Knife Riv Holding Co. · NYSE:KNF
Knife Riv — Q1 2024 Earnings Presentation
25 slides from Knife Riv's earnings presentation, May 7, 2024
Slide 1: First Quarter 2024 Results Presentation
First Quarter 2024 Results Presentation May 7, 2024
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: First Quarter Highlights
First Quarter Highlights Positive Momentum Heading Into Construction Season; Reaffirming 2024 Guidance 2024 Guidance 1Q 2024 Results 2024 Outlook Revenue Adj. EBITDA1 Adj. EBITDA Funding Environment ($ in millions) ($ in millions) Margin1 And Market Demand Revenue YoY Change 7% (29)% (90)bps Remain
Slide 4: Seasonality
Seasonality Construction Activity Across Knife River Markets is Influenced by Seasonality Revenue Seasonality EBITDA3 Seasonality As a % of Full-Year Results As a % of Full-Year Results Knife River 5 Year Average1 Knife River 5 Year Average1 First Quarter 20242 First Quarter 20244 57% 38% 28% 30% 22
Slide 5: First Quarter: Company Highlights
First Quarter: Company Highlights Strong Backlog Supports Momentum Entering Construction Season Favorable Funding and Demand Environment ‒ Double digit Federal/State funding increases across Knife River footprint ‒ First quarter backlog improved to levels similar to last year, and at higher margins
Slide 6: Rising Transportation Infrastructure Spending
Rising Transportation Infrastructure Spending Federal, State, Local Funding Remains at Healthy Levels Above Historic Averages Key Highlights DOT Budget Tailwinds New Backlog ($ in millions) Projected Growth in 2024 DOT Budgets Across Backlog awarded in the first quarter 2024 Pace of public infrastru
Slide 7: Executing on Our Competitive EDGE Strategy
Executing on Our Competitive EDGE Strategy EBITDA Margin Discipline Growth Excellence Improvement Strengthen market position Commercial and operational Strong balance sheet and Be best in class in all aspects through organic and excellence initiatives disciplined allocation of capital of the busines
Slide 8: First Quarter: Segment Performance
First Quarter: Segment Performance TTM1 Adjusted EBITDA Margins2 Continue Year-Over-Year Improvement Pacific Northwest Energy Mountain Central Consolidated Services 1Q’24 $78.4M $120.3M $59.8M $61.0M $12.8M $329.6M Revenue 1Q’24 Revenue 19% 4% (1)% 6% 36% 7% Growth 1Q’24 Adjusted $(0.7)M $20.1M $(6.
Slide 9: Product Line Results and Seasonality Trends
Product Line Results and Seasonality Trends First Quarter Typically Has Limited Influence on Full Year Results Average Selling Price1 1Q 2023 1Q 2024 % Change Volume 1Q 2023 1Q 2024 % Change Aggregates (per ton) $17.16 $19.80 15% Aggregates (tons) 4,868 4,255 (13)% Ready-mix concrete (per cubic yard
Slide 10: Disciplined, Returns-Focused Capital Management
Disciplined, Returns-Focused Capital Management Healthy Capital Position Supports Growth Initiatives Available Liquidity Debt Schedule 1Q 2024 Net Leverage1 ($ in millions) ($ in millions) Senior Notes $425.0 7.75% Due 2031 $457 2.5x LT Target Term Loan Agreement $269.8 ~7.25% Due 2028 2.3x Revolvin
Slide 11: 2024 Guidance
2024 Guidance Knife River Reaffirms Full Year Revenue, Adjusted EBITDA1 Guidance FY 2024 Guidance KEY ASSUMPTIONS ($ in millions) Low High Pricing: Mid-Single Digit to High-Single Digit Revenue Improvements (Knife River Consolidated) $2,750 $2,950 Adjusted EBITDA1 Volume: Flat to Low-Single Digit De
Slide 12: Appendix and Non-GAAP Financial Measures
APPENDIX AND NON-GAAP FINANCIAL MEASURES
Slide 13: Attractive High-Growth Markets
Attractive High-Growth Markets We Believe Knife River will Benefit From Population, Gross State Product, and Industry Growth 10-YR POPULATION CAGR OF KNIFE RIVER STATES 10-YR GROSS STATE PRODUCT2 CAGR (‘12–’22) State ’13–’23 population CAGR1 % of 2023 revenue 2.9% Idaho 2.0% 12% 2.1% Texas 1.4% 7% 1
