[10-Q] Knife River Corp Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Knife River Corporation reported Q3 2025 results showing solid top-line growth and stable profitability. Total revenue was 1,203,717, with net income of $143,151 and diluted EPS of $2.52. Construction materials revenue rose to $647,277, while contracting services were $556,440. Gross profit was $284,334 and operating income was $215,205.
Year-to-date revenue reached 2,390,948. The company completed the $454.0 million acquisition of Strata Corporation, which contributed $95.3 million of revenue and $9.3 million of net income in the quarter. Backlog was $994.6 million, including $764.4 million expected within 12 months, $129.0 million in 13–24 months, and $101.2 million in 25 months or more. Cash from operations was $82,583 for the nine months, offset by $783,019 used in investing, and $500,399 provided by financing, including $520,000 of new long-term debt issuance. Shares outstanding were 56,664,165 as of October 28, 2025. The company reorganized into four segments: West, Mountain, Central, and Energy Services.
Positive
- None.
Negative
- None.
Insights
Q3 revenue grew, EPS steady; backlog and M&A underpin activity.
Knife River delivered Q3 revenue of
The
Cash flows show investment-heavy execution: nine-month cash from operations of
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____________ to ______________
Commission file number 1-41642
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
(Zip Code)
(701 ) 530-1400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated Filer | ☐ | |||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
Emerging Growth Company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ .
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of October 28, 2025: 56,664,165 shares.
Index
| Index | |||||
| Page | |||||
Introduction | 3 | ||||
Part I -- Financial Information | |||||
Item 1. Financial Statements | 4 | ||||
Consolidated Statements of Operations -- Three and Nine Months Ended September 30, 2025 and 2024 | 4 | ||||
Consolidated Statements of Comprehensive Income -- Three and Nine Months Ended September 30, 2025 and 2024 | 5 | ||||
Consolidated Balance Sheets -- September 30, 2025 and 2024, and December 31, 2024 | 6 | ||||
Consolidated Statements of Equity -- Three and Nine Months Ended September 30, 2025 and 2024 | 7 | ||||
Consolidated Statements of Cash Flows -- Nine Months Ended September 30, 2025 and 2024 | 9 | ||||
Notes to Consolidated Financial Statements | 10 | ||||
1. Background | 10 | ||||
2. Basis of presentation | 10 | ||||
3. New accounting standards | 11 | ||||
4. Receivables and allowance for expected credit losses | 12 | ||||
5. Inventories | 13 | ||||
6. Net income per share | 14 | ||||
7. Accumulated other comprehensive loss | 14 | ||||
8. Revenue from contracts with customers | 14 | ||||
9. Uncompleted contracts | 16 | ||||
10. Acquisitions and Dispositions | 17 | ||||
11. Goodwill and other intangible assets | 19 | ||||
12. Fair value measurements | 20 | ||||
13. Debt | 22 | ||||
14. Cash flow information | 23 | ||||
15. Business segment data | 23 | ||||
16. Commitments and contingencies | 26 | ||||
17. Related-party transactions | 27 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 28 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 43 | ||||
Item 4. Controls and Procedures | 43 | ||||
Part II -- Other Information | |||||
Item 1. Legal Proceedings | 44 | ||||
Item 1A. Risk Factors | 44 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 44 | ||||
Item 3. Defaults Upon Senior Securities | 44 | ||||
Item 4. Mine Safety Disclosures | 44 | ||||
Item 5. Other Information | 44 | ||||
Item 6. Exhibits | 44 | ||||
Exhibits Index | 45 | ||||
Signatures | 46 | ||||
Unless otherwise stated or the context otherwise requires, references in this report to “Knife River,” the “Company,” “we,” “our,” or “us” refer to Knife River Corporation and its consolidated subsidiaries.
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Index
Introduction
Knife River is an aggregates-led, vertically integrated construction materials and contracting services company with 1.2 billion tons of aggregate reserves as of December 31, 2024. About 37 percent of these aggregates support internal production of ready-mix concrete, asphalt, and various contracting services, including heavy-civil and concrete construction. Our company targets mid-size, high-growth markets and is dedicated to growth and stakeholder value through our core values: People, Safety, Quality, and the Environment.
We supply construction materials and contracting services across 14 U.S. states, mainly serving public-sector infrastructure projects like highways and bridges. Our access to high-quality aggregates supports our vertically integrated model, allowing us to share resources and maximize efficiency. Products are transported by truck, rail, or barge, depending on the market. Strategically located aggregate sites, plants, and a large fleet help us serve customers effectively. This integrated approach provides scale, efficiency, and operational excellence, benefiting customers, shareholders, and communities.
In January 2025, we made a change to our organizational structure to better align with our business strategy. We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our former North Central and South operating segments were combined to form the new Central operating segment. The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. All periods have been recast to conform to the current reportable segment presentation.
Three of the reportable segments are aligned by key geographic areas, West, Mountain and Central, due to the production of construction materials and related contracting services and one is based on product line. Each geographic segment offers a vertically integrated suite of products and services, including aggregates, ready-mix concrete, asphalt and contracting services, while the Energy Services segment, which has locations throughout our geographic footprint, produces and supplies liquid asphalt and related services, primarily for use in asphalt road construction. We also provide the details of Corporate Services, which includes accounting, legal, treasury, information technology, human resources, corporate development costs and certain corporate expenses that support our operating segments. For more information on our business segments, see Note 15 of the Notes to Consolidated Financial Statements.
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Part I -- Financial Information
Item 1. Financial Statements
Knife River Corporation | ||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| Revenue: | ||||||||||||||
| Construction materials | $ | $ | $ | $ | ||||||||||
| Contracting services | ||||||||||||||
| Total revenue | ||||||||||||||
| Cost of revenue: | ||||||||||||||
| Construction materials | ||||||||||||||
| Contracting services | ||||||||||||||
| Total cost of revenue | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||
| Operating income | ||||||||||||||
| Interest expense | ||||||||||||||
| Other income | ||||||||||||||
| Income before income taxes | ||||||||||||||
| Income tax expense | ||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||
| Net income per share | ||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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| Knife River Corporation | |||||||||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||
| Other comprehensive income: | |||||||||||||||||
| Postretirement liability adjustment: | |||||||||||||||||
Amortization of postretirement liability losses included in net periodic benefit cost, net of tax of $ | |||||||||||||||||
| Postretirement liability adjustment | |||||||||||||||||
| Other comprehensive income | |||||||||||||||||
Comprehensive income attributable to common stockholders | $ | $ | $ | $ | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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| Knife River Corporation | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (Unaudited) | |||||||||||
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands, except shares and per share amounts) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
| Receivables, net | |||||||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | |||||||||||
| Inventories | |||||||||||
| Prepayments and other current assets | |||||||||||
| Total current assets | |||||||||||
| Noncurrent assets: | |||||||||||
| Net property, plant and equipment | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Investments and other | |||||||||||
| Total noncurrent assets | |||||||||||
| Total assets | $ | $ | $ | ||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Long-term debt - current portion | $ | $ | $ | ||||||||
| Accounts payable | |||||||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | |||||||||||
| Accrued compensation | |||||||||||
Taxes payable | |||||||||||
| Accrued interest | |||||||||||
| Current operating lease liabilities | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Noncurrent liabilities: | |||||||||||
| Long-term debt | |||||||||||
| Deferred income taxes | |||||||||||
| Noncurrent operating lease liabilities | |||||||||||
| Other | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity: | |||||||||||
Common stock, | |||||||||||
| Other paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Treasury stock held at cost - | ( | ( | ( | ||||||||
| Accumulated other comprehensive loss | ( | ( | ( | ||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | $ | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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| Knife River Corporation | ||||||||||||||||||||||||||||||||
| Consolidated Statements of Equity | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Common Stock | Other Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||
| (In thousands, except shares) | ||||||||||||||||||||||||||||||||
At December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued for employee compensation, net of tax withholding | ( | — | — | — | — | ( | ||||||||||||||||||||||||||
| At March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued for board of director fees | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| At June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
| At September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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| Knife River Corporation | ||||||||||||||||||||||||||||||||
| Consolidated Statements of Equity | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Common Stock | Other Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||
| (In thousands, except shares) | ||||||||||||||||||||||||||||||||
At December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Common stock issued for employee compensation, net of tax withholding | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||
At March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | ( | — | — | — | ||||||||||||||||||||||||||
Common stock issued for board of director fees | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||
At June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
At September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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| Knife River Corporation | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (In thousands) | ||||||||
| Operating activities: | ||||||||
| Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, depletion and amortization | ||||||||
| Deferred income taxes | ||||||||
| Provision for credit losses | ||||||||
| Amortization of debt issuance costs | ||||||||
| Employee stock-based compensation costs | ||||||||
| Pension and postretirement benefit plan net periodic benefit cost | ||||||||
| Unrealized gains on investments | ( | ( | ||||||
| Gains on sales of assets | ( | ( | ||||||
Gain on bargain purchase | ( | |||||||
| Equity in losses of unconsolidated affiliates | ( | ( | ||||||
| Changes in current assets and liabilities, net of acquisitions: | ||||||||
| Receivables | ( | ( | ||||||
| Inventories | ( | ( | ||||||
| Other current assets | ||||||||
| Accounts payable | ||||||||
| Other current liabilities | ||||||||
| Pension and postretirement benefit plan contributions | ( | ( | ||||||
| Other noncurrent changes | ||||||||
| Net cash provided by operating activities | ||||||||
| Investing activities: | ||||||||
| Capital expenditures | ( | ( | ||||||
| Acquisitions, net of cash acquired | ( | ( | ||||||
| Net proceeds from sale or disposition of property and other | ||||||||
| Investments | ( | ( | ||||||
| Net cash used in investing activities | ( | ( | ||||||
| Financing activities: | ||||||||
| Issuance of long-term debt | ||||||||
| Repayment of long-term debt | ( | ( | ||||||
| Debt issuance costs | ( | |||||||
Tax withholding on stock-based compensation | ( | ( | ||||||
| Net cash provided by (used in) financing activities | ( | |||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||
| Cash, cash equivalents and restricted cash -- beginning of year | ||||||||
| Cash, cash equivalents and restricted cash -- end of period | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Knife River Corporation
Notes to Consolidated
Financial Statements
September 30, 2025 and 2024
(Unaudited)
Note 1 - Background
At Knife River, we are a people-first construction materials and contracting services company. We provide construction materials and contracting services to build safe roads, bridges, airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need. We are one of the leading providers of crushed stone and sand and gravel in the United States and operate across 14 states. We conduct our operations through four reportable segments: West, Mountain, Central and Energy Services.
In January 2025, we made a change to our organizational structure to better align with our business strategy. We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our former North Central and South operating segments were combined to form the new Central operating segment. The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, business development, information technology, human resources, and other corporate expenses that support the operating segments. Prior periods have been recast to conform to the current reportable segment presentation.
Note 2 - Basis of presentation
The accompanying consolidated interim financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Interim financial statements do not include all disclosures provided in annual financial statements and, accordingly, these financial statements should be read in conjunction with the Company's 2024 Annual Report on Form 10-K (Annual Report). The information is unaudited but includes adjustments that are, in the opinion of management, necessary for a fair presentation of the accompanying consolidated interim financial statements and are of a normal recurring nature.
All revenues and costs, as well as assets and liabilities, directly associated with our business activities are included in the consolidated financial statements. General corporate expenses are included in the Consolidated Statements of Operations within selling, general and administrative expenses and other income.
On March 7, 2025, we acquired Strata Corporation (Strata), a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota. The purchase price for Strata totaled $454.0 million and is subject to post-closing adjustments. The results of operations and balance sheet accounts for Strata are included in the consolidated financial statements from the date of acquisition. For more information, see Note 10.
