Knife River (KNF) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue, net income and Adjusted EBITDA reached records; the 15.3% Adjusted EBITDA margin achieved the 2025 target two years early.

• Q4 revenue rose 20% YoY to $646.9 million, net income rose 15% to $20.7 million and Adjusted EBITDA increased 10% to $72.4 million.

Financial highlights

• FY revenue was $2,830.3 million, up 12%; gross profit rose 49% to $538.9 million and net income rose 57% to $182.9 million.

• FY diluted EPS was $3.23 versus $2.05; Q4 diluted EPS was $0.36 versus $0.32.

• FY EBITDA was $422.0 million versus $306.7 million; Adjusted EBITDA was $432.4 million versus $313.4 million, up 38%.

• Q4 net income was $20.7 million versus $18.0 million; consolidated Adjusted EBITDA margin was 11.2% versus 12.2%.

Outlook and guidance

• FY 2024 revenue guidance is $2.75–$2.95 billion and Adjusted EBITDA guidance is $425–$475 million; midpoint implies 4.1% consolidated growth.

• Adjusted EBITDA guidance is $375–$415 million for geographic segments and Corporate Services and Eliminations, and $50–$60 million for Energy Services.

• Guidance assumes mid- to high-single-digit price growth and flat to low-single-digit volume declines in aggregates, ready-mix and asphalt; Energy Services is expected to normalize from 2023 results.

• 2024 capital expenditures are expected at 5%–7% of revenue; geographic-segment guidance midpoint implies 11.5% growth, including corporate services costs.