Slide 14: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Three Months Ended March 31, 2024 Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Eliminations Net income (loss) $(6.5) $10.2 $(12.4) $(27.4) $(3.7) $(7.8) $(47.6) Depreciation, depletion and a
Slide 15: EBITDA and Adjusted EBITDA – Segment Reconciliation
EBITDA and Adjusted EBITDA – Segment Reconciliation Corporate Twelve Months Ended December 31, 2023 Pacific Northwest Mountain Central Energy Services Services and Consolidated ($ in millions) Eliminations Net income (loss) $34.9 $83.1 $78.3 $82.9 $73.1 $(169.4) $182.9 Depreciation, depletion and am
Slide 16: EBITDA and Adjusted EBITDA – Historical Reconciliation
EBITDA and Adjusted EBITDA – Historical Reconciliation 2023 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year ($ in millions) Net income (loss) $(41.3) $56.8 $146.7 $20.7 $182.9 Depreciation, depletion and amortization 29.6 31.1 31.8 31.3 123.8 Interest expense, net 9.5 17.1 14.7 1
Slide 17: EBITDA and Adjusted EBITDA – Historical Reconciliation
EBITDA and Adjusted EBITDA – Historical Reconciliation 2021 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year ($ in millions) Net income (loss) $(30.8) $51.4 $96.3 $12.9 $129.8 Depreciation, depletion and amortization 23.4 25.3 25.5 26.8 101.0 Interest expense, net 4.7 4.8 4.8 4.8
Slide 18: EBITDA and Adjusted EBITDA – Historical Reconciliation
EBITDA and Adjusted EBITDA – Historical Reconciliation 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year ($ in millions) Net income (loss) $(34.4) $29.2 $102.6 $23.0 $120.4 Depreciation, depletion and amortization 17.6 19.4 20.6 19.8 77.4 Interest expense, net 5.3 6.8 6.4 5.2
Slide 19: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) Twelve Months Three Months Twelve Months Three Months Twelve Months Twelve Months Twelve Months ($ in millions, except for ROIC value) Ended Ended Ended Ended Ended Ended Ended March 31, 2024 March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2023 December
Slide 20: Net Leverage Reconciliation
Net Leverage Reconciliation 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 $673.5 $674.6 $675.6 $832.0 Long-term debt – current portion 7.1 7.1 7.1 7.1 Total debt $680.6 $681.7 $682.7 $839.1 Add: Unamortiz
Slide 21: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Three Months Ended Twelve Months Ended Three Months Ended ($ in millions) March 31, 2024 March 31, 2024 December 31, 2023 March 31, 2023 Net income (loss) $176.6 $(47.6) $182.9 $41.3 Depreciation, depletion and amortization 126.4 32.2 123.8 29.6 Intere
Slide 22: Net Leverage Reconciliation
Net Leverage Reconciliation Twelve Months Ended Nine Months Ended Twelve Months Ended Nine Months Ended ($ in millions) September 30, 2023 September 30, 2023 December 31, 2022 September 30, 2022 Net income (loss) $180.2 $162.2 $116.2 $98.2 Depreciation, depletion and amortization 121.7 92.5 117.8 88
Slide 23: Adjusted EBITDA Guidance Reconciliation
Adjusted EBITDA Guidance Reconciliation Expect Adjusted EBITDA1 Growth of 11.5% for all Geographic Segments2 and normalization of Energy Services ($ in millions) +4.1% $450.0 $432.4 Pacific, Northwest, Mountain, Central & Corporate Services and Eliminations Energy Services $354.3 $395.0 • Building o
Slide 24: Adjusted EBITDA Guidance Table
Adjusted EBITDA Guidance Table Full-Year Guidance 2024 ($ in millions) Low High Net Income (loss) $180.0 $215.0 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 — — S
Slide 25: 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