Knife River (KNF) investor relations material

Executive summary

• Revenue increased 16% year-over-year to $410.1 million, with adjusted EBITDA also up 16% and margin expanding by 290 basis points.

• Achieved record first quarter backlog of $1.2 billion, up 25% from last year, reflecting strong demand and successful acquisition strategy.

• Completed three aggregates-based acquisitions in Q1 2026, expanding into Utah and strengthening the Montana footprint.

• Strong momentum heading into construction season, with EDGE initiatives and cost optimization driving growth.

• The company reaffirmed its guidance and expects 2026 results to trend toward the upper half of revenue and adjusted EBITDA ranges.

Financial highlights

• Aggregates volume grew 26%, ready-mix volumes increased 33%, and asphalt volumes rose 42% year-over-year, with price increases and cost controls driving margin improvement.

• Adjusted EBITDA improved 16% to $(31.8) million, with margin improving by 290 basis points to (7.8)%.

• Net loss for Q1 2026 was $(79.2) million, with a net loss margin of (19.3)%.

• Gross margin improvements across aggregates (+390bps), ready-mix (+260bps), asphalt (+1,180bps), and liquid asphalt (+1,930bps); contracting services margin declined by 240bps.

• Per unit production costs for aggregates were reduced by over 10% through process improvements and investments.

Outlook and guidance

• Full-year 2026 revenue expected between $3.3 billion and $3.5 billion; Adjusted EBITDA guidance of $520–$560 million.

• Guidance assumes mid-single digit increases in aggregates and asphalt volumes/pricing, and mid-teens growth in ready-mix volumes.

• Backlog of $1.2 billion, with 75% expected to be completed in 2026, supports visibility and confidence in future performance.

• Anticipated net leverage near long-term target of 2.5x by year-end, with no borrowing expected on the $500 million revolver.

• Energy Services results expected to be in line with 2025; depreciation and amortization to rise mid-single digits.