Achieved record first quarter revenue
Increased backlog at higher expected
margins
Advanced organic and acquisition growth
initiatives
Knife River Corporation (NYSE: KNF), an aggregates-led,
vertically integrated construction materials and contracting
services company, today announced financial results for the first
quarter ended March 31, 2024.
PERFORMANCE SUMMARY
First Quarter
(In millions, except per share)
2024
2023
% Change
Revenue
$
329.6
$
307.9
7
%
Gross profit
$
6.5
$
4.1
59
%
Net loss
$
(47.6
)
$
(41.3
)
(15
)%
Net loss margin
(14.5
)%
(13.4
)%
EBITDA
$
(20.6
)
$
(14.1
)
(46
)%
EBITDA margin
(6.2
)%
(4.6
)%
Adjusted EBITDA
$
(17.7
)
$
(13.7
)
(29
)%
Adjusted EBITDA margin
(5.4
)%
(4.5
)%
Net loss per share
$
(0.84
)
$
(0.73
)
(15
)%
Note: EBITDA, Adjusted EBITDA, EBITDA
margin and Adjusted EBITDA margin are non-GAAP financial measures.
For more information on all non-GAAP measures and a reconciliation
to the nearest GAAP measure, see the section entitled "Non-GAAP
Financial Measures."
MANAGEMENT COMMENTARY
“In the first quarter of 2024, we continued to make good
progress on our ‘Competitive EDGE’ initiatives, including our
pricing strategy, disciplined bidding to target higher-margin work
and investing in growth opportunities,” said Knife River President
and CEO Brian Gray. “We achieved record revenue for the quarter and
continue to see momentum with infrastructure funding as we head
into the start of the construction season. A seasonal loss in the
first quarter is typical for our business, as construction activity
in many of our northern markets doesn't ramp up until the second
quarter. While we historically spend less time in the field in the
first quarter, we have been active preparing for the start of the
season and investing in strategic growth projects.”
"We advanced a number of organic growth investments, including
upgraded plants to add capacity, a greenfield ready-mix operation
in our Central segment and the redistribution of plant assets into
markets where we believe we can achieve higher returns as we
optimize our portfolio," Gray said. "Additionally, on April 3,
Knife River acquired a small ready-mix operation in South Dakota,
providing infill growth between our successful Sioux Falls and
Yankton locations. This was Knife River’s 85th acquisition and we
expect it to be a sign of more deals to come. We have an active
acquisition pipeline, and we continue to bolster our corporate
development team.”
“At the same time, we have been busy adding to our backlog,”
Gray continued. “At the end of the first quarter, contracting
services backlog was $959.5 million, up from the prior-year period
and with higher expected margins. During the quarter, we added $423
million to our backlog, a 66% increase from what we added in the
same period last year. The transportation departments in Knife
River’s 14 states increased their total spending authority for 2024
by 16% from 2023, and we see ample opportunities to bid upcoming
work. We believe we have solid footing heading into the heart of
the construction season, and I would like to thank our entire Knife
River team for all of their efforts.”
“Today, we are reaffirming the 2024 guidance we shared last
quarter, including mid-to-high single-digit price growth and flat
to low-single-digit volume declines,” Gray said. “We are also
reaffirming revenue guidance in the range of $2.75 billion to $2.95
billion, and Adjusted EBITDA in the range of $425 million to $475
million.”
FIRST QUARTER 2024 RESULTS
For the three months ended March 31, 2024, we reported record
consolidated revenue of $329.6 million, a 7% increase from the
prior-year period, driven by price increases across most product
lines and increased contracting services revenues. Also in the
quarter, we experienced a seasonal net loss of $47.6 million,
compared to a seasonal net loss of $41.3 million in the prior-year
period. Adjusted EBITDA for the quarter was a loss of $17.7
million, compared to a loss of $13.7 million in the prior-year
period. During the first quarter, our operations were able to begin
pre-construction season activities earlier, which included expenses
for maintenance-related work, plant mobilization and crew training.
