KNF - Earnings call transcript Q4 2024 | Knife River Corporation

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Operator

Good morning, ladies and gentlemen, and warm welcome to the Knife River Corporation Fourth Quarter and Full Year 2024 Results Conference Call. [Operator Instructions] Also note that this call is being recorded on Thursday, February 13, 2025.

And now I would like to turn the conference over to Nathan Ring, Chief Financial Officer. Please go ahead.

Nathan Ring

Thank you, and welcome to everyone joining us for the Knife River Corporation Fourth Quarter and Full Year Results Conference Call. Ring, by Officer Executive our Gray. Nathan and Knife Officer, is joined I'm President name Chief of Financial River, Brian My and Chief

discussion projected in operational forward-looking statements. about results Today's differ today's forward-looking expectations. may those financial Actual future from materially contain will and statements

by For please website Except which SEC, are today's on our refer we earnings risk website. and the law, the further discussed filings in obligation required our with the no detail, and as SEC statements. factors forward-looking our to to release most undertake recent available update

to During defined non-GAAP this our presentation, most in we will to materials reconciled release. These make directly are on references are measures earnings GAAP available measure certain today's website. non-GAAP the comparable information. and These also

begin high-level and Brian results, our today's our XXXX update a by plan Competitive EDGE call of with followed recap. overview an on segment Gray a will

a and the our summary, I line Following line a session. product for remarks, our a of conclusion financial update capital will XXXX remarks, question-and-answer prepared will open his we the of review guidance. provide a At

With that, the I'll Brian. over now to turn call

Brian Gray

Thank our publicly Nathan. full we us XXXX, today. as Good completed results. for and again morning, In you you, thank a achieved and traded joining company year record first everyone,

us team. grow shareholders. entire Over River we excited our the I testament of value the to strategy success EBITDA adjusted in last the dedication Knife the long-term for and basis have to EDGE to adjusted X This and years, a is the of we our EBITDA XX% continue XXX opportunities and about create front our be by grew our points. margins by of Competitive

on we progress record Knife recap XXXX and Corporation. of a and an our EDGE plan XXXX, on including pending me acquisition update Strata in preview ahead of results let that, see share our River's With what

increases of prices adjusted year our on price At X% controlling adjusted same ready-mix. focused XXXX, In and XX% costs. performance, to Starting efforts optimize full with record aggregates achieved drove EBITDA for our XXXX revenue, and the we we annual margin. EBITDA time, for

XX Our across and our Teams our improve operational drive visited ready-mix Process to asphalt Improvement plants, efficiencies. product margin helped This lines. improvements aggregates, continuing

contracting the and gross by our project points, execution. a margin disciplined basis XXX we business, of industry-leading of improved result On solid our side bidding

Looking which look a $XX on at forward $XXX on growth. We million million from acquisitions year six contributions we million year invested XXXX. be full to of a opportunities. expect led approximately in XXXX last to EBITDA acquisitions We to our with materials focus $XX

EDGE do. committed results, in our to we EBITDA be oversee all we to our drive margin Officer practices. created these XX%. record our to to relentless on Excellence we best of excellence, strive expanding standardization everything Lastly, have best of focus are exceeding implement the helped the This and continue achieve to Combined, best-in-class. of role long-term improve our will become and to we and us PIT efforts We Crews position leading efforts our adjusted to recently goal Chief

we and are new Looking year to continue with work. backlog, to a XXXX, we the strong ahead starting add

the roads our upstream to provides is public The same we margins higher the with in achieved expect see deliver XXXX, building Our us $XXX with contracting are backlog very the our work, XXXX which XX% similar and opportunity backlog backlog and million point margins. highways, we pleased With pull-through our is to of paving backlog of bidding, selective strong majority at year. our our and materials. than last

asphalt and and aggregates, highway, of will total, of bridge million X it of ready-mix. X of of miles X this, secured cubic As In a the replacements prime XX construction road X-year $XX example XX,XXX This we yards job includes tons recently million project concrete Idaho. utilize of miles a in pathways. of XXX,XXX tons reconstruction

are will of most less million completed our we are jobs than more in projects under and While $X bid, large be for out X coming seeing year.

