Knife Riv Holding Co. · NYSE:KNF
Knife Riv — Q4 2024 Earnings Presentation
30 slides from Knife Riv's earnings presentation, Feb 13, 2025
Slide 1: Q4 and Full-Year 2024 Results Presentation
Q4 and Full-Year 2024 Results Presentation February 13, 2025
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, including with respect to the consummation of the acquisition of Strata Corporation and the timing and benefits thereof. Man
Slide 3: Key Highlights
Key Highlights Record Results | Strong Outlook | Investing for Long-Term Growth 2025 Guidance1 Full Year Results 2025 Opportunities Revenue Adj. EBITDA2 Adj. EBITDA Margin2 Expansion of EDGE Revenue (Record) (Record) (Record) initiatives $3.0B - $3.2B $2,830M $2,899M Organic growth supported $463M b
Slide 4: Fourth Quarter Results
Fourth Quarter Results Geographic Segments Continue to Generate Strong EBITDA1 Growth Fourth Quarter Recap Fourth Quarter Adjusted EBITDA1 Geographic Segments $81.2M Record combined EBITDA1, led by $72.4M Central’s record fourth quarter +13% Energy Services Geographic Segments Margins normalized
Slide 5: Committed to Excellence
Committed to Excellence PIT Crew Expansion Continues Across the Organization 2024: Materials PIT Crew Process Improvement Team Expansion in Action Visited 8 Locations, 58 Plants in 2024 Appointed new Chief Excellence Officer Initiatives – Improving current operations and streamlining acquisition
Slide 6: Backlog
Backlog Backlog Increases 13% Y/Y, at Similar Expected Margins Backlog Total Projects in Backlog Funding Sources of Backlog Greater than $10M 8% Private 14% $5 - $10M 9% $746M $662M Public 86% +13% Less than 83% $5M 4Q23 4Q24 Strong public funding supports backlog 85% of backlog revenue is expected
Slide 7: Infrastructure Funding
Infrastructure Funding Federal, State, Local Budgets Remain Near Record Levels DOT Budget Backdrop1 IIJA Funds1,2 DOT Budgets Remain Near Record Levels 43% of IIJA-related funds within Knife River’s footprint have yet to be obligated $66B $64B $54B $56B 2 $50B IIJA Highway/Bridge Funding Funds Yet t
Slide 8: 2024 Segment Performance
2024 Segment Performance Record Adjusted EBITDA1 | Adjusted EBITDA Margin1 of 16% Geographic Energy Pacific Northwest Mountain Central Consolidated3 Segments2 Services 2024 Revenue $493.1M $692.4M $663.1M $818.1M $2,666.7M $275.7M $2,899M 2024 Revenue 7% 4% 5% (1%) 3% (6%) 2% Growth 2024 Adjusted $5
Slide 9: Pacific
Pacific Full-Year Revenue and EBITDA1 Improve in 2024 Financial Performance 2025 Outlook 2023 2024 Change Public Projects: Revenue $462.2M $493.1M 7% Northern California bidding environment remains strong; military project in Hawaii; Alaska airport work EBITDA1 $56.2M $59.9M 7% Private Work: Res
Slide 10: Northwest
Northwest Record Full-Year Revenue, EBITDA1, EBITDA Margin1 Financial Performance 2025 Outlook 2023 2024 Change Public and Private Work: Revenue $666.1M $692.4M 4% Prestress operations supporting bridge projects and data centers Increase in private work slated for second half of the year EBITDA1
Slide 11: Mountain
Mountain Record Full-Year Revenue, EBITDA1, EBITDA Margin1 Financial Performance 2025 Outlook 2023 2024 Change Population Drivers: Revenue $634.0M $663.1M 5% In-migration supporting sustained market activity Infrastructure Funding: EBITDA1 $103.2M $113.5M 10% Record fourth quarter backlog suppor
Slide 12: Central
Central Record Full-Year EBITDA1, EBITDA Margin1 Financial Performance 2025 Outlook 2023 2024 Change Funding and Backlog: Revenue $825.0M $818.1M (1%) Strong backlog in Texas, Minnesota, Iowa, Nebraska Expect to benefit from greater DOT allocation to asphalt paving projects EBITDA1 $116.6M $131.
