
|
|
4.1 |
|
Selling, general and administrative expenses |
|
60.2 |
|
|
48.7 |
|
Operating loss |
|
(53.7 |
) |
|
(44.6 |
) |
Interest expense |
|
13.9 |
|
|
9.5 |
|
Other income |
|
3.7 |
|
|
.9 |
|
Loss before income taxes |
|
(63.9 |
) |
|
(53.2 |
) |
Income tax benefit |
|
(16.3 |
) |
|
(11.9 |
) |
Net loss |
$ |
(47.6 |
) |
$ |
(41.3 |
) |
|
|
|
||||
Net loss per share: |
|
|
||||
Basic |
$ |
(.84 |
) |
$ |
(.73 |
) |
Diluted |
$ |
(.84 |
) |
$ |
(.73 |
) |
Weighted average common shares outstanding: |
|
|
||||
Basic |
|
56.6 |
|
|
56.6 |
|
Diluted |
|
56.6 |
|
|
56.6 |
|
|
|||||||||||
Consolidated Balance Sheets |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|
||||||
Assets |
(In millions, except shares and per share amounts) |
||||||||||
Current assets: |
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash |
$ |
170.7 |
|
|
$ |
7.2 |
|
|
$ |
262.3 |
|
Receivables, net |
|
183.7 |
|
|
|
174.6 |
|
|
|
266.8 |
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
|
33.6 |
|
|
|
31.0 |
|
|
|
27.3 |
|
Due from related-party |
|
— |
|
|
|
16.9 |
|
|
|
— |
|
Inventories |
|
375.8 |
|
|
|
373.2 |
|
|
|
319.6 |
|
Prepayments and other current assets |
|
54.0 |
|
|
|
36.3 |
|
|
|
37.5 |
|
Total current assets |
|
817.8 |
|
|
|
639.2 |
|
|
|
913.5 |
|
Noncurrent assets: |
|
|
|
|
|
||||||
Property, plant and equipment |
|
2,609.6 |
|
|
|
2,512.7 |
|
|
|
2,579.7 |
|
Less accumulated depreciation, depletion and amortization |
|
1,289.0 |
|
|
|
1,195.3 |
|
|
|
1,264.7 |
|
Net property, plant and equipment |
|
1,320.6 |
|
|
|
1,317.4 |
|
|
|
1,315.0 |
|
|
|
274.5 |
|
|
|
274.5 |
|
|
|
274.5 |
|
Other intangible assets, net |
|
10.3 |
|
|
|
12.8 |
|
|
|
10.8 |
|
Operating lease right-of-use assets |
|
45.8 |
|
|
|
44.0 |
|
|
|
44.7 |
|
Investments and other |
|
44.6 |
|
|
|
38.9 |
|
|
|
41.3 |
|
Total noncurrent assets |
|
1,695.8 |
|
|
|
1,687.6 |
|
|
|
1,686.3 |
|
Total assets |
$ |
2,513.6 |
|
|
$ |
2,326.8 |
|
|
$ |
2,599.8 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
|
||||||
Long-term debt - current portion |
$ |
7.1 |
|
|
$ |
.2 |
|
|
$ |
7.1 |
|
Related-party notes payable - current portion |
|
— |
|
|
|
238.0 |
|
|
|
— |
|
Accounts payable |
|
97.4 |
|
|
|
80.4 |
|
|
|
107.7 |
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
|
50.8 |
|
|
|
37.4 |
|
|
|
51.4 |
|
Accrued compensation |
|
17.7 |
|
|
|
14.0 |
|
|
|
48.1 |
|
Accrued interest |
|
15.5 |
|
|
|
— |
|
|
|
7.2 |
|
Due to related-party |
|
— |
|
|
|
23.5 |
|
|
|
— |
|
Current operating lease liabilities |
|
13.3 |
|
|
|
13.0 |
|
|
|
12.9 |
|
Other accrued liabilities |
|
95.4 |
|
|
|
66.7 |
|
|
|
112.9 |
|
Total current liabilities |
|
297.2 |
|
|
|
473.2 |
|
|
|
347.3 |
|
Noncurrent liabilities: |
|
|
|
|
|
||||||
Long-term debt |
|
673.5 |
|
|
|
.3 |
|
|