We also experienced increased costs related to the separation from
MDU Resources of approximately $6.4 million, of which $1.5 million
were one-time costs.
In the fourth quarter of 2023, we realigned our reportable
segments to better support our operational strategies. The liquid
asphalt and related services portion of the Pacific segment’s
businesses are now reported under the Energy Services segment. In
addition, the North Central and South operating segments have been
aggregated into one reportable segment, Central. We also
reallocated certain amounts to the operating segments that were
previously reported within Corporate Services. All periods have
been recast to conform with the revised presentation.
See the section entitled "Non-GAAP Financial Measures" for more
information on all non-GAAP measures and a reconciliation to the
nearest GAAP measure.
REPORTING SEGMENT PERFORMANCE
Pacific
Alaska, California, Hawaii
Three Months Ended
March 31,
2024
2023
% Change
(In millions)
Revenue
$
78.4
$
65.7
19
%
Gross profit
$
3.8
$
4.4
(14
)%
Gross margin
4.8
%
6.7
%
EBITDA
$
(.7
)
$
.1
(602
)%
EBITDA margin
(.9
)%
.2
%
First quarter revenue improved 19% year-over-year, led by
increased contracting services revenues in Northern California as a
result of an earlier start to the construction season than the
prior year. In the first quarter of 2023, Northern California
experienced abnormally wet weather which delayed work.
Additionally, strong residential demand in Northern California
positively impacted ready-mix concrete volumes. EBITDA decreased
$800,000 year-over-year, largely driven by the timing of expenses
for repair, maintenance and aggregates production costs.
Northwest
Oregon, Washington
Three Months Ended
March 31,
2024
2023
% Change
(In millions)
Revenue
$
120.3
$
115.9
4
%
Gross profit
$
20.2
$
16.6
22
%
Gross margin
16.8
%
14.3
%
EBITDA
$
20.1
$
14.0
44
%
EBITDA margin
16.8
%
12.1
%
First quarter revenue improved 4% year-over-year to a record
$120.3 million, with strong contracting services results benefiting
from more available winter work and stronger asphalt demand driving
up volumes. EBITDA improved 44% year-over-year to a first quarter
record of $20.1 million. The segment experienced improved margins
in contracting services and aggregates, driven by EDGE-related
pricing initiatives, as well as increased asphalt margins due to
lower costs. In addition, higher asset sale gains of approximately
$1.0 million positively contributed to EBITDA.
Mountain
Idaho, Montana, Wyoming
Three Months Ended
March 31,
2024
2023
% Change
(In millions)
Revenue
$
59.8
$
60.6
(1
)%
Gross profit
$
(3.7
)
$
(3.0
)
(23
)%
Gross margin
(6.2
)%
(5.0
)%
EBITDA
$
(6.1
)
$
(3.8
)
(62
)%
EBITDA margin
(10.1
)%
(6.2
)%
First quarter revenue was comparable with prior year revenue.
EBITDA decreased $2.3 million year-over-year, due in part to the
absence of asset sale gains of approximately $2.0 million during
the first quarter of 2023, as well as an earlier start preparing
for the construction season, which includes higher expenses for
equipment mobilization and repair and maintenance. Contracting
services margins improved due to a combination of change order work
and cost savings on projects. This segment recognized a normal
seasonal loss in the quarter as less construction activity is
typically completed in the first quarter.
Central
Iowa, Minnesota, North Dakota, South
Dakota, Texas
Three Months Ended
March 31,
2024
2023
% Change
(In millions)
Revenue
$
61.0
$
57.6
6
%
Gross profit
$
(12.9
)
$
(12.2
)
(6
)%
Gross margin
(21.2
)%
(21.0
)%
EBITDA
$
(18.7
)
$
(16.9
)
(11
)%
EBITDA margin
(30.7
)%
(29.3
)%
During the first quarter of 2024, revenue improved 6%
year-over-year, benefiting from increased pricing across all core
product lines. EBITDA decreased 11% year-over-year, as the northern
markets experienced an earlier start to its pre-construction season
activities, which includes higher expenses for maintenance-related
work, plant mobilization and crew training. The decrease was
partially offset by strong aggregates margins in Texas, driven by
increased pricing. The Central segment recognized a normal seasonal
loss in the quarter as less construction activity is typically
completed in the first quarter.