Slide 13: Energy Services
Energy Services EBITDA Margin1 Accretive to Knife River Financial Performance 2025 Outlook 2023 2024 Change EBITDA1 and EBITDA Margin1: Revenue $292.3M $275.7M (6%) Expect benefit to EBITDA1 from acquisition of Albina Asphalt EBITDA margin1 growth opportunities at Albina via synergies, PIT Crew
Slide 14: 2024 Full-Year Product Line Results
2024 Full-Year Product Line Results Aggregate and Ready-Mix Pricing Momentum Continues Volume 2023 2024 Change Average Selling Price1 2023 2024 Change Aggregates (tons) 33,637 31,832 (5%) Aggregates (per ton) $16.29 $17.47 7% Ready-mix concrete (cubic yards) 3,837 3,484 (9%) Ready-mix concrete (per
Slide 15: Capital Structure
Capital Structure Strong Capital Position to Pursue Strategic Growth Opportunities Available Liquidity Debt Schedule 4Q24 Net Leverage2 Senior Notes $425.0M 7.75% Due 2031 Term Loan Agreement $264.7M 2.5x LT Target 6.18% Due 2028 2.3x Revolving Credit Agreement $0.0 Revolver1 ~6.18% Due 2028 - $350M
Slide 16: Capital Allocation
Capital Allocation Investments Support Operations and Drive Growth Maintenance Improvements Organic Acquisition Plant & equipment and EDGE-related upgrades to Greenfield growth in new Target mid-sized, high-growth aggregate reserve replacement existing operations to increase markets or new operation
Slide 17: Investing for Growth
Investing for Growth Expanded Corp Development Team | Robust Pipeline | Compelling Growth Opportunities Corporate Development Update Organic Investments Expanded Corporate Development team at HQ and regions Quarry With Rail Service in South Dakota to review deals, manage diligence, support integra
Slide 18: Strata Corporation: Acquisition Update
Strata Corporation: Acquisition Update Aggregates-Led | Infill Growth | Expect to Close 1H 2025 Strata Corporation: Infill Growth for Central Segment Definitive agreement to acquire Strata for $454M Aggregates-led, vertically integrated Leading construction materials provider in ND and western
Slide 19: 2025 Guidance
2025 Guidance Introduced Revenue and Adjusted EBITDA1 Guidance FY 2025 Guidance2 Key Assumptions3 Low High Pricing Volume Revenue (Knife River Consolidated) $3,000M $3,200M Aggregates Mid-Single-Digit Low-Single-Digit Increase Increase Adjusted EBITDA1 Mid-Single-Digit Low-Single-Digit Ready-Mix Inc
Slide 20: Appendix and Non-GAAP Financial Measures
Appendix and Non-GAAP Financial Measures 20
Slide 21: Fourth Quarter 2024 Segment Performance
Fourth Quarter 2024 Segment Performance Record Geographic Segments EBITDA1; 13% Growth Y/Y Geographic Energy Pacific Northwest Mountain Central Consolidated3 Segments2 Services 4Q24 Revenue $117.9M $152.7M $148.2M $187.5M $606.3M $60.8M $657.2M 4Q24 Revenue 3% (6%) 4% 3% 1% 4% 2% Growth 4Q24 Adjuste
Slide 22: Fourth Quarter Product Line Results
Fourth Quarter Product Line Results Aggregate and Ready-Mix Pricing Momentum Continues Volume 4Q23 4Q24 Change Average Selling Price1 4Q23 4Q24 Change Aggregates (tons) 7,566 6,999 (8%) Aggregates (per ton) $16.43 $17.14 4% Ready-mix concrete (cubic yards) 893 831 (7%) Ready-mix concrete (per cubic
Slide 23: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Three Months Ended December 31, 2024 Geographic Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Regions Eliminations Net income (loss) $7.1 $12.6 $10.4 $25.0 $55.1 $7.1 $(38.9) $23.3 Depreciati
Slide 24: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Twelve Months Ended December 31, Corporate 2024 Geographic Energy Pacific Northwest Mountain Central Services and Consolidated Segments Services ($ in millions) Eliminations Net income (loss) $35.6 $107.8 $87.1 $94.7 $325.2 $53.9 $(177.4) $201.7 De
Slide 25: Net Leverage Reconciliation
Net Leverage Reconciliation ($ in millions, except net September 30, September 30, December 31, 2024 June 30, 2024 March 31, 2024 December 31, 2023 June 30, 2023 leverage) 2024 2023 Long-term debt $666.9 $669.7 $672.5 $673.5 $674.6 $675.6 $832.0 Long-term debt – current portion 10.5 8.8 7.1 7.1 7.1
Slide 26: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Nine Months Ended Twelve Months Ended Nine Months Ended ($ in millions) September 30, 2024 September 30, 2024 December 31, 2023 September 30, 2023 Net income (loss) $199.1 $178.4 $182.9 $162.2 Depreciation, depletion and amortization 132.8 101.5 123.8
Slide 27: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Three Months Ended Twelve Months Ended Three Months Ended ($ in millions) March 31, 2024 March 31, 2024 December 31, 2023 March 31, 2023 Net income (loss) $176.6 $(47.6) $182.9 $(41.3) Depreciation, depletion and amortization 126.4 32.2 123.8 29.6 Inte
Slide 28: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Nine Months Ended Twelve Months Ended Nine Months Ended ($ 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
Slide 29: Adjusted EBITDA Guidance Table
Adjusted EBITDA Guidance Table Full-Year Guidance 2025 (In millions) Low High Net income (loss) $210.0 $245.0 Interest expense, net 44.0 44.0 Income taxes 71.0 86.0 Depreciation, depletion and amortization 148.0 148.0 EBITDA $473.0 $523.0 Unrealized (gains) losses on benefit plan investments – – Sto
Slide 30: Disclaimer
Disclaimer Our guidance for long-term Adjusted EBITDA margin, projected EBITDA contributions, and net leverage 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 these non-GA