|
674.6 |
|
Related-party notes payable |
|
— |
|
|
|
578.1 |
|
|
|
— |
|
Deferred income taxes |
|
174.1 |
|
|
|
175.1 |
|
|
|
174.5 |
|
Noncurrent operating lease liabilities |
|
32.6 |
|
|
|
31.0 |
|
|
|
31.8 |
|
Other |
|
117.6 |
|
|
|
94.3 |
|
|
|
105.6 |
|
Total liabilities |
|
1,295.0 |
|
|
|
1,352.0 |
|
|
|
1,333.8 |
|
Commitments and contingencies |
|
|
|
|
|
||||||
Stockholders' equity: |
|
|
|
|
|
||||||
Common stock, 300,000,000 shares authorized, |
|
.6 |
|
|
|
.8 |
|
|
|
.6 |
|
Other paid-in capital |
|
614.6 |
|
|
|
548.2 |
|
|
|
614.5 |
|
Retained earnings |
|
618.2 |
|
|
|
441.7 |
|
|
|
665.8 |
|
|
|
— |
|
|
|
(3.6 |
) |
|
|
— |
|
|
|
(3.6 |
) |
|
|
— |
|
|
|
(3.6 |
) |
Accumulated other comprehensive loss |
|
(11.2 |
) |
|
|
(12.3 |
) |
|
|
(11.3 |
) |
Total stockholders' equity |
|
1,218.6 |
|
|
|
974.8 |
|
|
|
1,266.0 |
|
Total liabilities and stockholders' equity |
$ |
2,513.6 |
|
|
$ |
2,326.8 |
|
|
$ |
2,599.8 |
|
|
|||||||
Consolidated Statements of Cash Flows |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
||||||
|
|
2024 |
|
|
|
2023 |
|
|
(In millions) |
||||||
Operating activities: |
|
|
|
||||
Net loss |
$ |
(47.6 |
) |
|
$ |
(41.3 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
32.2 |
|
|
|
26.5 |
|
Changes in current assets and liabilities, net of acquisitions: |
|
|
|
||||
Receivables |
|
76.8 |
|
|
|
34.2 |
|
Due from related-party |
|
— |
|
|
|
(.8 |
) |
Inventories |
|
(56.2 |
) |
|
|
(49.9 |
) |
Other current assets |
|
(16.5 |
) |
|
|
(18.4 |
) |
Accounts payable |
|
(4.2 |
) |
|
|
1.9 |
|
Due to related-party |
|
— |
|
|
|
4.6 |
|
Other current liabilities |
|
(39.7 |
) |
|
|
(36.3 |
) |
Pension and postretirement benefit plan contributions |
|
(.1 |
) |
|
|
(.2 |
) |
Other noncurrent changes |
|
12.1 |
|
|
|
.4 |
|
Net cash used in operating activities |
|
(43.2 |
) |
|
|
(79.3 |
) |
Investing activities: |
|
|
|
||||
Capital expenditures |
|
(43.7 |
) |
|
|
(42.4 |
) |
Net proceeds from sale or disposition of property and other |
|
1.6 |
|
|
|
3.2 |
|
Investments |
|
(3.0 |
) |
|
|
(1.6 |
) |
Net cash used in investing activities |
|
(45.1 |
) |
|
|
(40.8 |
) |
Financing activities: |
|
|
|
||||
Issuance of long-term related-party notes, net |
|
— |
|
|
|
131.6 |
|
Repayment of long-term debt |
|
(1.7 |
) |
|
|
— |
|
Tax withholding on stock-based compensation |
|
(1.6 |
) |
|
|
— |
|
Net transfers to |
|
— |
|
|
|
(14.4 |
) |
Net cash provided by (used in) financing activities |
|
(3.3 |
) |
|
|
117.2 |
|
Decrease in cash, cash equivalents and restricted cash |
|
(91.6 |
) |
|
|
(2.9 |
) |
Cash, cash equivalents and restricted cash -- beginning of year |
|
262.3 |
|
|
|
10.1 |
|
Cash, cash equivalents and restricted cash -- end of period |
$ |
170.7 |
|
|
$ |
7.2 |
|