Energy Services
California, Iowa, Nebraska, South Dakota,
Texas, Wyoming
Three Months Ended
March 31,
2024
2023
% Change
(In millions)
Revenue
$
12.8
$
9.4
36
%
Gross profit
$
(1.3
)
$
(1.8
)
28
%
Gross margin
(10.2
)%
(19.6
)%
EBITDA
$
(2.5
)
$
(3.0
)
17
%
EBITDA margin
(19.4
)%
(31.7
)%
First quarter revenue improved 36% year-over-year, despite
liquid asphalt volumes remaining relatively flat. Activity in the
Texas and California markets benefited from favorable weather
conditions and strong demand, which more than offset lower volumes
in Wyoming. EBITDA improved 17% year-over-year, due to the strong
Texas and California markets, and decreased liquid asphalt costs.
This segment recognized a normal seasonal loss in the quarter as
less construction activity of our customers is typically completed
in the first quarter.
CAPITAL ALLOCATION &
LIQUIDITY
As of March 31, 2024, Knife River had $128.4 million of
unrestricted cash and cash equivalents and had $695.2 million of
gross debt and $329.0 million of available capacity under its
revolving credit facility, net of outstanding letters of credit.
Net leverage, defined as the ratio of net debt to
trailing-twelve-month Adjusted EBITDA, was 1.3x at March 31,
2024.
During the first quarter of 2024, we invested approximately
$43.7 million on capital projects, with the majority being spent on
maintenance projects. We continue to anticipate capital
expenditures to be approximately 5% to 7% of revenue for the full
year 2024, consisting of both maintenance and organic growth
projects. Our management team remains focused on organic and
acquisition growth opportunities that align with our EDGE
strategies, which includes the acquisition of a small ready-mix
operation in South Dakota on April 3.
2024 FINANCIAL GUIDANCE
Knife River is reaffirming the following financial guidance
ranges for the full year 2024, based on normal weather, economic
and operating conditions.
2024 Full Year Guidance
Low
High
(In millions)
Revenue
Revenue (Knife River Consolidated)
$
2,750.0
$
2,950.0
Adjusted
EBITDA
Geographic Segments (including Corporate
Services)
$
375.0
$
415.0
Energy Services
$
50.0
$
60.0
Knife River Consolidated
$
425.0
$
475.0
FIRST QUARTER 2024 RESULTS CONFERENCE
CALL
Knife River will host a conference call at 10 a.m. ET on May 7,
2024, to discuss first quarter results, 2024 guidance and conduct a
question-and-answer session. The event will be webcast at
https://events.q4inc.com/attendee/997203803.
To participate in the live call:
- Domestic: 1-888-259-6580
- International: 1-416-764-8624 Conference ID: 74896485
ABOUT KNIFE RIVER CORPORATION
Knife River Corporation, a member of the S&P MidCap 400
index, mines aggregates and markets crushed stone, sand, gravel and
related construction materials, including ready-mix concrete,
asphalt and other value-added products. Knife River also performs
vertically integrated contracting services, specializing in
publicly funded DOT projects and private projects across the
industrial, commercial and residential space. For more information
about the company, visit www.kniferiver.com.