In Across the our funded remains has footprint, to local, active publicly IIJA state nearly from levels. fourth near in we our record majority the quarter, and customers. at be the funding our bid to of quarter half takes states, XX infrastructure federal and yet of spending obligated. and or The schedules place see first our bidding continue

In macroeconomic increased work bid that see starting opportunities to private as are in for have been beginning again. reasons addition, to projects we are delayed

of robust we with in are EDGE, EDGE backlog Starting opportunities improved line the ending sight plan. G with top in infrastructure and On our of Growth. spending XXXX and several

our are about We excited acquisition pipeline.

and of We for materials the adding River, reserves provide aggregate contracting Strata its of over company. division. stages construction It vertically growth infill Knife acquire definitive In will have plants for December, to Corporation. asphalt Strata our services Central several X various Strata our along $XXX in deals aggregates-led years Like including integrated segment, XX an with agreement is announced XX million. plants, development, well ready-mix operations, in we

to year, We expect the customary of first the transaction to close conditions. subject closing half in this

to targets on in team other pipeline. our Strata, numerous development addition the acquisition corporate In is diligently working

strong potential have to in these and financial position are companies, ranging single-site size we We multi-location in deals bolt-ons the opportunities. to larger from platform a invest

the with reputation. is and a good strong acquirer in local of markets River business our choice Knife relationships

proven the for the have developed Over throughout year. diligence announcements look additional playbook acquisitions, to and XX acquisition a of we and we course forward due integration,

significantly add rail projects production expected strategy, rapidly our as Falls market organic the increase we which and services growing include important in also aggregates in These grow multiple are Sioux business. Equally investing in M&A an capabilities for distribution. is project our our Dakota, expansion to to South

be partial in scheduled returns but anticipate prior full going XXXX, production. to seeing The to into project finished we is

region We high-quality site to and are excited about this the for ability to decades core come. materials in provide

lot have now work new greenfielding Falls, our plant, work past, as a of equipment to fixed also base we this can starting the part Idaho, a market. performed ready-mix and small from are Twin In with We operations office this portable in a yard. begin we high-growth have Idaho in this and team a with local of crews. building will greenfield, With midsized

Another example of Services this polymer-modified online bring Energy fully a we will in our spring. facility growth organic liquid-asphalt segment, production new is where

have we started savings benefits market additional of are already delivery We at in plant, and transportation supply the this seeing bid taking through and project on feed the room capacity.

all Knife in We EDGE has look past We year have vital million over growth approximately the a currently X success forward part as $XX acquisitions, the decades on our River's to projects growth discussing approved organic and projects. progresses. Along an growth strategy. our for with XXXX of Competitive been integral is of component of organic updates

XXXX, time, undertaking, same expect even Excellence which we the another initiatives of EDGE from about equally key At the momentum more excited strategy. our see are PIT In we our is expanded Crews. to we are aspect

a now PIT As materials to that a key reminder, over on from dozen we teams Operational are focused Crew areas: Standardization. one three Commercial Excellence, focused have gone Excellence; and

Officer, leading newly Glenn will current Pladsen, believe at is Our we process, drive acquisitions. allowing integration our improvements Excellence which appointed of operations continued this for also our Chief quicker while

expansion. pricing to and our continue margin efforts also optimize drive We

phases introducing curriculum. and program, and Complementing execution are into early training of customer software of our service continue new in manage sales company-wide the we to enhance to this, We quoting the we processes. our are our deep rollout and

our in to an growth from our dynamic they represent And in for growth long-term blueprint our PIT achieving both and self-help acquisitions to from opportunities, these organic near-term is Crews investment of pricing combined, future. our Each goals. the

Pacific In with to streamlined Energy To four. Mountain, we segments Services, initiatives, help our teams have adoption facilitate our from the the support segments they pursue reported and segments XXXX, former combining opportunities. and implement into five regional are West, EDGE and local of our and our Central enhanced growth believe segment. provide us as the newly We allows formed to our teams this for support Northwest West

QX change segments, will You with report. our starting see this reporting earnings in

we our on our share segments ahead in will I XXXX. see what Finally, an XXXX and in in markets performance update

geographic had a year-over-year. record million Our XX% EBITDA, achieving a year, increase segments $XXX in

from EBITDA California. services year and Starting increases Northern was activity revenue year. across and driven all by contracting This both strong full increased lines in X% last Pacific, product the price

in Looking Northern California. ahead, in commercial military work energy and opportunities Alaska see private in we in California increased marine for in Southern projects Hawaii, construction XXXX development and

improving in The of EBITDA increase drive and labor Spokane, in continued gross generated at its all-time Strong $X of basis XX%. XXX more region improved results, profit XXXX. Northwest The from along continued our these also in $XXX material year. its savings our operations helped public and XX.X%, by with in XXXX February new and Prestress success efficiencies We see Prestress million its record million. came at plant improved XX% XXXX, plant, points Washington. to prior than record our raw an The region the by EBITDA online an success margin work agency to

this an Oregon, centers, increase the also the in slated the region on and half at in work seeing private commercial of particular, railroad year, for residential projects, developments. Looking data whole, is second

