Highlights

  • Second quarter 2026 revenue rose 13% to $938.6 million, while net income fell to $43.9 million, or $0.77 per share.
  • The company posted a six-month net loss of $35.3 million, compared with a loss of $18.1 million a year earlier.
  • Backlog stood at $1.2 billion, with expected margins slightly below last year, and about 85% of it publicly funded.
  • A May amendment added $400 million to the Term Loan B, lifting its outstanding principal to $895.0 million.

Knife River (NYSE:KNF) shares were trading near their 52-week low at USD 52.32 on October 21, 2026, up 2.23%. The construction materials and contracting services company reported second quarter 2026 results in a Form 10-Q filed on August 4, after adding $400 million to its Term Loan B in May and completing four aggregates-based acquisitions in the first half.

Knife River is a Delaware corporation headquartered in Bismarck, North Dakota. It describes itself as one of the leading providers of crushed stone and sand and gravel in the United States, operating across 15 states with 1.3 billion tons of aggregate reserves. It reports four segments: West, Mountain and Central, which sell aggregates, asphalt and ready-mix concrete and perform contracting work, and Energy Services, which supplies liquid asphalt. Public-sector projects account for roughly 80% of its historical contracting revenue. Its fiscal year ends December 31.

Second Quarter: Higher Revenue, Lower Profit

Revenue for the three months ended June 30, 2026 was $938.6 million, up $104.8 million from $833.8 million. The company cited double-digit volume gains, more asphalt paving work, acquisitions, and $15.3 million from pricing. Gross profit rose $5.5 million to $162.8 million, though contracting services margins were lower because of project timing and type and competitive bidding.

Selling, general and administrative expense was $81.7 million, or 8.7% of revenue against 8.3%, partly because the prior-year quarter included $10.3 million of asset sale gains. Interest expense rose to $24.5 million from $22.3 million on higher average debt. Operating income fell to $81.1 million from $88.1 million, and net income was $43.9 million, or $0.77 per diluted share, against $50.6 million, or $0.89. Adjusted EBITDA, a non-GAAP measure, was $139.7 million against $140.8 million.

For the first half, which is seasonally weak, revenue grew 14% to $1,348.7 million and the net loss widened to $35.3 million, or $0.62 per share, from $18.1 million, or $0.32.

Regional Mix, Backlog and Public Funding

Results diverged by region. West revenue fell $27.0 million in the quarter on less public-agency work in Oregon and a late construction season in Alaska. Mountain revenue rose $60.4 million, led by Idaho contracting work and three first-quarter acquisitions. Central revenue rose $70.4 million, helped by North Dakota and Minnesota public work, aggregate sales to data center projects and the December 2025 TexCrete acquisition.

Backlog was $1.2 billion at June 30, 2026, of which the company expects to complete about $984 million within 12 months. Management said expected margins on backlog were slightly lower than a year earlier. It described state funding as strong, noting that eleven of its 15 states have record transportation budgets for fiscal 2026. About 38% of federal infrastructure act formula funding in its markets was unspent as of May 2026, and that act is authorized through September 30, 2026.

Balance Sheet, Acquisitions and Outlook

On May 15, 2026, Knife River increased its Term Loan B by $400.0 million and cut the interest margin by 0.25 percentage points, leaving $895.0 million outstanding with a March 2032 maturity. At June 30, it held $40.7 million of cash, working capital of $794.4 million and $387.2 million of revolver capacity, and said it had enough liquidity for at least the next 12 months.

In the first half it spent $184.4 million on acquisitions, including Morgan Asphalt, which brought entry into Utah, plus acquisitions in Montana and Oregon.

The 10-Q contains no earnings guidance. The company estimates 2026 maintenance and improvement capital spending of $170 million to $235 million, plus about $76.4 million of organic growth spending over the rest of the year. Planned projects include a Minnesota ready-mix plant expected to operate in the third quarter of 2026, a Conroe, Texas plant by the end of 2026, and a South Dakota aggregates expansion scheduled for 2027. Management expects acquisitions to raise selling, general and administrative expense in their first year, and noted continued margin pressure from competition and input costs.