Knife River
Corporation
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended
March 31,
2024
2023
(In millions, except per share
amounts)
Revenue:
Construction materials
$
204.1
$
192.9
Contracting services
125.5
115.0
Total revenue
329.6
307.9
Cost of revenue:
Construction materials
209.8
194.1
Contracting services
113.3
109.7
Total cost of revenue
323.1
303.8
Gross profit
6.5
4.1
Selling, general and administrative
expenses
60.2
48.7
Operating loss
(53.7
)
(44.6
)
Interest expense
13.9
9.5
Other income
3.7
.9
Loss before income taxes
(63.9
)
(53.2
)
Income tax benefit
(16.3
)
(11.9
)
Net loss
$
(47.6
)
$
(41.3
)
Net loss per share:
Basic
$
(.84
)
$
(.73
)
Diluted
$
(.84
)
$
(.73
)
Weighted average common shares
outstanding:
Basic
56.6
56.6
Diluted
56.6
56.6
Knife River
Corporation
Consolidated Balance
Sheets
(Unaudited)
March 31, 2024
March 31, 2023
December 31, 2023
Assets
(In millions, except shares and
per share amounts)
Current assets:
Cash, cash equivalents and restricted
cash
$
170.7
$
7.2
$
262.3
Receivables, net
183.7
174.6
266.8
Costs and estimated earnings in excess of
billings on uncompleted contracts
33.6
31.0
27.3
Due from related-party
—
16.9
—
Inventories
375.8
373.2
319.6
Prepayments and other current assets
54.0
36.3
37.5
Total current assets
817.8
639.2
913.5
Noncurrent assets:
Property, plant and equipment
2,609.6
2,512.7
2,579.7
Less accumulated depreciation, depletion
and amortization
1,289.0
1,195.3
1,264.7
Net property, plant and equipment
1,320.6
1,317.4
1,315.0
Goodwill
274.5
274.5
274.5
Other intangible assets, net
10.3
12.8
10.8
Operating lease right-of-use assets
45.8
44.0
44.7
Investments and other
44.6
38.9
41.3
Total noncurrent assets
1,695.8
1,687.6
1,686.3
Total assets
$
2,513.6
$
2,326.8
$
2,599.8
Liabilities and Stockholders' Equity
Current liabilities:
Long-term debt - current portion
$
7.1
$
.2
$
7.1
Related-party notes payable - current
portion
—
238.0
—
Accounts payable
97.4
80.4
107.7
Billings in excess of costs and estimated
earnings on uncompleted contracts
50.8
37.4
51.4
Accrued compensation
17.7
14.0
48.1
Accrued interest
15.5
—
7.2
Due to related-party
—
23.5
—
Current operating lease liabilities
13.3
13.0
12.9
Other accrued liabilities
95.4
66.7
112.9
Total current liabilities
297.2
473.2
347.3
Noncurrent liabilities:
Long-term debt
673.5
.3
674.6
Related-party notes payable
—
578.1
—
Deferred income taxes
174.1
175.1
174.5
Noncurrent operating lease liabilities
32.6
31.0
31.8
Other
117.6
94.3
105.6
Total liabilities
1,295.0
1,352.0
1,333.8
Commitments and contingencies
Stockholders' equity:
Common stock, 300,000,000 shares
authorized, $0.01 par value, 57,040,840 shares issued and
56,609,704 shares outstanding at March 31, 2024; 57,009,542 shares
issued and 56,578,406 shares outstanding at December 31, 2023;
80,000 shares authorized, issued and outstanding, $10 par value at
March 31, 2023
.6
.8
.6
Other paid-in capital
614.6
548.2
614.5
Retained earnings
618.2
441.7
665.8
MDU Resources common stock held by
subsidiary at cost - 538,921 shares at March 31, 2023
—
(3.6
)
—
Treasury stock held at cost - 431,136
shares
(3.6
)
—
(3.6
)
Accumulated other comprehensive loss
(11.2
)
(12.3
)
(11.3
)
Total stockholders' equity
1,218.6
974.8
1,266.0
Total liabilities and stockholders'
equity
$
2,513.6
$
2,326.8
$
2,599.8
Knife River
Corporation
Consolidated Statements of
Cash Flows
(Unaudited)
Three Months Ended
March 31,
2024
2023
(In millions)
Operating activities:
Net loss
$
(47.6
)
$
(41.3
)
Adjustments to reconcile net loss to net
cash used in operating activities:
32.2
26.5
Changes in current assets and liabilities,
net of acquisitions:
Receivables
76.8
34.2
Due from related-party
—
(.8
)
Inventories
(56.2
)
(49.9
)
Other current assets
(16.5
)
(18.4
)
Accounts payable
(4.2
)
1.9
Due to related-party
—
4.6
Other current liabilities
(39.7
)
(36.3
)
Pension and postretirement benefit plan
contributions
(.1
)
(.2
)
Other noncurrent changes
12.1
.4
Net cash used in operating activities
(43.2
)
(79.3
)
Investing activities:
Capital expenditures
(43.7
)
(42.4
)
Net proceeds from sale or disposition of
property and other
1.6
3.2
Investments
(3.0
)
(1.6
)
Net cash used in investing activities
(45.1
)
(40.8
)
Financing activities:
Issuance of long-term related-party notes,
net
—
131.6
Repayment of long-term debt
(1.7
)
—
Tax withholding on stock-based
compensation
(1.6
)
—
Net transfers to Centennial Energy
Holdings Inc.
