Knife Riv Holding Co. · NYSE:KNF
Knife Riv — Q2 2024 Earnings Presentation
24 slides from Knife Riv's earnings presentation, Aug 6, 2024
Slide 1: Second Quarter 2024 Results Presentation
Second Quarter 2024 Results Presentation August 6, 2024 1
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: Second Quarter Highlights
Second Quarter Highlights Strong Start to Construction Season; Raised 2024 Guidance 2024 Updated Guidance 2024 2Q Results 2024 Outlook Revenue Revenue Adj. EBITDA1 Adj. EBITDA Public Infrastructure (millions) (millions) Margin1 Funding Remains $2.80B - $3.00B Y/Y 3% 22% 300bps Healthy Previously: $2
Slide 4: Operations PIT Crew
Operations PIT Crew Operational Excellence Through Best Practices and Process Improvement Sites Visited Early Successes Progress Medford, Oregon: >$1.0M Expected Annualized 98 Sites Visited Benefit • Implementation of new mining plan and overland conveyor system. 1,294 Improvements Identified Casper
Slide 5: Acquisition Growth Update
Acquisition Growth Update Strong Pipeline Of Materials Based Acquisitions Deal Size Acquiror of Choice Markets Longstanding - Local Relationships Adjacent > $200M Strong Reputation Markets $100M - $200M People First Culture New SMAs within Current Regions $25M - $100M Regionally Managed Infill Exist
Slide 6: Backlog
Backlog Expected Low Risk Backlog with Resilient Funding Backlog Projects in Backlog Funding Sources of Backlog (millions) $1,041 $989 Central $328 Central Greater than Private $302 $10M 6% 13% Mountain Mountain $377 $366 $5M - $10M 9% Public 87% Northwest Northwest $257 $220 Less than 85% $5M Pacif
Slide 7: Infrastructure Funding
Infrastructure Funding Federal, State, Local Budgets Remain Healthy DOT Budget Backdrop1 IIJA Funds2,3 DOT Budgets Remain at Record Levels 56% of IIJA-related funds within Knife River’s footprint have yet to be obligated $56 $65 $50 $54 IIJA Funding % of Funds Funds Remaining $48 (billions) Remainin
Slide 8: Second Quarter: Segment Performance
Second Quarter: Segment Performance TTM1 Adjusted EBITDA Margin2 Expands 240 bps Y/Y Energy Pacific Northwest Mountain Central Consolidated Services 2Q24 $131.8M $201.2M $194.0M $214.7M $76.2M $806.9M Revenue 2Q24 Revenue 5% 12% 10% (7)% (9)% 3% Growth 2Q24 Adjusted $17.8M $50.7M $43.1M $36.2M $19.4
Slide 9: Product Line Results
Product Line Results Aggregates Pricing Improved High-Single-Digits YTD1 YTD YTD Volume 2Q23 2Q24 Change Average Selling Price2 2Q23 2Q24 Change Change Change Aggregates (tons) 9,181 9,408 2% (3)% Aggregates (per ton) $15.95 $16.84 6% 8% Ready-mix concrete (cubic yards) 1,113 975 (12)% (10)% Ready-m
Slide 10: Capital Structure
Capital Structure Capacity for Both Organic and Acquisition Opportunities Available Liquidity Debt Schedule Net Leverage1 (millions) 2Q24 (millions) Senior Notes $425.0 7.75% Due 2031 2.5x LT Target Term Loan Agreement $268.1 7.20% Due 2028 2.3x Revolving Credit Agreement $0.0 ~7.25% Due 2028 - $350
Slide 11: 2024 Guidance
2024 Guidance Raised Full Year Revenue, Adjusted EBITDA1 Guidance; Refined Key Assumptions FY 2024 Guidance Key Assumptions2 (millions) Low High Pricing Volume Revenue $2,800 $3,000 High-Single-Digit Flat to Low-Single-Digit (Knife River Consolidated) Aggregates Increase Decline Adjusted EBITDA1 Hig
Slide 12: Adjusted EBITDA Guidance Comparison
Adjusted EBITDA Guidance Comparison Adjusted EBITDA1 Growth of 15% for Geographic Segments2 and a Normalization of Energy Services +4.1% +7.5% Initial Updated ------------------------- Guidance Guidance $465.0 $450.0 $432.4 $432.4 (millions) (millions) Geographic Segments & Corporate Services and El