In July 2025, House Bill 1, known as the One Big Beautiful Bill Act ("OBBBA"), was enacted. The OBBBA includes significant provisions that, among other provisions, makes 100% bonus depreciation permanent and restores the ability to expense domestic research expenditures. The OBBBA is not expected to have a material impact on the Company’s annual estimated income tax rate, but did result in a reclassification between current taxes payable and deferred tax liabilities.
Principles of consolidation
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and goodwill; fair values of acquired assets and liabilities under the acquisition method of accounting; aggregate reserves; property depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; expected credit losses; environmental and other loss contingencies; costs on contracting services contracts;
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actuarially determined benefit costs; asset retirement obligations; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.
Cash, cash equivalents and restricted cash
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands) | |||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Restricted cash | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
Seasonality of operations
Some of our operations are seasonal and revenues from, and certain expenses for, such operations may fluctuate significantly among quarterly periods, with lower activity in the winter months and higher activity in the summer months. Accordingly, the interim results for particular segments, and for Knife River as a whole, may not be indicative of results for the full fiscal year or other future periods.
Note 3 - New accounting standards
The following table provides a brief description of the accounting pronouncements applicable to us and the potential impact on our consolidated financial statements and/or disclosures:
| Standard | Description | Standard Effective Date | Impact on financial statements/disclosures | ||||||||
Recently adopted Financial Accounting Standards Board (FASB) accounting standards updates (ASU) | |||||||||||
| ASU 2023-07 - Improvements to Reportable Segment Disclosures | In November 2023, the FASB issued guidance on modifying the disclosure requirements to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The guidance also expands the interim disclosure requirements. The guidance is to be applied on a retrospective basis to the financial statements and footnotes and early adoption is permitted. | Adopted for the year ended December 31, 2024. | We updated our disclosures for the year ended December 31, 2024 and interim periods for 2025 to incorporate the required changes. | ||||||||
| ASU 2023-09 - Improvements to Income Tax Disclosures | In December 2023, the FASB issued guidance on modifying the disclosure requirements to increase transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is to be applied on a prospective basis to the financial statements and footnotes, however, retrospective adoption is also permitted. The guidance also permits early adoption. | Adopted for the year ended December 31, 2024. | We updated our disclosures, which were not material, for the year ended December 31, 2024. | ||||||||
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| Standard | Description | Standard Effective Date | Impact on financial statements/disclosures | ||||||||
Recently issued ASU's not yet adopted | |||||||||||
ASU 2024-03 -Disaggregation of Income Statement Expenses | In November 2024, the FASB issued guidance on modifying the disclosure requirements to improve the disclosures for a public entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is to be applied either on a prospective basis to the financial statements issued for reporting periods after the effective date or on a retrospective basis to the financial statements to all prior periods presented in the financial statements. Early adoption is permitted. | Annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. | We are currently evaluating the impact the guidance will have on our disclosures for the year ended December 31, 2027 and interim periods for fiscal year 2028. | ||||||||
ASU 2025-05 - Measurement of Credit Losses for Accounts Receivable and Contract Assets | In July 2025, the FASB issued guidance to provide a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. | Annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods on a prospective basis. Early adoption is permitted and should be applied on a prospective basis. | We are currently evaluating the impact the guidance will have on our financial statements and related disclosures. | ||||||||
ASU 2025-06 - Targeted Improvements to the Accounting for Internal-Use Software | In September 2025, the FASB issued guidance to provide targeted improvements to the accounting for internal-use software which is intended to modernize the recognition and capitalization framework to reflect current software development practices. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. | Annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. | We are currently evaluating the impact this guidance will have on our financial statements and disclosures. | ||||||||
Note 4 - Receivables and allowance for expected credit losses
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands) | |||||||||||
| Trade receivables | $ | $ | $ | ||||||||
| Contract receivables | |||||||||||
| Retention receivables | |||||||||||
| Receivables, gross | |||||||||||
| Less expected credit loss | |||||||||||
| Receivables, net | $ | $ | $ | ||||||||
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Details of our expected credit losses were as follows:
| West | Mountain | Central | Energy Services | Total | |||||||||||||
(In thousands) | |||||||||||||||||
As of December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||
Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | ( | ||||||||||||||||
| Less write-offs charged against the allowance | ( | ( | ( | ||||||||||||||
At June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||
| West | Mountain | Central | Energy Services | Total | |||||||||||||
(In thousands) | |||||||||||||||||
| As of December 31, 2023 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | ( | ( | ( | ||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At March 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At June 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | ( | ||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At September 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||
Note 5 - Inventories
Inventories on the Consolidated Balance Sheets were as follows:
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands) | |||||||||||
| Finished products | $ | $ | $ | ||||||||
| Raw materials | |||||||||||
| Supplies and parts | |||||||||||
| Total | $ | $ | $ | ||||||||
Inventories are valued at the lower of cost or net realizable value using the average cost method. Inventories include production costs incurred as part of our aggregate mining activities. These inventoriable production costs include all mining and processing costs associated with the production of aggregates. Stripping costs incurred during the production phase, which represent costs of removing overburden and waste materials to access mineral deposits, are a component of inventoriable production costs.
13
Index
Note 6 - Net income per share
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
Effect of dilutive performance shares and restricted stock units | ||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||
Shares excluded from the calculation of diluted income per share | ||||||||||||||
Net income per share - basic | $ | $ | $ | $ | ||||||||||
Net income per share - diluted | $ | $ | $ | $ | ||||||||||
Note 7 - Accumulated other comprehensive loss
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). The only component of other comprehensive income (loss) is the amortization of postretirement liability losses for our benefit plans. As of September 30, 2025 and 2024, and December 31, 2024, accumulated other comprehensive loss was $9.1 million, $11.1 million and $9.3 million, respectively.
Note 8 - Revenue from contracts with customers
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Index
Disaggregation
In the following tables, revenue is disaggregated by category for each segment and includes sales of materials to both third parties and internal customers. Due to consolidation requirements, the internal sales revenues must be eliminated against the construction materials product used in downstream materials and contracting services to arrive at the external operating revenues. We believe this level of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. For more information on the Company’s reportable segments, see Note 15.
| Three Months Ended September 30, 2025 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Three Months Ended September 30, 2024 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Nine Months Ended September 30, 2025 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
15
Index
| Nine Months Ended September 30, 2024 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
Note 9 - Uncompleted contracts
The timing of revenue recognition may differ from the timing of invoicing to customers. The timing of invoicing to customers does not necessarily correlate with the timing of revenues being recognized under the cost-to-cost method of accounting. Contracts from contracting services are billed as work progresses in accordance with agreed upon contractual terms. Generally, billing to the customer occurs contemporaneous to revenue recognition. A variance in timing of the billings may result in a contract asset or a contract liability. A contract asset occurs when revenues are recognized under the cost-to-cost measure of progress, which exceeds amounts billed on uncompleted contracts. Such amounts will be billed as standard contract terms allow, usually based on various measures of performance or achievement. A contract liability occurs when there are billings in excess of revenues recognized under the cost-to-cost measure of progress on uncompleted contracts. Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation.
The changes in contract assets and liabilities were as follows:
| September 30, 2025 | December 31, 2024 | Change | Location on Consolidated Balance Sheets | |||||||||||
| (In thousands) | ||||||||||||||
Contract assets | $ | $ | $ | Costs and estimated earnings in excess of billings on uncompleted contracts | ||||||||||
| Contract liabilities | ( | ( | ( | Billings in excess of costs and estimated earnings on uncompleted contracts | ||||||||||
Net contract assets (liabilities) | $ | $ | ( | $ | ||||||||||
| September 30, 2024 | December 31, 2023 | Change | Location on Consolidated Balance Sheets | |||||||||||
| (In thousands) | ||||||||||||||
Contract assets | $ | $ | $ | Costs and estimated earnings in excess of billings on uncompleted contracts | ||||||||||
| Contract liabilities | ( | ( | Billings in excess of costs and estimated earnings on uncompleted contracts | |||||||||||
Net contract assets (liabilities) | $ | $ | ( | $ | ||||||||||
We recognized $2.0 million and $39.9 million in revenue for the three and nine months ended September 30, 2025, which was previously included in contract liabilities at December 31, 2024. We recognized $3.9 million and $48.8 million in revenue for the three and nine months ended September 30, 2024, which was previously included in contract liabilities at December 31, 2023.
We recognized a net increase in revenues of $11.8 million and $24.1 million for the three and nine months ended September 30, 2025, respectively, from performance obligations satisfied in prior periods. We recognized a net increase in revenues of $15.9 million and $28.6 million for the three and nine months ended September 30, 2024, respectively, from performance obligations satisfied in prior periods.
Remaining performance obligations
The remaining performance obligations, also referred to as backlog, include unrecognized revenues that we reasonably expect to be realized. These unrecognized revenues can include: projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and conditions, and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. The majority of our contracts for contracting services have an original duration of less than one year.
At September 30, 2025, our remaining performance obligations were $994.6 million. We expect to recognize the following revenue amounts in future periods related to these remaining performance obligations: $764.4 million within the next 12 months or less; $129.0 million within the next 13 to 24 months; and $101.2 million in 25 months or more.
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Index
Note 10 - Acquisitions and Dispositions
Acquisitions
The following acquisitions were accounted for as business combinations in accordance with ASC 805 - Business Combinations. The results of the business combinations have been included in the Company's Consolidated Financial Statements beginning on the acquisition dates. Pro forma financial amounts reflecting the effects of the business combinations are not presented, as none of these business combinations, individually or in the aggregate, were material to our financial position or results of operations.
Acquisitions are also subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business as of the closing date. The amounts included in the Consolidated Balance Sheets for these adjustments are considered provisional until final settlement has occurred.
Strata Corporation
On March 7, 2025, we completed the acquisition of Strata Corporation, a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota. The purchase of Strata includes operations that expand our aggregates, ready-mix and asphalt operations, as well as our trucking fleet, locomotives and railcars, in our current geographic locations. The purchase price for Strata totaled $454.0 million and is subject to post-closing adjustments. The results of Strata are included in our Central segment.
The estimated fair value of the assets acquired and liabilities assumed are preliminary, as we continue to gather information to finalize the valuation of these assets and liabilities. The fair values are considered provisional until final fair values are determined, or the measurement period has passed. We expect to record adjustments as we accumulate the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill. We utilized market and cost approaches to estimate the fair value of the property, plant and equipment, excluding aggregate reserves. The fair value of aggregate reserves and intangible assets were determined using the income approach. All estimates, key assumptions, and forecasts were either provided by or reviewed by management. We engaged third-party valuation firms to assist in the analysis and valuation of the assets of Strata. While we chose to utilize third-party valuation firms, the fair value analysis and related valuations represent the conclusions of management and not the conclusions or statements of any third party.
The excess of the total purchase price over the fair value of assets acquired and liabilities assumed was allocated to goodwill. We believe that the goodwill relates to several factors, including potential synergies related to market opportunities for multiple product offerings and economies of scale expected from combining our operations with the business acquired.
The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill, and will be made as soon as practical, but no later than one year from the respective acquisition dates. However, any subsequent measurement period adjustments are not expected to have a material impact on our results of operations.
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Index
The preliminary allocation of the purchase price for Strata is as follows, which has been updated as of September 30, 2025, to include measurement period adjustments for updated fair values of certain assets, working capital adjustments and reclassification of assets held for sale to property, plant and equipment.