Segment Financial Data and Highlights (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
|
||||||||||
|
2024 |
|
2023 |
||||||||
|
Dollars |
Margin |
|
Dollars |
Margin |
||||||
|
(Dollars in millions) |
||||||||||
Revenues by segment: |
|
|
|
|
|
||||||
Pacific |
$ |
78.4 |
|
|
|
$ |
65.7 |
|
|
||
Northwest |
|
120.3 |
|
|
|
|
115.9 |
|
|
||
Mountain |
|
59.8 |
|
|
|
|
60.6 |
|
|
||
Central |
|
61.0 |
|
|
|
|
57.6 |
|
|
||
Energy Services |
|
12.8 |
|
|
|
|
9.4 |
|
|
||
Total segment revenues |
|
332.3 |
|
|
|
|
309.2 |
|
|
||
Corporate Services and Eliminations |
|
(2.7 |
) |
|
|
|
(1.3 |
) |
|
||
Consolidated revenues |
$ |
329.6 |
|
|
|
$ |
307.9 |
|
|
||
|
|
|
|
|
|
||||||
Gross profit by segment: |
|
|
|
|
|
||||||
Pacific |
$ |
3.8 |
|
4.8 |
% |
|
$ |
4.4 |
|
6.7 |
% |
Northwest |
|
20.2 |
|
16.8 |
% |
|
|
16.6 |
|
14.3 |
% |
Mountain |
|
(3.7 |
) |
(6.2 |
)% |
|
|
(3.0 |
) |
(5.0 |
)% |
Central |
|
(12.9 |
) |
(21.2 |
)% |
|
|
(12.2 |
) |
(21.0 |
)% |
Energy Services |
|
(1.3 |
) |
(10.2 |
)% |
|
|
(1.8 |
) |
(19.6 |
)% |
Total segment gross profit |
|
6.1 |
|
1.8 |
% |
|
|
4.0 |
|
1.3 |
% |
Corporate Services and Eliminations |
|
.4 |
|
(17.0 |
)% |
|
|
.1 |
|
(9.1 |
)% |
Consolidated gross profit |
$ |
6.5 |
|
2.0 |
% |
|
$ |
4.1 |
|
1.3 |
% |
|
|
|
|
|
|
||||||
Net income (loss) by segment: |
|
|
|
|
|
||||||
Pacific |
$ |
(6.5 |
) |
(8.3 |
)% |
|
$ |
(5.0 |
) |
(7.6 |
)% |
Northwest |
|
10.2 |
|
8.5 |
% |
|
|
5.1 |
|
4.4 |
% |
Mountain |
|
(12.4 |
) |
(20.8 |
)% |
|
|
(9.8 |
) |
(16.2 |
)% |
Central |
|
(27.4 |
) |
(44.9 |
)% |
|
|
(25.0 |
) |
(43.3 |
)% |
Energy Services |
|
(3.7 |
) |
(29.1 |
)% |
|
|
(4.2 |
) |
(44.8 |
)% |
Total segment net loss |
|
(39.8 |
) |
(12.0 |
)% |
|
|
(38.9 |
) |
(12.6 |
)% |
Corporate Services and Eliminations |
|
(7.8 |
) |
288.4 |
% |
|
|
(2.4 |
) |
184.7 |
% |
Consolidated net loss |
$ |
(47.6 |
) |
(14.5 |
)% |
|
$ |
(41.3 |
) |
(13.4 |
)% |
|
|
|
|
|
|
||||||
EBITDA* by segment: |
|
|
|
|
|
||||||
Pacific |
$ |
(.7 |
) |
(.9 |
)% |
|
$ |
.1 |
|
.2 |
% |
Northwest |
|
20.1 |
|
16.8 |
% |
|
|
14.0 |
|
12.1 |
% |
Mountain |
|
(6.1 |
) |
(10.1 |
)% |
|
|
(3.8 |
) |
(6.2 |
)% |
Central |
|
(18.7 |
) |
(30.7 |
)% |
|
|
(16.9 |
) |
(29.3 |
)% |
Energy Services |
|
(2.5 |
) |
(19.4 |
)% |
|
|
(3.0 |
) |
(31.7 |
)% |
Total segment EBITDA* |
|
(7.9 |
) |
(2.4 |
)% |
|
|
(9.6 |
) |
(3.1 |
)% |
Corporate Services and Eliminations |
|
(12.7 |
) |
471.8 |
% |
|
|
(4.5 |
) |
353.4 |
% |
Consolidated EBITDA* |
$ |
(20.6 |
) |
(6.2 |
)% |
|
$ |
(14.1 |
) |
(4.6 |
)% |
* EBITDA, Segment EBITDA, and EBITDA margin are non-GAAP financial measures. For more information and a reconciliation to the nearest GAAP measure, see the section entitled "Non-GAAP Financial Measures." |
The following table summarizes backlog for the company.