In drove higher and strong EBITDA. demand revenue for the services Mountain record contracting pricing region, and

execution. and of benefit We also both record population for continues disciplined work. improved solid regional private from to bidding a XX.X% strong full construction region through a margin year budgets This and our growth EBITDA public project to and

backlog it. to record continue at start year here We the add to of have and

in spending There's Cheyenne, ], an and Falls subdivision public also throughout seeing and Idaho. addition market. the bidding in to residential In work, and Wyoming region, commercial Boise throughout especially in of in the [ are industrial particular we increase Idaho most increased

DOT Central, achieved Nebraska. higher including services a strong entered Minnesota, led In record and Iowa price we year XXXX strong increases contracting and activity. backlog EBITDA in than margin, We EBITDA by Texas, with ago, environments bidding and

to to in as funding expect are more benefit markets. We our we these in directly seeing paving targeted projects from more asphalt states

including growth growth also a in rail Honey to in benefit and improved from and Creek this uptime quarry We Texas. expect region, from shipments acquisition organic

and are California. integration the a revenue we grow. contributions from we XXXX, down to but the EBITDA from We're about believe forward anticipated, excited record EBITDA of to full Oregon in Albina of is we That position Services, going Asphalt. year Energy look Washington, in four good as addition At year our and were a smoothly, terminals in and

integration, of River's terms of footprint covers demand. concentration vertical Knife highest liquid In asphalt Albina's

pre-acquisition XXXX, remain Energy lower and concepts as what typically overall to of margins see disciplined EDGE In accretive we we our bidding Albina's will Services, the River's While Knife margins Services is utilize margins. adjusted improve EBITDA improvements. backlog than at expect we to operational Energy we expect at

are of while we financial conclusion, safety We achieved our our also performance. proud improving XXXX. accomplishments record results in In

River strategy EDGE Knife our is working, is delivering Our on it. and team

long-term a We excellent efforts have in to of EDGE opportunities lot forward to our XXXX growth. continued markets, drive evolution strong growth and and beyond, including profitable to look the

I'll turn call that, Nathan. the With over to

Nathan Ring

Good morning.

include our are with XXXX of These we results. each pleased record very our in stated, Brian lines. As fundamentals results product strong

with quantity. improvement which increase our increasing annual price call in solid but at the was prior related less average directly selling over the improved taking year. price on our Along we Starting of quality prices, margin continue over initiatives record higher This improving we aggregates, a pricing, with our we gross to to see X% work, XX%. to aggregate EDGE

hard type customer of completed work resetting we projects mostly the have our bid. narrowing of and We the base

look growth we XXXX. economic of increases XXXX, XXXX markets. and over ahead low to for pricing reflective believe As single volumes and price digits continue anticipate mid-single-digit from X will years We in the increase past will our we momentum be expect more

Moving to average prior we with annual year in period. a line, price saw XX% the increase the over improvement the product ready-mix selling

considering the X%, Similar pricing private volumes numbers, margin impressive gross down related have EDGE to to XXXX. were increase base less reset digits our single in record volumes to and demand we and XX%. increased aggregates, our Our market. customer in our expect are low primarily initiatives a to These

for and infrastructure are We year. demand industrial the of second large off taking commercial including increased projects half seeing several in this projects,

digits. We XXXX continue with mid-single year increases full expect improvement price to also of in

increase pricing Moving that our current price to in anticipate increase visibility increase XXX-basis-point backlog despite digits future product put low on we downward highest single volumes costs input focused would work, bid Based improvement XXXX. our resulting on to lettings, higher-margin asphalt. and We lower realized for XXXX, in a pricing. normally and asphalt among We into the pressure on margin, lines. X% a gross in

are same and and margins successful of our product of record the our The the gross improvement strong We the compared in margin billion revenue site. bidding XXXX, contracting XXXX At directly XX%. line, a continue time attributable year job had is margin margins. record in revenue, we results disciplined execution services construction with we last to backlog Along record higher at at to see of seeing $X.X and similar to backlog.

or in at River record funds states As have where funding state obligated operates. of the levels, near mentioned, the federal and and is Brian Knife to half IIJA yet nearly be

transportation more our believe than our in of of new states this valid services continue utilization six in $X investments for passed level measures demand We billion for renewed Additionally, and will XXXX, pull-through creating of materials. our funding. contracting and with upstream funding

returns. confident approximately is are will increased mid-single administration, costs our gains to digits, Moving and lower long-term driving SG&A and anticipated due initiatives sales labor as our These third-party in included higher In on acquisition to initiatives $XX expenses were asset in Crews, of This increases X% to over other strong from support investing costs, prior million program, offset by inflationary operations overall and addition our the we to in to the and program. generate will standard our acquisition are that XXXX, we be partially step-up guidance, these related incentive payments. investment higher year-over-year growth. EDGE year PIT