As of March 7, 2025 | Measurement Period Adjustments | As of September 30, 2025 | ||||||||||||
| (In thousands) | ||||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | $ | |||||||||||
Receivables | ||||||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | ||||||||||||||
Inventories | ( | |||||||||||||
Assets held for sale | ( | |||||||||||||
Prepayments and other current assets | ||||||||||||||
Total current assets | ( | |||||||||||||
| Noncurrent assets: | ||||||||||||||
Property, plant and equipment | ||||||||||||||
Goodwill | ( | |||||||||||||
Other intangible assets | ( | |||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
Total noncurrent assets | ( | |||||||||||||
Total assets acquired | $ | $ | ( | $ | ||||||||||
Liabilities | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | $ | |||||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | ( | |||||||||||||
| Current operating lease liabilities | ||||||||||||||
Other accrued liabilities | ( | |||||||||||||
| Total current liabilities | ( | |||||||||||||
Noncurrent liabilities: | ||||||||||||||
| Deferred income taxes | ||||||||||||||
Other noncurrent liabilities | ||||||||||||||
Total noncurrent liabilities | ||||||||||||||
Total liabilities assumed | ( | |||||||||||||
Total consideration (fair value) | $ | $ | $ | |||||||||||
Intangible assets for Strata, as of the date of acquisition, included $8.8 million for customer backlog with an amortization period of 9 months and $4.1 million for permits with an amortization period of 10 years upon commencement of operations.
Revenue attributable to Strata included in our Consolidated Statements of Operations for the three and nine months ended September 30, 2025, was $95.3 million and $145.1 million, respectively, and net income was $9.3 million and $2.3 million, respectively.
Other
During the first nine months of 2025, we completed the following acquisitions:
•A Washington aggregate quarry operation in the West segment which included a bargain purchase gain of $3.5 million, net of deferred taxes of $1.3 million, and was recorded in other income on the Consolidated Statement of Operations. In the first quarter of 2025, we reviewed the fair values of the assets and liabilities and determined that the purchase would result in a gain being recognized at the time of the acquisition. We believe the bargain purchase gain was primarily the result of the sellers’ desire to exit quickly due to cash flow constraints which were limiting their ability to operate the business efficiently.
•An Oregon aggregates and contracting company in the West segment which included a $5.4 million holdback liability.
•A Central Minnesota aggregates and contracting services business in the Central segment.
18
Index
The acquisitions resulted in the recognition of $14.1 million of current assets; $69.3 million of assets in property, plant and equipment; $24,000 of operating lease right-of-use assets; $33.3 million of goodwill; $1.9 million of intangible assets, which included $100,000 of non-compete agreements and $1.8 million of customer relationships; $8.7 million of current liabilities; $1.3 million deferred income tax liability and $6.2 million of noncurrent liabilities - other.
During 2024, we completed four acquisitions with an aggregated purchase price of $120.7 million, subject to future post-closing adjustments. The purchase accounting for Albina Asphalt was completed in the second quarter of 2025 and no material adjustments were needed.
For the three and nine months ended September 30, 2025, we incurred acquisition-related costs on completed and other potential acquisitions of $1.1 million and $8.0 million, respectively. These costs are included in our Corporate Services in selling, general and administrative expenses on the Consolidated Statement of Operations.
Dispositions
On March 7, 2025, we sold four ready-mix plant operations for total proceeds of $14.5 million. The ready-mix plant operations were acquired by us as part of the Strata acquisition and subsequently sold to a third-party. The ready-mix plants were included in assets held for sale on the opening balance sheet for Strata at the time of the acquisition.
Note 11 - Goodwill and other intangible assets
The changes in the carrying amount of goodwill were as follows:
| Balance at January 1, 2025 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at September 30, 2025 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | ( | ||||||||||||||||
| Energy Services | ( | ||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||
| Balance at January 1, 2024 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at September 30, 2024 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | |||||||||||||||||
| Energy Services | |||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||
| Balance at January 1, 2024 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at December 31, 2024 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | |||||||||||||||||
| Energy Services | |||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||
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Index
Other amortizable intangible assets were as follows:
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands) | |||||||||||
| Customer relationships | $ | $ | $ | ||||||||
| Less accumulated amortization | |||||||||||
| Noncompete agreements | |||||||||||
| Less accumulated amortization | |||||||||||
Tradename | |||||||||||
| Less accumulated amortization | |||||||||||
Backlog | |||||||||||
Less accumulated amortization | |||||||||||
| Other | |||||||||||
| Less accumulated amortization | |||||||||||
| Total | $ | $ | $ | ||||||||
The previous tables include goodwill and intangible assets associated with the business combinations completed in the first nine months of 2025. For more information related to these business combinations, see Note 10.
Amortization expense for amortizable intangible assets for the three and nine months ended September 30, 2025, was $4.7 million and $10.8 million, respectively. Amortization expense for amortizable intangible assets for the three and nine months ended September 30, 2024, was $522,000 and $1.6 million, respectively. Estimated amortization expense for identifiable intangible assets as of September 30, 2025, was:
| Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | |||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Amortization expense | $ | $ | $ | $ | $ | $ | ||||||||||||||
Note 12 - Fair value measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The fair value guidance establishes a hierarchy for grouping assets and liabilities, based on the significance of inputs. The estimated fair values of the assets and liabilities measured on a recurring basis are determined using the market approach.
Financial instruments measured at fair value on a recurring basis
20
Index
The Company's assets measured at fair value on a recurring basis were as follows:
| Fair Value Measurements at September 30, 2025, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at September 30, 2025 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
| Fair Value Measurements at September 30, 2024, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at September 30, 2024 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
| Fair Value Measurements at December 31, 2024, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at December 31, 2024 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
Our Level 2 money market funds are valued at the net asset value of shares held at the end of the period, based on published market quotations on active markets, or using other known sources including pricing from outside sources. The estimated fair value of the Level 2 insurance contracts is based on contractual cash surrender values that are determined primarily by investments in managed separate accounts of the insurer. These amounts approximate fair value. The managed separate accounts are valued based on other observable inputs or corroborated market data.
Though we believe the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.
Nonfinancial instruments measured at fair value on a nonrecurring basis
We apply the provisions of the fair value measurement standard to our nonrecurring, non-financial measurements, including long-lived asset impairments. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. We review the carrying value of our long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying amounts may not be recoverable.
The assets and liabilities of the acquisitions that occurred through the third quarter of 2025 were calculated using a market or cost approach. The fair value of some of the assets was determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates and sales projections, all of which require significant management judgment. For more information on these Level 2 and 3 fair value measurements, see Note 10.
21
Index
Our long-term debt is not measured at fair value on the Consolidated Balance Sheets and the fair value is being provided for disclosure purposes only. The fair value was categorized as Level 2 in the fair value hierarchy and was based on discounted cash flows using current market interest rates. The estimated fair value of our Level 2 long-term debt was as follows:
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In thousands) | |||||||||||
| Carrying amount | $ | $ | $ | ||||||||
| Fair value | $ | $ | $ | ||||||||
The carrying amounts of our remaining financial instruments included in current assets and current liabilities approximate their fair values.
Note 13 - Debt
Certain debt instruments of ours contain restrictive covenants and cross-default provisions. In order to borrow under the debt agreements, we must be in compliance with the applicable covenants and certain other conditions, all of which management believes we, as applicable, were in compliance with at September 30, 2025. In the event we do not comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued.
On March 7, 2025, we entered into an amendment to the senior secured credit agreement to, among other things, increase our revolving credit facility from $350.0 million to $500.0 million and extend the maturity to March 7, 2030, refinance the existing $275.0 million Term Loan A to extend the maturity to March 7, 2030, and provide for a new Term Loan B in an aggregate principal amount of $500.0 million with a maturity of March 8, 2032. The Term Loan B was funded on March 7, 2025. Each facility has a SOFR-based interest rate. The Term Loan A has a mandatory annual amortization of 2.50 percent for years one and two, 5.00 percent for years three and four, and 7.50 percent in the fifth year. The Term Loan B has a mandatory annual amortization of $5.0 million. The agreement contains customary covenants and provisions, including a covenant of Knife River not to permit, at any time, the ratio of total debt to trailing-twelve-month earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) to be greater than 4.75 to 1.00. The covenants also include restrictions on the sale of certain assets, loans and investments.
Long-term Debt Outstanding Long-term debt outstanding was as follows:
Weighted Average Interest Rate at September 30, 2025 | September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||||
| (In thousands) | ||||||||||||||
Term loan A agreement due on March 7, 2030 | % | $ | $ | $ | ||||||||||
Term loan B agreement due on March 8, 2032 | % | |||||||||||||
| Revolving credit agreement | % | |||||||||||||
Senior notes due on May 1, 2031 | % | |||||||||||||
Other notes due on January 1, 2061 | % | |||||||||||||
| Less unamortized debt issuance costs | ||||||||||||||
| Total long-term debt | ||||||||||||||
| Less current maturities | ||||||||||||||
| Net long-term debt | $ | $ | $ | |||||||||||
Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs, at September 30, 2025, were as follows:
Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | |||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Long-term debt maturities | $ | $ | $ | $ | $ | $ | ||||||||||||||
22
Index
Note 14 - Cash flow information
Cash expenditures for interest and income taxes were as follows:
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (In thousands) | ||||||||
Interest paid, net | $ | $ | ||||||
| Income taxes paid, net | $ | $ | ||||||
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
| Property, plant and equipment additions in accounts payable | $ | $ | |||||||||
Accrual for holdback payment related to a business combination | $ | $ | |||||||||
Note 15 - Business segment data
In January 2025, we made a change to our organizational structure to better align with our business strategy. We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our former North Central and South operating segments were combined to form the new Central operating segment. The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, business development, information technology, human resources, and other corporate expenses that support the operating segments.
Each geographic segment offers a vertically integrated suite of products and services, including aggregates, ready-mix concrete, asphalt and contracting services, while the Energy Services segment produces and supplies liquid asphalt, primarily for use in asphalt road construction, and is a supplier to some of the other segments. Each geographic segment mines, processes and sells construction aggregates (crushed stone and sand and gravel); produces and sells asphalt; and produces and sells ready-mix concrete as well as vertically integrating its contracting services to support the aggregate-based product lines including heavy-civil construction, asphalt and concrete paving, and site development and grading. Although not common to all locations, the geographic segments also sell cement, merchandise and other building materials and related services.
Corporate Services represents the unallocated costs of certain corporate functions, such as accounting, legal, treasury, business development, information technology, human resources and other corporate expenses that support the operating segments. Corporate Services also includes an immaterial amount of external revenue from the Knife River Training Center. We account for intersegment sales and transfers as if the sales or transfers were to third parties. The accounting policies applicable to each segment are consistent with those used in the audited consolidated financial statements.
The proceeding information follows the same accounting policies as described in the audited financial statements and notes included in the Company's 2024 Annual Report. Prior periods presented have been recast to conform to the current reportable segment presentation.
