Key Takeaways
Knife River Corp. (NYSE: KNF) reported first-quarter revenue and adjusted EBITDA both rose 16 percent from the prior year, prompting the company to signal its full-year results are tracking toward the upper end of its guidance.
“We are just now entering the start of our construction season, and we are doing so from a position of strength,” President and Chief Executive Officer Brian Gray said. He cited a record first-quarter backlog of $1.2 billion in contracting services and the completion of three acquisitions during the period.
The construction materials supplier saw broad-based growth, with aggregates volumes up 26 percent, ready-mix volumes climbing 33 percent, and asphalt volumes increasing 42 percent year-over-year. Adjusted for geographic mix, aggregates pricing was up 4.1 percent, contributing to a 390-basis-point expansion in aggregates gross profit margin.
Shares of Knife River were not yet trading pre-market. The company reaffirmed its expectation for mid-single-digit aggregates pricing improvement for the full year and is targeting net leverage near 2.5 times.
Chief Financial Officer Nathan Ring said Knife River achieved volume, revenue, and gross profit improvement across all its core product lines. The strong performance was supported by double-digit volume growth, cost controls, and pricing initiatives, which helped expand adjusted EBITDA margins by 290 basis points.
The company’s contracting backlog hit a record $1.2 billion. Management expects approximately 75 percent of that work to be completed in 2026, including a higher level of asphalt paving work that is anticipated to support margins and pull through more upstream materials.
Knife River continued its expansion strategy, closing three aggregates-based acquisitions in the quarter: Morgan Asphalt in Utah and two others in Montana. Gray highlighted the Morgan Asphalt deal as a key strategic entry into the Salt Lake City market.
Gray emphasized the company’s vertical integration as a “profit multiplier,” allowing it to capture higher margins by supplying its own construction projects. He pointed to the company’s Honey Creek Quarry near Austin, Texas, as an example of an asset that supports downstream product lines and third-party customers in a high-growth market.
The strong start to the year and contributions from the new acquisitions give management confidence that revenue and adjusted EBITDA will trend toward the upper half of the company’s guidance ranges. Investors will be watching for the company's Q2 results to see if the momentum continues through the main construction season.
This article is for informational purposes only and does not constitute investment advice.
