Knife River Corp. announced financial results for the first quarter ended March 31. The company 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, the company 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, its operations were able to begin pre-construction season activities earlier, which included expenses for maintenance-related work, plant mobilization and crew training. The company 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, the company realigned its reportable segments to better support its 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. The company 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.
“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.”