—
(14.4
)
Net cash provided by (used in) financing
activities
(3.3
)
117.2
Decrease in cash, cash equivalents and
restricted cash
(91.6
)
(2.9
)
Cash, cash equivalents and restricted cash
-- beginning of year
262.3
10.1
Cash, cash equivalents and restricted cash
-- end of period
$
170.7
$
7.2
Segment Financial
Data and Highlights (Unaudited)
Three Months Ended
March 31,
2024
2023
Dollars
Margin
Dollars
Margin
(Dollars in millions)
Revenues by segment:
Pacific
$
78.4
$
65.7
Northwest
120.3
115.9
Mountain
59.8
60.6
Central
61.0
57.6
Energy Services
12.8
9.4
Total segment revenues
332.3
309.2
Corporate Services and Eliminations
(2.7
)
(1.3
)
Consolidated revenues
$
329.6
$
307.9
Gross profit by segment:
Pacific
$
3.8
4.8
%
$
4.4
6.7
%
Northwest
20.2
16.8
%
16.6
14.3
%
Mountain
(3.7
)
(6.2
)%
(3.0
)
(5.0
)%
Central
(12.9
)
(21.2
)%
(12.2
)
(21.0
)%
Energy Services
(1.3
)
(10.2
)%
(1.8
)
(19.6
)%
Total segment gross profit
6.1
1.8
%
4.0
1.3
%
Corporate Services and Eliminations
.4
(17.0
)%
.1
(9.1
)%
Consolidated gross profit
$
6.5
2.0
%
$
4.1
1.3
%
Net income (loss) by segment:
Pacific
$
(6.5
)
(8.3
)%
$
(5.0
)
(7.6
)%
Northwest
10.2
8.5
%
5.1
4.4
%
Mountain
(12.4
)
(20.8
)%
(9.8
)
(16.2
)%
Central
(27.4
)
(44.9
)%
(25.0
)
(43.3
)%
Energy Services
(3.7
)
(29.1
)%
(4.2
)
(44.8
)%
Total segment net loss
(39.8
)
(12.0
)%
(38.9
)
(12.6
)%
Corporate Services and Eliminations
(7.8
)
288.4
%
(2.4
)
184.7
%
Consolidated net loss
$
(47.6
)
(14.5
)%
$
(41.3
)
(13.4
)%
EBITDA* by segment:
Pacific
$
(.7
)
(.9
)%
$
.1
.2
%
Northwest
20.1
16.8
%
14.0
12.1
%
Mountain
(6.1
)
(10.1
)%
(3.8
)
(6.2
)%
Central
(18.7
)
(30.7
)%
(16.9
)
(29.3
)%
Energy Services
(2.5
)
(19.4
)%
(3.0
)
(31.7
)%
Total segment EBITDA*
(7.9
)
(2.4
)%
(9.6
)
(3.1
)%
Corporate Services and Eliminations
(12.7
)
471.8
%
(4.5
)
353.4
%
Consolidated EBITDA*
$
(20.6
)
(6.2
)%
$
(14.1
)
(4.6
)%
* EBITDA, Segment EBITDA, and EBITDA
margin are non-GAAP financial measures. For more information and a
reconciliation to the nearest GAAP measure, see the section
entitled "Non-GAAP Financial Measures."