|
|
|
|
||
|
(In millions) |
||||
Pacific |
$ |
92.9 |
|
$ |
75.1 |
Northwest |
|
204.2 |
|
|
250.5 |
Mountain |
|
383.2 |
|
|
366.1 |
Central |
|
279.2 |
|
|
266.8 |
|
$ |
959.5 |
|
$ |
958.5 |
Margins on backlog at
|
Three Months Ended |
|||
|
|
|||
|
2024 |
2023 |
||
Sales (thousands): |
|
|
||
Aggregates (tons) |
|
4,255 |
|
4,868 |
Ready-mix concrete (cubic yards) |
|
530 |
|
561 |
Asphalt (tons) |
|
221 |
|
179 |
|
|
|
||
Average selling price:* |
|
|
||
Aggregates (per ton) |
$ |
19.80 |
$ |
17.16 |
Ready-mix concrete (per cubic yard) |
$ |
188.41 |
$ |
172.64 |
Asphalt (per ton) |
$ |
74.50 |
$ |
76.07 |
* The average selling price includes freight and delivery and other revenues. |
|
Three Months Ended |
||||||||||
|
|
||||||||||
|
2024 |
|
2023 |
||||||||
|
Dollars |
Margin |
|
Dollars |
Margin |
||||||
|
(Dollars in millions) |
||||||||||
Revenues by product line: |
|
|
|
|
|
||||||
Aggregates |
$ |
84.3 |
|
|
|
$ |
83.5 |
|
|
||
Ready-mix concrete |
|
99.8 |
|
|
|
|
96.8 |
|
|
||
Asphalt |
|
16.5 |
|
|
|
|
13.6 |
|
|
||
Liquid asphalt |
|
11.0 |
|
|
|
|
8.3 |
|
|
||
Other* |
|
39.0 |
|
|
|
|
30.3 |
|
|
||
Contracting services |
|
125.5 |
|
|
|
|
115.0 |
|
|
||
Internal sales |
|
(46.5 |
) |
|
|
|
(39.6 |
) |
|
||
Total revenues |
$ |
329.6 |
|
|
|
$ |
307.9 |
|
|
||
|
|
|
|
|
|
||||||
Gross profit by product line: |
|
|
|
|
|
||||||
Aggregates |
$ |
4.8 |
|
5.7 |
% |
|
$ |
2.3 |
|
2.8 |
% |
Ready-mix concrete |
|
8.6 |
|
8.6 |
% |
|
|
8.8 |
|
9.0 |
% |
Asphalt |
|
(5.6 |
) |
(33.8 |
)% |
|
|
(6.0 |
) |
(43.8 |
)% |
Liquid asphalt |
|
(.9 |
) |
(8.6 |
)% |
|
|
(1.0 |
) |
(12.7 |
)% |
Other* |
|
(12.6 |
) |
(32.4 |
)% |
|
|
(5.3 |
) |
(17.3 |
)% |
Contracting services |
|
12.2 |
|
9.7 |
% |
|
|
5.3 |
|
4.6 |
% |
Total gross profit |
$ |
6.5 |
|
2.0 |
% |
|
$ |
4.1 |
|
1.3 |
% |
* Other includes cement, merchandise, fabric and spreading, and other products and services that individually are not considered to be a core line of business. |
NON-GAAP FINANCIAL MEASURES
EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, including those measures by segment, as applicable, net debt and net leverage are considered non-GAAP measures of financial performance. These non-GAAP financial measures are not measures of financial performance under GAAP. The items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. Therefore, these non-GAAP financial measures should not be considered substitutes for the applicable GAAP metric.
EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are most directly comparable to the corresponding GAAP measures of net income and net income margin. Net debt and net leverage are most directly comparable to the corresponding GAAP measures of total debt. We believe these non-GAAP financial measures, in addition to corresponding GAAP measures, are useful to investors by providing meaningful information about operational efficiency compared to our peers by excluding the impacts of differences in tax jurisdictions and structures, debt levels and capital investment. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance by excluding stock-based compensation and unrealized gains and losses on benefit plan investments as they are considered non-cash and not part of our core operations. We also exclude the one-time, non-recurring costs associated with the separation of Knife River from
EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income. EBITDA margin is calculated by dividing EBITDA by revenues. Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation and one-time separation costs, to EBITDA. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues. Net debt is calculated by adding unamortized debt issuance costs to the total debt balance presented on the balance sheet, less any unrestricted cash. Net leverage is calculated by dividing net debt by trailing-twelve-month Adjusted EBITDA. These non-GAAP financial measures are calculated the same for both the segment and consolidated metrics and should not be considered as alternatives to, or more meaningful than, GAAP financial measures such as net income, net income margin and total debt and are intended to be helpful supplemental financial measures for investors’ understanding of our operating performance. Our non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies’ EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA Margin, net debt and net leverage measures having the same or similar names.