As we maintenance aggregate a reserve look our business. grow and capital improvement we for and assets, stock balance In and fixed $XXX are the believe and our upgrades. position replacements our invested solid we sheet to to million plant XXXX, for rolling including allocation, we in

on $XXX in improved we our investing long-term construction Having million of at of million acquisitions. After Additionally, leverage healthy. cash, to our are priorities. XXXX, target $XXX remains support a capital unrestricted $XXX X.X position in strong with we year-end materials six invested and a X.Xx to million net

maintenance with capital maintenance and between and to portion and depletion. line our expect the be X% in revenue, we XXXX, of depreciation for X% with For expenditures improvements

acquisitions million, growth $XXX capital and organic organic projects would reserves projects Future including For and well increasing aggregate production as additional we have related the as approved expenditures, Strata this to be amount. ready-mix pending to acquisition.

raise year. acquisition, We the of the this our we $XXX are debt. help of finance additional close first to million in Strata on track approximately of Corporation half acquisition to To plan

as $XXX EBITDA, million, of $XXX and revenue geographic between Services record billion, year $XX look and million. million between $X million, Lastly, EBITDA expect and and adjusted $XXX $XXX we another $X.X $XX and to corporate between between and billion revenue XXXX, consolidated and adjusted million we and million including services Energy including segments

our In teams conclusion, position to are we proud work and success record and beyond. for of have us XXXX done XXXX in the further results achieve in

producing results. are excellent segments Our

from contributions across excited and dedicated and acquisitions segments expect infrastructure both we we our have strong a of We backdrop Energy funding, Services. geographic are about the see to our

shareholder growing, goals, the River our we committed Knife is are choice and achieving of delivering to employer EDGE being long-term serving our in value. customers,

I would to the for call open questions. now like

Operator

question, [Operator Davidson. Thielman from Instructions] Brent Your at first D.A. which will be

Brent Thielman

there's XXXX company, great you place, more Congrats look the first think you're the you kind of of in sort going to some of and margin guess executing you for a meaningful you of about putting think just expecting standpoint, And are the on line do in Brian, initiatives all potential from improvement year. do exclusive the obviously question, finish different within good you're based is the on into product and and enhancement which I see regions profitability of what you. Strata a then to margins? where when initiatives to similarly, for sort

Brian Gray

Brent.

We going and bid and PIT maximizing Obviously, We and the identifying room. we and margins efficiencies. are about initiatives. the to our on very materials Crew frankly, having do We're successes I were our in focused those been just the EDGE all dynamic a the deployed to we've that. bid continue operational that excited focused saw on initial lot been of pricing consistent we've very mean, initiatives.

added that more And XX, in initiative XX teams we improved there. so and significantly

on on to years in started to our continues it's of back to as that can focused around site. specifically that time improve be to all focused. and continue self-help see Crews relates aggregate in larger PIT [ margin We one PIT operating but in. to we aggregate real on our that quality it ready-mix, shop the say with ago. been They've at liquid some that. team mean see is product our I identified go maintenance it see most in in we opportunities we the our some and sites, that opportunities aggregates together the we put that Crews sites the our We've looking we we're ] asphalt, our our efficiencies. And our frankly, are probably line going control areas I them, Where of that expansion the recently, asphalt, out and X

margin significant we've the in X either. not last had years, services, there some Contracting but expansion we're done

probably think Brent. And so mean the margin most expansion I got there, aggregates has I opportunities the

are all the corner, turned the strong and improving. exciting the see and in Northern really momentum backlog again, we down with our regions, the now. impact we've very right And marine We're in re-segmentation in some in very projects the of Northwest as got think I'm West. see and into regions construction we've to Southern combining Alaska. I far Pacific some the region As got excited California. Pacific up opportunities Hawaii, more starting California. up in We've And

far region, as I one specific all so they're geographic going think to as And improve.

most I they that XX% their Brent. Pacific have long see region, EBITDA that But eye think probably margin in term. all I upside the there's the on

Brent Thielman

then bit business area opportunities overhang those well. as -- starting to of the why helpful. expand if you maybe not Brian, increased of you in necessarily heard sort commented follow-up just a seeing I'm an the that's Yes, on some of And unlock on all. private opportunities do could kind now? now what you're a from of sure right Yes, those on you're work, really maybe we've just thoughts which on Maybe still

Brian Gray

work actually half bidding of when I the at there's second year. have say that think going we're of look I'd that's sight say those say we half this But of private that year. I majority certainly in projects very of I of looking on. back would into that the in will really There that specific or a year. would at talk. play, the that coming the lot is half the us some line second the We in some first help the of

I mean, Pacific subdivision million that a to the Manager there, Back bid give election, list over our the the they've a just since I region, election. of $XX dozen General had over me since jobs

the of private so activity is of on there And lot a side the market.