The following table summarizes backlog for the company.
March 31, 2024
March 31, 2023
(In millions)
Pacific
$
92.9
$
75.1
Northwest
204.2
250.5
Mountain
383.2
366.1
Central
279.2
266.8
$
959.5
$
958.5
Margins on backlog at March 31, 2024, are expected to be higher
than the margins on backlog at March 31, 2023. Approximately 85% of
the company's contracting services backlog relates to publicly
funded projects, including street and highway construction
projects. Period over period increases or decreases should not be
used as an indicator of future revenues or earnings.
Three Months Ended
March 31,
2024
2023
Sales (thousands):
Aggregates (tons)
4,255
4,868
Ready-mix concrete (cubic yards)
530
561
Asphalt (tons)
221
179
Average selling price:*
Aggregates (per ton)
$
19.80
$
17.16
Ready-mix concrete (per cubic yard)
$
188.41
$
172.64
Asphalt (per ton)
$
74.50
$
76.07
* The average selling price includes
freight and delivery and other revenues.
Three Months Ended
March 31,
2024
2023
Dollars
Margin
Dollars
Margin
(Dollars in millions)
Revenues by product line:
Aggregates
$
84.3
$
83.5
Ready-mix concrete
99.8
96.8
Asphalt
16.5
13.6
Liquid asphalt
11.0
8.3
Other*
39.0
30.3
Contracting services
125.5
115.0
Internal sales
(46.5
)
(39.6
)
Total revenues
$
329.6
$
307.9
Gross profit by product line:
Aggregates
$
4.8
5.7
%
$
2.3
2.8
%
Ready-mix concrete
8.6
8.6
%
8.8
9.0
%
Asphalt
(5.6
)
(33.8
)%
(6.0
)
(43.8
)%
Liquid asphalt
(.9
)
(8.6
)%
(1.0
)
(12.7
)%
Other*
(12.6
)
(32.4
)%
(5.3
)
(17.3
)%
Contracting services
12.2
9.7
%
5.3
4.6
%
Total gross profit
$
6.5
2.0
%
$
4.1
1.3
%
* Other includes cement, merchandise,
fabric and spreading, and other products and services that
individually are not considered to be a core line of business.
NON-GAAP FINANCIAL
MEASURES
EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin,
including those measures by segment, as applicable, net debt and
net leverage are considered non-GAAP measures of financial
performance. These non-GAAP financial measures are not measures of
financial performance under GAAP. The items excluded from these
non-GAAP financial measures are significant components in
understanding and assessing financial performance. Therefore, these
non-GAAP financial measures should not be considered substitutes
for the applicable GAAP metric.
EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA
margin are most directly comparable to the corresponding GAAP
measures of net income and net income margin. Net debt and net
leverage are most directly comparable to the corresponding GAAP
measures of total debt. We believe these non-GAAP financial
measures, in addition to corresponding GAAP measures, are useful to
investors by providing meaningful information about operational
efficiency compared to our peers by excluding the impacts of
differences in tax jurisdictions and structures, debt levels and
capital investment. We believe Adjusted EBITDA and Adjusted EBITDA
margin are useful performance measures because they allow for an
effective evaluation of our operating performance by excluding
stock-based compensation and unrealized gains and losses on benefit
plan investments as they are considered non-cash and not part of
our core operations. We also exclude the one-time, non-recurring
costs associated with the separation of Knife River from MDU
Resources as those are not expected to continue. We believe EBITDA
and Adjusted EBITDA assist rating agencies and investors in
comparing operating performance across operating periods on a
consistent basis by excluding items management does not believe are
indicative of the company's operating performance, including using
EBITDA and Adjusted EBITDA to calculate Knife River’s leverage as a
multiple of EBITDA and Adjusted EBITDA. Additionally, EBITDA and
Adjusted EBITDA are important financial metrics for debt investors
who utilize debt to EBITDA and debt to Adjusted EBITDA ratios. We
believe EBITDA and EBITDA margin, including those measures by
segment, are useful performance measures because they provide
clarity as to the operational results of the company. Management
believes net debt and net leverage are useful performance measures
because they provide a measure of how long it would take the
company to pay back its debt if net debt and Adjusted EBITDA were
constant. Net leverage also allows management to assess our
borrowing capacity and optimal leverage ratio. Our management uses
these non-GAAP financial measures in conjunction with GAAP results
when evaluating our operating results internally and calculating
employee incentive compensation, and leverage as a multiple of
Adjusted EBITDA to determine the appropriate method of funding our
operations.