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| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||
| West | Mountain | Central | Energy Services | Total | West | Mountain | Central | Energy Services | Total | |||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Intersegment revenues | ||||||||||||||||||||||||||||||||||||||
| Total segment revenue | ||||||||||||||||||||||||||||||||||||||
Other revenues1 | ||||||||||||||||||||||||||||||||||||||
| Less: Elimination of intersegment revenue | ||||||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | $ | ||||||||||||||||||||||||||||||||||||
| Cost of revenue excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Other segment items2 | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Consolidated income before income taxes | ||||||||||||||||||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Interest expense, net3 | ||||||||||||||||||||||||||||||||||||||
| Less unallocated amounts: | ||||||||||||||||||||||||||||||||||||||
Other corporate services revenue | ||||||||||||||||||||||||||||||||||||||
Other corporate services expenses | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | ||||||||||||||||||||||||||||||||||||
1 Other revenues is comprised of revenue included within our corporate services.
2 Other segment items is comprised of other income (expense) items on the income statement.
3 Interest expense, net is interest expense net of interest income.
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Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||
| West | Mountain | Central | Energy Services | Total | West | Mountain | Central | Energy Services | Total | |||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Intersegment revenues | ||||||||||||||||||||||||||||||||||||||
| Total segment revenue | ||||||||||||||||||||||||||||||||||||||
Other revenues1 | ||||||||||||||||||||||||||||||||||||||
| Less: Elimination of intersegment revenue | ||||||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | $ | ||||||||||||||||||||||||||||||||||||
| Cost of revenue excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Other segment items2 | ( | |||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Consolidated income (loss) before income taxes | ||||||||||||||||||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Interest expense, net3 | ||||||||||||||||||||||||||||||||||||||
| Less unallocated amounts: | ||||||||||||||||||||||||||||||||||||||
Other corporate services revenue | ||||||||||||||||||||||||||||||||||||||
Other corporate services expenses | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | ||||||||||||||||||||||||||||||||||||
1 Other revenues is comprised of revenue included within our corporate services.
2 Other segment items is comprised of other income (expense) items on the income statement.
3 Interest expense, net is interest expense net of interest income.
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At September 30, 2025 | At September 30, 2024 | |||||||||||||||||||||||||||||||||||||
| West | Mountain | Central | Energy Services | Total | West | Mountain | Central | Energy Services | Total | |||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||||
| Elimination of intercompany receivables and investment in subsidiaries | ||||||||||||||||||||||||||||||||||||||
| Total consolidated assets | $ | $ | ||||||||||||||||||||||||||||||||||||
Note 16 - Commitments and contingencies
We are party to claims and lawsuits arising out of our business and that of our consolidated subsidiaries, which may include, but are not limited to, matters involving property damage, personal injury, and environmental, contractual and statutory obligations. We accrue a liability for those contingencies when the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, we disclose the nature of the contingency and, in some circumstances, an estimate of the possible loss. Accruals are based on the best information available, but in certain situations management is unable to estimate an amount or range of a reasonably possible loss including, but not limited to when: (1) the damages are unsubstantiated or indeterminate, (2) the proceedings are in the early stages, (3) numerous parties are involved, or (4) the matter involves novel or unsettled legal theories.
At September 30, 2025 and 2024, and December 31, 2024, we accrued contingent liabilities as a result of litigation, which have not been discounted, of $3.3 million, $3.2 million and $6.6 million, respectively. At September 30, 2025 and 2024, there were no 459,000 related to the accrued liabilities. Most of these claims and lawsuits are covered by insurance, thus our exposure is typically limited to our deductible amount. Management will continue to monitor each matter and adjust accruals as might be warranted based on new information and further developments. Management believes that the outcomes with respect to probable and reasonably possible losses in excess of the amounts accrued, net of insurance recoveries, while uncertain, either cannot be estimated or will not have a material effect upon the Company's financial position, results of operations or cash flows. Unless otherwise required by GAAP, legal costs are expensed as they are incurred.
Environmental matters
Knife River Corporation - Northwest is a party to claims for the cleanup of a superfund site in Portland, Oregon. There were no material changes to the environmental matters that were previously reported in the audited financial statements and notes included in our 2024 Annual Report.
Guarantees
We have outstanding obligations to third parties where we have guaranteed our performance. These guarantees are related to contracts for contracting services and certain other guarantees. At September 30, 2025, the fixed maximum amounts guaranteed under these agreements aggregated to $11.5 million, all of which have no scheduled maturity date. Certain of the guarantees also have no fixed maximum amounts specified. There were no amounts outstanding under the previously mentioned guarantees at September 30, 2025.
We have outstanding letters of credit to third parties related to insurance policies and other agreements. At September 30, 2025, the fixed maximum amounts guaranteed under these letters of credit aggregated to $23.4 million. At September 30, 2025, the amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $50,000 in 2025, $23.0 million in 2026, $104,000 in 2027 and $175,000 in 2028. There were no amounts outstanding under the previously mentioned letters of credit at September 30, 2025.
In the normal course of business, we have surety bonds related to contracts for contracting services, reclamation obligations and insurance policies of its subsidiaries. In the event a subsidiary of Knife River does not fulfill a bonded obligation, we would be responsible to the surety bond company for completion of the bonded contract or obligation. A large portion of the surety bonds are expected to expire within the next 12 months; however, we will likely continue to enter into surety bonds for our subsidiaries in the
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future. At September 30, 2025, approximately $832.1 million of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet.
Note 17 - Related-party transactions
Transition services agreements
On May 31, 2023, the separation of Knife River from MDU Resources Group, Inc. (MDU Resources) and its other businesses was completed and Knife River became an independent, publicly traded company (Separation) listed on the New York Stock Exchange under the symbol "KNF". As part of the Separation, MDU Resources provided transition services to us and we provided transition services to MDU Resources in accordance with the Transition Services Agreement entered into on May 30, 2023. We paid $40,000 for the three months ended and $1.3 million for the nine months ended September 30, 2024, related to these activities, which were reflected in selling, general and administrative expenses on the Consolidated Statements of Operations. We received $14,000 for the three months ended and $152,000 for the nine months ended September 30, 2024, related to these activities, which were reflected in other income on the Consolidated Statements of Operations. The majority of the transition services were completed over a period of one year after the Separation and, as of December 31, 2024, no further obligation for services exists for either party.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Forward-looking statements are all statements other than statements of historical fact, including without limitation those statements that are identified by the words "anticipates," "estimates," "expects," "intends," "plans," "predicts" and similar expressions, and include statements concerning plans, projections, objectives, goals, strategies, future events or performance, and underlying assumptions (many of which are based, in turn, upon further assumptions) and other statements that are other than statements of historical facts. From time to time, Knife River Corporation ("Knife River," the "Company," "we," "our," or "us") may publish or otherwise make available forward-looking statements of this nature, including statements related to its Competitive EDGE strategy (EDGE) implemented to improve margins and to execute on other strategic initiatives aimed at generating long-term profitable growth, shareholder value creation, expected long-term goals, expected backlog margin, acquisitions, financing plans, expected federal and state funding for infrastructure or other proposed strategies.
Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Nonetheless, our expectations, beliefs or projections may not be achieved or accomplished and changes in such assumptions and factors could cause actual future results to differ materially.
Any forward-looking statement contained in this document speaks only as of the date on which the statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. New factors emerge from time to time, and it is not possible for management to predict all the factors, nor can it assess the effect of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements, whether written or oral and whether made by or on behalf of our Company, are expressly qualified by the risk factors and cautionary statements reported in the section entitled "Item 1A. Risk Factors" in Part I of the Company's 2024 Annual Report on Form 10-K (Annual Report) and subsequent filings with the United States Securities and Exchange Commission (SEC).
Company Overview
At Knife River, we are a people-first construction materials and contracting services company. We provide construction materials and contracting services to build safe roads, bridges, airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need. We also champion a positive workplace culture by focusing on safety, training, inclusion, compensation and work-life balance.
We are one of the leading providers of crushed stone and sand and gravel in the U.S. and operate through four operating segments, which are also our reportable segments, across 14 states: West, Mountain, Central and Energy Services. The geographic segments primarily provide aggregates, asphalt and ready-mix concrete, as well as related contracting services such as heavy-civil construction, asphalt paving, concrete construction, site development and grading. The Energy Services segment produces and supplies liquid asphalt and related services, primarily for use in asphalt road construction.
As an aggregates-led construction materials and contracting services company, we have 1.2 billion tons of aggregate reserves supporting our vertically integrated business strategy. About 37 percent of these aggregates are used internally to support value-added downstream products like ready-mix concrete and asphalt, as well as contracting services such as heavy-civil construction, asphalt paving, concrete construction, bridges and in some segments the manufacturing of prestressed concrete products. Our strategically located aggregate sites and associated asphalt and ready-mix plants near mid-sized, high-growth markets offer transportation advantages, enabling competitive pricing and higher margins. We serve both public and private markets, with public projects making up most of our work and providing stability through economic cycles, which helps offset the cyclical nature of the private markets.
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We provide various products and services and operate a variety of facility types, including aggregate quarries and mines, ready-mix concrete plants, asphalt plants and distribution facilities, in the following states:
•West: Alaska, California, Hawaii, Oregon, and Washington
•Mountain: Idaho, Montana and Wyoming
•Central: Iowa, Minnesota, North Dakota, South Dakota and Texas
•Energy Services: California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington and Wyoming
The following table presents a summary of products and services provided, as well as modes of transporting those products:
| Products and Services | Modes of Transportation | ||||||||||||||||||||||||||||||||||
| Precast/ | |||||||||||||||||||||||||||||||||||
| Ready-Mix | Construction | Prestressed | Liquid | Heavy | |||||||||||||||||||||||||||||||
| Aggregates | Asphalt | Concrete | Services | Concrete | Asphalt | Cement | Equipment | Trucking | Rail | Barge | |||||||||||||||||||||||||
| West | X | X | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||
| Mountain | X | X | X | X | X | X | |||||||||||||||||||||||||||||
| Central | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||
| Energy Services | X | X | X | ||||||||||||||||||||||||||||||||
Basis of Presentation
In January 2025, we made a change to our organizational structure to better align with our business strategy. We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our former North Central and South operating segments were combined to form the new Central operating segment. The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, business development, information technology, human resources, and other corporate expenses that support the operating segments. Prior periods have been recast to conform to the current reportable segment presentation.
Market Conditions and Outlook
Federal and state funding remains strong for a majority of our markets with approximately 80 percent of our historical contracting services revenue each year coming from public-sector projects, enhancing stability through market cycles. For more information on factors that may negatively impact our business, see the section entitled "Item 1A. Risk Factors" in Part I of the Company's 2024 Annual Report.
Backlog. Our contracting services backlog was as follows:
| September 30, 2025 | September 30, 2024 | December 31, 2024 | |||||||||
| (In millions) | |||||||||||
| West | $ | 257.5 | $ | 282.9 | $ | 230.2 | |||||
| Mountain | 386.0 | 279.9 | 339.9 | ||||||||
| Central | 351.1 | 192.3 | 175.5 | ||||||||
| $ | 994.6 | $ | 755.1 | $ | 745.6 | ||||||
Expected margins on backlog at September 30, 2025, were slightly lower compared to the expected margins on backlog at September 30, 2024. Of the $995 million of backlog at September 30, 2025, we expect to complete approximately $764 million in the 12 months following September 30, 2025. Approximately 87 percent of our backlog at September 30, 2025, related to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation (DOT). Further, there continues to be infrastructure development, as discussed in the following section on Public Funding, which is expected to continue to provide bidding opportunities in our markets. Oregon, however, has seen challenges with both public and private projects contributing to lower backlog in the West segment. On the public side, delays with the Oregon DOT budget, as discussed in the following section on Public funding, have created a headwind in 2025.
Period-over-period increases or decreases in backlog may not be indicative of future revenues, margins, net income or earnings before interest, taxes, depreciation, depletion and amortization (EBITDA). See the section entitled “Item 1A. Risk Factors” in Part I of the Company's 2024 Annual Report for a list of factors that can cause revenues to be realized in periods and at levels that are different from originally projected.