key part success centers a and has Data been the our obviously past. of in the business

our to Dakota. in in in Oregon, Wyoming, see those throughout Idaho, opportunities We footprint in continue South

And in specific up us some got so there's up contracts a there of energy number We've very projects, some year. Alaska in North the Slope. to that's going specific next benefit

little big Harbor We and been talked little ready-mix at the XXXX. delayed mobilizing Hawaii. benefit plant then to expect bit later last And job year, we're and that. the this Pearl again see that bit a volumes in but certainly to from It's will about on year, some us site a but

not on Brent, XXXX. but happen amount a jobs of of I of yet, a will those amount expect in volume lot talk fair going So that that, fair actual out fully a bids,

Operator

Kathryn Thompson Next Research be question Thompson, Group. will from

Kathryn Thompson

quarter, And million wanted And $XX XXXX? your guess I been step-up or how that? prepared should not that the is doing more included you color just it Strata we to for going to what that? instance, how know costs, had But circle into is move is in importantly, different appreciate SG&A this than up acquisition-related included acquisition in on it think in I to in included or For with about would isn't to previously? what in that the clarify be helpful $XX I step-up related million commentary. costs.

Brian Gray

those excitement it the in million at turn SG&A. of as $XX model to you just that Kathryn, bucket specifically help Yes. $XX look XXXX Nathan start I'll to I'll and the really it to we've relates and over initiatives got with million then that and

quarter in kind the You this know and third XXXX. in hit of of saw active pipeline in last we're started those and that year, we've We us later of of opportunities development. our in fourth robust some costs year the quarter business

our of us large execute so XX opportunities a our $XX full and months both related a help and growth ongoing And for for step-up strategy, of to robust really our million plan that M&A is organic part of activity. growth

of teams, teams initiatives. expedite initiatives is our other really in to are to provide just that and those and staff up EDGE really The us some purchase kind embrace that accelerate track and to help software and additional our our EDGE parts tools

investment that think And really is a investments. so I have them very the good invested they for value. I'm a long-term will about return those on excited capital confident it on shareholder super and

So SG&A then and to that with quarter that, fourth through walk to I'll Nathan, over XXXX. you going to how maybe it turn model asked SG&A the into about

Nathan Ring

go it's for the if to bit Also thanks compared XXXX million calling to Kathryn, costs did $XX what why SG&A you this in in helpful about more variance you asked million cost quarter, we in costs XXXX. the $XX for talk Brian. understand last that it. I mentioned, fourth with didn't associated XXXX have you year, year-over-year. about in, things because quarter three was in to appreciate that Thanks, with want fourth help actually There are down there Brian a of little maybe understand

is $X in one in we That first out. quarter, was fourth bonus million. about have higher incentive the paid The XXXX

impairments million. fourth then recall 'XX. And that in talked onetime $X these about all that asset the lastly, You we about also quarter were may of are these

the onetime of fourth had quarter million. $X We also of 'XX costs about during

like the what So onetime of we costs. told, call quarter million fourth all I'll XXXX, of these $XX in had about

to compare of the the year-over-year. into see it that would we annual about in is the we take third costs in costs acquisition normal additional and and 'XX, you If program quarter that higher to really about million. we were that account related inflationary 'XX, And and $X 'XX then actually increase relates talked

with We associated was that as shared did the what hopefully, with costs helps you. kind acquisition higher in have our us understand of So quarter, we fourth it. program,

a a talked just we I As here. fair is as XXXX We're we similar to the variances few variances throughout like quarter. XXXX. talked the But top the seeing for XXXX beginning last fourth being And look starting probably would your of mid-single in can I year, to starting digits probably same a in point that, I say the up look to at about did on about there, year of think and year. expect modeling. There's mean, point. in we that XXXX SG&A I costs we we thing what

So you then digits million. that, start with $XXX And of mid-single normal for inflationary expecting we're on annual costs. top

and going margin I'll And the that guidance, excited end our Very what guidance, adjusted on within there. then we saying all that, our with our see costs. went prepared up, remarks EBITDA the have million with about It's Brian $XX in with EBITDA in talked of included that -- through. in included and we about these and just that terms can it. including with This is are you excited adjusted very our

that quarter, we maybe understand you kind So going and helps what for SG&A. Kathryn, fourth into of expect XXXX

Kathryn Thompson

I know but going of you've segment, sticking concrete segment in this be through for terms Maybe and lot public. the for perspective, Also, a on aggregates, looking. contracting overall that bit, I numbers does. a margins given for noted asphalt, you little backwards would forward-looking over in putting contracting services a happened you into bit a particular, on some But EDGE and just services. important. commentary, of color revenue. the spending it has Nathan, you more would for give has you that think have lot of for prepared services. years much just detail It since segments been how of to and backlogs impact and time little other in flowed the how guide past couple a mean, maybe contracting your 'XX Also of in color

