Knife Riv Holding Co. · NYSE:KNF
Knife Riv — Q3 2023 Earnings Presentation
18 slides from Knife Riv's earnings presentation, Nov 6, 2023
Slide 1: 3Q 2023 Earnings Presentation
3Q 2023 Earnings Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements The information in this presentation 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 t
Slide 3: Third Quarter Highlights
Third Quarter Highlights Record Quarter Revenue, Net Income, EBITDA , Adj. EBITDA KEY DRIVERS RECORD RESULTS INCREASED 2023 GUIDANCE Revenue EBITDA1 Adj. EBITDA1 REVENUE ‘Competitive EDGE’ + 12% + 40% + 43% strategy creating margin expansion $2.7 BN – $2.8 BN $1,090.4 $247.5 $241.4 ($In Millions) $9
Slide 4: Leading Integrated Materials and Services Provider
Leading Integrated Materials and Services Provider Aggregates-led, vertically integrated construction materials and contracting services company Well-established with track record of execution in mid-sized, high-growth markets Competitive EDGE plan for continued profitable growth Strong people-first
Slide 5: Competitive EDGE: Framework for Long-Term Shareholder Value Creation
Competitive EDGE: Framework for Long-Term Shareholder Value Creation EDGE 2025 Expectations STRONG AND BALANCED REVENUE GROWTH EBITDA Margin Improvement Increasing Mix of Aggregates ATTRACTIVE CASH FLOW GENERATION Cash Flow growth ~in-line with Adj. EBITDA growth SIGNIFICANT ADJ. EBITDA MARGIN EXPAN
Slide 6: Third Quarter: Segment Overview
Third Quarter: Segment Overview Broad-Based Margin Expansion and Growth Across Segments North Pacific Northwest Mountain All Other1 Consolidated Central 3Q’23 Revenue $181.4 MM $209.4 MM $255.1 MM $305.1 MM $139.4 MM $1,090.4 MM 3Q’23 Revenue 19% 2% 25% 4% 16% 12% Growth 3Q’23 Adjusted $37.6 MM $48.
Slide 7: Third Quarter: Segment Highlights
Third Quarter: Segment Highlights Continued Implementation of EDGE ‒ Optimized prices to align with value of high-quality integrated products and services ‒ Disciplined and targeted bidding, leveraging vertically integrated business model ‒ Customer contracts refined to protect against further infla
Slide 8: Product Lines
Product Lines Strong Pricing Growth and Margin Expansion Across Product Lines Average Selling Price1 Q3'23 Q3'22 % Change Volume Q3'23 Q3'22 % Change Aggregates (per ton) $16.10 $13.86 16% Aggregates (tons) 12,022 12,399 (3%) Ready-mix concrete (per cubic yard) $169.98 $152.34 12% Ready-mix concrete
Slide 9: Capital Allocation Priorities
Capital Allocation Priorities Debt Schedule Q3 2023 1 IMPROVED FINANCIAL FLEXIBILITY 1.4x Term Loan Agreement $273.3 Net Debt to TTM Adj. EBITDA Revolving credit agreement $0.0 Senior Notes $425.0 Other Notes $0.4 STRONG SEASONAL FREE CASH FLOW GENERATION $153MM Total Debt $698.7 Operating Cash Flow
Slide 10: Guidance
Guidance KEY EXPECTED DRIVERS 2023 GUIDANCE REVENUE ($BN) $2.70 - ‘Competitive EDGE’ $2.80* REVENUE $2.18 $2.23 $2.54 $2.19 Price Strategy to Align with $1.93 Value of Products/Services $2.70 BN – $2.80 BN Operational Discipline – EBITDA1 Targeted Bid Strategy, Cost Focus $388 MM – $418 MM 2018 2019
Slide 11: Appendix and Non-GAAP Financial Measures
APPENDIX AND NON-GAAP FINANCIAL MEASURES 11
Slide 12: Net Leverage
Net Leverage Twelve-Months Ended Nine-Months Ended Twelve-Months Ended Nine-Months Ended (In millions) September 30, 2023 September 30, 2023 December 31, 2022 September 30, 2022 Net income (loss) $180.2 $162.2 $116.2 $98.2 Depreciation, depletion and amortization 121.7 92.5 117.8 88.6 Interest expen
Slide 13: Adjusted EBITDA
Adjusted EBITDA All Other and Three Months Ended September 30, 2023 Pacific Northwest Mountain North Central Intersegment Consolidated (in millions) Eliminations Net Income (loss) $ 31.9 $ 39.1 $ 54.1 $ 64.4 $ (42.8) $ 146.7 Depreciation, depletion and amortization 5.7 9.8 6.3 6.1 3.9 31.8 Interest
Slide 14: Adjusted EBITDA (Cont'd)
Adjusted EBITDA (Cont’d) All Other and Nine Months Ended September 30, 2023 Pacific Northwest Mountain North Central Intersegment Consolidated (in millions) Eliminations Net Income (loss) $ 39.8 $ 74.3 $67.9 $ 53.5 $ (73.3) $ 162.2 Depreciation, depletion and amortization 16.7 28.4 18.5 17.9 11.0 92
Slide 15: Adjusted EBITDA (Cont'd)
Adjusted EBITDA (Cont’d) All Other and Twelve Months Ended September 30, 2023 Pacific Northwest Mountain North Central Intersegment Consolidated (in millions) Eliminations Net Income (loss) $ 44.9 $ 89.7 $ 74.7 $ 62.4 $ (91.5) $ 180.2 Depreciation, depletion and amortization 22.2 37.1 24.0 23.6 14.8
Slide 16: Adjusted EBITDA (Cont'd)
Adjusted EBITDA (Cont’d) Twelve-Months Ended Nine-Months Ended Twelve-Months Ended Nine-Months Ended (In millions) September 30, 2022 September 30, 2022 December 31, 2021 September 30, 2021 Net Income (loss) $111.1 $98.2 $129.8 $116.9 Depreciation, depletion and amortization 115.2 88.6 101.0 74.4 In
Slide 17: Adjusted EBITDA Guidance
Adjusted EBITDA Guidance Full-Year Guidance 2023 (in millions) Low High Net Income (loss) $160.0 $180.0 Depreciation, depletion and amortization 120.0 120.0 Interest expense, net 55.0 55.0 Income taxes 53.0 63.0 EBITDA $388.0 $418.0 Unrealized (gains) losses on benefit plan investments (1.1) (1.1) S
Slide 18: Adjusted EBITDA Disclaimer
Adjusted EBITDA Disclaimer Our guidance for Adjusted EBITDA margin expansion by 2025 and long-term Adjusted EBITDA margin are non-GAAP financial measures that exclude or otherwise have been adjusted for non-GAAP adjustment items from our U.S. GAAP financial statements. When we provide guidance for t