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Public Funding. Funding for public projects is dependent on federal and state funding, such as appropriations to the Federal Highway Administration. Currently, states have continued moving forward with allocating funds from federal programs, such as the Infrastructure Investment and Jobs Act (IIJA), which is authorized to provide $1.2 trillion in funding from 2022 through 2026. As of August 2025, approximately 52 percent of IIJA formula funding had yet to be spent in our 14 state operating market. Additionally, DOT budgets in most of the states where we operate remain strong, which is expected to favorably affect bidding through the remainder of this year and into next year. Ten of our 14 states have record DOT budgets going into the 2026 fiscal year. In the second quarter of 2025, Washington, Idaho and North Dakota all passed bills that support their transportation funding. We continue to monitor the implementation and impact of these legislative items. Year-to-date, projects in Oregon have been delayed and funding has been diverted from maintenance and repair work, which includes asphalt paving, to megaprojects as a result of the state's DOT budget shortfall and general uncertainty for funding. However, in September 2025, Oregon passed a transportation bill to raise $4.3 billion over the next 10 years; approximately 50% of the funds from the new bill will be routed to cities and counties for road maintenance programs, which we expect will begin to become available in 2026. While the state DOT budget is not yet final, it is expected that the contributions from the new bill will bring total funding for the 2025-27 biennium to approximately $6.1 billion, compared to the record $6.2 billion for the previous two-year cycle.
Earlier this year, the American Society of Civil Engineers published its 2025 Report Card for America's Infrastructure, assigning the United States roads a "D+" grade and estimating that between 2024 and 2033, the country will require more funding than what is currently authorized. It is estimated that a total of $2.2 trillion in funding will be needed for our roadway systems to reach a state of good repair during that time period.
Profitability. The management team consistently monitors profit margins and has adopted a proactive approach in supporting long-term profitability objectives and creating shareholder value. In 2023, we began the implementation of our EDGE initiatives and established specialized teams tasked with delivering training, facilitating the pursuit of higher-margin bidding opportunities across various regions, and identifying growth prospects. Furthermore, these teams have been engaged in the identification and execution of measures aimed at increasing operational efficiency and reducing costs. Since its establishment, the Materials Process Improvement Team, also referred to as the Materials PIT Crew, has conducted visits at 27 locations within the organization’s operational footprint, encompassing 178 individual aggregate, asphalt, and ready-mix concrete plants, representing approximately 70% of our materials sales volumes. This PIT Crew has rolled out new technologies and training programs to boost productivity across the product lines and provide more real-time visibility into daily operations.
In 2024, we created the position of Chief Excellence Officer. This newly formed position became effective January 1, 2025, and is focused on expanding our PIT Crews while leading our standardization efforts. Under the leadership of the Chief Excellence Officer, a broader process improvement framework was established, creating more teams focused on standardization, commercial excellence and operational excellence. In June 2025, we appointed a Senior Vice President of Aggregate and Rail. This role adds to the EDGE strategy by working with our PIT Crews to focus on identifying and driving cost reductions at our aggregate production facilities while also helping shape our corporate strategy and evaluating and supporting new aggregate opportunities.
Under the current tariff environment, we have not experienced a material direct impact in the first nine months of 2025. We have clauses in most of our quotes that allows for us to pass-through increased costs associated with tariffs to our customers, and to date, we have been successful with passing those costs on. We continue to closely monitor the effects and changes to these announcements.
Growth. Our management team continues to evaluate growth opportunities, both through organic growth and acquisitions they believe will generate shareholder value. Our business development team is focused on our growth with materials-led businesses in mid-size, high growth markets, and has several targets at various stages of completion in our acquisition pipeline. In the third quarter of 2025, we acquired High Desert Aggregate and Paving, an aggregates-led construction materials and contracting services business in central Oregon. This is in addition to the acquisitions completed in the first half of 2025 that included an aggregates and contracting services business in central Minnesota and Strata Corporation, which are both included in our Central segment, as well as an aggregate quarry operation in Washington, adding to the West segment.
In addition, we are investing in multiple organic projects, including an aggregates expansion project in South Dakota that will increase our production capabilities in the Sioux Falls market. This project is scheduled to be operational in 2027. Earlier this year we completed construction of a processing plant to manufacture polymer modified asphalt (PMA) and add liquid asphalt storage in our South Dakota operations, which will allow us to more cost effectively supply this local market. In Twin Falls, Idaho, we are greenfielding new ready-mix operations, which allows us to build a local team in this high-growth market, and are expected to be operating in the first quarter of 2026.
Seasonality. Our operations have been and may continue to be impacted by weather. Generally, our construction activity in the northern states is from May into the first part of November. An unusually wet spring or early winter can lead to reduced construction activity, which will also impact our aggregate and asphalt product lines. In the second and third quarters of 2025, parts of our Central and Mountain segments were impacted by increased rainfall amounts, causing a delay in work. Further, the tragic July 4 flooding in Central Texas shut down production at our Honey Creek Quarry for 10 days and affected delivery of our products for 51 days while the rail and roads were being repaired.
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Workforce. As a people-first company, we continually take steps to address safety, recruitment and retention of our employees. Safety is one of Knife River's core values. The fundamental tenets of our "I Choose Safety" program are that safety is a choice and that all injuries are preventable. Our team is committed to work safely every day and we continue to advance our culture of safety through engagement and empowering our team members to take action and make meaningful changes that improve their well-being and the well-being of others.
We continue to deploy resources to attract, develop and retain qualified and diverse talent. As the United States faces shortages in the availability of individuals to fill careers in our industry, we have taken significant steps to showcase construction as a career of choice. In April 2025, we created the position Chief People Officer, which oversees our team member relations, recruitment and retention and training and career development.
We own and operate a state-of-the-art training facility, the Knife River Training Center. This unique, 230-acre facility, used corporatewide, provides ample space to enhance the skills of both new and existing employees through classroom education and hands-on experience. One of the most popular courses at the Knife River Training Center is the commercial driver's license training (CDL), which is helping to address an industry-wide labor shortage. In addition to CDL training for new truck drivers, the training center offers experienced truck driver training, new and experienced equipment operator training and the center offers a diverse array of courses designed to foster leadership and facilitate professional skills development in sales, instruction, and more. These courses are available to all Knife River employees, ensuring that our team members, from frontline workers to senior leadership, have access to the training and support they need to grow in their roles.
Our training and development team, based out of the Knife River Training Center, is comprised of professional instructors, who bring a wealth of knowledge and experience to the learning environment. This dedicated team has a long-standing tradition of delivering quality training programs that are both comprehensive and practical. Their expertise helps ensure that every employee receives the highest standard of education and skill development.
Consolidated Overview
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 1,203.7 | $ | 1,105.3 | 9 | % | $ | 2,390.9 | $ | 2,241.8 | 7 | % | ||||||||
| Cost of revenue | 919.4 | 832.3 | 10 | % | 1,958.9 | 1,786.1 | 10 | % | ||||||||||||
| Gross profit | 284.3 | 273.0 | 4 | % | 432.0 | 455.7 | (5) | % | ||||||||||||
| Selling, general and administrative expenses | 69.1 | 63.9 | 8 | % | 211.4 | 183.6 | 15 | % | ||||||||||||
| Operating income | 215.2 | 209.1 | 3 | % | 220.6 | 272.1 | (19) | % | ||||||||||||
| Interest expense | 23.0 | 13.9 | 65 | % | 60.6 | 41.8 | 45 | % | ||||||||||||
| Other income | 1.2 | 2.5 | (52) | % | 8.0 | 7.5 | 7 | % | ||||||||||||
Income before income taxes | 193.4 | 197.7 | (2) | % | 168.0 | 237.8 | (29) | % | ||||||||||||
Income tax expense | 50.2 | 49.6 | 1 | % | 42.9 | 59.4 | (28) | % | ||||||||||||
Net income | $ | 143.2 | $ | 148.1 | (3) | % | $ | 125.1 | $ | 178.4 | (30) | % | ||||||||
| EBITDA* | $ | 269.2 | $ | 244.6 | 10 | % | $ | 367.5 | $ | 375.4 | (2) | % | ||||||||
| Adjusted EBITDA* | $ | 272.8 | $ | 245.2 | 11 | % | $ | 377.1 | $ | 381.8 | (1) | % | ||||||||
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures."
Revenue includes revenue from the sale of construction materials and contracting services. Revenue for construction materials is recognized at a point in time when delivery of the products has taken place. Contracting services revenue is recognized over time using an input method based on the cost-to-cost measure of progress on a project.
Cost of revenue includes all material, labor and overhead costs incurred in the production process for our products and services. Cost of revenue also includes depreciation, depletion and amortization attributable to the assets used in the production process.
Gross profit includes revenue less cost of revenue, as defined above, and is the difference between revenue and the cost of making a product or providing a service, before deducting selling, general and administrative expenses, income taxes and interest expense.
Selling, general and administrative expenses include the costs for estimating, bidding and corporate development, as well as costs related to segment and corporate management and administrative functions. Selling expenses can vary depending on the volume of
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projects in process and the number of employees assigned to estimating and bidding activities. Other general and administrative expenses include outside services; information technology; depreciation and amortization; training, travel and entertainment; office supplies; allowance for expected credit losses; gains or losses on the sale of assets; and other miscellaneous expenses.
Other income includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on investments for our nonqualified benefit plans; earnings or losses on joint venture arrangements; gain on bargain purchase; and other miscellaneous income or expenses, including expenses related to the transition services agreement with MDU Resources Group, Inc.
Income tax (benefit) expense consists of corporate income taxes related to our net income (loss). Income taxes are presented at the corporate services level and not at the individual segments. The effective tax rate can be affected by many factors, including changes in tax laws, regulations or rates, new interpretations of existing laws or regulations and changes to our overall levels of income (loss) before income tax.
The discussion that follows focuses on the key financial measures we use to evaluate the performance of our business, which include revenue, EBITDA and EBITDA margin. EBITDA and EBITDA margin are non-GAAP financial measures used to measure profitability by our management and chief operating decision maker. For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures."
The following tables summarize our operating results.
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
Dollars | Margin | Dollars | Margin | Dollars | Margin | Dollars | Margin | |||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Revenues by segment: | ||||||||||||||||||||||||||
| West | $ | 396.0 | $ | 383.1 | $ | 921.7 | $ | 914.9 | ||||||||||||||||||
| Mountain | 229.8 | 261.1 | 471.9 | 514.9 | ||||||||||||||||||||||
| Central | 434.4 | 354.9 | 757.4 | 630.5 | ||||||||||||||||||||||
| Energy Services | 169.2 | 125.9 | 280.5 | 214.9 | ||||||||||||||||||||||
| Total segment revenues | 1,229.4 | 1,125.0 | 2,431.5 | 2,275.2 | ||||||||||||||||||||||
| Corporate Services and Eliminations | (25.7) | (19.7) | (40.6) | (33.4) | ||||||||||||||||||||||
| Consolidated revenues | $ | 1,203.7 | $ | 1,105.3 | $ | 2,390.9 | $ | 2,241.8 | ||||||||||||||||||
EBITDA (a): | ||||||||||||||||||||||||||
| West | $ | 91.8 | 23.2% | $ | 85.4 | 22.3% | $ | 177.5 | 19.3% | $ | 173.3 | 19.0% | ||||||||||||||
| Mountain | 50.7 | 22.1% | 59.4 | 22.8% | 65.4 | 13.8% | 96.5 | 18.7% | ||||||||||||||||||
| Central | 99.7 | 23.0% | 79.8 | 22.5% | 119.8 | 15.8% | 97.3 | 15.4% | ||||||||||||||||||
| Energy Services | 39.7 | 23.4% | 33.7 | 26.8% | 48.9 | 17.4% | 50.6 | 23.5% | ||||||||||||||||||
| Total segment EBITDA (a) | 281.9 | 22.9% | 258.3 | 23.0% | 411.6 | 16.9% | 417.7 | 18.4% | ||||||||||||||||||
Corporate Services and Eliminations (b) | (12.7) | N.M. | (13.7) | N.M. | (44.1) | N.M. | (42.3) | N.M. | ||||||||||||||||||
Consolidated EBITDA (a) | $ | 269.2 | 22.4% | $ | 244.6 | 22.1% | $ | 367.5 | 15.4% | $ | 375.4 | 16.7% | ||||||||||||||
(a)EBITDA, total segment EBITDA, EBITDA margin and total segment 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."