EBITDA is calculated by adding back income taxes, interest
expense (net of interest income) and depreciation, depletion and
amortization expense to net income. EBITDA margin is calculated by
dividing EBITDA by revenues. Adjusted EBITDA is calculated by
adding back unrealized gains and losses on benefit plan
investments, stock-based compensation and one-time separation
costs, to EBITDA. Adjusted EBITDA Margin is calculated by dividing
Adjusted EBITDA by revenues. Net debt is calculated by adding
unamortized debt issuance costs to the total debt balance presented
on the balance sheet, less any unrestricted cash. Net leverage is
calculated by dividing net debt by trailing-twelve-month Adjusted
EBITDA. These non-GAAP financial measures are calculated the same
for both the segment and consolidated metrics and should not be
considered as alternatives to, or more meaningful than, GAAP
financial measures such as net income, net income margin and total
debt and are intended to be helpful supplemental financial measures
for investors’ understanding of our operating performance. Our
non-GAAP financial measures are not standardized; therefore, it may
not be possible to compare these financial measures with other
companies’ EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA
Margin, net debt and net leverage measures having the same or
similar names.
The following information reconciles segment and consolidated
net income to EBITDA and Adjusted EBITDA and provides the
calculation of EBITDA margin, Adjusted EBITDA margin, net debt and
net leverage. Interest expense, net, is net of interest income that
is included in other income (expense) on the Consolidated
Statements of Operations.
Three Months Ended March 31, 2024
Pacific
Northwest
Mountain
Central
Energy Services
Corporate Services and
Eliminations
Consolidated
(In millions)
Net income (loss)
$
(6.5
)
$
10.2
$
(12.4
)
$
(27.4
)
$
(3.7
)
$
(7.8
)
$
(47.6
)
Depreciation, depletion and
amortization
5.8
9.9
6.3
8.7
1.2
.3
32.2
Interest expense, net
—
—
—
—
—
11.1
11.1
Income taxes
—
—
—
—
—
(16.3
)
(16.3
)
EBITDA
$
(.7
)
$
20.1
$
(6.1
)
$
(18.7
)
$
(2.5
)
$
(12.7
)
$
(20.6
)
Unrealized (gains) losses on benefit plan
investments
$
(1.2
)
$
(1.2
)
Stock-based compensation expense
1.8
1.8
One-time separation costs
2.3
2.3
Adjusted EBITDA
$
(9.8
)
$
(17.7
)
Revenue
$
78.4
$
120.3
$
59.8
$
61.0
$
12.8
$
(2.7
)
$
329.6
Net Income Margin
(8.3
)%
8.5
%
(20.8
)%
(44.9
)%
(29.1
)%
N.M.
(14.5
)%
EBITDA Margin
(.9
)%
16.8
%
(10.1
)%
(30.7
)%
(19.4
)%
N.M.
(6.2
)%
Adjusted EBITDA Margin
N.M.
(5.4
)%
* N.M. - not meaningful
Three Months Ended March 31, 2023
Pacific
Northwest
Mountain
Central
Energy Services
Corporate Services and
Eliminations
Consolidated
(In millions)
Net income (loss)
$
(5.0
)
$
5.1
$
(9.8
)
$
(25.0
)
$
(4.2
)
$
(2.4
)
$
(41.3
)
Depreciation, depletion and
amortization
5.1
8.9
6.0
8.1
1.2
.3
29.6
Interest expense, net
—
—
—
—
—
9.5
9.5
Income taxes
—
—
—
—
—
(11.9
)
(11.9
)
EBITDA
$
.1
$
14.0
$
(3.8
)
$
(16.9
)
$
(3.0
)
$
(4.5
)
$
(14.1
)
Unrealized (gains) losses on benefit plan
investments
$
(1.3
)
$
(1.3
)
Stock-based compensation expense
.9
.9
One-time separation costs
.8
.8
Adjusted EBITDA
$
(4.1
)
$
(13.7
)
Revenue
$
65.7
$
115.9
$
60.6
$
57.6
$
9.4
$
(1.3
)
$
307.9
Net Income Margin
(7.6
)%
4.4
%
(16.2
)%
(43.3
)%
(44.8
)%
N.M.