Brian Gray

an era our is written golden mean, Yes, you've in our to contracting rebuilding of this reports, about acknowledged of is infrastructure. your that It's important I services And of XX% part kind America's of revenue. XX% you've as Kathryn. total Thanks, company. our the

near-record got budgets states all so XX% ability services in. operate mean, to we and we pivot The fundamentals into I or we record that our of be We're work. that and we've DOT unique that And work the between continues do, have majority feed all -- public. starting the strong. private contracting public was to that the

a so what we part big public is do work. And of

worth And So next decade very to get look very really of work go those couple this of years. robust, We funding as and just is caught fundamentals it's healthy. and at up it's for not out to that rebuild. the have a

our And that up a mentioned And that job necessarily what the know, to of revenue is is backlog $XX backlog year. that that's as You really, million XX%. and it indicative as you X-year for and that's one get job, and we of that going kind includes our that not those you and equal of can look phased really of of be at and X/X chunks. a X/X X/X. benefit projects It's kind the having be

built that into backlog. that's so And

more year. good quarter normal of this of bid We had cycle a and success. lettings a bid we then lettings fourth had timing And

And the active, in first in a backlog now the we quarter. had work fourth success so is busy still bidding little right our that the timing improvement of and bit We're the quarter. very

to long way are the a say that's strong. so fundamentals And that

-- give is for contracting Our And how don't services. But look really, to strong. backlog I'd what at we that to is guidance last point specific we year. our had you success

pretty can year, what through you of think -- line kind saying pulling contracting our services we're in revenue you on material for contracting our line increase at from just with growth of we're for would last ready-mix business. which, how looking our lot of side much volumes and asphalt. that low look our looking again, And revenue be is We're at single-digit materials. I our if I really the those volumes services, much at at very our much think and margins with and look in for aggregates, a

contracting services. about excited our So very

about amount of asked frame in really to EDGE our work strategy public We June kind You into that. successes had internally we've XXXX, of started up and just that of we've been and the we putting that XXXX. EDGE talking effort early in went the just just initiative in the and

the actually the big results aggregates, to EBITDA, and which work. by X the at less so those from in at by improved of we've mean, I our our ready-mix improved EBITDA is strategy we mean, during board on XX.X% grow the that results adjusted X pricing of improvement in to did those yet almost And million. $XXX 'XX, adjusted I end asphalt XX% on margins. And a our we and XX% X 'XX EBITDA you of look if has $XXX went end EBITDA really our the compared almost been our years. years, EDGE And a so it's just at across those revenue mean, years, to And I our through working. less part taking in work million.

We've raised years. in prices X those by aggregate XX% our

ready-mix XX%. by Our prices

all efforts a commercial so team and our paying long sales dynamic is our of at And pricing about the a in talk XX% lot EDGE and and it's part we Sandler our do. exceeding term. is excellence truly growth best-in-class becoming EBITDA strategy that off. our putting also Training We But the we're big margin into and XX%, everything

focus as year. to about a best-in-class improvements in just year. to team going this of about that safety, internally operators. announced, XXXX. becoming the our the And members excited with just that six we Strata Even is EBITDA on all at excited world-class other initiatives frontline the relates intent half the keen to acquisition deal the being and so last employees, first did that we more And it just contribute we acquisitions and And in close then

in some of going years. at that embedded lots in accomplishments first on X certainly River, great but the Knife So lots EDGE,

Operator

at Grooms will Trey be question from Stephens. Next

Trey Grooms

nice in Nathan, the quarter. work Brian and

maybe So see overall how to outlook Strata EDGE specifically speaking your other little of to these if I strategy maybe if enterprise, opportunities demand compare pricing these more, what a markets maybe maybe the bit also or from could maybe markets, kind there -- just any dive implementing and we and could into for opportunities? attracts the about a geographic markets, you you

Brian Gray

tell that announced approval going close this that that is we half Trey. you are year. to we're that process for as I'd expect on in Yes. customary very about And right now. going track opportunity, No, And just excited have the that And of we're good. you through we regulatory the first know, and

that a got vertically Knife frankly, in a It's Knife This very and markets to midsize, led It's Bradshaw. growth all owner, strategy. we by is our aggregates-led. Jim It's that, strategy into markets. It's really it boxes acquisitions of those It's It's the markets. well. high-quality integrated. an qualified checks management our one team, River. our infill accretive high-growth margins. to well-respected cultural It's in EDGE and know their fit of of It's River's

how They very quality Our at looking Knife materials. frankly, their of and decades of they a core by time. start ahead and high-quality Life really And values market reputation got in great are environment safety, at were with people, move very rail. efficiently can for line they were ago They've theirs. much thoughtful really, aggregates

frankly, in in throughout high-growth midsized this fits of And so Minnesota. markets And home aggregates, we our and well. can know state, throughout multimodal Dakota move got we North that is markets and Dakota, North our they've operations model how at looking

decades looked is come. for to value we've this it's to that our a one long-term for company going time to up for a shareholders and really So long provide