(b)N.M. - not meaningful
32
Index
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Sales (thousands): | ||||||||||||||
| Aggregates (tons) | 11,610 | 11,169 | 24,303 | 24,833 | ||||||||||
| Ready-mix concrete (cubic yards) | 1,331 | 1,148 | 2,916 | 2,653 | ||||||||||
| Asphalt (tons) | 3,111 | 3,150 | 4,953 | 5,183 | ||||||||||
| Average selling price:* | ||||||||||||||
| Aggregates (per ton) | $ | 18.78 | $ | 17.32 | $ | 19.15 | $ | 17.56 | ||||||
| Ready-mix concrete (per cubic yard) | $ | 196.43 | $ | 185.97 | $ | 197.49 | $ | 185.78 | ||||||
| Asphalt (per ton) | $ | 64.43 | $ | 68.28 | $ | 66.10 | $ | 67.68 | ||||||
*The average selling price includes freight and delivery and other revenues.
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
Dollars | Margin | Dollars | Margin | Dollars | Margin | Dollars | Margin | |||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Revenues by product line: | ||||||||||||||||||||||||||
| Aggregates | $ | 218.1 | $ | 193.4 | $ | 465.4 | $ | 436.2 | ||||||||||||||||||
| Ready-mix concrete | 261.4 | 213.5 | 575.8 | 492.8 | ||||||||||||||||||||||
| Asphalt | 200.4 | 215.1 | 327.4 | 350.8 | ||||||||||||||||||||||
Liquid asphalt | 148.8 | 110.9 | 246.9 | 187.3 | ||||||||||||||||||||||
| Other* | 91.4 | 89.7 | 214.4 | 206.4 | ||||||||||||||||||||||
| Contracting services | 556.4 | 559.6 | 1,036.7 | 1,056.8 | ||||||||||||||||||||||
| Internal sales | (272.8) | (276.9) | (475.7) | (488.5) | ||||||||||||||||||||||
| Total revenues | $ | 1,203.7 | $ | 1,105.3 | $ | 2,390.9 | $ | 2,241.8 | ||||||||||||||||||
| Gross profit by product line: | ||||||||||||||||||||||||||
| Aggregates | $ | 59.4 | 27.2% | $ | 51.7 | 26.7% | $ | 88.0 | 18.9% | $ | 96.1 | 22.0% | ||||||||||||||
| Ready-mix concrete | 52.8 | 20.2% | 39.6 | 18.6% | 93.9 | 16.3% | 78.1 | 15.8% | ||||||||||||||||||
| Asphalt | 40.4 | 20.2% | 43.1 | 20.0% | 51.5 | 15.7% | 54.7 | 15.6% | ||||||||||||||||||
Liquid asphalt | 33.7 | 22.7% | 28.8 | 26.0% | 44.5 | 18.0% | 43.7 | 23.3% | ||||||||||||||||||
| Other* | 34.2 | 37.4% | 37.5 | 41.8% | 38.7 | 18.1% | 47.1 | 22.8% | ||||||||||||||||||
| Contracting services | 63.8 | 11.5% | 72.3 | 12.9% | 115.4 | 11.1% | 136.0 | 12.9% | ||||||||||||||||||
| Total gross profit | $ | 284.3 | 23.6% | $ | 273.0 | 24.7% | $ | 432.0 | 18.1% | $ | 455.7 | 20.3% | ||||||||||||||
*Other includes cement, merchandise, fabric and spreading, and other products and services that individually are not considered to be a core line of business.
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenue
Revenue increased $98.4 million, largely driven by contributions from acquired companies, as well as price increases of mid-single digits on aggregates and ready-mix. Partially offsetting the increased revenue was lower contracting services work and asphalt volumes in the Mountain segment, due in part to less public-agency work compared to the prior year. Parts of our Central and Mountain segments also faced increased rainfall in the quarter.
Gross profit
Gross profit improved $11.3 million, largely the result of acquired companies, as well as higher pricing for aggregates and ready-mix. Energy Services also saw a rise in gross profit due to decreased boiler repairs and maintenance costs compared to the prior year. In California, contracting services benefitted from public agency work and favorable project execution. Offsetting these increases was the effects of reduced work activity in the Mountain segment and a $1.9 million negative impact to the aggregates product line as a result of selling acquired inventory after markup to fair value as part of acquisition accounting.
33
Index
Selling, general and administrative expenses
Selling, general and administrative expenses increased $5.2 million for the third quarter. Our reportable segments had higher costs of $6.4 million, primarily due to additional costs associated with the acquired companies and increased information technology-related costs of $645,000 to support our EDGE initiatives. This increase was offset in part by higher gains of $2.2 million on the sale of equipment throughout the West and Mountain segments and lower payroll-related costs as a result of lower incentive accruals.
Corporate Services had a decrease in selling, general and administrative costs of $1.2 million compared to third quarter 2024. This decrease is largely related to lower payroll-related and business development costs. Offsetting the cost decrease was a less favorable adjustment to the incurred but not reported losses in our captive insurance program.
Interest expense
Interest expense increased $9.1 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility, offset in part by lower average interest rates.
Other income
Other income decreased $1.3 million, largely driven by decreased interest income as a result of less cash on hand.
Income tax expense
Income tax expense decreased $600,000, corresponding with lower income before income taxes.
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenue
Revenue increased $149.1 million, largely driven by contributions of acquired companies, as well as price increases of mid-single digits on aggregates and ready-mix. California saw an increase in public-agency and commercial work, which positively impacted contracting services and ready-mix revenues. Partially offsetting the increased revenue was less contracting services work in Oregon, primarily the result of less public-agency work, and less contracting services work in the Mountain and Central segments, due in part to less public-agency work and increased rainfall during the second and third quarters, which also impacted asphalt and aggregate volumes.
Gross profit decreased $23.7 million, largely due to less work performed, as previously discussed. The decrease in aggregate volumes further impacted our results as we experienced higher per-unit fixed costs. In addition, Energy Services saw a decrease in gross profit mostly due to competitive market conditions and higher repairs and maintenance costs. Also, the impact of selling acquired inventory after markup to fair value as part of acquisition accounting negatively impacted the aggregates product line by $3.0 million and liquid asphalt by $300,000. These decreases were offset in part by the contributions of acquired companies, higher gross profit in California from favorable construction project execution and higher margins in Alaska and Hawaii.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $27.8 million for the first nine months of 2025. Our reportable segments had higher costs of $26.7 million, primarily due to additional costs associated with the acquired companies, an increase in labor-related costs partly due to additional employees and increased information technology-related costs to support our EDGE initiatives. Partially offsetting these increases was higher gains of $9.3 million on the sale of non-strategic assets and equipment throughout the West and Central segments and lower professional services fees of $1.2 million.
Corporate Services had an increase in selling, general and administrative costs of $1.1 million. This increase was largely the result of higher business development costs of $6.5 million related to corporate development and completed acquisitions and a less favorable adjustment to the incurred but not reported losses in our captive insurance program. Offsetting the increased costs were lower payroll-related costs and the absence of one-time Separation costs in 2024 of $3.8 million.
Interest expense
Interest expense increased $18.8 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility, offset in part by lower average interest rates.
Other income
Other income increased $500,000, largely driven by a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment, offset in part by a decrease in interest income of $2.2 million as a result of less cash on hand and lower investment returns on our nonqualified defined benefit plans.
Income tax expense
Income tax expense decreased $16.5 million, corresponding with lower income before income taxes.
34
Index
Business Segment Financial and Operating Data
A discussion of key financial data from our business segments follows. We provide segment-level information by revenue, EBITDA and EBITDA margin, as these are the measures of profitability used by our chief operating decision maker to assess operational results.
In January 2025, we made a change to our organizational structure to better align with our business strategy. We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our former North Central and South operating segments were combined to form the new Central operating segment. The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, information technology, human resources, and other corporate expenses that support the operating segments. Prior periods presented have been recast to conform to the current reportable segment presentation.
Results of Operations - West
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | Sept. 30, | |||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 396.0 | $ | 383.1 | 3% | $ | 921.7 | $ | 914.9 | 1% | ||||||||||
| EBITDA | $ | 91.8 | $ | 85.4 | 8% | $ | 177.5 | $ | 173.3 | 2% | ||||||||||
| EBITDA margin | 23.2 | % | 22.3 | % | 19.3 | % | 19.0 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 91.2 | $ | 90.6 | $ | 222.3 | $ | 234.0 | ||||||
| Ready-mix concrete | 98.6 | 87.4 | 258.3 | 232.7 | ||||||||||
| Asphalt | 61.7 | 59.1 | 109.1 | 110.7 | ||||||||||
| Other* | 50.3 | 53.4 | 134.0 | 130.3 | ||||||||||
| Contracting services | 170.4 | 164.6 | 359.2 | 361.0 | ||||||||||
| Internal sales | (76.2) | (72.0) | (161.2) | (153.8) | ||||||||||
| $ | 396.0 | $ | 383.1 | $ | 921.7 | $ | 914.9 | |||||||
*Other includes cement, merchandise, transportation services and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenue increased $12.9 million mainly as a result of increased pricing in aggregates and ready-mix throughout the segment, which accounted for $6.4 million of the increase, and ready-mix volume increases in Alaska and Hawaii of $4.0 million driven by market demand. In addition, California's public agency market remained strong and contributed an additional $6.1 million in contracting services and asphalt volumes, while recent acquisitions in Oregon also positively contributed. Offsetting these increases were slightly lower aggregate volumes throughout the segment.
EBITDA increased 8 percent for the quarter, resulting from increased pricing that outpaced costs for most product lines, along with increased ready-mix volumes in Alaska and Hawaii. California's contracting margins improved as a result of favorable project execution on completed work and higher revenues. The segment also benefitted from an increase of $1.1 million in gains on asset sales throughout the segment. Partially offsetting these increases was reduced contracting services margins in Oregon related to less public-agency and data center work in the quarter.
35
Index
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenue increased $6.8 million. In California, more available public-agency and private work and increased pricing largely contributed to the increase compared to the prior year. Hawaii experienced increased ready-mix and cement volumes of $10.7 million driven by increased market demand, while Alaska saw its aggregate and ready-mix volumes increase by $6.9 million due to stronger demand in the private sector. Partially offsetting these increases were lower revenues across most Oregon product lines due to less available public-agency and private work.
EBITDA increased 2 percent year-over-year, primarily driven by a $9.4 million improvement in contracting services margins as a result of favorable project executions in California, while Hawaii and Alaska also saw increased margins overall. In addition, the segment benefitted from an increase of $4.0 million in gains on the sale of assets throughout the segment and a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the first quarter of 2025, as discussed in Note 10. Offsetting theses increases were higher selling, general and administrative costs of $5.3 million, mostly attributed to increased labor-related costs, and lower aggregate and contracting services margins in Oregon as a result of fewer projects, as previously mentioned.