Slide 13: Appendix and Non-GAAP Financial Measures
APPENDIX AND NON-GAAP FINANCIAL MEASURES 13
Slide 14: Product Line Results YTD
Product Line Results YTD1 Consolidated Margin Trends Remain Aligned with EDGE Strategy Volume YTD23 YTD24 % Change Average Selling Price2 YTD23 YTD24 % Change Aggregates (tons) 14,049 13,663 (3)% Aggregates (per ton) $16.37 $17.76 8% Ready-mix concrete (cubic yards) 1,674 1,505 (10)% Ready-mix concr
Slide 15: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Three Months Ended June 30, 2024 Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Eliminations Net income (loss) $11.7 $39.7 $36.5 $26.9 $18.1 $(55.0) $(77.9) Depreciation, depletion and amortiz
Slide 16: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Six Months Ended June 30, 2024 Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Eliminations Net income (loss) $5.1 $50.0 $24.1 $(0.5) $14.4 $(62.8) $30.3 Depreciation, depletion and amortizatio
Slide 17: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Twelve Months Ended December 31, 2023 Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Eliminations Net income (loss) $34.9 $83.1 $78.3 $82.9 $73.1 $(169.4) $182.9 Depreciation, depletion and am
Slide 18: Net Leverage Reconciliation
Net Leverage Reconciliation As of June 30, 2024 As of March 31, 2024 As of December 31, 2023 As of September 30, 2023 As of June 30, 2023 ($ in millions, except net leverage) Long-term debt $672.5 $673.5 $674.6 $675.6 $832.0 Long-term debt – current portion 7.1 7.1 7.1 7.1 7.1 Total debt $679.6 $680
Slide 19: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Six Months Ended Twelve Months Ended Six Months Ended ($ in millions) June 30, 2024 June 30, 2024 December 31, 2023 June 30, 2023 Net income (loss) $197.7 $30.3 $182.9 $15.5 Depreciation, depletion and amortization 129.8 66.7 123.8 60.7 Interest expens
Slide 20: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended ($ in millions) December 31, 2023 Net income (loss) $182.9 Depreciation, depletion and amortization 123.8 Interest expense, net 52.9 Income taxes 62.4 EBITDA $422.0 Unrealized (gains) losses on benefit plan investments (2.7) Stock-based compensation ex
Slide 21: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Six Months Ended Twelve Months Ended Six Months Ended ($ in millions) June 30, 2023 June 30, 2023 December 31, 2022 June 30, 2022 Net income (loss) $133.2 $15.5 $116.2 $(1.5) Depreciation, depletion and amortization 120.4 60.7 117.8 58.1 Interest expen
Slide 22: Adjusted EBITDA Guidance Table
Adjusted EBITDA Guidance Table Full-Year Guidance 2024 ($ in millions) Low High Net Income (loss) $193.0 $223.0 Interest expense, net 45.0 45.0 Income taxes 65.0 75.0 Depreciation, depletion and amortization 132.5 132.5 EBITDA $435.5 $475.5 Unrealized (gains) losses on benefit plan investments (1.6)
Slide 23: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) Twelve Months Six Months Twelve Months Six Months ($ in millions, except for ROIC value) Ended Ended Ended Ended June 30, 2024 June 30, 2024 December 31, 2023 June 30, 2023 Operating Income $310.4 $63.0 $296.4 $49.0 Average Shareholders’ Equity $1,196.8 Average Debt
Slide 24: Disclaimer
Disclaimer Our guidance for long-term Adjusted EBITDA margin and long-term 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-GAAP metrics described ab