(13.4
)%
EBITDA Margin
.2
%
12.1
%
(6.2
)%
(29.3
)%
(31.7
)%
N.M.
(4.6
)%
Adjusted EBITDA Margin
N.M.
(4.5
)%
* N.M. - not meaningful
The following tables provide the reconciliation to
trailing-twelve-month EBITDA and Adjusted EBITDA as of March 31,
2024, as well as the net leverage calculation of net debt to
trailing-twelve-month Adjusted EBITDA.
Twelve Months Ended March 31,
2024
Three Months Ended March 31,
2024
Twelve Months Ended December 31,
2023
Three Months Ended March 31,
2023
(In millions)
Net income (loss)
$
176.6
$
(47.6
)
$
182.9
$
(41.3
)
Depreciation, depletion and
amortization
126.4
32.2
123.8
29.6
Interest expense, net
54.5
11.1
52.9
9.5
Income taxes
58.0
(16.3
)
62.4
(11.9
)
EBITDA
$
415.5
$
(20.6
)
$
422.0
$
(14.1
)
Unrealized (gains) losses on benefit plan
investments
(2.6
)
(1.2
)
(2.7
)
(1.3
)
Stock-based compensation expense
4.0
1.8
3.1
.9
One-time separation costs
11.5
2.3
10.0
.8
Adjusted EBITDA
$
428.4
$
(17.7
)
$
432.4
$
(13.7
)
The following table provides the reconciliation of the net
leverage calculation of net debt to Adjusted EBITDA.
Twelve Months Ended March 31,
2024
(In millions)
Long-term debt
$
673.5
Long-term debt - current portion
7.1
Total debt
680.6
Add: Unamortized debt issuance costs
14.6
Total debt, gross
695.2
Less: Cash and cash equivalents, excluding
restricted cash
128.4
Total debt, net
$
566.8
Trailing twelve months ended March 31,
2024, Adjusted EBITDA
$
428.4
Net leverage
1.3
x
The following table provides a reconciliation of consolidated
GAAP net income to EBITDA and Adjusted EBITDA for forecasted
results.
2024
Low
High
(In millions)
Net income
$
180.0
$
215.0
Adjustments:
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
—
—
Stock-based compensation expense
6.0
6.0
One-time separation costs
3.5
3.5
Adjusted EBITDA
$
425.0
$
475.0
FORWARD-LOOKING
STATEMENTS
The information in this news release 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 the meaning of Section 21E of the Securities
Exchange Act of 1934. Although the company believes that its
expectations are based on reasonable assumptions, there is no
assurance the company’s projections or estimates for growth,
shareholder value creation, financial guidance, expected backlog
margin or other proposed strategies will be achieved. Please refer
to assumptions contained in this news release, as well as the
various important factors listed in Part I, Item 1A - Risk Factors
in the company's 2023 Form 10-K and subsequent filings with the
Securities and Exchange Commission.
Changes in such assumptions and factors could cause actual
future results to differ materially from growth and financial
guidance. All forward-looking statements in this news release are
expressly qualified by such cautionary statements and by reference
to the underlying assumptions. Undue reliance should not be placed
on forward-looking statements, which speak only as of the date they
are made. Except as required by law, the company does not undertake
to update forward-looking statements, whether as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507454280/en/
Media Contact: Tony Spilde, Senior Director of
Communications, 541-693-5949 IR Contact: Zane Karimi,
Director of Investor Relations, 503-944-3508
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