Results of Operations - Mountain
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 229.8 | $ | 261.1 | (12)% | $ | 471.9 | $ | 514.9 | (8)% | ||||||||||
| EBITDA | $ | 50.7 | $ | 59.4 | (15)% | $ | 65.4 | $ | 96.5 | (32)% | ||||||||||
| EBITDA margin | 22.1 | % | 22.8 | % | 13.8 | % | 18.7 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 34.9 | $ | 40.1 | $ | 72.2 | $ | 80.7 | ||||||
| Ready-mix concrete | 42.1 | 40.6 | 90.9 | 89.4 | ||||||||||
| Asphalt | 42.2 | 60.0 | 71.5 | 93.8 | ||||||||||
| Contracting services | 155.5 | 185.7 | 314.2 | 356.9 | ||||||||||
| Internal sales | (44.9) | (65.3) | (76.9) | (105.9) | ||||||||||
| $ | 229.8 | $ | 261.1 | $ | 471.9 | $ | 514.9 | |||||||
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenue decreased $31.3 million in the quarter, primarily due to decreased contracting services work, which also brought asphalt and aggregate volumes down. The decrease in contracting services revenue was largely due to lower asphalt paving work as a result of competitive bid dynamics, type and location of available DOT projects, the timing of public-agency jobs and increased rainfall amounts in certain markets. Partially offsetting the decrease was higher ready-mix and aggregate pricing of $3.8 million.
EBITDA decreased $8.7 million for the quarter, largely due to lower contracting service margins as a result of less paving work and the type of work performed, as discussed above, which also impacted asphalt and aggregate gross profit. Slightly offsetting was higher ready-mix and aggregate pricing.
36
Index
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenue decreased $43.0 million, primarily due to decreased contracting services work, which was driven by lower asphalt paving work as a result of the type and location of available DOT projects, the timing of public-agency jobs and increased rainfall amounts in certain markets. The decrease in contracting services also brought aggregate and asphalt volumes down by $33.6 million. Partially offsetting the decrease was higher aggregate and ready-mix pricing of $9.7 million.
EBITDA decreased $31.1 million year-over-year. Contracting services experienced lower margins throughout the segment due to less available work, while lower margins on aggregates and asphalt were largely the result of lower sales volumes due to fewer construction projects, as previously discussed, and higher repairs and maintenance costs which contributed to an increase in per-unit fixed costs. Selling, general and administrative costs were $1.9 million higher, largely from increased labor-related costs.
Results of Operations - Central
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 434.4 | $ | 354.9 | 22% | $ | 757.4 | $ | 630.5 | 20% | ||||||||||
| EBITDA | $ | 99.7 | $ | 79.8 | 25% | $ | 119.8 | $ | 97.3 | 23% | ||||||||||
| EBITDA margin | 23.0 | % | 22.5 | % | 15.8 | % | 15.4 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 92.0 | $ | 62.7 | $ | 170.9 | $ | 121.5 | ||||||
| Ready-mix concrete | 120.7 | 85.5 | 226.6 | 170.7 | ||||||||||
| Asphalt | 96.5 | 96.0 | 146.8 | 146.3 | ||||||||||
| Other* | 12.2 | 12.2 | 27.2 | 25.0 | ||||||||||
| Contracting services | 230.5 | 209.3 | 363.3 | 338.9 | ||||||||||
| Internal sales | (117.5) | (110.8) | (177.4) | (171.9) | ||||||||||
| $ | 434.4 | $ | 354.9 | $ | 757.4 | $ | 630.5 | |||||||
*Other includes merchandise and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenue increased 22 percent year-over-year to $434.4 million, primarily driven by contributions from acquired companies and price increases across our legacy aggregate and ready-mix product lines. This increase was offset in part by a reduction in contracting services work due to increased rainfall in the period, which also impacted asphalt volumes, and reduced volumes from our Honey Creek Quarry due to the historic flooding as previously mentioned.
EBITDA improved $19.9 million, largely the result of acquired companies. Slightly offsetting the increase was reduced contracting services work primarily due to unfavorable weather in most parts of the segment, as previously discussed. In addition, the impact of selling acquired inventory after markup to fair value as part of acquisition accounting of $1.9 million negatively impacted the aggregate product line.
37
Index
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenue increased $126.9 million, largely driven by contributions from acquired companies, as well as the impact of our legacy operations price increases in the aggregate product line of $10.3 million and ready-mix product line of $5.0 million. Partially offsetting these increases was less contracting services work throughout the segment due to increased rainfall in the second and third quarters, which also caused decreased aggregate and ready-mix volumes.
EBITDA improved 23 percent, largely the result of acquired companies and $4.9 million of increased gains on asset sales. Offsetting these increases were fewer job incentives compared to 2024, as well as less contracting services work largely due to unfavorable weather in most parts of the segment. In addition, the impact of selling acquired inventory after markup to fair value as part of acquisition accounting of $3.0 million negatively impacted the aggregate product line.
Results of Operations - Energy Services
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 169.2 | $ | 125.9 | 34% | $ | 280.5 | $ | 214.9 | 31% | ||||||||||
| EBITDA | $ | 39.7 | $ | 33.7 | 18% | $ | 48.9 | $ | 50.6 | (3)% | ||||||||||
| EBITDA margin | 23.4 | % | 26.8 | % | 17.4 | % | 23.5 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
Liquid Asphalt | $ | 148.8 | $ | 110.9 | $ | 246.9 | $ | 187.3 | ||||||
| Other* | 25.5 | 20.9 | 42.7 | 38.3 | ||||||||||
| Internal sales | (5.1) | (5.9) | (9.1) | (10.7) | ||||||||||
| $ | 169.2 | $ | 125.9 | $ | 280.5 | $ | 214.9 | |||||||
*Other includes fabric and spreading, burner fuels, merchandise and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenue increased $43.3 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $10.7 million in revenue. These increases were partially offset by lower volumes and lower pricing in some locations driven by current liquid asphalt market pricing.
EBITDA improved $6.0 million, largely as a result of the addition of Albina Asphalt, as well as lower operating costs associated with the plant repairs made in 2024 at our California terminal. Offsetting were lower volumes and a decrease in margins due to competitive market conditions.
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenue increased $65.6 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $14.3 million in revenue. These increases were partially offset by lower volumes due to unfavorable weather and lower pricing in some locations driven by current liquid asphalt market pricing.
EBITDA decreased $1.7 million, largely decreased pricing that resulted in lower margins due to competitive market conditions, as well as planned and required maintenance expenses related to our railcar fleet, continued tank and equipment repair costs at our terminals and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting for Albina of $295,000. Partially offsetting the decrease was contributions from the acquisition of Albina Asphalt.
38
Index
Corporate Services and Eliminations
Corporate Services includes all expenses related to the corporate functions of our company, as well as insurance activity at our captive insurer; interest expense on a majority of our long-term debt; interest income; and unrealized gains or losses on investments for nonqualified benefit plans.
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
During the third quarter of 2025, Corporate Services contributed negative EBITDA of $12.7 million, compared to negative EBITDA of $13.7 million in the prior year. Corporate Services had lower selling, general and administrative costs of $1.2 million in the quarter, driven largely by lower payroll-related and business development costs. Offsetting the cost decrease was a less favorable adjustment of $2.2 million to the incurred but not reported losses in our captive insurance program.
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
During the first nine months of 2025, Corporate Services contributed negative EBITDA of $44.1 million, compared to negative EBITDA of $42.3 million in the prior year. Corporate Services had higher selling, general and administrative costs of $1.0 million in the year, driven largely by an increase in business development costs of $6.5 million related to corporate development and completed acquisitions and a less favorable adjustment of $2.2 million to the incurred but not reported losses in our captive insurance program. Offsetting the increased costs was lower payroll-related costs and the absence of one-time Separation costs in 2024 of $3.8 million. Corporate Services also had lower investment returns of $700,000 on our nonqualified defined benefit plans.
Liquidity and Capital Resources
At September 30, 2025, we had unrestricted cash and cash equivalents of $30.7 million, working capital of $660.9 million and borrowing capacity of $456.6 million on our revolving credit facility, net of our outstanding letters of credit. Working capital is calculated as current assets less current liabilities. As of September 30, 2025, we had sufficient liquid assets and borrowing capacity to meet our financial commitments, debt obligations and anticipated capital expenditures for at least the next 12 months.
Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year. Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing our equipment, facilities and crews for our construction season. Working capital levels then decrease as the construction season winds down and we collect on receivables.
The ability to fund our cash needs will depend on the ongoing ability to generate cash from operations and obtain debt financing with competitive rates. We rely on access to capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations, particularly in the first half of the year due to the seasonal nature of the business. Our principal uses of cash in the future will be to fund our operations, working capital needs, capital expenditures, repayment of debt and strategic business development transactions.
On March 7, 2025, we entered into an amendment to our senior secured credit agreement to increase our revolving credit facility from $350 million to $500 million and extend the maturity to March 7, 2030, refinance our existing $275 million Term Loan A with a maturity of March 7, 2030, and provide for a new Term Loan B in an aggregate principal amount of $500.0 million with a maturity date of March 8, 2032. We used the proceeds from the issuance of the new Term Loan B to fund a portion of Strata's purchase price. Separately, we increased the total commitments under our existing revolving credit facility for future expenditures. For more information on the debt agreements and covenant restrictions, see Note 13.
Capital expenditures
We are committed to disciplined capital allocation, including reinvesting in our company to maintain fixed assets, improve operations and grow our business.
We currently estimate total 2025 capital expenditures for maintenance and improvement to be between $160 million and $225 million. For the nine months ended September 30, 2025, we spent $154.8 million, largely on the replacement of depleting aggregate reserves, construction equipment and plant improvements.
Additionally, for the nine months ended September 30, 2025, we spent $663.5 million on growth initiatives, which comprised of $528.0 million on acquisitions and $135.5 million on aggregate expansion and greenfield projects. In connection with the Strata acquisition, we also received proceeds of $14.5 million on the sale of four ready-mix plant operations. For the remainder of 2025, we estimate to spend $32.2 million on organic growth projects. Capital expenditures for future acquisitions and new organic growth opportunities would be incremental to our outlined capital program. It is anticipated that capital expenditures for the remainder of 2025 will be funded by various sources, including internally generated cash and debt facilities.
39
Index
Cash flows
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (In millions) | ||||||||
| Net cash provided by (used in) | ||||||||
| Operating activities | $ | 82.6 | $ | 149.9 | ||||
| Investing activities | (783.0) | (137.8) | ||||||
| Financing activities | 500.4 | (7.0) | ||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (200.0) | 5.1 | ||||||
| Cash, cash equivalents and restricted cash -- beginning of year | 281.1 | 262.3 | ||||||
| Cash, cash equivalents and restricted cash -- end of period | $ | 81.1 | $ | 267.4 | ||||
Operating activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Components of net cash provided by operating activities: | ||||||||||||||
| Net income | $ | 125.1 | $ | 178.4 | $ | (53.3) | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities | 141.2 | 115.1 | 26.1 | |||||||||||
| Changes in current assets and liabilities, net of acquisitions: | ||||||||||||||
| Receivables | (267.5) | (224.8) | (42.7) | |||||||||||
| Inventories | (15.3) | (27.3) | 12.0 | |||||||||||
| Other current assets | 3.8 | 11.1 | (7.3) | |||||||||||
| Accounts payable | 72.5 | 77.2 | (4.7) | |||||||||||
| Other current liabilities | 16.7 | 17.3 | (.6) | |||||||||||
| Pension and postretirement benefit plan contributions | (.5) | (2.5) | 2.0 | |||||||||||
| Other noncurrent charges | 6.6 | 5.4 | 1.2 | |||||||||||
| Net cash provided by operating activities | $ | 82.6 | $ | 149.9 | $ | (67.3) | ||||||||
Cash provided by operating activities at September 30, 2025, decreased $67.3 million, largely related to higher working capital needs and a decrease in net income. Cash used by working capital components totaled $189.8 million for the nine months ended September 30, 2025, compared to $146.5 million for the nine months ended September 30, 2024. This increase in cash usage was primarily the result of higher working capital needs due to the increase in revenues, as discussed in Business Segment Financial and Operating Data, and timing of prepaid insurance, offset in part by lower liquid asphalt and cement inventory balances.