The following information reconciles segment and consolidated net income to EBITDA and Adjusted EBITDA and provides the calculation of EBITDA margin, Adjusted EBITDA margin, net debt and net leverage. Interest expense, net, is net of interest income that is included in other income (expense) on the Consolidated Statements of Operations.
Three Months Ended |
Pacific |
Northwest |
Mountain |
Central |
Energy
|
Corporate
|
Consolidated |
||||||||||||||
|
(In millions) |
||||||||||||||||||||
Net income (loss) |
$ |
(6.5 |
) |
$ |
10.2 |
|
$ |
(12.4 |
) |
$ |
(27.4 |
) |
$ |
(3.7 |
) |
$ |
(7.8 |
) |
$ |
(47.6 |
) |
Depreciation, depletion and amortization |
|
5.8 |
|
|
9.9 |
|
|
6.3 |
|
|
8.7 |
|
|
1.2 |
|
|
.3 |
|
|
32.2 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11.1 |
|
|
11.1 |
|
Income taxes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(16.3 |
) |
|
(16.3 |
) |
EBITDA |
$ |
(.7 |
) |
$ |
20.1 |
|
$ |
(6.1 |
) |
$ |
(18.7 |
) |
$ |
(2.5 |
) |
$ |
(12.7 |
) |
$ |
(20.6 |
) |
Unrealized (gains) losses on benefit plan investments |
|
|
|
|
|
$ |
(1.2 |
) |
$ |
(1.2 |
) |
||||||||||
Stock-based compensation expense |
|
|
|
|
|
|
1.8 |
|
|
1.8 |
|
||||||||||
One-time separation costs |
|
|
|
|
|
|
2.3 |
|
|
2.3 |
|
||||||||||
Adjusted EBITDA |
|
|
|
|
|
$ |
(9.8 |
) |
$ |
(17.7 |
) |
||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
Revenue |
$ |
78.4 |
|
$ |
120.3 |
|
$ |
59.8 |
|
$ |
61.0 |
|
$ |
12.8 |
|
$ |
(2.7 |
) |
$ |
329.6 |
|
Net Income Margin |
|
(8.3 |
)% |
|
8.5 |
% |
|
(20.8 |
)% |
|
(44.9 |
)% |
|
(29.1 |
)% |
N.M. |
|
(14.5 |
)% |
||
EBITDA Margin |
|
(.9 |
)% |
|
16.8 |
% |
|
(10.1 |
)% |
|
(30.7 |
)% |
|
(19.4 |
)% |
N.M. |
|
(6.2 |
)% |
||
Adjusted EBITDA Margin |
|
|
|
|
|
N.M. |
|
(5.4 |
)% |
||||||||||||
* N.M. - not meaningful |
Three Months Ended |
Pacific |
Northwest |
Mountain |
Central |
Energy
|
Corporate
|
Consolidated |
||||||||||||||
|
(In millions) |
||||||||||||||||||||
Net income (loss) |
$ |
(5.0 |
) |
$ |
5.1 |
|
$ |
(9.8 |
) |
$ |
(25.0 |
) |
$ |
(4.2 |
) |
$ |
(2.4 |
) |
$ |
(41.3 |
) |
Depreciation, depletion and amortization |
|
5.1 |
|
|
8.9 |
|
|
6.0 |
|
|
8.1 |
|
|
1.2 |
|
|
.3 |
|
|
29.6 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
9.5 |
|
|
9.5 |
|
Income taxes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(11.9 |
) |
|
(11.9 |
) |
EBITDA |
$ |
.1 |
|
$ |
14.0 |
|
$ |
(3.8 |
) |
$ |
(16.9 |
) |
$ |
(3.0 |
) |
$ |
(4.5 |
) |
$ |
(14.1 |
) |
Unrealized (gains) losses on benefit plan investments |
|
|
|
|
|
$ |
(1.3 |
) |
$ |
(1.3 |
) |
||||||||||
Stock-based compensation expense |
|
|
|
|
|
|
.9 |
|
|
.9 |
|
||||||||||
One-time separation costs |
|
|
|
|
|
|
.8 |
|
|
.8 |
|
||||||||||
Adjusted EBITDA |
|
|
|
|
|
$ |
(4.1 |
) |
$ |
(13.7 |
) |
||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
Revenue |
$ |
65.7 |
|
$ |
115.9 |
|
$ |
60.6 |
|
$ |
57.6 |
|
$ |
9.4 |
|
$ |
(1.3 |
) |
$ |
307.9 |
|
Net Income Margin |
|
(7.6 |
)% |
|
4.4 |
% |
|
(16.2 |
)% |
|
(43.3 |
)% |
|
(44.8 |
)% |
N.M. |
|
(13.4 |
)% |
||
EBITDA Margin |
|
.2 |
% |
|
12.1 |
% |
|
(6.2 |
)% |
|
(29.3 |
)% |
|
(31.7 |
)% |
N.M. |
|
(4.6 |
)% |
||
Adjusted EBITDA Margin |
|
|
|
|
|
N.M. |
|
(4.5 |
)% |
||||||||||||