So that really about. something excited we're

Trey Grooms

Very right. gears ready-mix. good. to maybe shifting Brian. All And

up good You guys are in still business. putting there really margins some ready-mix

and for ready-mix looking additional year. this pricing You're

about what the segment? inflation raw outlook I your the is, is question this how So material cost for guess And price, market? are you ready-mix in in thinking

Brian Gray

Yes.

been base our our relooking at prices at a level mid-single We raised more EBITDA. done see taking digits, It we've on, work yard, really margin, overall more moderating And overall of sustainable think per and making job less those I do a there. money and that again, fantastic last Trey. XX%. years by the really X we've intentional, to over very has customer

And into supply And so private be residential market. opportunities know, back. the some of and see centers that as we with we the warehousing ready-mix you data most would coming eventually and do

markets. ready-mix that's as to all think I relates our upside it

we input aggregates. supply of as our most far all As costs,

pricing And go River well. going so to that increase as to market in is Knife

mid-single-digit a cost as there as there. So be increase far will

of have Our we cement different our suppliers, one markets. in a of number suppliers each

price continue that increases we'll our And just margin ready-mix. expansion I costs we've ready-mix, think those and can into our mid-single-digit and forward. will to I and stabilized, built say going has our outpace price increases see cost that in

Trey Grooms

sneak maybe to housekeeping more just one. one in a Nathan, hear. I bit little Very could If for good. a of That's a good

have to maybe So this Could for the bit year, you in capital just inventories, little inventory anything a ticked up quarter. And bit? a where you working there of little note? expand on kind expectations that kind that maybe where of -- or

Nathan Ring

Brian get acquisitions it and thing probably that moment We a of a Trey, we the of was there year, the note One, their we balance piece the largest few Yes. towards just of be, did end the would that as of then sheet about, talked course, year. the mentioned end and the year, towards is ago. here pieces. to last main

a materials-led And of all what relate say we see That's lot good it, -- that so businesses. bringing a increase of I does that you of the on portion shouldn't but to purchased.

we Albina, business, then reserves. liquid you aggregate that's So asphalt had a have and

look, you it. line. the of So sheet of inventory That's over balance when most that comes majority in their

Of course, part volumes the in our about And increases annual have we up. going of we've That's talked do inventory. then costs.

do So little volumes have amount, the bit. mean it's but tons I higher we the ground, on rock do terms some a huge a of not have in -- of we

that balance too, acquisitions, of those into, I'd working increase their bring capital. it, be it, be the see of piece talked is the the we buckets So you would capital, on are working would other put three full most in about sheet but that of Trey, those you

capital a do. an at of year-over-year I'd be of might notice lot uptick. say looking that working you has and to So percentage

results see get I you'll come So working when to off and the level that related we into again we of see XXXX, capital place, operations these think into those acquisitions.

that help, Does Trey?

Trey Grooms

Yes Absolutely.

Operator

question Next from Garik Capital. Shmois be will Loop at

Garik Shmois

to whether half very think, I how EBITDA play of on growth the year year a second cadence recognizing, in the anything just is half growth? ago. there the expected Also strong price out. first it's aggregates had first I or to notable, ask Is wanted first quarter, you

think timing. I of was project that it's some

So just should help progress? there's out year the to us how to if of call anything the shape wondering model

Brian Gray

northern everyone have having our to that we it's Yes. last first a because the that about a I'd in Traditionally, lose don't years, much. exposure, our we Garik. of over that annual that quarter, we've footprint, first we important our of changing and that see very EBITDA X% historically, remind say X that quarter. And

talk very we some July that think and I that see that and contracts the some and that the when jobs in half June, opportunities frame. have we specific second starting and of time I opportunities about May,

I that bit the differently that in say X/X in will it's that I material in very need look little more quarter. you think cadence make benefit us half second average, enough we quarter of really probably losses half at about the first to second of year. the our the wouldn't kind a our second of X-year of EBITDA X%, the -- and

much. for traditionally The don't third a peak. our quarter in It's changing is always that XX%. very to I see XX% us. large quarter And that's that

of a comp last that over XXXX. favorable And beat us of can in years. us, that we that good then quarter. last very in fourth we've XXXX the had part also And the part weather fourth And against in was this Frankly, that was quarter that reason, X the impact very for weather. was weather had

of no, more half impact could us it's normal. I think work, a material, see that but more don't second certainly than railroad of extra weeks work data help private center that work, so And couple I in subdivision does work, But opportunities, positively us out. warehousing do