Investing activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Capital expenditures | $ | (290.3) | $ | (127.2) | $ | (163.1) | ||||||||
| Acquisitions, net of cash acquired | (528.0) | (15.0) | (513.0) | |||||||||||
| Net proceeds from sale or disposition of property and other | 38.3 | 7.6 | 30.7 | |||||||||||
| Investments | (3.0) | (3.2) | .2 | |||||||||||
| Net cash used in investing activities | $ | (783.0) | $ | (137.8) | $ | (645.2) | ||||||||
The increase in cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to additional investments to grow our company. We spent $513.0 million more on acquisitions in 2025, including the acquisition of Strata, as discussed in Note 10. We also spent $163.1 million more on capital expenditures, including the replenishment of depleting aggregate reserves and greenfield projects. The increase in cash usage was offset in part by proceeds from the sale of ready-mix operations in the Central segment in the first quarter of 2025, as discussed in Note 10, and non-strategic asset sales in both the West and Central segments.
40
Index
Financing activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Issuance of long-term debt | $ | 520.0 | $ | — | $ | 520.0 | ||||||||
| Debt issuance costs | (11.1) | — | (11.1) | |||||||||||
| Repayment of long-term debt | (5.9) | (5.3) | (.6) | |||||||||||
Tax withholding on stock-based compensation | (2.6) | (1.7) | (.9) | |||||||||||
| Net cash provided by (used in) financing activities | $ | 500.4 | $ | (7.0) | $ | 507.4 | ||||||||
The increase in cash flows provided by financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was largely related to the funding of a new Term Loan B in March of 2025, as well as borrowings under our revolving credit facility, as discussed in Note 13. Offsetting the cash provided by long-term debt were higher debt issuance costs associated with the amendment of our senior secured credit agreement to increase our revolving credit facility capacity, extend the maturity date of the revolving credit facility and Term Loan A, and the issuance of a new Term Loan B.
Material cash requirements
There were no material changes in the contractual obligations from those reported in the 2024 Annual Report other than as set forth below. For more information on our contractual obligations on long-term debt, operating leases and purchase commitments, see Part II, Item 8 in the 2024 Annual Report.
Our material short-term and long-term cash requirements include repayment of third-party long-term debt and related interest payments, payments on operating lease agreements, payments of obligations on purchase commitments and asset retirement obligations.
At September 30, 2025, our long-term debt reflected an increase of approximately $514.1 million from the balance at December 31, 2024. This increase is due to issuing a new $500 million Term Loan B facility with the proceeds being used to fund a portion of Strata's purchase price in addition to borrowing $20 million under our revolving credit facility.
At September 30, 2025, our total estimated interest payments over the life of our debt reflected an increase of approximately $184.1 million from the total estimated interest payments at December 31, 2024. This increase is primarily due to the change in long-term debt outstanding related to the new Term Loan B and borrowings under our revolving credit facility, as previously mentioned.
At September 30, 2025, our purchase commitments reflected a decrease of approximately 22 percent from the balance at December 31, 2024. This decrease is primarily due to the seasonality of work and the third quarter being in our peak construction season, our purchase commitments saw an expected decrease from the balance at June 30, 2025. We expect purchase commitments to continue to decrease throughout the remainder of 2025 as obligations continue to be satisfied during the construction season.
Defined benefit pension plans
We have frozen noncontributory qualified defined benefit pension plans for certain employees. Various assumptions are used in calculating the benefit expense (income) and liability (asset) related to these plans. Costs of providing these benefits are dependent upon assumptions of future conditions and bear the risk of changing.
There were no material changes to our qualified noncontributory defined benefit pension plans from those reported in the 2024 Annual Report. We do not expect to make any pension plan contributions in 2025 as the plan is fully funded. For more information, see Part II, Item 8 in the 2024 Annual Report.
Non-GAAP Financial Measures
The Business Segment Financial and Operating Data includes financial information prepared in accordance with GAAP, as well as EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin, as well as total segment measures, as applicable, that 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. We believe these non-GAAP financial measures, in addition to corresponding
41
Index
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, unrealized gains and losses on benefit plan investments and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting 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 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 our operating performance. 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 these non-GAAP financial measures, including total segment measures, as applicable, are useful performance measures because they provide clarity as to our operational results. Our management uses these non-GAAP financial measures in conjunction with GAAP results when evaluating our operating results internally and calculating employee incentive compensation.
EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income (loss). 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, impact of selling acquired inventory after markup to fair value as part of acquisition accounting, and one-time Separation costs, to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues. These non-GAAP financial measures are calculated the same for both the total segment and consolidated metrics and should not be considered as alternatives to, or more meaningful than, GAAP financial measures such as net income or net income margin, 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 and Adjusted EBITDA margin measures having the same or similar names.
The following information reconciles segment and consolidated net income (loss) to EBITDA and Adjusted EBITDA and provides the calculation of EBITDA margin and Adjusted EBITDA margin. Interest expense, net, is net of interest income that is included in other income on the Consolidated Statements of Operations.
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| (In millions) | ||||||||||||||
Net income | $ | 143.2 | $ | 148.1 | $ | 125.1 | $ | 178.4 | ||||||
| Depreciation, depletion and amortization | 53.4 | 34.8 | 142.4 | 101.5 | ||||||||||
| Interest expense, net | 22.4 | 12.1 | 57.1 | 36.1 | ||||||||||
| Income taxes | 50.2 | 49.6 | 42.9 | 59.4 | ||||||||||
| EBITDA | $ | 269.2 | $ | 244.6 | $ | 367.5 | $ | 375.4 | ||||||
| Unrealized (gains) losses on benefit plan investments | (1.1) | (1.2) | (2.2) | (2.8) | ||||||||||
| Stock-based compensation expense | 2.9 | 1.8 | 8.5 | 5.4 | ||||||||||
Impact of selling acquired inventory after markup to fair value as part of acquisition accounting | 1.8 | — | 3.3 | — | ||||||||||
One-time separation costs | — | — | — | 3.8 | ||||||||||
| Adjusted EBITDA | $ | 272.8 | $ | 245.2 | $ | 377.1 | $ | 381.8 | ||||||
| Revenue | $ | 1,203.7 | $ | 1,105.3 | $ | 2,390.9 | $ | 2,241.8 | ||||||
Net income margin | 11.9 | % | 13.4 | % | 5.2 | % | 8.0 | % | ||||||
| EBITDA margin | 22.4 | % | 22.1 | % | 15.4 | % | 16.7 | % | ||||||
| Adjusted EBITDA margin | 22.7 | % | 22.2 | % | 15.8 | % | 17.0 | % | ||||||
New Accounting Standards
For information regarding new accounting standards, see Note 3, which is incorporated by reference.
Critical Accounting Estimates
Our critical accounting estimates include revenue recognized using the cost-to-cost measure of progress for contracts; fair values of acquired assets and liabilities assumed under the acquisition method of accounting; impairment testing of goodwill; and impairment testing of long-lived assets excluding goodwill. There were no material changes in the Company's critical accounting estimates from those that were previously reported in the Company's 2024 Annual Report.
42
Index
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of market fluctuations associated with interest rates and commodity prices. We have policies and procedures to assist in controlling these market risks and from time to time have utilized derivatives to manage a portion of our risk.
Interest rate risk
As of September 30, 2025, we had $778.9 million of outstanding borrowings under our Term Loan A, Term Loan B and revolving credit facility, which bear interest at a variable rate. As of September 30, 2025, the weighted-average rate in effect was 5.99 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at September 30, 2025, would increase the all-in rate to 6.99 percent, the effect of which would increase the Company's interest expense by $7.8 million over the next 12 months based on the balances outstanding for these borrowings as of September 30, 2025.
At September 30, 2025, we had no outstanding interest rate hedges.
Commodity price risk
There were no material changes to commodity price risk that we faced from those reported in the 2024 Annual Report.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and other procedures as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and the chief financial officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective at a reasonable assurance level.
Changes in internal controls
We completed the acquisitions of Albina Asphalt and Strata Corporation on November 2, 2024 and March 7, 2025, respectively. Under the guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company. We are in the process of assessing the internal control over financial reporting of the acquired companies and integrating them with our existing internal controls over financial reporting.
Except as noted above, there were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
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Index
Part II -- Other Information
Item 1. Legal Proceedings
There were no material changes to the Company's legal proceedings that were previously reported in Part 1, Item 3 - Legal Proceedings in the 2024 Annual Report.
Item 1A. Risk Factors
Refer to the Company's risk factors that are disclosed in Part I, Item 1A. Risk Factors in its 2024 Annual Report that could be materially harmful to the Company's business, prospects, financial condition or financial results if they occur.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
For information regarding mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, see Exhibit 95 to this Form 10-Q, which is incorporated herein by reference.
Item 5. Other Information
During the three months ended September 30, 2025, no director or officer of the Company adopted terminated
Item 6. Exhibits
See the index to exhibits immediately preceding the signature page to this report.
44
Index
| Exhibits Index | ||||||||||||||||||||||||||
| Incorporated by Reference | ||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Filed Herewith | Furnished Herewith | Form | Period Ended | Exhibit | Filing Date | File Number | ||||||||||||||||||
3.1 | Second Amended and Restated Certificate of Incorporation of Knife River Corporation | 8-K | 3.1 | 5/28/25 | 1-41642 | |||||||||||||||||||||
3.2 | Second Amended and Restated Bylaws of Knife River Corporation | 8-K | 3.2 | 5/28/25 | 1-41642 | |||||||||||||||||||||
31.1 | Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
31.2 | Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 32 | Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 95 | Mine Safety Disclosures | X | ||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||
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Index
Signatures
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Knife River Corporation | |||||||||||
| DATE: | November 4, 2025 | BY: | /s/ Nathan W. Ring | ||||||||
| Nathan W. Ring | |||||||||||
| Vice President and Chief Financial Officer | |||||||||||
| BY: | /s/ Marney L. Kadrmas | ||||||||||
| Marney L. Kadrmas | |||||||||||
Vice President and Chief Accounting Officer | |||||||||||
46
FAQ
What was Knife River (KNF) Q3 2025 revenue and EPS?
Q3 2025 revenue was 1,203,717, with diluted EPS of $2.52 and net income of $143,151.
How large is Knife River’s backlog and when will it be recognized?
Backlog was $994.6 million: $764.4 million within 12 months, $129.0 million in 13–24 months, and $101.2 million in 25+ months.
What impact did the Strata acquisition have in Q3 2025?
Strata contributed $95.3 million of revenue and $9.3 million of net income in Q3. The purchase price totaled $454.0 million.
How did segment reporting change at Knife River in 2025?
The company reorganized into four reportable segments: West, Mountain, Central, and Energy Services, with prior periods recast.
What were Knife River’s nine-month cash flows in 2025?
Operating cash flow was $82,583; investing used $783,019; financing provided $500,399, including $520,000 of new long-term debt.
What were Q3 2025 construction materials and contracting services revenues?
Construction materials revenue was $647,277; contracting services revenue was $556,440.
How many KNF shares were outstanding recently?
As of October 28, 2025, there were 56,664,165 shares outstanding.
Knife River Ord Shs When Issued
NYSE:KNF
KNF Rankings
KNF Latest News
KNF Latest SEC Filings
Nov 4, 2025
[8-K] Knife River Corp Reports Material Event
Aug 14, 2025
[SCHEDULE 13G] Knife River Corporation SEC Filing
KNF Stock Data
3.75B
56.48M
0.33%
96.24%
5.69%
Building Materials
Mining & Quarrying of Nonmetallic Minerals (no Fuels)
United States
BISMARCK