* N.M. - not meaningful |
The following tables provide the reconciliation to trailing-twelve-month EBITDA and Adjusted EBITDA as of
|
Twelve Months
|
|
Three Months
|
Twelve Months
|
Three Months
|
||||||||
|
(In millions) |
||||||||||||
Net income (loss) |
$ |
176.6 |
|
|
$ |
(47.6 |
) |
$ |
182.9 |
|
$ |
(41.3 |
) |
Depreciation, depletion and amortization |
|
126.4 |
|
|
|
32.2 |
|
|
123.8 |
|
|
29.6 |
|
Interest expense, net |
|
54.5 |
|
|
|
11.1 |
|
|
52.9 |
|
|
9.5 |
|
Income taxes |
|
58.0 |
|
|
|
(16.3 |
) |
|
62.4 |
|
|
(11.9 |
) |
EBITDA |
$ |
415.5 |
|
|
$ |
(20.6 |
) |
$ |
422.0 |
|
$ |
(14.1 |
) |
Unrealized (gains) losses on benefit plan investments |
|
(2.6 |
) |
|
|
(1.2 |
) |
|
(2.7 |
) |
|
(1.3 |
) |
Stock-based compensation expense |
|
4.0 |
|
|
|
1.8 |
|
|
3.1 |
|
|
.9 |
|
One-time separation costs |
|
11.5 |
|
|
|
2.3 |
|
|
10.0 |
|
|
.8 |
|
Adjusted EBITDA |
$ |
428.4 |
|
|
$ |
(17.7 |
) |
$ |
432.4 |
|
$ |
(13.7 |
) |
The following table provides the reconciliation of the net leverage calculation of net debt to Adjusted EBITDA.
|
Twelve Months
|
||
|
(In millions) |
||
Long-term debt |
$ |
673.5 |
|
Long-term debt - current portion |
|
7.1 |
|
Total debt |
|
680.6 |
|
Add: Unamortized debt issuance costs |
|
14.6 |
|
Total debt, gross |
|
695.2 |
|
Less: Cash and cash equivalents, excluding restricted cash |
|
128.4 |
|
Total debt, net |
$ |
566.8 |
|
Trailing twelve months ended |
$ |
428.4 |
|
|
|
|
|
Net leverage |
|
1.3 |
x |
The following table provides a reconciliation of consolidated GAAP net income to EBITDA and Adjusted EBITDA for forecasted results.
|
2024 |
|||
|
Low |
High |
||
|
(In millions) |
|||
Net income |
$ |
180.0 |
$ |
215.0 |
Adjustments: |
|
|
||
Interest expense, net |
|
45.0 |
|
45.0 |
Income taxes |
|
60.0 |
|
75.0 |
Depreciation, depletion and amortization |
|
130.5 |
|
130.5 |
EBITDA |
$ |
415.5 |
$ |
465.5 |
Unrealized (gains) losses on benefit plan investments |
|
— |
|
— |
Stock-based compensation expense |
|
6.0 |
|
6.0 |
One-time separation costs |
|
3.5 |
|
3.5 |
Adjusted EBITDA |
$ |
425.0 |
$ |
475.0 |
FORWARD-LOOKING STATEMENTS
The information in this news release highlights the key growth strategies, projections and certain assumptions for the company and its subsidiaries. Many of these highlighted statements and other statements not historical in nature are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, there is no assurance the company’s projections or estimates for growth, shareholder value creation, financial guidance, expected backlog margin or other proposed strategies will be achieved. Please refer to assumptions contained in this news release, as well as the various important factors listed in Part I, Item 1A - Risk Factors in the company's 2023 Form 10-K and subsequent filings with the
Changes in such assumptions and factors could cause actual future results to differ materially from growth and financial guidance. All forward-looking statements in this news release 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 undertake to update forward-looking statements, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507454280/en/
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