Garik Shmois

some And pricing where And bit maybe That's pricing. network. wondering your price aggregates I that to they think you aggregates stand an were what was implementing about, later a with saw follow-up than yesterday think producer just to year question indicated a Okay. helpful. little a increase update I an markets then if anything more could we provide heard on you shifting is from on across dynamic ago.

there's if year. anything should aggregates from pricing standpoint a wondering about Just think for we this timing that

Brian Gray

there's or dynamic as X end. we're in year the there's No, locations our the on anything timing on that of that jobs that I we're pricing think or out I an year the is throughout costs you proximity annual of at April know, our X that materials don't pricing, specifically bidding real-time are. the the increase different June what mean our goes our beginning jobs on dynamically not the to and based

so will And that continue.

additional that initiative providing dynamic regions pricing. for We process our year. tools have of had We're that last good adoption throughout teams and sales continuing our

sustainable I I could the think a that And new digits become mid-single guidance is our so increase that of think norm.

us a momentum X the the high the think catch-up all have the I next double that single had even we with going kind help to But in was ago place pricing year into and we I year. digits 'XX. digits of throughout that tools from good years implement think

first half, half So nothing real on specific cadence on second pricing.

Operator

will we Ian hear Zaffino Next, from Instructions] [Operator at Oppenheimer.

Isaac Sellhausen

for is Sellhausen Isaac Ian. This

end commercial initiatives. as is points to guess, about focus operations to pricing That's guess, or year. 'XX. it get Just the for, of on would EBITDA spoke high to What compared like on I guidance, for the maybe to playbook call I dynamic the take margin to expansion, this margins XXXX XX XX the particular guess, the the basis such I PIT side, guide? on you there a the out Crew anything

Brian Gray

Yes.

us development you that our stepped $XX Isaac, actually initiatives in EDGE-related grow making in includes that everything gains business those So to do. we additional those basis that XX-basis-point I our suggested additional XX points points and costs. includes the as it think excellent -- improvement guidance that in up That become about includes that we're help million in basis And frankly, XX of is investments midpoint midpoint, that improvement. of

of that to us see beginning hit that things. I you've would me guidance, about. private on it a amount end number the the we're heard of to work talk talk about a there's take What high and fair mean

the in fruition bid to coming are those of room. Some

think our ready-mix. especially And specifically side, -- of I where the on the would of biggest that I and opportunities private would so business, material aggregates benefit lots that impact side be there. the That's we see think there's

years us last this a the I identified year have think think some cost the those actually and last the were we have improvements of And that to we'll And a year. X roll see as been begin things that out in meaningful. that operational those benefits initiatives. continue lot PIT and hit we to costs that our Crew self-help I

side, of the active year to again, is time right be our end still the room now. to we're high in of of revenue busiest bidding lot that, work, on a opportunities. the and This bid be the On there's

expectations the our like margin think continue so and And at be and Iowa, bid of Texas coming maintain but in amount and disciplined room, states if that lettings work the the I looking out we going disciplined bid in continue to Nebraska, are capacity opportunities the work. more and up we're but to to work, take our there we of got on Minnesota, hit continue be margins. make We've Idaho, to pick lot to that's to a sure

upside on revenue would EBITDA range. the be on both that within guidance side some and that So the

Isaac Sellhausen

very helpful. might I then to follow-up That's Strata. have too anyway. be It quick but And a on comment, Okay. early just ask to

for accretion on color additional and If margin the profile of you deal? have potential any business the

Brian Gray

They details the are at led to I Knife to a we're similar provide very business. upon No, look review can of anxious completion approval. you materials and that Yes. Strata more would say regulatory the River.

XX% about percent have comes contracting is materials, I of just towards services materials. influenced revenue little a XX% their bit heavily XX% say I'd and our bit is little and they're materials. more from contracting. say would revenue And of -- We a more

materials this you And two to is. or are profile that consolidated River whether accretive primary And company is So margin will ready-mix, those of look aggregates they margins. business, sell. than that that's our overall at a -- materials Knife bigger our and their products our margins that's

year. at you on first I of we're look think them and to excited that bring the the way, I half could -- in that So think it

Operator

proceed. at this Please we questions time, registered. And other no have

Brian Gray

XXXX Well, now right. your of the that. and over operator. years about We beyond to for we We're excited us thanks, appreciate today. in All again River, the continued joining and plan what see everyone, we'll turn Knife ahead back and EDGE the support call our

Operator

you this for disconnect sir. call for rest ask do your conclude the that and indeed this you Enjoy attending. your thank gentlemen, does And today. again, of Ladies at you, conference time, please day. your Once Thank we lines.

Knife River (KNF) 13 Feb 252024 Q4 Earnings call transcript